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Linear Technology Corp/CA · 10-K · For 6/30/02

Filed On 9/18/02 3:56pm ET · SEC File 0-14864 · Accession Number 950005-2-907

  As Of               Filer                 Filing     As/For/On Docs:Pgs              Issuer               Agent

 9/18/02  Linear Technology Corp/CA         10-K        6/30/02    6:59                                     Pacific Fin..Printing/FA

Annual Report · Form 10-K
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 10-K        Annual Report                                         22    137K 
 2: EX-10.49    2001 Nonstatutory Stock Option Plan                   15     58K 
 3: EX-13       Registrant's Annual Report to Stockholders            19    110K 
 4: EX-21.1     List of Subsidiaries                                   1      4K 
 5: EX-23.1     Independent Auditors                                   1      7K 
 6: EX-99.1     Certification of Ceo and Cfo                           1      7K

10-K · Annual Report
Document Table of Contents

Page	(sequential)	\|	(alphabetic)	Top
			Alternative Formats (RTF, XML, et al.) Business Certain Relationships and Related Transactions Changes in and Disagreements with Accountants on Accounting and Financial Disclosure Directors and Executive Officers of the Registrant Executive Compensation Executive Officers of the Registrant Exhibits, Financial Statements, Schedules, and Reports on Form 8-K Financial Statements and Supplementary Data Legal Proceedings Management's Discussion and Analysis of Financial Condition and Results of Operations Market for the Registrant's Common Equity and Related Stockholder Matters Properties Quantitative and Qualitative Disclosures about Market Risk Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters Selected Financial Data Submission of Matter to a Vote of Security Holders
1	1st Page
2	Item 1. Business
11	Executive Officers of the Registrant
12	Item 2. Properties
13	Item 3. Legal Proceedings
"	Item 4. Submission of Matter to a Vote of Security Holders
14	Item 5. Market for the Registrant's Common Equity and Related Stockholder Matters
"	Item 6. Selected Financial Data
"	Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations
"	Item 7A. Quantitative and Qualitative Disclosures about Market Risk
"	Item 8. Financial Statements and Supplementary Data
"	Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
15	Item 10. Directors and Executive Officers of the Registrant
"	Item 11. Executive Compensation
"	Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
"	Item 13. Certain Relationships and Related Transactions
16	Item 14. Exhibits, Financial Statements, Schedules, and Reports on Form 8-K

10-K 1st Page of 22 TOC Top Previous Next Bottom Just 1st
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 FORM 10-K
(Mark One)                                                                      
[ X ]     ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES       
EXCHANGE ACT OF 1934                                        

 For the fiscal year ended June 30, 2002

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

 Commission File Number. 0-14864

 LINEAR TECHNOLOGY CORPORATION

(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

DELAWARE                                    94-2778785
(STATE OR OTHER JURISDICTION OF                     (I.R.S. EMPLOYER        
INCORPORATION OR ORGANIZATION)                     IDENTIFICATION NO.)      

 1630 McCarthy Boulevard
Milpitas, California 95035
(408) 432-1900
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES,
INCLUDING ZIP CODE AND TELEPHONE NUMBER)

 Securities registered pursuant to Section 12(b) of the Act:
NONE

 Securities registered pursuant to Section 12(g) of the Act:
 Common Stock, $0.001 Pare Value

         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 the  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]                                                

         The aggregate  market value of voting stock held by  non-affiliates  of
the  Registrant  was  approximately  $7,388,044,304.00  as of September 9, 2002,
based upon the closing sale price on the Nasdaq  National Market System reported
for such date.  Shares of common  stock held by each officer and director and by
each  person  who owns 5% or more of the  outstanding  common  stock  have  been
excluded in that such persons may be deemed to be affiliates. This determination
of affiliate  status is not  necessarily  a conclusive  determination  for other
purposes.                                                                       

         There were 314,384,864  shares of the Registrant's  common stock issued
and outstanding as of September 9, 2002.                                        

DOCUMENTS INCORPORATED BY REFERENCE:

(1)     Items  1 and 2 of  Part  I and  Items  5,  6,  7,  7A and 8 of  Part  II
        incorporate information by reference from Exhibit 13.1 to this Form 10-K
        which  contains  certain  information  included in  Registrant's  Annual
Report to Stockholders for the fiscal year ended June 30, 2002. 

(2)     Items 10, 11 and 12 of Part III  incorporate  information  by  reference
        from the definitive proxy statement (the "2002 Proxy Statement") for the
Annual Meeting of Stockholders to be held on November 6, 2002.  

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PART I

Item 1.        Business                                                         

Except for historical  information contained in this annual report on Form 10-K,
certain  statements set forth herein,  including certain statements in this Item
1, are  forward-looking  statements  that are  dependent  on  certain  risks and
uncertainties  including such factors,  among others, as the timing,  volume and
pricing  of new  orders  for  the  Company's  products,  timely  ramp-up  of new
facilities,  the timely  introduction  of new processes  and  products,  general
conditions  in the  world  economy  and  financial  markets  and  other  factors
described below.  Therefore,  actual outcomes and results may differ  materially
from what is expressed  or forecast in such  forward-looking  statements.  Words
such as "expect," "anticipate," "intend," "plan," "believe," "seek," "estimate,"
variations of such words and similar  expressions  are intended to identify such
forward looking statements.                                                     

General                                                                         

         Linear   Technology   Corporation   (together  with  its   consolidated
subsidiaries,  "Linear Technology" or the "Company")  designs,  manufactures and
markets a broad line of standard high performance  linear  integrated  circuits.
Applications  for the Company's  products include  telecommunications,  cellular
telephones,  networking products such as optical switches,  notebook and desktop
computers, computer peripherals,  video/multimedia,  industrial instrumentation,
security monitoring devices,  high-end consumer products such as digital cameras
and MP3  players,  complex  medical  devices,  automotive  electronics,  factory
automation,  process  control,  and military and space systems.  The Company was
organized  and  incorporated  in  1981 by a  management  team  with  significant
experience in the design,  manufacture and marketing of linear circuits.  During
fiscal year 2001, the Company  reincorporated  from California to Delaware.  The
Company  competes  primarily  on the  basis of  performance,  functional  value,
quality, reliability and service.                                               

The linear circuit industry                                                     

         Semiconductor  components  are the electronic  building  blocks used in
electronic  systems and  equipment.  These  components  are classified as either
discrete  devices (such as individual  transistors)  or integrated  circuits (in
which a number of  transistors  and other  elements  are combined to form a more
complicated electronic circuit). Integrated circuits ("ICs") may be divided into
two general categories,  digital and linear (or analog).  Digital circuits, such
as memory  devices and  microprocessors,  generally  process  on-off  electrical
signals, represented by binary digits, "1" and "0." In contrast, linear circuits
monitor,  condition,  amplify or transform  continuous analog signals associated
with physical properties, such as temperature, pressure, weight, light, sound or
speed, and play an important role in bridging between real world phenomena and a
variety of electronic  systems.  Linear circuits also provide voltage regulation
and power control to electronic systems, especially in hand-held battery powered
systems.                                                                        

         The Company  believes that several  factors  generally  distinguish the
linear integrated circuit business from the digital circuit business, including:

                  Importance  of  Individual  Design  Contribution.  The Company
           believes that the  creativity of  individual  design  engineers is of
           particular importance in the linear circuit industry. The design of a
           linear integrated  circuit  generally  involves a greater variety and
           less repetition of circuit elements than digital design. In addition,
           the interaction of linear circuit elements is complex,  and the exact
           placement  of  these  elements  in the  circuit  is  critical  to the
           circuit's precision and performance.  Computer-aided  engineering and
           design  tools for linear  circuits  are not as  accurate  in modeling
           circuits as those tools used for  designing  digital  circuits.  As a
           result,  the contributions of a relatively small number of individual
           design engineers are generally of greater importance in the design of
linear circuits than in the design of digital circuits.   

                  Smaller Capital Requirements.  Digital circuit design attempts
           to minimize  device size and  maximize  speed by  increasing  circuit
           densities.  The process  technology  necessary for increased  density
           requires very expensive  wafer  fabrication  equipment.  In contrast,
           linear circuit  design  focuses on precise  matching and placement of
           circuit  elements,  and linear  circuits  often require large feature
           sizes to achieve precision and high voltage  operation.  Accordingly,
           the linear circuit  manufacturing  process generally requires smaller
           initial capital expenditures, particularly for photomasking equipment
           and  clean  room  facilities,   and  less  frequent   replacement  of
           manufacturing equipment because the equipment has, to date, been less
vulnerable to technological obsolescence.                 

                  Market Diversity;  Relative Pricing Stability.  Because of the
           varied  applications  for linear  circuits,  manufacturers  typically
           offer a greater  variety of device types to a more  diverse  group of
customers, who typically                                  

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           have smaller  volume  requirements  per device.  As a result,  linear
           circuit  manufacturers  are  often  less  dependent  upon  particular
           products or customers,  linear  circuit  markets are  generally  more
           fragmented,  and  competition  within those  markets tends to be more
           diffused. The Company believes that competition in the linear circuit
           market is particularly dependent upon performance,  functional value,
           quality, reliability and service. As a result, linear circuit pricing
       has generally been more stable than most digital circuit pricing.

                  Less Japanese And Other Asian Competition.  To date,  Japanese
           and other Asian  firms have  concentrated  their  efforts on the high
           volume digital and consumer  linear  markets,  as opposed to the high
         performance end of the linear circuit market served by the Company.

Products and markets                                                            

         Linear  Technology  produces a wide range of products  for a variety of
customers  and  markets.  The Company  emphasizes  standard  products to address
larger  markets and to reduce the risk of  dependency  upon a single  customer's
requirements.  The Company  targets the high  performance  segment of the linear
circuit market.  "High  performance" is characterized by higher precision,  both
high power or micropower,  higher speed, more subsystem  integration on a single
chip and many other special  features.  The Company focuses virtually all of its
design efforts on proprietary  products which, at the time of introduction,  are
original designs by the Company offering unique characteristics  differentiating
them from those offered by competitors.                                         

         Although the types and mix of linear products vary by application,  the
principal product categories are as follows:                                    

         Amplifiers - These circuits  amplify the voltage or output current of a
device. The amplification  represents the ratio of the output voltage or current
to the input voltage or current.  The most widely used device is the operational
amplifier due to its versatility and precision.                                 

         High Speed  Amplifiers - These  amplifiers are used to amplify  signals
above  5MHz for  applications  such as  video,  fast data  acquisition  and data
communication.                                                                  

         Voltage Regulators - Voltage regulators control the voltage of a device
or circuit at a specified level. This category of product consists  primarily of
two types,  the linear  regulator  and the switch  mode  regulator.  Switch mode
regulators  are also used to  convert  voltage up or down  within an  electronic
system for power management and battery charging.                               

         Voltage  References - These  circuits  serve as  electronic  benchmarks
providing  a constant  voltage for system  usage.  Precision  references  have a
constant output independent of input, temperature changes or time.              

         Interface  -  Interface  circuits  act as an  intermediary  to transfer
digital signals between or within electronic systems. These circuits are used in
computers, modems, instruments and remote data acquisition systems.             

         Data Converters - These circuits  change linear  (analog)  signals into
digital  signals,  or vice versa,  and are often referred to as data acquisition
subsystems, A/D converters and D/A converters. The accuracy and speed with which
the analog  signal is converted to its digital  counterpart  is considered a key
characteristic for these devices.                                               

         Radio Frequency  Circuits - These circuits include mixers,  modulators,
demodulators, amplifiers, drivers, and power detectors and controllers. They are
used in  wireless  and  cable  infrastructure,  cellphones,  and  wireless  data
communications.                                                                 

         Other - Other linear circuits include buffers,  battery monitors, motor
controllers,   hot  swap   circuits,   comparators,   sample-and-hold   devices,
modulators/demodulators,  drivers  and  filters,  both  switched  capacitor  and
continuous  time,  which are used to limit  and/or  manipulate  signals  in such
applications  as  cellular   telephones,   base  stations,   navigation   system
instrumentation and detection circuitry.                                        

         Linear   circuits   are   used  in   various   applications   including
telecommunications,  cellular  telephones,  networking  products such as optical
switches,    notebook    and   desktop    computers,    computer    peripherals,
video/multimedia,   industrial  instrumentation,  security  monitoring  devices,
high-end  consumer  products  such as digital  cameras and MP3 players,  complex
medical devices,  automotive electronics,  factory automation,  process control,
and military and space systems.  The Company focuses its product development and
marketing efforts on high performance applications where the Company believes it
can  position  itself  competitively  with  respect to product  performance  and
functional value.                                                               

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The  following  table sets  forth,  examples  of product  families by end market
application and end-market:                                                     

                                                        [Enlarge/Download Table]


                                                                                              
Market          End Applications/Products                     Example Product Families        
                                                          --                                  
Industrial       Flow or rate metering                     |                                  
                 Position/pressure/                        |                                  
                 temperature sensing and control           |                                  
                 Robotics                                  |                                  
                 Energy management                         |                                  
                 Process control data communication        |                                  
                 Network and factory automation            |                                  
                 Security and surveillance systems         |                                  
                 Curve tracers                             |  Data acquisition products       
                 Logic analyzers                           |  High performance operational    
                 Multimeters                               |  amplifiers                      
                 Oscilloscopes                             |  Interface (RS 485/232) products 
                 Test equipment                            |  Instrumentation amplifiers      
                 Voltmeters                                |  Line drivers                    
                 Network analyzers                         |  Line receivers                  
                 Scales                                    |  Precision comparators           
                 Analytic instruments                      |  Precision voltage references    
                 Gas chromatic graphs                      |  Monolithic filters              
                 EKG, CAT scanners                         |  Switching voltage regulators    
                 DNA analysis                              |  Voltage references              
                 Blood analyzers                           |  Hot swap circuits               
                                                           |  DC-DC converters                
Space/Military   Communications                            |                                  
and Automotive   Satellite                                 |                                  
                 Guidance and navigation systems           |                                  
                 Displays                                  |                                  
                 Firing control                            |                                  
                 Ground support equipment                  |                                  
                 Radar systems                             |                                  
                 Sonar systems                             |                                  
                 Surveillance equipment                    |                                  
                 GPS                                       |                                  
                 Entertainment                             |                                  
                 Safety systems                            |                                  
                 Suspension systems                      __|                                  
                                                          --                                  
Communications   Cellular phones (CDMA/WCDMA/GPRS/3G)      |  DC - DC converters              
                 Cellular basestations                     |  V.35 transceiver                
                 Pagers                                    |  High-speed amplifiers           
                 Modems/fax machines                       |  Line drivers                    
                 PBX switches                              |  Line receivers                  
                 GPS systems                               |  Low noise operational amplifiers
                 Optical networking                        |  Micropower products             
                 ADSL modems                               |  Power management                
                 Channel service unit/data service unit    |  Switched capacitor filters      
                 Cable modems                              |  Voltage references              
                 Internet appliances                       |  Voltage regulators              
                 Servers                                   |  Data acquisition products       
                 Routers                                   |  Hot Swap controllers            
                 Switches                                  |  Multi-protocol circuits         
                                                           |  Thermal Electric Cooler         
                                                           |  Power Amplifier Control         
                                                           |  Modulators/Demodulators         
                                                           |  Battery Chargers                
                                                         __|  Multi-Phase Switching Regulators

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                                                         --                                   
Computer         Communications/interface modems           |  Battery charging                
                 Disk drives                               |  DC - DC converters              
                 Notebook computers                        |  Data acquisition products       
                 Desktop computers                         |  Hot Swap controllers            
                 Workstations                              |  Line drivers                    
                 LCD displays/monitors                     |  Line receivers                  
                 Plotters/printers                         |  Low drop out linear regulators  
                 Digital still cameras                     |  Micropower products             
                 Power supplies                            |  Multi-Phase Switching Regulators
                 Handheld PCs                              |  PCMCIA power switching          
                 Battery chargers                          |  Power management                
                 Video/multimedia                          |                                  
                 MP3 players                               |                                  
                 PDAs                                      |                                  
                 Pet Robots                              __|                                  

Marketing and customers                                                         

         The Company  markets its  products  worldwide,  through a direct  sales
staff,  electronics  distributors,  and a small  network  of  independent  sales
representatives, to a broad range of customers in diverse industries. Within the
United States,  in late fiscal 2001, the Company  transitioned  its sales effort
from a network of independent sales representatives  primarily to a direct sales
staff.  Additionally  in fiscal  2001 the  Company  reduced  its number of large
national distributors from two to one. The Company sells to over 15,000 Original
Equipment  Manufacturer  (OEM)  customers  directly  and/or  through  the  sales
distributor  channel.  Distributor  and  direct  customers  generally  buy on an
individual purchase order basis,  rather than pursuant to long-term  agreements.
Of the Company's domestic  distributors,  one domestic distributor accounted for
16% of net sales and 17% of accounts  receivable  during fiscal 2002, and 12% of
net sales and 13% of accounts  receivable  during fiscal 2001, two  distributors
accounted  for   approximately  14%  and  11%  of  net  sales  in  fiscal  2000.
Distributors  are not end  customers,  but rather  serve as a channel of sale to
many end users of the  Company's  products.  No other  distributor  or  customer
accounted for 10% or more of net sales for fiscal 2002, 2001 or 2000.           

         The  Company's   sales   organization  is  divided  into  domestic  and
international  regions, with sales offices located in the following metropolitan
areas: Seattle,  Baltimore,  Denver,  Philadelphia,  Raleigh,  Chicago,  Dallas,
Austin,  Houston,  San  Jose,  Los  Angeles,   Irvine,  San  Diego,  Huntsville,
Minneapolis,   Cleveland,  Portland,  London,  Stockholm,  Helsinki,  Ascheberg,
Munich,  Stuttgart,  Paris, Lyon, Tokyo, Osaka, Taipei,  Singapore,  Seoul, Hong
Kong,  Bejing  and  Shanghai.   The  Company's   products  typically  require  a
sophisticated technical sales effort.                                           

         The Company has agreements with 4 independent sales  representatives in
the United States and 2 in Canada. Commissions are paid to sales representatives
upon shipments  either  directly from the Company or through  distributors.  The
Company has agreements with 2 independent  distributors  in North America,  5 in
Europe, 2 in Japan, 2 each in China and Taiwan, and 1 each in Korea,  Singapore,
Malaysia, Thailand, South Africa, Philippines, India, Israel, Australia, and New
Zealand. The Company's  distributors  purchase the Company's products for resale
to  customers.  Additionally,  domestic  distributors  often  sell  competitors'
products.  Under certain  agreements,  the Company's  domestic  distributors are
entitled to price  protection  on inventory if the Company  lowers the prices of
its products.  The agreements also generally permit  distributors to exchange up
to 3% of purchases on a semi-annual  basis.  See Note 1 of Notes to Consolidated
Financial  Statements  incorporated  herein by reference to Exhibit 13.1 of this
Form 10-K,  which contains  certain  information  included in the Company's 2002
Annual Report to Stockholders.                                                  

         During  fiscal  2002,  2001 and 2000,  export  sales were  primarily to
Europe,  Japan and Asia and  represented  approximately  64%, 54% and 54% of net
sales,  respectively.  Because most of the Company's export sales are billed and
payable in United  States  dollars,  export  sales are  generally  not  directly
subject to fluctuating currency exchange rates. A strengthening of the dollar in
relation to other currencies may,  however,  create pricing  pressure.  Although
export sales are subject to certain control restrictions,  including approval by
the Office of Export Administration of the United States Department of Commerce,
the Company  has not  experienced  any  material  difficulties  relating to such
restrictions.                                                                   

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         The  Company's  backlog of released  and firm orders was  approximately
$46.1  million at June 30, 2002 as compared  with $71.5 million at July 1, 2001.
In addition to its backlog,  the Company had $28.8  million of products  sold to
and held by domestic  distributors at June 30, 2002 as compared to $31.8 million
at  July  1,  2001.  Generally,  shipments  to  domestic  distributors  are  not
recognized  as  sales  until  the  distributor  has  sold  the  products  to its
customers.  The Company  defines  backlog as consisting of distributor  stocking
orders and OEM orders for which a delivery  schedule  has been  specified by the
OEM  customer  for  product  shipment  within six months.  Although  the Company
receives volume purchase  orders,  most of these purchase orders are cancelable,
generally  outside  of  thirty  days  of  delivery,   by  the  customer  without
significant  penalty.  Lead-time for the release of purchase orders depends upon
the scheduling  practices of the  individual  customer and the  availability  of
individual  products,  so the rate of booking  new orders  varies  from month to
month. The ordering practices of many semiconductor customers has shifted from a
practice of placing orders with delivery dates  extending over several months to
the practice of placing  orders with shorter  delivery dates in concert with the
Company's lead times. Also, the Company's  agreements with certain  distributors
provide for price  protection.  Consequently,  the Company does not believe that
its backlog at any time is  necessarily  representative  of actual sales for any
succeeding period.                                                              

         In the operating  history of the Company,  seasonality  of business has
not been a material  factor,  although the results of  operations  for the first
fiscal quarter of each year are impacted  slightly by customary summer holidays,
particularly in Europe.                                                         

         The Company warrants that its products,  until they are incorporated in
other  products,  are free from defects in workmanship and materials and conform
to the Company's published specifications.  Warranty expense has been nominal to
date.                                                                           

Manufacturing                                                                   

         The  Company's  wafer  fabrication  and  manufacturing  facilities  are
located in Milpitas,  California  ("Hillview") and Camas,  Washington ("Camas").
Each  facility  was  built to  Company  specifications  to  support  a number of
sophisticated process technologies and to satisfy rigorous quality assurance and
reliability  requirements  of United States  military  specifications  and major
worldwide OEM  customers.  All of the Company's  manufacturing  facilities  have
received ISO 9001/ISO 9002 certification.                                       

         The Company's wafer fabrication  facility located in Camas,  Washington
commenced  manufacturing  operations  in the  second  half of fiscal  1997,  the
facility is used to produce  six-inch  diameter wafers for use in the production
of the Company's  devices.  In fiscal 1999, the Company added 40,000 square feet
to the Camas facility and during fiscal 2001 the Company purchased an additional
16.5 acres  adjacent to its Camas facility for future  expansion.  The Company's
Hillview facility located in Milpitas,  California was completed in fiscal 2001.
Production  for this six-inch  wafer  fabrication  plant  commenced in the third
quarter  of fiscal  2001.  The  Company  currently  uses  similar  manufacturing
processes in both its Hillview and Camas  facilities.  During  fiscal 2002,  the
Company  discontinued  production in its oldest 4-inch wafer  fabrication  plant
located at the Milpitas, California headquarters.                               

         The Company's  basic process  technologies  include high speed bipolar,
high  gain,  low  noise  bipolar,   radio   frequency   bipolar,   silicon  gate
complementary  metal-oxide  semiconductor  ("CMOS")  and BiCMOS  processes.  The
Company also has two proprietary  complementary bipolar processes. The Company's
bipolar  processes are typically  used in linear  circuits  where high voltages,
high  power,  high  frequency,  low noise or  effective  component  matching  is
necessary.  The Company's proprietary silicon gate CMOS processes provide switch
characteristics  required  for  many  linear  circuit  functions,  as well as an
efficient  mechanism for combining linear and digital circuits on the same chip.
The Company's CMOS processes were developed to address the specific requirements
of linear circuit functions.  The complementary bipolar processes were developed
to address higher speed analog  functions.  The Company's basic processes can be
combined  with a  number  of  adjunct  processes  to  create a  diversity  of IC
components.  A minor portion of the Company's wafer manufacturing,  particularly
very small features size CMOS products, is done at an independent foundry.      

         The  accompanying  chart  provides a brief overview of the Company's IC
process capabilities:                                                           

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                                                        [Enlarge/Download Table]


                                  PROCESS CAPABILITIES                                         

Process Families       Benefit/Market Advantage                Product Application             
----------------       ------------------------                -------------------             
                                                                                               
P-Well SiGate CMOS     General purpose, stability              Switches, filters, data         
                                                               conversion, chopper amplifiers  

N-Well SiGate CMOS     Speed, density, stability               Switches, data conversion       

BiCMOS                 Speed, density, stability, flexibility  Data conversion                 

High Power Bipolar     Power (100 watts), high current         Linear and smart power products,
                       (10 amps)                               switching regulators            

Low Noise Bipolar      Precision, low current, low noise,      Op amps, voltage references     
                       high gain                                                               

High Speed Bipolar     Fast, wideband, video high data         Op amps, video, comparators,    
                       rate                                    switching regulators            

JFETS                  Speed, precision, low current           Op amps, switches, sample and   
                                                               hold                            

Rad - Hard             Total dose radiation hardened           All space products              

Complementary Bipolar  Speed, low distortion, precision        Op amps, video amps, converters 

CMOS/ Thin Films       Stability, precision                    Filters, data conversion        

High Voltage CMOS      High voltage general-purpose,           Switches, chopper amplifiers    
                       compatible with Bipolar                                                 

Bipolar/Thin Films     Precision, stability, matching          Converters, amplifiers          

RF Bipolar             High speed, low power                   RF wireless, high speed         
                                                               data communications             

         The Company  emphasizes  quality and  reliability  from initial product
design through  manufacturing,  packaging and testing. The Company's design team
focuses on fault  tolerant  design and optimum  location of circuit  elements to
enhance reliability.  Linear Technology's wafer fabrication facilities have been
designed to minimize wafer handling and the impact of operator error through the
use of  microprocessor-controlled  equipment.  The Company has obtained  Defense
Supply Center,  Columbus (DSCC) qualification to participate in high reliability
JAN38510 (class B) military business.  The Company has also received Jan Class S
Microcircuit  Certification,  which enables the Company to manufacture  products
intended  for use in space or for critical  applications  where  replacement  is
extremely difficult or impossible and where reliability is imperative.          

         The Company is certified to comply with the ISO 9001/9002 international
quality standard and QS 9000 automotive  quality  standard.  This  certification
covers the Company's design,  manufacturing and service  organizations and is an
important  standard  especially  in the  European  marketplace.  The Company has
received MIL-PRF-38535  Qualified  Manufacturers Listing (QML) certification for
military products from DSCC.                                                    

         Processed wafers are sent to either the Company's  assembly facility in
Penang,  Malaysia  or to offshore  independent  assembly  contractors  where the
wafers are separated into individual circuits and packaged.  The Penang facility
opened in October 1994 and services  approximately  60% to 90% of the  Company's
assembly  requirements for plastic packages.  The Company completed an extension
of approximately  75,000 square feet to the Penang facility in late fiscal 2000.
Significant  assembly  subcontractors  used by the  Company are  Carsem(M)  Sdn,
Carsem Semiconductor Sdn and Unisem(M) Sdn located in                           

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Malaysia.  The Company also maintains  domestic  assembly  operations to satisfy
particular customer  requirements,  especially those for military  applications,
and to provide rapid turnaround for new product development.                    

         After  assembly,  most  products  are sent to the  Company's  Singapore
facility for final testing,  inspection and packaging as required. Some products
are returned to Milpitas for the same back-end processing.                      

         Linear  Technology from time to time has experienced  competition  from
other manufacturers seeking assembly of circuits by independent contractors. The
Company  currently  believes that alternative  foreign assembly sources could be
obtained without significant interruption.  Foreign assembly is subject to risks
normally  associated  with  foreign  operations,   including  changes  in  local
governmental  policies,  currency  fluctuations,  transportation  delays and the
imposition of export controls or increased import tariffs.                      

         From time to time  certain  materials,  including  silicon  wafers  and
plastic molding  compounds,  have been in short supply.  To date the Company has
experienced  no delays in obtaining  raw  materials  which could have  adversely
affected production.  As is typical in the industry,  the Company must allow for
significant lead times in delivery of its materials.                            

         Manufacturing of individual  products,  from wafer fabrication  through
final  testing,  may take from ten to sixteen  weeks.  Since the Company sells a
wide  variety of device  types,  and  customers  typically  expect  delivery  of
products within a short period of time following order, the Company  maintains a
substantial work-in-process and finished goods inventory.                       

         Based on its anticipated production requirements,  the Company believes
it will have  sufficient  available  resources  and  manufacturing  capacity for
fiscal 2003.                                                                    

Patents, licenses and trademarks                                                

         The Company has been awarded over 166 United  States and  International
patents, and has filed 103 additional patent applications.  Although the Company
believes  that  these  patents  and  patent  applications  may have  value,  the
Company's future success will depend primarily upon the technical  abilities and
creative skills of its personnel, rather than on its patents.                   

         As is common in the  semiconductor  industry,  the Company has at times
been notified of claims that it may be infringing  patents issued to others.  If
it appears  necessary or  desirable,  the Company may seek  licenses  under such
patents,  although there can be no assurance that all necessary  licenses can be
obtained by the Company on acceptable terms.                                    

         In  addition,  from time to time the Company may  negotiate  with other
companies  to license  patents,  products or process  technology  for use in its
business.                                                                       

Government sales                                                                

  The Company currently has no material U.S. Government contracts.

Risks and Competition                                                           

         In  addition  to the  risks  discussed  below  and  elsewhere  in  this
"Business section", see the "Factors Affecting Future Operating Results" section
included in Exhibit 13.1-3,  "Management's Discussion and Analysis," for further
discussion of other risks and uncertainties that may affect the business.       

Semiconductor Industry                                                          

         The semiconductor  market has historically been cyclical and subject to
significant economic downturns at various times, including the recent decline in
demand  experienced  during  fiscal 2002.  Many OEM customers  have  significant
excess inventories in their channels thus making it difficult for the Company to
know real end user demand. The cyclical nature of the semiconductor industry may
cause the Company to experience  substantial  period-to-period  fluctuations  in
results of operations.                                                          

         Typically,  the  Company's  ability  to  meet  its  revenue  goals  and
projections  is dependent  to a large extent on the orders it receives  from its
customers within the period.  Historically,  the Company has maintained low lead
times,  which have  enabled  customers to place orders close to their true needs
for  product.  In  defining  its goals and  projections  the  Company  considers
inventory on hand,  backlog,  production cycles and expected order patterns from
customers.  If the Company's estimates in these areas become inaccurate,  it may
not be able to meet  its  revenue  goals  and  projections.  In  addition,  some
customers                                                                       

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require the Company to  manufacture  product and have it available for shipment,
even though the customer is unwilling to make a binding  commitment  to purchase
all, or even some, of the product.                                              

         The  semiconductor  industry is  characterized  by rapid  technological
change, price erosion, occasional shortages of materials,  capacity constraints,
variations in  manufacturing  efficiencies,  and  significant  expenditures  for
capital  equipment  and product  development.  New product  introductions  are a
critical  factor for future sales growth and sustained  profitability.  Although
the Company  believes that the high  performance  segment of the linear  circuit
market  is  generally   less  affected  by  price  erosion  or  by   significant
expenditures   for  capital   equipment  and  product   development  than  other
semiconductor  market sectors,  future operating results may reflect substantial
period to period fluctuations due to these or other factors.                    

Manufacturing                                                                   

         The Company relies on its internal manufacturing  facilities located in
California and Washington to fabricate most of its wafers;  however, the Company
is  dependent  on outside  silicon  foundries  for a small  portion of its wafer
fabrication.  The Company  could be  adversely  affected in the event of a major
earthquake, which could cause temporary loss of capacity, loss of raw materials,
and damage to  manufacturing  equipment.  Additionally the Company relies on its
internal and external assembly and testing  facilities  located in Singapore and
Malaysia.  The Company is subject to economic and  political  risks  inherent to
international  operations,  including  changes in local  governmental  policies,
currency  fluctuations,  transportation  delays  and the  imposition  of  export
controls or increased import tariffs. The Company could be adversely affected if
any such changes are applicable to the Company's foreign operations.            

         The Company's manufacturing yields are a function of product design and
process technology,  both of which are developed by the Company. The manufacture
and design of integrated  circuits is highly complex.  To the extent the Company
does not achieve  acceptable  manufacturing  yields or there are delays in wafer
fabrication, its results of operations could be adversely affected.             

Litigation                                                                      

         The Company is subject to various  legal  proceedings  arising out of a
wide range of matters,  including,  among  others,  patent suits and  employment
claims.  From time to time,  as is typical in the  semiconductor  industry,  the
Company receives notice from third parties alleging that the Company's  products
or processes infringe such third parties'  intellectual  property rights. If the
Company is unable to obtain a necessary license, and one or more of its products
or processes is determined to infringe any such intellectual  property rights of
others, a court might enjoin the Company from further manufacture and/or sale of
the affected  products.  In that case,  the Company would need to reengineer the
affected  products  or  processes  in  such  a  way  as  to  avoid  the  alleged
infringement,  which may or may not be possible. An adverse result in litigation
arising from such a claim could  involve an injunction to prevent the sales of a
portion of the Company's  products,  a reduction or the elimination of the value
of related  inventories,  and/or the assessment of a substantial  monetary award
for damages related to past sales. The Company does not believe that the current
suits  will have a  material  impact on its  business  or  financial  condition.
However,  current  lawsuits and any future  lawsuits  will divert  resources and
could  result  in the  payment  of  substantial  damages.  See  "Item  3.  Legal
Proceedings."                                                                   

Key Personnel                                                                   

         The Company's performance is substantially dependent on the performance
of the executive officers and key employees. The loss of the services of the key
officers,  technical  personnel or other key employees  could harm the business.
The success of the  Company  depends on its ability to  identify,  hire,  train,
develop and retain highly qualified technical and managerial personnel.  Failure
to attract and retain the necessary  technical and  managerial  personnel  could
harm the Company.                                                               

Competition                                                                     

         Linear  Technology  competes  in the high  performance  segment  of the
linear market.  The Company's  competitors  include Analog Devices,  Inc., Maxim
Integrated Products,  Inc., Motorola,  Inc., Micrel Inc., National Semiconductor
Corporation and Texas  Instruments,  Inc.  Competition  among  manufacturers  of
linear integrated circuits is intense, and certain of the Company's  competitors
may have significantly greater financial, technical, manufacturing and marketing
resources  than the  Company.  The  principal  elements of  competition  include
product  performance,  functional  value,  quality  and  reliability,  technical
service and support, price, diversity of product line and delivery capabilities.
The Company believes it competes                                                

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favorably with respect to these factors, although it may be at a disadvantage in
comparison to larger companies with broader product lines and greater  technical
service and support capabilities.                                               

         Although  the  Company   believes  that  it  has  the  product   lines,
manufacturing  facilities and technical and financial  resources for its current
operations,  sales and profitability can be significantly  affected by the above
and other factors.  Additionally, the Company's common stock could be subject to
significant  price  volatility  should  sales and/or  earnings  fail to meet the
expectations of the investment community. Furthermore, stocks of high technology
companies  are subject to extreme price and volume  fluctuations  that are often
unrelated or disproportionate to the operating performance of these companies.  

Research and development                                                        

         The  Company's  ability to compete  depends in part upon its  continued
introduction  of  technologically  innovative  products  on a timely  basis.  To
facilitate this need, the Company has organized its product  development efforts
into four groups: power management,  signal conditioning,  mixed signal and high
frequency.  Linear Technology's  product development strategy emphasizes a broad
line of standard products to address a diversity of customer  applications.  The
Company's  research and development  efforts are directed primarily at designing
and introducing  new products and, to a lesser extent,  developing new processes
and advanced packaging.                                                         

         As of June  30,  2002,  the  Company  had  681  employees  involved  in
research,  development and engineering  related functions of which 336 employees
are engaged in new product design.  The Company had 214 employees engaged in new
product  design at its  Milpitas  headquarters  as well as 14  employees  at its
Singapore design center,  46 employees at its Boston design center, 24 employees
at its Colorado design center,  12 employees at its New Hampshire design center,
11  employees  at its Raleigh  design  center  which  opened in fiscal  2000,  7
employees at its Santa Barbara  design center which opened in fiscal 2001, and 8
at its Burlington design center which opened in fiscal 2002.                    

         For  the  fiscal  years  2002,   2001,  and  2000,  the  Company  spent
approximately $79.8 million, $102.5 million, and $78.3 million, respectively, on
research and  development.  The  reduction in expenses in 2002 from 2001 was due
primarily  to a reduction  in profit  sharing  expense.  Headcount  in total R&D
personnel  increased  from 670 in fiscal 2001 to 681 in fiscal 2002.  Within R&D
the number of actual circuit designers increased from 139 to 161 in fiscal 2002.

Environmental regulation                                                        

         Federal,  state  and local  regulations  impose  various  environmental
controls on the storage,  use,  discharge and disposal of certain  chemicals and
gases used in  semiconductor  processing.  The  Company's  facilities  have been
designed to comply with these  regulations,  and the Company  believes  that its
activities  conform  to present  environmental  regulations.  Increasing  public
attention has, however,  been focused on the environmental impact of electronics
manufacturing  operations.  While the  Company to date has not  experienced  any
materially adverse business effects from environmental regulations, there can be
no assurance  that changes in such  regulations  will not require the Company to
acquire costly remediation  equipment or to incur substantial expenses to comply
with such  regulations.  Any failure by semiconductor  companies,  including the
Company, to control the storage,  use or disposal of, or adequately restrict the
discharge  of  hazardous  substances  could  also  subject  them to  significant
liabilities.                                                                    

Employees                                                                       

         As of June 30, 2002, the Company had 2,691 employees,  including 256 in
marketing  and sales,  681 in  research,  development  and  engineering  related
functions,  1,664  in  manufacturing  and  production,  and  90  in  management,
administration  and finance.  The Company's success depends upon a number of key
employees,  the loss of whom could  adversely  impact the  Company.  The Company
believes  that its future  success will depend in large part upon its ability to
attract,  retain and motivate highly skilled employees.  In the San Jose/Silicon
Valley area, where the Company's principal  facilities are located,  competition
for such employees is intense.                                                  

         The Company has never had a work stoppage, no employees are represented
by a labor organization, and the Company considers its employee relations to be 
good.                                                                           

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Executive Officers of the Registrant                                            

         The executive  officers of the Company,  and their ages as of September
9, 2002, are as follows:                                                        

                                                        [Enlarge/Download Table]

Name                            Age  Position                                                      
----                            ---  --------                                                      
                                                                                                   
Robert H. Swanson, Jr...........64   Chairman and Chief Executive Officer                          
Clive B. Davies.................59   President                                                     
Paul Chantalat..................52   Vice President Quality and Reliability                        
Paul Coghlan....................57   Vice President of Finance and Chief Financial Officer         
Robert C. Dobkin................58   Vice President of Engineering and Chief Technical Officer     
Lothar Maier....................47   Vice President and Chief Operating Officer                    
Richard Nickson.................52   Vice President of North American Sales                        
David A. Quarles................36   Vice President of International Sales                         
David B. Bell...................46   Vice President and General Manager, Power Business Unit       
William Gross...................53   Vice President and General Manager, Signal Conditioning Unit  
Robert Reay.....................41   Vice President and General Manager, Mixed Signal Business Unit
Arthur F. Schneiderman..........60   Secretary                                                     

         Mr.  Swanson,  a founder of the Company,  has served as Chairman of the
Board of Directors and Chief  Executive  Officer since April 1999,  and prior to
that time as President,  Chief  Executive  Officer and a director of the Company
since its incorporation in September 1981. From August 1968 to July 1981, he was
employed   in  various   positions   at   National   Semiconductor   Corporation
("National"),  a manufacturer of integrated  circuits,  including Vice President
and General  Manager of the Linear  Integrated  Circuit  Operation  and Managing
Director in Europe.  Mr. Swanson has a BS degree in Industrial  Engineering from
Northeastern University.                                                        

         Dr.  Davies  has  served  as  President  since  April  1999 and as Vice
President and Chief Operating Officer from January 1989 to April 1999. From July
1982 to January 1989, Dr. Davies held the position of Vice President of Quality,
Reliability and Customer Service.  From April 1971 to July 1982, he was employed
in  various  positions  at  National,  including  Group  Director  for  Advanced
Technology, Group Managing Director of the Singapore and Hong Kong Manufacturing
Operations  and  Business  Director  of  Standard  Linear   Integrated   Circuit
Operations.  Dr. Davies received a B.Sc. (Honors) in Physics in 1964 and a Ph.D.
in Physics in 1967 from the University of Reading, England.                     

         Mr.  Chantalat has served as Vice President of Quality and  Reliability
since  July  1991.  From  January  1989 to July 1991,  he held the  position  of
Director of Quality and Reliability.  From July 1983 to January 1989 he held the
position of Manager of Quality and Reliability. From February 1976 to July 1983,
he was employed in various positions at National, where his most recent position
was Group Manager of Manufacturing Quality Engineering. Mr. Chantalat received a
BS and an MS in  Electrical  Engineering  from  Stanford  University in 1970 and
1972, respectively.                                                             

         Mr. Coghlan has served as Vice President of Finance and Chief Financial
Officer of the Company since December 1986.  From October 1981 until joining the
Company, he was employed in various positions at GenRad, Inc., a manufacturer of
automated test  equipment,  including  Corporate  Controller,  Vice President of
Corporate  Quality and most recently Vice  President and General  Manager of the
Structural Test Products Division.  Before joining GenRad, Inc., Mr. Coghlan was
associated  with Price  Waterhouse  & Company  in the  United  States and Paris,
France for twelve years.  Mr. Coghlan  received a BA from Boston College in 1966
and an MBA from Babson College in 1968.                                         

         Mr. Dobkin,  a founder of the Company,  has served as Vice President of
Engineering and Chief Technical  Officer since April 1999, and as Vice President
of  Engineering  from  September  1981 to April 1999.  From January 1969 to July
1981,  he was employed in various  positions at National,  where his most recent
position was Director of Advanced Circuit Development.  Mr. Dobkin has extensive
experience  in linear  circuit  design.  Mr. Dobkin  attended the  Massachusetts
Institute of Technology.                                                        

         Mr. Maier joined the Company as Chief Operating  Officer in April 1999.
From 1983 to 1999,  he was  employed  at Cypress  Semiconductor  Corporation  in
various  management  positions,  mostly  recently as Senior Vice  President  and
Executive  Vice  President of Worldwide  Operations.  Mr. Maier received a BS in
Chemical Engineering in 1978 from the University of California at Berkeley.     

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         Mr.  Nickson has served as Vice President of North American Sales since
October  2001.  From  February  1998  until  July 2001,  he was  European  Sales
Director. From August 1993 until January 1998, he held the position of Northwest
Area Sales  Manager.  From  April  1991 to August  1993,  he was  President  and
Co-founder of Focus Technical  Sales.  From August 1983 to April 1991, he served
with National  Semiconductor in various positions where his most recent position
was Vice  President  of North  American  Sales.  Mr.  Nickson  was  Founder  and
President of Micro-Tex,  Inc. from June 1980 to August 1983.  Prior to 1980, Mr.
Nickson  spent seven years in  semiconductor  sales,  including  four years with
Texas Instruments.  He received a B.S. in Mathematics from Illinois Institute of
Technology in 1971.                                                             

         Mr. Quarles has served as Vice President of  International  Sales since
August  2001.  From October 2000 to August 2001 he held the position of Director
of Marketing.  From July 1996 to September 2000 he held the position of Director
of  Asia-Pacific  Sales  stationed in Singapore.  From June 1991 to July 1996 he
worked as a Sales  Engineer and later as District Sales Manager for the Bay Area
sales team. Prior to Linear, Mr. Quarles worked two years as a Sales Engineer at
National  Semiconductor.  Mr. Quarles received a BS in Electrical Engineering in
1988 from Cornell University.                                                   

         Mr. Bell has served as Vice President and General  Manager of the Power
Business  Unit since January 2002 and as General  Manager of the Power  Business
Unit since February 1999. From June 1994 to January 1999 he held the position of
Manager  of  Strategic  Product  Development.  From July 1991 to May 1994 he was
employed as Director of  Electrical  Engineering  at IDEO  Product  Development.
Prior to July 1991 Mr. Bell was employed in various  management and  engineering
positions at Bell Associates,  Inc., Sydis, Inc., and Hewlett Packard,  Inc. Mr.
Bell has a BS degree in Electrical Engineering from the Massachusetts  Institute
of Technology.                                                                  

         Mr.  Gross has  served as Vice  President  and  General  Manager of the
Signal  Conditioning  Business Unit since January 2002 and as General Manager of
the Signal Conditioning  Business Unit since February 1999. He held the position
of Design Manager from July 1989 to February 1999  responsible  for  amplifiers,
comparators and voltage references.  Previously he was Design Manager at Elantec
from  January  1984 to June 1989.  From  January  1973 to December  1983 he held
several  positions  at National  Semiconductor,  including  Design  Engineer and
Design  Manager  of  the  Japan  Design  Center.  Mr.  Gross  received  a BS  in
electronics  engineering from California Polytechnic University in 1971 and a MS
in electrical engineering from University of Arizona in 1973.                   

         Mr. Reay has served as Vice President and General  Manager of the Mixed
Signal  Business  Unit since  January  2002 and as General  Manager of the Mixed
Signal  Business Units since November 2000. From January 1992 to October 2000 he
was the Design Engineering Manager responsible for a variety of product families
including interface, supervisors, battery chargers and hot swap controllers. Mr.
Reay joined Linear  Technology in April 1988 as a design engineer after spending
four years at GE  Intersil.  Mr. Reay  received a B.S.  and M.S.  in  electrical
engineering from Stanford University in 1984.                                   

         Mr. Schneiderman has served as Secretary of the Company since September
1981.  He is an  attorney  and a  member  of the law  firm of  Wilson,  Sonsini,
Goodrich & Rosati, Professional Corporation, general counsel to the Company.    

Item 2.  Properties                                                             

         At the  Company's  headquarter  campus  in  Milpitas,  California,  the
Company owns the land and 3 buildings of approximately 41,000, 42,000 and 70,000
square  feet,  respectively.  These  buildings are  used  for  support  services
engineering,  prototype  testing of new  products  and  worldwide  headquarters.
Additionally in the same campus the Company leases 60,000 and 31,000 square foot
buildings  used primarily for circuit  design  activities and future  expansion.
During fiscal 1999, the Company purchased a 96,000 square foot building near its
headquarter campus in Milpitas, California. This building was converted to a new
six-inch wafer fabrication plant completed during the first half of fiscal 2001,
with production commencing during the third quarter of fiscal 2001.             

         The Company  occupies a 72,000  square foot  manufacturing  facility in
Singapore.  Test and packaging  operations  are performed at this facility along
with certain design and product distribution activity. The Company has a 30-year
lease on the land where the plant is located  that  commenced  in 1994,  with an
option to extend for an  additional 30 years.  During  fiscal 2001,  the Company
leased 6 acres of land adjacent to its Singapore facility.                      

         In 1994,  the Company  opened a 55,000  square foot  assembly  plant in
Penang,  Malaysia.  The Company has a 60-year  lease on the land where the plant
was  constructed.  In fiscal 1999,  the Company  purchased a 23,400  square foot
building adjacent to its existing facility.  The Company demolished the acquired
building,  and built a 75,000 square foot extension to its existing  facility on
the site.                                                                       

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         During  fiscal 1996,  the Company  completed  construction  of a 60,000
square foot facility on land it owns in Camas, Washington. This facility is used
to  fabricate  six-inch  wafers.  Manufacturing  operations  commenced  at  this
facility in the second half of fiscal 1997.  In fiscal 1999,  the Company  added
40,000  square feet to this facility for future  expansion.  During fiscal 2001,
the Company purchased 16.5 acres of land adjacent to its Camas facility.        

         The  Company  leases  design  facilities   located  in:  Bedford,   New
Hampshire,  Raleigh,  North  Carolina,  Burlington,  Vermont and Santa  Barbara,
California.  In fiscal 2002,  the Company  purchased  land in Colorado  Springs,
Colorado and constructed a new 20,000 square foot design center. In fiscal 1999,
the Company purchased land in the Boston metropolitan area and constructed a new
20,000  square foot design and sales office.  In fiscal 2002,  the Company added
10,000  square feet to this  facility.  The Company  leases sales offices in the
areas of Bellevue, Baltimore, Denver, Milpitas, Philadelphia,  Raleigh, Chicago,
Dallas, Austin, Houston,  Milpitas, Los Angeles,  Irvine, San Diego, Huntsville,
Minneapolis,   Cleveland,  Portland,  London,  Stockholm,  Helsinki,  Ascheberg,
Munich,  Stuttgart,  Paris, Lyon, Tokyo, Osaka, Taipei,  Singapore,  Seoul, Hong
Kong and  Shanghai.  See Note 3 of Notes to  Consolidated  Financial  Statements
incorporated  herein by  reference  to  Exhibit  13.1 of this  Form  10-K  which
contains  certain  information  included in the Company's  2002 Annual Report to
Stockholders.                                                                   

Item 3.  Legal Proceedings                                                      

         To protect its  intellectual  property,  and in  particular  its patent
rights,  the  Company  has been the  plaintiff  in various  patent  infringement
lawsuits.  The defendants' responses to litigation initiated by the Company have
in  certain  cases  included   counterclaims   or  separate   actions   alleging
infringement  by the Company of unrelated  patents owned by the  defendant.  One
such  instance  has  arisen in which  Texas  Instruments,  Inc.  (TI) filed suit
against the  Company on January 6, 2001,  in federal  court in Texas.  This suit
alleges that certain  semiconductor  manufacturing  equipment,  purchased by the
Company from  independent  third party  suppliers and used by the Company in its
manufacturing  processes,  infringed  three  patents owned by TI. The suit seeks
unspecified  monetary damages and injunctive  relief. In the course of defending
the lawsuit brought by TI, the Company has filed third-party  complaints against
the manufacturers of the allegedly infringing  equipment,  seeking indemnity and
alleging  breach of contract,  breach of warranty,  fraud,  and unfair  business
practices.  While the Company  believes that  resolution of these actions should
not have a material effect on the Company's financial  position,  it can give no
assurances that it will prevail in them.                                        

Item 4.  Submission of Matter to a Vote of Security Holders                     

Not applicable.                                               

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 PART II

Item 5.   Market for the  Registrant's  Common Equity and Related  Stockholder  
Matters                                                     

         The  information  required  by  the  Item  is  incorporated  herein  by
reference to the section entitled  "Quarterly  Results and Stock Market Data" of
Exhibit 13.1 to this Form 10-K which contains  certain  information  included in
the Registrant's 2002 Annual Report to Stockholders.                            

Item 6.  Selected Financial Data                                                

         The  information  required  by  the  Item  is  incorporated  herein  by
reference  to the section  entitled  "Selected  Financial  Information/Five-Year
Trend" of Exhibit  13.1 to this Form 10-K  which  contains  certain  information
included in the Registrant's 2002 Annual Report to Stockholders.                

Item 7.  Management's  Discussion  and Analysis of Financial  Condition  and    
Results of Operations                                         

         The  information  required  by  the  Item  is  incorporated  herein  by
reference  to the section  entitled  "Management's  Discussion  and  Analysis of
Results of Operations and Financial Condition" of Exhibit 13.1 to this Form 10-K
which contains  certain  information  included in the  Registrant's  2002 Annual
Report to Stockholders.                                                         

Item 7A. Quantitative and Qualitative Disclosures about Market Risk             

         The  information  required  by  the  Item  is  incorporated  herein  by
reference  to the section  entitled  "Management's  Discussion  and  Analysis of
Results of Operations and Financial Condition" of Exhibit 13.1 to this Form 10-K
which contains  certain  information  included in the  Registrant's  2002 Annual
Report to Stockholders.                                                         

Item 8.  Financial Statements and Supplementary Data                            

         Consolidated Financial Statements of Linear Technology at June 30, 2002
and July 1, 2001 and for each of the three  years in the  period  ended June 30,
2002,  the  report  of Ernst & Young  LLP,  independent  auditors,  thereon  and
unaudited  quarterly  financial data for the two year period ended June 30, 2002
are  incorporated  herein by  reference  to Exhibit 13.1 of this Form 10-K which
contains certain information  included in the Registrant's 2002 Annual Report to
Stockholders.                                                                   

Item 9.  Changes  in  and  Disagreements  with  Accountants  on  Accounting  and
Financial Disclosure                                          

Not applicable.                                               

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PART III

Item 10.  Directors and Executive Officers of the Registrant                    

         The  information  required by this item for the Company's  directors is
incorporated herein by reference to the 2002 Proxy Statement,  under the caption
"Proposal One - Election of  Directors,"  and for the executive  officers of the
Company,  the  information  is  included  in Part I  hereof  under  the  caption
"Executive Officers of the Registrant."                                         

Item 11.  Executive Compensation                                                

         Incorporated  by  reference  to the 2002  Proxy  Statement,  under  the
section titled "Executive Officer Compensation."                                

Item 12. Security  Ownership of Certain  Beneficial  Owners and  Management  and
Related Stockholder Matters                                   

         Incorporated  by  reference  to the 2002  Proxy  Statement,  under  the
section titled "Beneficial  Security Ownership of Directors,  Executive Officers
and Certain Other  Beneficial  Owners" and  "Securities  Authorized for Issuance
Under Equity Compensation Plans."                                               

Item 13. Certain Relationships and Related Transactions                         

Not applicable.                                               

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 PART IV

Item 14.  Exhibits, Financial Statements, Schedules, and Reports on Form 8-K    

(a)  1.   Financial Statements                                                  

                  The financial  statements listed in the accompanying  Index to
         Consolidated  Financial  Statements  are  filed as part of this  Annual
Report.                                                       

2.   Schedules                                                        

                  The financial statement schedule listed in Item 14(d) is filed
as part of this Annual Report.                                                  

                  All other schedules are omitted since the information required
         by  the  schedule  is not  applicable,  or is not  present  in  amounts
         sufficient  to require  submission  of the  schedule,  or  because  the
         information   required  is  included  in  the  Consolidated   Financial
Statements and notes thereto.                                 

3.   Exhibits                                                         

                  The  exhibits  listed in Item  14(c) are filed as part of this
         Annual  Report.  Each  compensatory  plan required to be filed has been
indicated in Item 14(c).                                      

(b)   Reports on Form 8-K.                                                      

          No reports on Form 8-K were  required to be filed for the three months
ended June 30, 2002.                                                            

(c)   Exhibits                                                                  

3.1      Certificate of Incorporation of Registrant. (9)                        

3.3      Bylaws of Registrant. (9)                                              

10.1     1981 Incentive Stock Option Plan, as amended,  and form of Stock Option
         Agreements,   as   amended   (including   Restricted   Stock   Purchase
Agreement).(*)(3)                                             

10.11    Agreement   to  Build  and  Lease   dated   January  8,  1986   between
Callahan-Pentz Properties, McCarthy Six and the Registrant.(1)

10.25    1986 Employee Stock Purchase Plan, as amended, and form of Subscription
Agreement.(*)(2)                                              

10.35    1988 Stock Option  Plan,  as amended,  form of  Incentive  Stock Option
         Agreement,   as  amended,   and  form  of  Non-statutory  Stock  Option
Agreement, as amended.(*)(6)                                  

10.36    Form of Indemnification Agreement. (9)                                 

10.45    Land  lease  dated  March  30,  1993  between  the  Registrant  and the
Singapore Housing and Development Board.(4)                   

10.46    Land lease dated  November  20, 1993  between  the  Registrant  and the
Penang Development Corporation. (5)                           

10.47    1996  Incentive  Stock  Option  Plan,  form of  Incentive  Stock Option
   Agreement and form of Nonstatutory Stock Option Agreement.(*) (7)

10.48    1996 Senior Executive Bonus Plan, as amended July 25, 2000.(*) (8)     

10.49    2001 Nonstatutory Stock Option Plan, as amended July 23, 2002, and form
of Stock Option Agreement.(*)                                 

10.50    Employment  Agreement dated January 15, 2002 between the Registrant and
Robert H. Swanson, Jr. (*) (10)                               

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10.51    Employment  Agreement dated January 15, 2002 between the Registrant and
Clive B. Davies. (*) (10)                                     

10.52    Employment  Agreement dated January 15, 2002 between the Registrant and
Paul Coghlan. (*) (10)                                        

10.53    Employment  Agreement dated January 15, 2002 between the Registrant and
Robert C. Dobkin. (*) (10)                                    

11.1     Computation of earnings per share.  (see Exhibit 13.1).                

13.1     Certain  information  included  in the  Registrant's  Annual  Report to
Stockholders for the fiscal year ended June 30, 2002.         

21.1     Subsidiaries of Registrant.                                            

23.1     Consent of Ernst & Young LLP, Independent Auditors.                    

24.1     Power of Attorney. (see page 19)                                       

99.1     Certification  of Robert H. Swanson Jr. and Paul Coghlan Pursuant to 18
         U.S.C.  Section  1350,  as  Adopted  Pursuant  to  Section  906  of the
Sarbanes Oxley Act of 2002.                                   

(d)      Financial  Statement  Schedule filed as a part of this Annual Report is
listed below:                                                 

Schedule                                                                        
Number                            Description                                   
------                            -----------                                   
II                                Valuation and qualifying accounts.            

--------------------------------------------------------------------------------

(Footnotes to Item 14 (c))                                                      

(*) The item listed is a compensatory plan of the Company.                      

(1)      Incorporated  by reference to  identically  numbered  exhibits filed in
         response to Item 16(a),  "Exhibits," of the  Registrant's  Registration
         Statement on Form S-1 and  Amendment  No. 1 and Amendment No. 2 thereto
(File No. 33-4766), which became effective on May 28, 1986.   

(2)      Incorporated  by reference to  identically  numbered  exhibit  filed in
         response  to  Item 6,  "Exhibits  and  Reports  on  Form  8-K,"  of the
         Registrant's  Quarterly  Report  on Form  10-Q  for the  quarter  ended
December 28, 1997.                                            

(3)      Incorporated  by reference to  identically  numbered  exhibit  filed in
         response  to  Item 6,  "Exhibits  and  Reports  on  Form  8-K,"  of the
         Registrant's  Quarterly  Report  on Form  10-Q  for the  quarter  ended
December 30, 1990.                                            

(4)      Incorporated  by reference to  identically  numbered  exhibit  filed in
         response to Item 14(a)(3) "Exhibits," of the Registrant's Annual Report
on Form 10-K for the fiscal year ended June 27, 1993.         

(5)      Incorporated  by reference to  identically  numbered  exhibit  filed in
         response to Item 14(a)(3) "Exhibits," of the Registrant's Annual Report
on Form 10-K for the fiscal year ended July 3, 1994.          

(6)      Incorporated  by reference to  identically  numbered  exhibit  filed in
         response  to  Item 6,  "Exhibits  and  Reports  on  Form  8-K,"  of the
         Registrant's  Quarterly  Report  on Form  10-Q  for the  quarter  ended
October 2, 1994.                                              

(7)      Incorporated  by reference to Exhibits 4.1 and 4.2 of the  Registrant's
         Registration  Statement on Form S-8 filed with the  Commission  on July
30, 1999.                                                     

(8)      Incorporated  by reference to  identically  numbered  exhibit  filed in
         response to Item 14(a)(3) "Exhibits," of the Registrant's Annual Report
on Form 10-K for the fiscal year ended July 2, 2000.          

16

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(9)      Incorporated  by reference to  identically  numbered  exhibit  filed in
         response to Item 14(a)(3) "Exhibits," of the Registrant's Annual Report
on Form 10-K for the fiscal year ended July 1, 2001.          

(10)     Incorporated  by reference to  identically  numbered  exhibit  filed in
         response  to  Item  6  "Exhibits  and  reports  on  Form  8-K,"  of the
         Registrant's  Quarterly Report on Form 10-Q for the quarter ended March
31, 2002.                                                     

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 LINEAR TECHNOLOGY CORPORATION

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
 (Item 14(a)1)

                                                                Page Reference
                                                                 to Exhibit 13.1

Consolidated balance sheets at June 30, 2002 and July 1, 2001    E13.1-8        

Consolidated statements of income for each of the three                         
years in the period ended June 30, 2002                          E13.1-7        

Consolidated statements of stockholders' equity for each of                     
the three years in the period ended June 30, 2002                E13.1-10       

Consolidated statements of cash flows for each of the three                     
years in the period ended June 30, 2002                          E13.1-9        

Notes to consolidated financial statements                       E13.1-11 to    
                                                          E13.1-18

Report of Ernst & Young LLP, independent auditors                E13.1-19       

         The  Consolidated  Financial  Statements  listed in the above index are
hereby  incorporated  by  reference  to  Exhibit  13.1 of this Form  10-K  which
contains  certain  information  included in the  Registrant's  Annual  Report to
Stockholders for the year ended June 30, 2002.                                  

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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.             

 LINEAR TECHNOLOGY CORPORATION
(Registrant)

By: /s/ Robert H. Swanson, Jr.
------------------------------
Robert H. Swanson, Jr.
 Chairman of the Board and
 Chief Executive Officer
September 18, 2002

 POWER OF ATTORNEY

         Know all persons by these  presents,  that each person whose  signature
appears below constitutes and appoints Robert H. Swanson,  Jr. and Paul Coghlan,
jointly  and  severally,   his   attorneys-in-fact,   each  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  and other
documents in connection therewith,  with the Securities and Exchange Commission,
hereby ratifying and confirming all that each of said attorneys-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/ Robert H. Swanson, Jr.            /s/ Paul Coghlan                          
--------------------------            ----------------                          
Robert H. Swanson, Jr.                Paul Coghlan                              
Chairman of the Board and             Vice President of Finance and Chief       
Chief Executive Officer               Financial Officer (Principal Financial    
(Principal Executive Officer)         Officer and Principal Accounting Officer) 
September 18, 2002                    September 18, 2002                        

/s/ David S. Lee                      /s/ Thomas S. Volpe                       
----------------                      -------------------                       
David S. Lee                          Thomas S. Volpe                           
Director                              Director                                  
September 18, 2002                    September 18, 2002                        

/s/ Leo T. McCarthy                   /s/ Richard M. Moley                      
-------------------                   --------------------                      
Leo T. McCarthy                       Richard M. Moley                          
Director                              Director                                  
September 18, 2002                    September 18, 2002                        

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CERTIFICATIONS

I, Robert H. Swanson, Jr. certify that:                                         

1.  I have  reviewed  this  annual  report  on Form  10-K of  Linear  Technology
Corporation;                                                            

2.  Based on my  knowledge,  this  annual  report  does not  contain  any untrue
    statement of a material fact or omit to state a material  fact  necessary to
    make the  statements  made, in light of the  circumstances  under which such
    statements  were made, not misleading  with respect to the period covered by
this annual report;                                                     

3.  Based  on my  knowledge,  the  financial  statements,  and  other  financial
    information  included in this annual report,  fairly present in all material
    respects the financial  condition,  results of operations  and cash flows of
   the registrant as of, and for, the periods presented in this annual report.

Date: September 18, 2002                                                        

                                /s/ Robert H. Swanson, Jr.
                                         -----------------------------------
                            Robert H. Swanson, Jr.
                                     Chairman of the Board and Chief
                                  Executive Officer (Principal
                        Executive Officer)

I, Paul Coghlan, certify that:                                                  

1.  I have  reviewed  this  annual  report  on Form  10-K of  Linear  Technology
Corporation;                                                            

2.  Based on my  knowledge,  this  annual  report  does not  contain  any untrue
    statement of a material fact or omit to state a material  fact  necessary to
    make the  statements  made, in light of the  circumstances  under which such
    statements  were made, not misleading  with respect to the period covered by
this annual report;                                                     

3.  Based  on my  knowledge,  the  financial  statements,  and  other  financial
    information  included in this annual report,  fairly present in all material
    respects the financial  condition,  results of operations  and cash flows of
   the registrant as of, and for, the periods presented in this annual report.

Date: September 18, 2002                                                        

                      /s/ Paul Coghlan
                                         -----------------------------------
                  Paul Coghlan
                                   Vice President of Finance and
                                        Chief Financial Officer (Principal
                                     Financial Officer and Principal
                         Accounting Officer)

20

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                                                                     SCHEDULE II

 LINEAR TECHNOLOGY CORPORATION

 VALUATION AND QUALIFYING ACCOUNTS
(Dollars in thousands)

                                                        [Enlarge/Download Table]

                                                      Additions                            
                                          Balance at  Charged to                 Balance at
                                          Beginning   Costs and                    End of  
                                          of Period   Expenses    Deductions(1)    Period  
                                          ----------  ----------  -------------  ----------
Allowance for doubtful accounts:                                                           

                                                                                           
Year ended July 2, 2000..................     $803       $ --         $ --          $803   
                                              ====       ====         ====          ====   

Year ended July 1, 2001..................     $803       $ --         $ --          $803   
                                              ====       ====         ====          ====   

Year ended June 30, 2002.................     $803       $800         $301        $1,302   
                                              ====       ====         ====        ======   

                                          (1) Write-offs of doubtful accounts.

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Dates Referenced Herein and Documents Incorporated By Reference

		Referenced-On Page
This 10-K Filing	Date	First	Last	Other Filings

	3/30/93	16
	6/27/93	17
	11/20/93	16
	7/3/94	17
	10/2/94	17
	12/28/97	17		10-Q
	7/30/99	17		S-8
	7/2/00	17	22	10-K
	7/25/00	16
	1/6/01	13
	7/1/01	6	22	10-K
	1/15/02	16	17
	3/31/02	18		10-Q
For The Period Ended	6/30/02	1	22
	7/23/02	16
	9/9/02	1	11
Filed On / Filed As Of	9/18/02	20	21
	11/6/02	1		DEF 14A

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Linear Technology Corp/CA · 10-K · For 6/30/02

Filed On 9/18/02 3:56pm ET · SEC File 0-14864 · Accession Number 950005-2-907

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