<PAGE>

    AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 28, 2000.

                                                     REGISTRATION NO. 333-
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

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

                                    FORM S-1
                             REGISTRATION STATEMENT
                                     UNDER
                           THE SECURITIES ACT OF 1933

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

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

<TABLE>
<S>                                       <C>                                       <C>
                DELAWARE                                    3674                                   59-3590018
    (STATE OR OTHER JURISDICTION OF             (PRIMARY STANDARD INDUSTRIAL                     (IRS EMPLOYER
     INCORPORATION OR ORGANIZATION)             CLASSIFICATION CODE NUMBER)                   IDENTIFICATION NO.)
</TABLE>

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

                            7585 IRVINE CENTER DRIVE
                                   SUITE 100
                            IRVINE, CALIFORNIA 92618
                                 (949) 341-7062
  (ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
                   REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)

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

                             STEPHEN M. MORAN, ESQ.
                 VICE PRESIDENT, GENERAL COUNSEL AND SECRETARY
                            7585 IRVINE CENTER DRIVE
                                   SUITE 100
                            IRVINE, CALIFORNIA 92618
                                 (949) 341-7040
 (NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
                             OF AGENT FOR SERVICE)

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

                                With Copies to:

<TABLE>
<S>                                                             <C>
                 CHRISTOPHER G. KARRAS, ESQ.                                       KRIS F. HEINZELMAN, ESQ.
                           DECHERT                                                 CRAVATH, SWAINE & MOORE
                   4000 BELL ATLANTIC TOWER                                            WORLDWIDE PLAZA
                       1717 ARCH STREET                                               825 EIGHTH AVENUE
               PHILADELPHIA, PENNSYLVANIA 19103                                    NEW YORK, NEW YORK 10019
                        (215) 994-4000                                                  (212) 474-1000
</TABLE>

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

    APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the effective date of this Registration Statement.

    If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. / /

    If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration number of the earlier effective
registration statement for the same offering. / / ______

    If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / / ______

    If delivery of the prospectus is expected to be made pursuant to Rule 434,
check the following box. / / ______

                        CALCULATION OF REGISTRATION FEE

<TABLE>
<CAPTION>
                                                                           PROPOSED MAXIMUM   PROPOSED MAXIMUM
                                                                           OFFERING PRICE       AGGREGATE
               TITLE OF EACH CLASS OF                    AMOUNT TO BE          PER               OFFERING         AMOUNT OF
            SECURITIES TO BE REGISTERED                 REGISTERED(1)         SHARE              PRICE(1)        REGISTRATION FEE
<S>                                                   <C>                  <C>                <C>                <C>
Class A Common Stock, par value $.01 per share......  11,500,000 shares        $53.4375         $614,531,250         $162,232
</TABLE>

(1) Estimated solely for the purpose of calculating the registration fee
    pursuant to Rule 457(a) under the Securities Act of 1933, based on the
    average of the high and low selling prices of the Class A Common Stock on
    August 24, 2000.

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

    THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.

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

<PAGE>

THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE
SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.

                  SUBJECT TO COMPLETION, DATED AUGUST 25, 2000

                                10,000,000 Shares

                          INTERSIL HOLDING CORPORATION

                              Class A Common Stock

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

     We are selling 3,000,000 shares and the selling shareholders named under
"Principal and Selling Shareholders" are selling 7,000,000 shares of our
Class A Common Stock. We will not receive any of the proceeds from shares of our
Class A Common Stock sold by the selling shareholders. We have granted the
underwriters an option to purchase a maximum of 500,000 additional shares and
one of the selling shareholders has granted the underwriters an option to
purchase a maximum of 1,000,000 additional shares to cover overallotments of
shares, if any.

     Our Class A Common Stock is listed on The Nasdaq Stock Market's National
Market under the symbol "ISIL." The last reported sale price of our Class A
Common Stock on August 24, 2000 was $52.00 per share.

     INVESTING IN OUR CLASS A COMMON STOCK INVOLVES RISKS. SEE "RISK FACTORS" ON
PAGE 6.

<TABLE>
<CAPTION>
                                                     UNDERWRITING                           PROCEEDS TO
                                      PRICE TO       DISCOUNTS AND        PROCEEDS            SELLING
                                       PUBLIC        COMMISSIONS        TO INTERSIL         SHAREHOLDERS
                                     -----------     -------------     ----------------     ------------
<S>                                  <C>             <C>               <C>                  <C>
Per Share........................              $                $                   $                  $
Total............................    $               $                 $                    $
</TABLE>

     Delivery of the shares of Class A Common Stock will be made on or about
        , 2000.

     Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
adequacy or accuracy of this prospectus. Any representation to the contrary is a
criminal offense.

CREDIT SUISSE FIRST BOSTON

                The date of this prospectus is August    , 2000.

<PAGE>

                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                 Page
                                                 ----
<S>                                              <C>
INDUSTRY DATA..................................     i
SUMMARY........................................     1
RISK FACTORS...................................     6
FORWARD-LOOKING STATEMENTS.....................    14
USE OF PROCEEDS................................    14
DIVIDEND POLICY................................    14
PRICE RANGE OF COMMON STOCK....................    15
CAPITALIZATION.................................    15
UNAUDITED PRO FORMA COMBINED CONDENSED
  STATEMENT OF OPERATIONS......................    16
SELECTED HISTORICAL FINANCIAL DATA AND OTHER
  DATA.........................................    19
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
  FINANCIAL CONDITION AND RESULTS OF
  OPERATIONS...................................    20
INDUSTRY OVERVIEW..............................    28
BUSINESS.......................................    31

<CAPTION>
                                                 Page
                                                 ----
<S>                                              <C>
MANAGEMENT.....................................    40
CERTAIN RELATIONSHIPS AND RELATED
  TRANSACTIONS.................................    46
PRINCIPAL AND SELLING SHAREHOLDERS.............    48
DESCRIPTION OF CAPITAL STOCK...................    50
DESCRIPTION OF CERTAIN INDEBTEDNESS............    54
SHARES ELIGIBLE FOR FUTURE SALE................    56
UNITED STATES TAX CONSEQUENCES
  TO NON-UNITED STATES HOLDERS.................    58
OTHER RESTRICTIONS ON RESALE...................
UNDERWRITING...................................    60
NOTICE TO CANADIAN RESIDENTS...................    62
LEGAL MATTERS..................................    63
EXPERTS........................................    63
WHERE YOU CAN FIND MORE
  INFORMATION..................................    63
INDEX TO FINANCIAL STATEMENTS..................   F-1
</TABLE>

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

     YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS DOCUMENT OR TO
WHICH WE HAVE REFERRED YOU. WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH
INFORMATION THAT IS DIFFERENT. THIS DOCUMENT MAY ONLY BE USED WHERE IT IS LEGAL
TO SELL THESE SECURITIES. THE INFORMATION IN THIS DOCUMENT MAY ONLY BE ACCURATE
ON THE DATE OF THIS DOCUMENT.

                                 INDUSTRY DATA

     In this document, we rely on and refer to information regarding the
semiconductor market and its segments and competitors from Dataquest,
International Data Corporation, Cahners In-Stat Group, Semiconductor Industry
Association, Worldwide Semiconductor Trade Statistics, Venture Development
Corporation, Johari Associates, market research reports, analyst reports and
other publicly available sources. The listed market research firms are not aware
of and have not consented to being named in this document. Although we believe
that this information is reliable, we have not independently verified the
accuracy and completeness of the information.

                                       i

<PAGE>

                                    SUMMARY

     This summary may not contain all of the information that may be important
to you. You should read this entire prospectus, including the financial data and
related notes, before making an investment decision.

                                    INTERSIL

     We are a systems oriented designer and manufacturer of analog and digital
integrated circuits and discrete semiconductors for the communications and power
management end-user markets.

     o Wireless--We are the industry leader in providing wireless local area
       networking semiconductor sets, which we refer to as our PRISM(R) chip
       set, based upon data published by Dataquest and Cahners In-Stat Group.
       The PRISM(R) chip set is our fastest growing product, which has
       applications in the wireless networking of voice, video and data for
       business and home and in transmitting data to and from broadband home
       data gateways to multiple end-user applications. The PRISM(R) chip set is
       also used to provide wireless connectivity to wired ethernet networks.

     o Analog & Mixed-Signal--Our analog and mixed-signal semiconductors are
       used in wireless and wired data and voice communications products. Our
       products include integrated circuits which perform multiple power
       management tasks, industry standard signal processing products that
       manage power in desktop and laptop computers and Internet servers, and a
       portfolio of standard analog products such as analog-to-digital and
       digital-to-analog converters.

     o Discrete Power--Our discrete semiconductors perform single power
       management functions such as switching electricity on or off or
       conditioning power used in communications, computing and automotive
       applications.

Business Strategy

     We provide systems level solutions for the growing integrated
communications semiconductor market. Integrated communications semiconductors
enable the convergence of voice, data and video. Within integrated
communications, we are focused on several key markets including high data rate
wireless connectivity, power management and wireless and wired communications
infrastructure. We use our expertise in digital and analog semiconductors and
radio and software design to deliver chip sets, components, software and
licensable application designs for communications equipment customers. For
fiscal year 2000, we allocated about 92% of our research and development
investment to the development of products for the integrated communications
market.

Sales and Manufacturing

     We currently sell to many industry leaders in our targeted markets
including Alcatel, Asustek, Cisco, Compaq, Dell, Ericsson, Hewlett-Packard,
Nokia, Siemens, Sony and 3Com. We have been doing business with many of these
industry leaders for more than ten years. No single customer represents more
than 5% of our total revenues. Our products are sold worldwide with about 49.2%,
22.0% and 28.8% of our revenues for fiscal year 2000 being derived from North
America, Europe and Asia/Pacific, respectively. We own wafer fabrication
facilities, which we refer to as fabs, that manufacture analog and discrete
semiconductors in Florida, Ohio and Pennsylvania. We contract with key suppliers
that use sub-micron complementary metal oxide semiconductors, or CMOS, and
silicon germanium semiconductor wafer fabrication processes to produce
components of our PRISM(R) chip sets.

Recent Developments

     In June 2000, we acquired No Wires Needed B.V., or NWN, in an all-stock
transaction. Based in Bilthoven, The Netherlands, NWN provides high performance
wireless-to-broadband access point reference designs. NWN combines the PRISM(R)
chip set with its own high data rate digital controller integrated circuit to
allow end users to wirelessly connect multiple computers and hand-held or
Internet appliances to a wired broadband network. NWN also provides wireless
encryption software which enhances the security of a wireless local area
network. We believe NWN's high data rate digital controller integrated circuit
will enhance the performance of future generations of our PRISM(R) chip set.

     In May 2000, we sold our assembly and test facilities in Malaysia to
ChipPAC, Inc. and entered into a multi-year supply agreement with ChipPAC under
which the Malaysian facility became our preferred provider of semiconductor
assembly and test services.

     Our principal executive office is located at 7585 Irvine Center Drive,
Suite 100, Irvine, California 92618, and our telephone number is (949) 341-7062.

<PAGE>

                                  THE OFFERING

     The offering information provided below assumes that the underwriters'
over-allotment option is not exercised and excludes:

     o shares of common stock reserved for issuance under our 1999 Equity
       Compensation Plan, under which options to purchase 2,954,894 shares were
       outstanding as of June 30, 2000 at a weighted average exercise price of
       $15.76 per share.

     o warrants outstanding to purchase 5,925,931 shares as of June 30, 2000 at
       an exercise price of $0.0015 per share.

     o options to purchase 40,886 shares of common stock, resulting from the
       conversion of options to purchase shares of our previously outstanding
       preferred stock.

<TABLE>
<S>                                          <C>
Class A Common Stock offered..............     3,000,000  shares by us
                                               7,000,000  shares by the selling shareholders

  Total offering..........................    10,000,000  shares
                                              ==========
Common stock to be outstanding after this
  offering................................    50,237,649  shares of Class A Common Stock
                                              ----------
                                              49,746,482  shares of Class B Common Stock
                                              ----------

Total.....................................    99,984,131  shares of common stock
                                              ==========

Voting rights.............................   Owners of Class A Common Stock are entitled to one vote per share on
                                             all matters submitted to a vote of our shareholders. Our Restated
                                             Certificate of Incorporation provides for cumulative voting in
                                             elections of directors. Owners of Class B Common Stock have no voting
                                             rights.

Other rights..............................   Except as to voting and conversion rights, each class of common stock
                                             has the same rights. Shares of each class of common stock are
                                             convertible on a one-for-one basis into shares of the other class of
                                             common stock at the option of the owner.

Use of proceeds...........................   We will not receive any of the proceeds from the sale of shares by the
                                             selling shareholders. We intend to use the net proceeds from the sale
                                             of shares by us for general corporate purposes, including expenditures
                                             for research and development of new products and sales and marketing
                                             efforts. In addition, we may use a portion of the net proceeds to
                                             acquire complementary products, technologies or businesses, or to retire
                                             portions of our outstanding debt. See "Use
                                             of Proceeds."

Nasdaq National Market symbol.............   ISIL
</TABLE>

                                  RISK FACTORS

     Investing in the Class A Common Stock involves substantial risks. See the
"Risk Factors" section of this prospectus for a description of some of the risks
you should carefully consider before investing in the Class A Common Stock.

                                       2

<PAGE>

                  SUMMARY HISTORICAL, PRO FORMA AND OTHER DATA

     We were formed on August 13, 1999 through a series of transactions in which
we and our wholly-owned subsidiary, Intersil, acquired the semiconductor
business of Harris Corporation, or Harris. Our financial statements include the
results of operations of our predecessor. Our acquisition of the semiconductor
business of Harris was accounted for using the purchase method of accounting. As
a result, our results of operations for periods subsequent to the acquisition
are not comparable to the results of operations for periods prior to the
acquisition.

     The following summary historical financial data for the fiscal years ended
July 3, 1998 and July 2, 1999 for Intersil Holding were derived from our
predecessor's audited consolidated financial statements included elsewhere in
this prospectus, except for revenue categorized by product line (Analog &
Mixed-Signal, Discrete Power and Wireless), which were derived from our
predecessor's books and records. The summary historical combined financial data
for the fiscal year ended June 30, 2000 (six weeks ended August 13, 1999
(Predecessor) and 46 weeks ended June 30, 2000 (Successor)) have been derived
from our predecessor's audited consolidated financial statements and from our
audited consolidated financial statements included elsewhere in this prospectus.
The summary pro forma financial information for the combined fiscal year ended
June 30, 2000 (six weeks ended August 13, 1999 (Predecessor) and 46 weeks ended
June 30, 2000 (Successor)) were derived from our pro forma unaudited
consolidated financial statements included elsewhere in this prospectus. The pro
forma adjustments give effect to the acquisition of the semiconductor business
of Harris and to our subsequent initial public offering as if they had occurred
on July 3, 1999.

     During the predecessor period covered by our consolidated financial
statements, our activities were conducted as part of Harris' overall operations.
Accordingly, our consolidated financial statements contain various allocations
for costs and expenses attributable to services provided by Harris. Therefore,
the Consolidated Statement of Operations may not be indicative of the results of
operations that would have resulted if we had operated on a stand-alone basis.

     Since the information in the tables below is a summary, you should read the
following tables in conjunction with other information contained under the
captions "Unaudited Pro Forma Combined Condensed Financial Statements,"
"Capitalization," "Selected Historical Financial Data and Other Data,"
"Forward-Looking Statements," "Management's Discussion and Analysis of Financial
Condition and Results of Operations," and with our financial statements and
related notes and other financial information contained elsewhere in this
prospectus.

                                       3

<PAGE>


<TABLE>
<CAPTION>
                                                                                                    SUCCESSOR
                                                               PREDECESSOR                 ----------------------------
                                                       ----------------------------        FISCAL YEAR ENDED JUNE 30,
                                                            FISCAL YEAR ENDED                          2000
                                                       ----------------------------        ----------------------------
                                                       JULY 3, 1998    JULY 2, 1999        COMBINED      PRO FORMA(1)
                                                       ------------    ------------        ----------    --------------
                                                                   (IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
<S>                                                    <C>             <C>                 <C>           <C>
STATEMENT OF OPERATIONS DATA:
Revenue:
  Analog & Mixed-Signal.............................      $390.4          $352.8             $396.8          $396.8
  Discrete Power....................................       176.4           161.6              205.9           205.9
  Wireless..........................................        10.0            18.3               51.5            51.5
                                                          ------          ------             ------          ------
Total revenue.......................................      $576.8          $532.7             $654.2          $654.2
                                                          ======          ======             ======          ======

Gross margin........................................      $207.5          $182.9             $262.0          $263.7
Research and development............................        75.1            67.0               78.0            78.0
Selling, general and administrative.................        98.2            84.0              108.1           108.4
Harris corporate expense allocation.................        10.0             9.3                1.2              --
Intangible amortization.............................         2.3             2.4               11.0            12.2
In-process research and development.................          --              --               20.2            20.2
Other...............................................          --              --                1.2             1.2
                                                          ------          ------             ------          ------
Operating income....................................        21.9            20.2               42.3            43.7
Loss on sale of Malaysian operation.................          --              --               24.8            24.8
Interest, net.......................................        (0.9)           (1.2)              38.1            13.3
                                                          ------          ------             ------          ------
Income (loss) before income taxes and extraordinary
  item..............................................        22.8            21.4              (20.6)            5.6
Income taxes (benefit)..............................         9.9            (6.0)              (0.4)            2.2
                                                          ------          ------             ------          ------
Net income (loss) before extraordinary item.........        12.9            27.4              (20.2)            3.4
Extraordinary item--loss on extinguishment of debt,
  net of tax effect.................................          --              --              (25.5)             --
                                                          ------          ------             ------          ------
Net income (loss)...................................        12.9            27.4              (45.7)            3.4
Preferred dividends.................................          --              --                5.4              --
                                                          ------          ------             ------          ------
Net income (loss) to common shareholders............      $ 12.9          $ 27.4             $(51.1)         $  3.4
                                                          ======          ======             ======          ======

BASIC AND DILUTED NET INCOME (LOSS) PER COMMON
  SHARE(2):
  Income (loss) before extraordinary item...........                                         $(0.34)         $ 0.03
  Extraordinary item................................                                          (0.33)             --
                                                                                             ------          ------
  Net income (loss).................................                                         $(0.67)         $ 0.03
                                                                                             ======          ======

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING(2):
  Basic.............................................            76.7            97.8
 Diluted............................................            76.7           104.8

SUPPLEMENTAL DATA:
Depreciation........................................      $ 65.0          $ 78.2             $ 59.3          $ 57.6
Capital expenditures................................        90.2            38.6               40.7            40.7
</TABLE>

                                       4

<PAGE>

<TABLE>
<CAPTION>
                                                                                                       AS OF
                                                                                                   JUNE 30, 2000
                                                                                               ---------------------
                                                                                                             AS
                                                                                               ACTUAL    ADJUSTED(3)
                                                                                               ------    -----------
                                                                                               (IN MILLIONS)
<S>                                                                                            <C>       <C>
BALANCE SHEET DATA:
Cash and cash equivalents...................................................................   $211.9     $   359.9
Total assets................................................................................    933.9       1,081.9
Long-term debt, including current portion...................................................    116.6         116.6
Total shareholders' equity..................................................................    679.0         827.0
</TABLE>

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

 (1) The pro forma information presented is a summary only and should be read in
     conjunction with "Unaudited Pro Forma Combined Condensed Financial
     Statements" included elsewhere in the prospectus. The pro forma adjustments
     give effect to the acquisition of the semiconductor business of Harris and
     to our subsequent initial public offering as if they had occurred on
     July 3, 1999.

 (2) Pro forma net income per common share and weighted average common shares
     outstanding include 3,000,000 shares issued in connection with this
     offering (assuming the underwriters do not exercise their over-allotment
     option).

 (3) Gives effect to the issuance of 3,000,000 shares at an assumed price per
     share of $52.00, (which was the last reported sale price on The Nasdaq
     National Market on August 24, 2000) net of assumed fees and expenses
     associated with this offering.

                                       5

<PAGE>

                                  RISK FACTORS

     You should carefully consider the risks described below before deciding to
invest in the Class A Common Stock. The risks described below are not the only
ones facing our company. Additional risks not now known to us or that we
currently deem immaterial may also impair our business operations.

FLUCTUATION OF OPERATING RESULTS--OUR FUTURE OPERATING RESULTS ARE LIKELY TO
FLUCTUATE AND THEREFORE MAY FAIL TO MEET EXPECTATIONS WHICH COULD CAUSE THE
PRICE OF THE CLASS A COMMON STOCK TO DECLINE.

     Our operating results have varied widely in the past and are likely to do
so in the future. In addition, our operating results may not follow any past
trends. Our future operating results will depend on many factors, many of which
are beyond our control, and may fail to meet our expectations for a number of
reasons, including those set forth in these risk factors. Any failure to meet
expectations could cause the price of the Class A Common Stock to significantly
fluctuate or decline.

     Factors that could cause our operating results to fluctuate that relate to
our internal operations include:

     o the need for continual and rapid introductions of new products;

     o changes in our product mix;

     o our inability to adjust our fixed costs in the face of any declines in
       sales; and

     o the availability of production capacity and fluctuations in the
       manufacturing yields at our facilities.

     Factors that could cause our operating results to fluctuate that depend on
our suppliers and customers include:

     o the timing of significant product orders, order cancellations and
       reschedulings;

     o the availability of production capacity and fluctuations in the
       manufacturing yields at third parties' facilities that manufacture our
       devices; and

     o the cost of raw materials and manufacturing services from our suppliers.

     Factors that could cause our operating results to fluctuate that relate to
our industry include:

     o the cyclical nature of the semiconductor industry;

     o the new and evolving nature of the wireless local area network market and
       the possibility that wireless local area network technology may not be
       adopted on a widespread basis or may be replaced by a competing
       technology; and

     o intense competitive pricing pressures.

CYCLICAL INDUSTRY--DOWNTURNS IN THE BUSINESS CYCLE COULD REDUCE THE REVENUES AND
PROFITABILITY OF OUR BUSINESS.

     The semiconductor industry is highly cyclical. In 1998, the semiconductor
industry experienced a downturn. Our markets may experience other, possibly more
severe and prolonged, downturns in the future. We may also experience
significant changes in our operating income margins as a result of variations in
sales, changes in product mix, price competition for orders and costs associated
with the need for continual and rapid introduction of new products.

     The markets for our products depend on continued demand for integrated
communications, industrial, automotive and consumer electronics products. There
can be no assurance that these end-user markets will not experience changes in
demand that will adversely affect our business, financial conditions or results
of operations.

                                       6

<PAGE>

NEW PRODUCT DEVELOPMENT AND TECHNOLOGICAL CHANGE--OUR INABILITY TO INTRODUCE NEW
PRODUCTS COULD RESULT IN DECREASED REVENUES AND LOSS OF MARKET SHARE TO
COMPETITORS; NEW TECHNOLOGIES COULD ALSO REDUCE THE DEMAND FOR OUR PRODUCTS.

     Rapidly changing technology and industry standards, along with frequent new
product introductions, characterize the semiconductor industry. Our success in
our markets depends on our ability to design, develop, manufacture, assemble,
test, market and support new products and enhancements on a timely and
cost-effective basis. There can be no assurance that we will successfully
identify new product opportunities and develop and bring new products to market
in a timely and cost-effective manner or that products or technologies developed
by others will not render our products or technologies obsolete or
noncompetitive. A fundamental shift in technology in our product markets could
have a material adverse effect on us.

DEPENDENCE ON SOURCES OF SUPPLY--PRODUCTION TIME AND THE COST OF OUR PRODUCTS
COULD INCREASE IF WE WERE TO LOSE ONE OF OUR LIMITED NUMBER OF SUPPLIERS OR IF
ONE OF THOSE SUPPLIERS INCREASED THE PRICES OF RAW MATERIALS.

     Our operating results could be adversely affected if we were unable to
obtain adequate supplies of raw materials in a timely manner or if the costs of
raw materials increased significantly. Our manufacturing operations depend upon
obtaining adequate supplies of raw materials on a timely basis. We purchase raw
materials, such as silicon wafers, from a limited number of suppliers on a
just-in-time basis. From time to time, suppliers may extend lead times, limit
supplies or increase prices due to capacity constraints or other factors.

DEPENDENCE ON OUTSIDE FOUNDRIES--BECAUSE WE DEPEND ON THIRD PARTY FOUNDRIES TO
MANUFACTURE, ASSEMBLE AND TEST SOME OF OUR PRODUCTS, WE MAY EXPERIENCE DELAYS
BEYOND OUR CONTROL IN DELIVERING THOSE PRODUCTS TO OUR CUSTOMERS.

     We use outside wafer fabrication foundries for the manufacture of device
types where we do not have the necessary technologies resident in house. We also
use advanced manufacturing processes of outside foundries for certain components
of our PRISM(R) products. We intend to continue to rely on third party foundries
and other specialist suppliers for some of our manufacturing requirements and
most of our assembly and testing requirements. However, these third party
foundries are not obligated to supply products to us for any specific period, in
any specific quantity or at any specific price, except with respect to a five-
year supply agreement with ChipPAC for test and assembly services and as may be
provided in a particular purchase order that has been accepted by one of them.
As a result, we cannot directly control semiconductor delivery schedules, which
could lead to product shortages, quality assurance problems and increases in the
cost of our products. We may experience delays in the future and we cannot be
sure that we will be able to obtain semiconductors within the time frames and in
the volumes required by us at an affordable cost or at all. Any disruption in
the availability of semiconductors or any problems associated with the delivery,
quality or cost of the fabrication, assembly and testing of our products could
significantly hinder our ability to deliver our products to our customers and
may result in a decrease in sales of our products. If the third party foundries
we currently use are unable to provide our products, we may be required to seek
new foundries, and we cannot be certain that their services will be available at
favorable terms or that sufficient capacity will be available.

     In addition, the manufacture of our products is a highly complex and
precise process, requiring production in a highly controlled environment.
Changes in manufacturing processes or the inadvertent use of defective or
contaminated materials by a third party foundry could adversely affect the
foundry's ability to achieve acceptable manufacturing yields and product
reliability. If the third party foundries we currently use do not achieve
adequate yields or product reliability, our customer relationships could suffer.
This could ultimately lead to a loss of sales of our products and have a
negative effect on our business, financial condition or results of operations.

                                       7

<PAGE>

DEPENDENCE ON CHIPPAC--BECAUSE WE DEPEND ON CHIPPAC TO PROVIDE US WITH ASSEMBLY
AND TEST SERVICES, WE MAY BE ADVERSELY AFFECTED IF CHIPPAC FAILS TO PERFORM
ADEQUATELY.

     We depend on ChipPAC for the assembly and testing of most of our
semiconductors. In connection with the sale of our assembly and test facilities
in Malaysia to ChipPAC, we entered into a five-year supply agreement with
ChipPAC under which the Malaysian facility became our preferred provider of
semiconductor assembly and test services. Any disruption in the availability of
semiconductors associated with the assembly and testing of our products by
ChipPAC could significantly hinder our ability to deliver our products to our
customers and may result in a decrease in sales of our products. In addition,
our business, financial condition or results of operations could be adversely
affected if ChipPAC is unable to obtain adequate supplies of raw materials in a
timely manner or if ChipPAC's costs of raw materials increase significantly. See
"Certain Relationships and Related Transactions."

MANUFACTURING RISKS--DELAYS IN PRODUCTION AT NEW FACILITIES, IN IMPLEMENTING NEW
PRODUCTION TECHNIQUES OR IN CURING PROBLEMS ASSOCIATED WITH TECHNICAL EQUIPMENT
MALFUNCTIONS MAY LOWER YIELDS AND REDUCE OUR REVENUES.

     Our manufacturing processes are highly complex, require advanced and costly
equipment and are continuously being modified in an effort to improve yields and
product performance. Impurities or other difficulties in the manufacturing
process can lower yields. Our manufacturing efficiency will be an important
factor in our future profitability and we cannot assure you that we will be able
to maintain our manufacturing efficiency or increase manufacturing efficiency to
the same extent as our competitors.

     In addition, as is common in the semiconductor industry, we have from time
to time experienced difficulty in beginning production at new facilities or in
effecting transitions to new manufacturing processes. As a consequence, we have
suffered delays in product deliveries and reduced yields. We may experience
manufacturing problems in achieving acceptable yields or experience product
delivery delays in the future as a result of, among other things, capacity
constraints, construction delays, upgrading or expanding existing facilities or
changing our process technologies, any of which could result in a loss of future
revenues. Our operating results could also be adversely affected by the increase
in fixed costs and operating expenses related to increases in production
capacity if revenues do not increase proportionately.

CONTROLLING SHAREHOLDERS--A LIMITED NUMBER OF PERSONS INDIRECTLY CONTROL US AND
MAY EXERCISE THEIR CONTROL IN A MANNER ADVERSE TO YOUR INTERESTS.

     As of June 30, 2000, Sterling Holding Company, LLC, or Sterling, and some
of our key employees owned about 40% of the outstanding Class A Common Stock,
our only class of voting stock, and about 91% of the outstanding Class B Common
Stock, which is convertible into shares of Class A Common Stock on a one-for-one
basis. By virtue of this stock ownership, they have the power to direct our
affairs and will be able to determine the outcome of all matters required to be
submitted to shareholders for approval, including the election of a majority of
our directors, any merger, consolidation or sale of all or substantially all of
our assets, and the amendment of our Restated Certificate of Incorporation.
Sterling also has a significant equity investment in Fairchild Semiconductor,
one of our competitors. An affiliate of Sterling is a principal shareholder of
ChipPAC. Because a limited number of persons control us, transactions could be
difficult or impossible to complete without the support of those persons. It is
possible that these persons will exercise control over us in a manner adverse to
your interests. See "Principal and Selling Shareholders."

COMPETITION--OUR BUSINESS IS VERY COMPETITIVE, AND INCREASED COMPETITION COULD
REDUCE GROSS MARGINS AND THE VALUE OF AN INVESTMENT IN OUR COMPANY.

     The semiconductor industry, and the semiconductor product markets
specifically, are highly competitive. Competition is based on price, product
performance, quality, reliability and customer service. The gross margins
realizable in our markets can differ across regions, depending on the economic
strength of end-product markets in those regions. Even in strong markets, price
pressures may emerge as competitors attempt to gain more market share by
lowering prices. Competition in the various markets in which we participate
comes from companies of various sizes, many of which are larger and have greater
financial and other resources than we have and thus can better withstand adverse
economic or market conditions. Competitors

                                       8

<PAGE>

include manufacturers of standard semiconductors, application-specific
integrated circuits and fully customized integrated circuits, as well as
customers who develop their own integrated circuit products. In addition,
companies not currently in direct competition with us may introduce competing
products in the future.

RESTRICTIONS AND COVENANTS IN OUR DEBT INSTRUMENTS--RESTRICTIONS IMPOSED BY OUR
SENIOR CREDIT FACILITIES AND THE INDENTURE GOVERNING THE 13.25% SENIOR
SUBORDINATED NOTES DUE 2009 LIMIT INTERSIL'S ABILITY TO ENGAGE IN OR ENTER INTO
BUSINESS, OPERATING AND FINANCING ARRANGEMENTS, WHICH COULD ADVERSELY AFFECT OUR
ABILITY TO TAKE ADVANTAGE OF POTENTIALLY PROFITABLE BUSINESS OPPORTUNITIES.

     The operating and financial restrictions and covenants in our debt
instruments, including the senior credit facilities and the indenture governing
the 13.25% Senior Subordinated Notes due 2009, or the Notes, may adversely
affect our ability to finance our future operations or capital needs or engage
in other business activities that may be in our interest.

     Intersil's senior credit facilities require it to maintain certain
financial ratios which become more restrictive over time. Intersil's ability to
comply with these ratios may be affected by events beyond our control. A breach
of any of these covenants or Intersil's inability to comply with the required
financial ratios could result in a default under Intersil's senior credit
facilities. In the event of any of these defaults, the lenders under Intersil's
senior credit facilities could elect to declare all borrowings outstanding,
together with accrued interest and other fees, to be due and payable, to require
us to apply all of Intersil's available cash to repay these borrowings or to
prevent Intersil from making debt service payments on the Notes, any of which
would be an event of default under the Notes. The indenture governing the Notes
restricts, among other things, the incurrence of additional debt, the payment of
dividends on the Class A Common Stock and other capital stock of Intersil,
investments, sales of assets and certain consolidations, mergers and transfers
of assets. See "Description of Certain Indebtedness."

HOLDING COMPANY STRUCTURE--AS A HOLDING COMPANY, WE ARE TOTALLY DEPENDENT ON
DIVIDENDS FROM OUR OPERATING SUBSIDIARIES TO MEET OUR DEBT OBLIGATIONS OR,
SHOULD WE SO CHOOSE, PAY DIVIDENDS. TO THE EXTENT WE DO NOT RECEIVE DIVIDENDS
FROM INTERSIL, WE COULD HAVE DIFFICULTY SATISFYING OUR OBLIGATIONS.

     We are a holding company whose only material asset is the capital stock of
Intersil. We conduct no business (other than in connection with our ownership of
the capital stock of Intersil and certain other administrative obligations), and
depend on distributions from Intersil to meet our obligations. Because of
Intersil's ability to incur substantial indebtedness and our dependence upon the
operating performance of Intersil to generate distributions to us, there can be
no assurance that any of these distributions will be adequate to fund our
obligations when due. In addition, the senior credit facilities, the Notes and
applicable Federal and state law impose restrictions on the payment of dividends
and the making of loans by Intersil to us. As a result of the foregoing
restrictions, we may be required to:

     o refinance our indebtedness;

     o seek additional debt or equity financing;

     o cause Intersil to refinance all or a portion of its indebtedness with
       indebtedness containing covenants allowing us to gain access to
       Intersil's cash flow or assets;

     o cause Intersil to obtain modifications of the covenants restricting our
       access to cash flow or assets of Intersil contained in Intersil's
       financing documents, including, without limitation, the senior credit
       facilities and the indenture governing the Notes;

     o merge Intersil with us, which merger would be subject to compliance with
       applicable debt covenants and the consents of certain lenders; or

     o pursue a combination of the foregoing actions.

     The measures we may undertake to gain access to sufficient cash flow to
meet our future debt service requirements will depend on general economic and
financial market conditions, as well as our financial condition and the
financial condition of Intersil and other relevant factors existing at the time.
No assurance

                                       9

<PAGE>

can be given that any of the foregoing measures can be accomplished, and the
failure to do so could have a material adverse effect on the value of the Class
A Common Stock.

CURRENCY EXCHANGE RATE FLUCTUATIONS--FLUCTUATIONS IN THE EXCHANGE RATE OF THE
U.S. DOLLAR AND FOREIGN CURRENCIES COULD INCREASE OPERATING EXPENSES AND
NEGATIVELY AFFECT OUR FINANCIAL PERFORMANCE AND RESULTS OF OPERATIONS.

     While we and our subsidiaries transact business primarily in U.S. dollars
and most of our revenues are denominated in U.S. dollars, a portion of our costs
and revenues is denominated in other currencies, such as the Euro and the
Japanese Yen. As a result, changes in the exchange rates of these currencies or
any other applicable currencies to the U.S. dollar will affect our costs of
goods sold and operating margins and could result in exchange losses. The impact
of future exchange rate fluctuations on our results of operations cannot be
accurately predicted. From time to time, we have engaged in, and may continue to
engage in, exchange rate hedging activities in an effort to mitigate the impact
of exchange rate fluctuations. However, any hedging technique that we may
implement may not be effective or may result in foreign exchange hedging losses.
In the past, we have incurred foreign exchange hedging losses, including
$13.3 million during fiscal year 1998 and $11.4 million during fiscal year 1999.
In fiscal year 2000, foreign exchange hedging resulted in a gain of $3.9
million.

RISKS ASSOCIATED WITH INTERNATIONAL OPERATIONS--OUR INTERNATIONAL OPERATIONS
SUBJECT US TO RISKS NOT FACED BY DOMESTIC COMPETITORS WHICH INCLUDE UNFAVORABLE
POLITICAL, REGULATORY, LABOR AND TAX CONDITIONS IN OTHER COUNTRIES.

     We cannot be certain to what extent our future operations and earnings may
be adversely affected by the risks related to, or any other problems arising
from, operating in international markets. We generate approximately one-half of
our revenue from outside the United States. Risks inherent in doing business on
an international level include:

     o economic and political instability;

     o trade restrictions;

     o foreign currency fluctuations; and

     o unexpected changes in the laws and policies of the United States and of
       the countries in which we manufacture and sell our products.

DEPENDENCE ON INTELLECTUAL PROPERTY--WE USE A SIGNIFICANT AMOUNT OF INTELLECTUAL
PROPERTY IN OUR BUSINESS. IF WE ARE UNABLE TO PROTECT THIS INTELLECTUAL
PROPERTY, WE COULD LOSE OUR RIGHT TO EXCLUSIVE USE OF KEY TECHNOLOGY, RESULTING
IN DECREASED REVENUES.

     Our future success and competitive position depend in part upon our ability
to obtain and maintain proprietary technology used in our principal products. We
rely on intellectual property rights, including, but not limited to, rights
existing under patent, trade secret, trademark, maskwork and copyright law, to
protect this technology. Some of our technology is not covered by any patent or
patent application, and there are risks that:

     o some of the approximately 1,250 patents that we own and other patents
       that we license from Harris may be invalidated, circumvented, challenged
       or licensed to others;

     o the license rights granted by Harris, or the patents that we own, will
       not provide competitive advantages to us; or

     o some of our pending or future patent applications will not be issued
       within the scope of the claims sought by us, if at all.

Further, others may develop technologies that are similar or superior to our
technology, duplicate our technology or design around our patents. In addition,
effective patent, trademark, copyright, maskwork and trade secret protection may
be unavailable, limited or not applied for in certain foreign countries.

                                       10

<PAGE>

     We also seek to protect our proprietary technology, including technology
that may not be patented or patentable, in part by confidentiality agreements
and, if applicable, inventors' rights agreements with our collaborators,
advisors, employees and consultants. There can be no assurance that these
agreements will not be breached or that we will have adequate remedies for any
breach.

     Some of our current licenses to use others' technology are scheduled to
expire periodically over the next several years, unless extended. In particular,
we have access to a portfolio of patents under cross-license agreements that
begin to expire in December of the year 2000. We will need to negotiate renewals
of these agreements or obtain the technology from alternative sources. There is
no guarantee that we will be able to obtain renewals on substantially similar
terms as those that currently exist.

DEPENDENCE ON INTELLECTUAL PROPERTY ACQUIRED FROM HARRIS--WE HAVE ACQUIRED
SUBSTANTIALLY ALL OF OUR INTELLECTUAL PROPERTY FROM HARRIS. TO THE EXTENT OUR
USE OF THIS INTELLECTUAL PROPERTY INFRINGES THE INTELLECTUAL PROPERTY RIGHTS OF
OTHERS, WE MAY BE REQUIRED TO CEASE OUR USE OR SALE OF AFFECTED PRODUCTS.

     Under our intellectual property agreement with Harris, Harris has limited,
royalty-free, worldwide, nonexclusive license rights (without right to
sublicense) to some of our technology. Under our patent assignment and services
agreements with Harris, Harris will retain the ownership and rights to certain
patents until August 13, 2002 after which time the patents will be assigned to
us, provided the patents are not the subject of litigation at that time, and
with the provision that any binding obligations on third parties to make royalty
or other payments respecting the patents will be retained by Harris.
Furthermore, the license agreements under which third parties are licensed to
use our intellectual property (or intellectual property that is assigned to us)
and under which Harris is cross-licensed to the third party's intellectual
property, may not be assignable to us. For this situation, Harris agreed to
partially indemnify us for limited periods in limited situations against claims
that our activities infringe upon the intellectual property rights of others.
The extent and duration of this indemnification may be insufficient to shield us
from the need to make monetary payments to third parties or to facilitate the
continued manufacture, use or sale of some affected products.

INTELLECTUAL PROPERTY UPON WHICH WE RELY MAY INFRINGE ON OTHER PARTIES'
INTELLECTUAL PROPERTY RIGHTS--WE MAY HAVE TO PAY OTHERS FOR INFRINGING THEIR
INTELLECTUAL PROPERTY RIGHTS OR DEFEND OURSELVES IN A LITIGATION, RESULTING IN
SIGNIFICANT EXPENSE TO US.

     Vigorous protection and pursuit of intellectual property rights or
positions characterize the semiconductor industry. This vigor and pursuit have
resulted in significant and often protracted and expensive litigation. We may
from time to time be notified of claims that we may be infringing third party
patents or other intellectual property rights. A countersuit has been brought
against Harris by Ericsson, one of its competitors and one of our customers,
alleging infringement by Harris of four of Ericsson's patents relating to
telephone subscriber line interface circuits. We have been joined as a defendent
in this action. Because this litigation was filed prior to our acquisition of
the semiconductor business of Harris, we believe our liability from this
litigation, if any, is covered by Harris' agreement to provide us with limited
indemnities. We do not believe that this litigation will have a material adverse
effect on our business, financial condition or results of operations. It is
still possible, however, that this litigation will be resolved in a manner that
is materially adverse to us.

     If necessary or desirable, we may, from time to time, seek licenses to
patents or other intellectual property rights. However, we cannot be certain
that we will obtain these licenses or that the terms of any offered licenses
will be acceptable to us, and the acquisition of any license could require
expenditure of substantial time and other resources. Furthermore, some licenses
or other rights to intellectual property of third parties that we use, such as
software, may not be freely assignable by Harris to us. Our failure to obtain a
license from a third party for technology we use could cause us to incur
substantial liabilities and to suspend the manufacture or shipment of products
or our use of processes requiring the technology. Litigation could result in
significant expense to us, adversely affecting sales of the challenged product
or technology and diverting the efforts of our technical and management
personnel, whether or not the litigation is determined in our favor. In the
event of an adverse outcome in any litigation, we may be required to:

     o pay substantial damages and incur significant attorneys' fees;

     o cease the manufacture, use, sale or importation of infringing products;

                                       11

<PAGE>

     o expend significant resources to develop or acquire non-infringing
       technology;

     o discontinue the use of some processes; or

     o obtain licenses to intellectual property covering the infringing
       technology.

ADDITIONAL BORROWINGS AVAILABLE--WE AND OUR SUBSIDIARIES WILL BE ABLE TO INCUR
SUBSTANTIALLY MORE DEBT, WHICH COULD FURTHER EXACERBATE THE RISKS
DESCRIBED BELOW.

     We and our subsidiaries may be able to incur substantial additional
indebtedness in the future. Although the indenture governing the Notes contains
restrictions on the incurrence of additional indebtedness, these restrictions
are subject to a number of qualifications and exceptions and the indebtedness
incurred in compliance with these restrictions could be substantial. Also, these
restrictions do not prevent us from incurring obligations that do not constitute
indebtedness. As of June 30, 2000, Intersil's senior credit facilities provided
for additional borrowings of up to $70.0 million, all of which would be
permitted under the indenture governing the Notes. To the extent new debt is
added to our and our subsidiaries' currently anticipated debt levels, it could:

     o require us to dedicate a substantial portion of our cash flow from
       operations to payments on our indebtedness, thereby reducing the
       availability of our cash flow to fund working capital, capital
       expenditures, research and development efforts and other general
       corporate purposes;

     o increase our vulnerability to adverse general economic or industry
       conditions;

     o limit our flexibility in planning for, or reacting to, changes in our
       business or the industry in which we operate;

     o prevent us from raising the funds necessary to repurchase all the Notes
       tendered to us upon the occurrence of certain changes of control in our
       ownership, which would constitute a default under the indenture governing
       the Notes; and

     o place us at a competitive disadvantage compared to our competitors that
       have less debt.

     See "Capitalization," "Selected Historical Financial Data and Other Data"
and "Description of Certain Indebtedness."

RISKS RELATING TO FUTURE ACQUISITIONS--WE MAY NOT BE ABLE TO CONSUMMATE FUTURE
ACQUISITIONS, AND THOSE ACQUISITIONS WHICH WE DO COMPLETE MAY BE DIFFICULT TO
INTEGRATE AND RESULT IN INCREASED DEBT AND LIABILITIES.

     We plan to pursue acquisitions of related businesses. We might not be able
to consummate acquisitions, or, if we complete any acquisition, we may not
realize any of the benefits anticipated from these acquisitions. Financing for
acquisitions may not be available and, depending on the terms of these
acquisitions, financing could be restricted by the terms of our senior credit
facilities and the indenture governing the Notes. The process of integrating
acquired operations into our existing operations may result in unforeseen
operating difficulties and may require significant financial resources that
would otherwise be available for the ongoing development or expansion of our
existing operations. Possible future acquisitions could result in the incurrence
of additional debt, contingent liabilities and amortization expenses related to
goodwill and other intangible assets, all of which could have a material adverse
effect on our business, financial condition or results of operations.

ENVIRONMENTAL LIABILITIES AND OTHER GOVERNMENTAL REGULATIONS--REGULATORY MATTERS
COULD FORCE US TO EXPEND SIGNIFICANT CAPITAL AND INCUR SUBSTANTIAL COSTS.

     We are subject to various environmental laws relating to the management,
disposal and remediation of hazardous materials and the discharge of pollutants
into the environment. We are also subject to laws relating to workplace safety
and worker health which, among other things, regulate employee exposure to
hazardous substances. Harris agreed to indemnify us for substantially all
environmental liabilities in excess of financial reserve amounts related to
events or activities occurring before our acquisition of the semiconductor
business. The nature of our ongoing operations exposes us to the risk of
liabilities with respect to environmental

                                       12

<PAGE>

matters, including those relating to the on- and off-site disposal and release
of hazardous materials, and there can be no assurance that material costs will
not be incurred in connection with such liabilities.

     Based on our experience, we believe that the future cost of compliance with
existing environmental and health and safety laws (and liability for known
environmental conditions) even without the Harris indemnity will not have a
material adverse effect on our business, financial condition or results of
operations. However, we cannot predict:

     o what environmental or health and safety legislation or regulations will
       be enacted in the future;

     o how existing or future laws or regulations will be enforced, administered
       or interpreted; or

     o the amount of future expenditures which may be required to comply with
       these environmental or health and safety laws or to respond to future
       cleanup matters or other environmental claims.

     See "Business--Environmental Matters."

RISKS RELATING TO FUTURE SALES OF OUR SHARES--ALL OF OUR OUTSTANDING SHARES OF
COMMON STOCK MAY BE SOLD INTO THE MARKET IN THE NEAR FUTURE, AND FUTURE SALES OF
THOSE SHARES COULD DEPRESS THE MARKET PRICE OF OUR CLASS A COMMON STOCK.

     Immediately after this offering, the public market for our Class A Common
Stock will include 43,096,424 shares of freely tradable Class A Common Stock,
assuming the over-allotment option is not exercised. At that time, there will be
an additional 7,141,225 shares of Class A Common Stock outstanding and
49,746,482 shares of Class B Common Stock outstanding, which are convertible
into shares of Class A Common Stock on a one-for-one basis.

     Our directors, executive officers and various shareholders, including the
selling shareholders, have entered into lock-up agreements which generally
provide that these holders will not offer, sell, contract to sell, grant any
option to purchase or otherwise dispose of our common stock or any securities
exercisable for or convertible into our common stock owned by them for a period
of 90 days after consummation of this offering without the prior written consent
of Credit Suisse First Boston Corporation. In addition, shareholders who
received our common stock in the acquisition of NWN have entered into lock-up
agreements which restrict the disposition of 131,844 shares of common stock, and
79,106 shares of common stock prior to August 23, 2001 and August 23, 2002,
respectively.

     Beginning August 13, 2000, warrants issued in connection with the Notes
that initially entitle their holders to acquire in the aggregate 3,703,707
shares of Class A Common Stock became exercisable. We have filed a shelf
registration statement to cover the warrants for resale and the issuance of the
Class A Common Stock upon exercise of these warrants. This registration
statement has been declared effective by the U.S. Securities and Exchange
Commission. Any common stock issued in connection with these warrants will be
freely tradable in the open market. Unless earlier exercised, these warrants
will expire on August 15, 2009.

     Beginning August 14, 2000, some of our existing shareholders have the right
to cause us to register the sale of their shares under the Securities Act and
some other current shareholders may have the right to cause us to register their
shares for resale if we choose to file a registration statement. Registration of
the sale of these shares of our common stock would permit their sale into the
market without regard to the legal restrictions on transfer mentioned above. If
our existing shareholders sell a large number of shares, the market price of the
Class A Common Stock could decline, as these sales may be viewed by the public
as an indication of an upcoming or recently occurring shortfall in our financial
performance. Moreover, the perception in the public market that these
shareholders might sell shares of Class A Common Stock could depress the market
price of the Class A Common Stock.

     We filed a registration statement with the Securities and Exchange
Commission on April 18, 2000 under which we registered 4.0 million shares of our
Class A Common Stock for issuance in connection with future acquisitions. As of
June 30, 2000, we had issued 3.35 million shares of Class A Common Stock under
this registration statement in connection with our acquisition of NWN. Any
shares issued pursuant to this registration will be freely tradeable without
restriction under the Securities Act and would result in dilution to our
existing shareholders. See "Shares Eligible for Future Sale."

                                       13

<PAGE>

                           FORWARD-LOOKING STATEMENTS

     This prospectus includes forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933. These statements relate to analyses
and other information which are based on forecasts of future results and
estimates of amounts that are not yet determinable. These statements also relate
to our future prospects, developments and business strategies.

     These forward-looking statements are identified by their use of terms and
phrases such as "anticipate," "believe," "could," "estimate," "expect,"
"intend," "may," "plan," "predict," "project," "will" and similar terms and
phrases, including references to assumptions. These statements are contained in
sections entitled "Summary," "Risk Factors," "Management's Discussion and
Analysis of Financial Condition and Results of Operations," "Business" and other
sections of this prospectus.

     These forward-looking statements involve known and unknown risks,
uncertainties and other factors that may cause actual results to be materially
different. These factors include, but are not limited to, the following: changes
in general economic and business conditions; changes in current pricing levels;
changes in political, social and economic conditions and local regulations;
changes in technology and the development of new technology; foreign currency
fluctuations; reductions in sales to any significant customers; changes in sales
mix; industry capacity; competition; disruptions of established supply channels;
manufacturing capacity constraints; and the availability, terms and deployment
of capital. Our risks are more specifically described in the "Risk Factors"
section of this prospectus. If one or more of these risks or uncertainties
materialize, or if underlying assumptions prove incorrect, our actual results
may vary materially from those expected, estimated or projected.

     We do not undertake to update our forward-looking statements or risk
factors to reflect future events or circumstances.

                                USE OF PROCEEDS

     The net proceeds received by us from the sale of Class A Common Stock in
this offering, assuming the underwriters do not exercise their over-allotment
option, and after deducting the underwriting discount and estimated offering
expenses of $8.0 million, will be approximately $148.0 million, assuming an
offering price of $52.00 per share (the last reported sale price on The Nasdaq
National Market on August 24, 2000). We intend to use the net proceeds received
by us from the sale of Class A Common Stock in this offering for general
corporate purposes, including expenditures for research and development of new
products and sales and marketing efforts. In addition, we may use a portion of
the net proceeds to acquire complementary products, technologies or businesses,
or to retire portions of our outstanding debt.

     The sale of Class A Common Stock in this offering by the selling
shareholders will be for their own accounts, and we will not receive any of the
proceeds from such sale.

                                DIVIDEND POLICY

     We have never paid a cash dividend and do not anticipate declaring or
paying any cash dividends on shares of our common stock in the foreseeable
future. In addition, any determination to declare and pay dividends will be made
by our board of directors in light of our earnings, financial position, capital
requirements, contractual limitations contained in our debt instruments and such
other factors as the board of directors deems relevant. See "Description of
Certain Indebtedness" and "Description of Capital Stock."

                                       14
<PAGE>

                          PRICE RANGE OF COMMON STOCK

     Our Class A Common Stock has been traded on the Nasdaq Stock Market's
National Market since February 23, 2000 under the symbol "ISIL." Prior to that
time, there was no public market for our common stock, and there is currently no
public market for our Class B Common Stock. The following table sets forth, for
the periods indicated, the high and low closing prices per share of our Class A
Common Stock as reported in Nasdaq Stock Market trading.

<TABLE>
<CAPTION>
                                                                                         HIGH      LOW
                                                                                        ------    ------
<S>                                                                                     <C>       <C>
First quarter of 2000 (from February 23, 2000 to March 31, 2000).....................   $66.00    $46.50

Second quarter of 2000 (from April 1, 2000 to June 30, 2000).........................   $58.50    $27.50

Third quarter of 2000 (from July 1, 2000 to August 24, 2000).........................   $67.00    $42.56
</TABLE>

     On August 24, 2000, the last reported sale price for our Class A Common
Stock was $52.00 per share. As of August 11, 2000, there were about 8,900
holders of record of our Class A Common Stock.

                                 CAPITALIZATION

     The following table sets forth our capitalization as of June 30, 2000 on an
actual basis and as adjusted for the issuance of shares in this offering. This
table should be read in conjunction with "Unaudited Pro Forma Combined Condensed
Financial Statements," "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and our Consolidated Financial Statements
included elsewhere in this prospectus.

<TABLE>
<CAPTION>
                                                                                    AS OF JUNE 30, 2000
                                                                                  ------------------------
                                                                                  ACTUAL    AS ADJUSTED(2)
                                                                                  ------    --------------
                                                                                       (IN MILLIONS)
<S>                                                                               <C>       <C>
Cash and cash equivalents......................................................   $211.9        $359.9
                                                                                  ======        ======
Long-term debt, including current portion:
  Senior Credit Facilities:
     Revolving Credit Facility(1)..............................................   $   --        $   --
  13.25% Senior Subordinated Notes due 2009....................................    112.4         112.4
     Other.....................................................................      4.2           4.2
                                                                                  ------        ------
          Total long-term debt.................................................    116.6         116.6
                                                                                  ------        ------
Shareholders' equity:
  Common stock.................................................................      0.9           1.0
  Additional paid-in capital...................................................    719.1         867.1
  Retained deficit.............................................................    (42.7)        (42.7)
  Accumulated other comprehensive income.......................................      1.7           1.7
                                                                                  ------        ------
          Total shareholders' equity...........................................    679.0         827.0
                                                                                  ------        ------
               Total capitalization............................................   $795.6        $943.7
                                                                                  ======        ======
</TABLE>

------------------
(1) The Revolving Credit Facility provides for maximum borrowings of up to $70.0
    million.

(2) Gives effect to the issuance of 3,000,000 shares at an assumed price per
    share of $52.00, which was the last reported sale price on The Nasdaq
    National Market on August 24, 2000, net of assumed fees and expenses
    associated with this offering.

                                       15
<PAGE>
         UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENT OF OPERATIONS

     The following Unaudited Pro Forma Combined Condensed Statement of
Operations (six weeks ended August 13, 1999 (Predecessor) and 46 weeks ended
June 30, 2000 (Successor)) are based on or derived from historical Consolidated
Financial Statements included elsewhere in this prospectus. The acquisition of
the semiconductor business of Harris was consummated on August 13, 1999.

     The Unaudited Pro Forma Combined Condensed Statement of Operations gives
effect to the transactions as if they had occurred on July 3, 1999. The
transactions and the related adjustments are described in the accompanying
notes. The pro forma statement of operations does not purport to represent what
our results of operations would actually have been had the transactions in fact
occurred on July 3, 1999 nor do they purport to project the results of
operations for any future period.

     The acquisition of the semiconductor business has been accounted for using
the purchase method of accounting. After the acquisition of the semiconductor
business, the total purchase price of the acquisition was allocated to the
tangible and intangible assets and liabilities of the semiconductor business
based upon their respective fair values. In the opinion of our management, all
adjustments that are necessary to present fairly the pro forma data have been
made.

     The Unaudited Pro Forma Combined Condensed Statement of Operations should
be read in conjunction with the Consolidated Financial Statements and notes
thereto as of June 30, 2000 and July 2, 1999 and for the fiscal year ended
July 2, 1999, the six weeks ended August 13, 1999, and the 46 weeks ended
June 30, 2000 included elsewhere in this prospectus. See "Forward-Looking
Statements" and "Management's Discussion and Analysis of Financial Condition and
Results of Operations."

         UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENT OF OPERATIONS

<TABLE>
<CAPTION>
                                                                          FISCAL YEAR ENDED JUNE 30, 2000
                                                       ----------------------------------------------------------------------
                                                       46 WEEKS ENDED      SIX WEEKS ENDED
                                                       JUNE 30, 2000       AUGUST 13, 1999       HARRIS           INITIAL
                                                       --------------    -------------------    SEMICONDUCTOR     PUBLIC
                                                       HISTORICAL         HISTORICAL            ACQUISITION      OFFERING
                                                       (SUCCESSOR)       (PREDECESSOR)          ADJUSTMENTS      ADJUSTMENTS
                                                       --------------    -------------------    -------------    ------------
                                                                      (IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
<S>                                                    <C>               <C>                    <C>              <C>
Sales:
    Product sales...................................       $596.8               $57.4               $  --           $   --
Costs and Expenses:
    Cost of product sales...........................        352.5                39.7                (1.7)(a)           --
    Research and development........................         69.5                 8.5                  --               --
    Selling, general and administrative.............         97.2                10.9                 0.3 (b)           --
    Harris corporate expense allocation.............           --                 1.2                (1.2)(b)           --
    Intangible amortization.........................         10.7                 0.3                 1.2 (c)           --
    In-process research and development.............         20.2                  --                  --               --
    Other...........................................          1.2                  --                  --               --
                                                           ------               -----               -----           ------
Operating income (loss).............................         45.5                (3.2)                1.4               --
    Loss on sale of Malaysian operation.............         24.8                  --                  --               --
    Interest, net...................................         38.2                (0.1)                7.6 (d)        (32.4)(g)
                                                           ------               -----               -----           ------
Income (loss) before income taxes and extraordinary
  item..............................................        (17.5)               (3.1)               (6.2)            32.4
Income taxes (benefit)..............................         (0.3)               (0.1)               (2.4)(e)          5.0 (h)
                                                           ------               -----               -----           ------
Net income (loss) before extraordinary item.........        (17.2)               (3.0)               (3.8)            27.4
Extraordinary item--loss on extinguishment of debt,
  net of tax effect.................................        (25.5)                 --                  --             25.5 (i)
                                                           ------               -----               -----           ------
Net income (loss)...................................        (42.7)               (3.0)               (3.8)            52.9
Preferred dividends.................................          5.4                  --                 1.2 (f)         (6.6)(j)
                                                           ------               -----               -----           ------
Net income (loss) to common shareholders............       $(48.1)              $(3.0)              $(5.0)          $ 59.5
                                                           ======               =====               =====           ======
Net income per common share (k):
  Basic.............................................
  Diluted...........................................

<CAPTION>

                                                      PRO FORMA
                                                      ---------
<S>                                                    <C>
Sales:
    Product sales...................................   $ 654.2
Costs and Expenses:
    Cost of product sales...........................     390.5
    Research and development........................      78.0
    Selling, general and administrative.............     108.4
    Harris corporate expense allocation.............        --
    Intangible amortization.........................      12.2
    In-process research and development.............      20.2
    Other...........................................       1.2
                                                       -------
Operating income (loss).............................      43.7
    Loss on sale of Malaysian operation.............      24.8
    Interest, net...................................      13.3
                                                       -------
Income (loss) before income taxes and extraordinary
  item..............................................       5.6
Income taxes (benefit)..............................       2.2
                                                       -------
Net income (loss) before extraordinary item.........       3.4
Extraordinary item--loss on extinguishment of debt,
  net of tax effect.................................        --
                                                       -------
Net income (loss)...................................       3.4
Preferred dividends.................................        --
                                                       -------
Net income (loss) to common shareholders............   $   3.4
                                                       =======
Net income/loss per common share (k):
  Basic.............................................   $  0.04
  Diluted...........................................      0.03
</TABLE>

 See accompanying Notes to Unaudited Pro Forma Combined Condensed Statement of
                                  Operations.

                                       16
<PAGE>

    NOTES TO UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENT OF OPERATIONS

     The unaudited pro forma combined consolidated statement of operations gives
effect to the following adjustments:

(a)  The total purchase price of $614.3 million was allocated to the assets and
     liabilities of the semiconductor business based upon their approximate fair
     value. The fair value of the net assets acquired exceeded the purchase
     price resulting in negative goodwill. This negative goodwill was allocated
     to property and equipment and identified intangible assets based on their
     relative fair value as follows:

<TABLE>
<CAPTION>
                                                                                          ALLOCATION
                                                                       FAIR VALUE OF      OF EXCESS     ADJUSTED
                                                                       ASSETS ACQUIRED    FAIR VALUE    FAIR VALUE
                                                                       ---------------    ----------    ----------
                                                                                      (IN MILLIONS)
<S>                                                                    <C>                <C>           <C>
       Net current assets...........................................       $ 160.6         $     --       $160.6
       Other amounts................................................          17.2               --         17.2
       Property and equipment.......................................         481.0           (153.2)       327.8
       Developed technology.........................................          80.0            (23.9)        56.1
       Customer base................................................          33.0            (10.0)        23.0
       In-process research and development..........................          29.0             (8.8)        20.2
       Assembled workforce..........................................          13.5             (4.1)         9.4
                                                                           -------         --------       ------
                                                                             814.3         $ (200.0)      $614.3
                                                                                           ========       ======
       Purchase price...............................................         614.3
                                                                           -------
       Excess fair value............................................       $ 200.0
                                                                           =======
</TABLE>

    As a result of the allocation of negative goodwill to property and
    equipment, the net book carrying value at August 13, 1999 of $403.7 million
    was reduced by $75.9 million to the fair value of $327.8 million. Therefore,
    for pro forma purposes, depreciation expense was reduced by $1.7 million for
    the six weeks ended August 13, 1999.

(b)  Historically, Harris allocated corporate headquarters expenses to the
     semiconductor business based on the semiconductor business' net sales as a
     percentage of Harris' net sales. This pro forma adjustment represents the
     elimination of this allocation and our estimate of the cost of replacing
     these services as a stand-alone company, calculated as follows:

<TABLE>
<CAPTION>
                                                                                              SIX WEEKS ENDED
                                                                                              AUGUST 13, 1999
                                                                                              ---------------
                                                                                               (IN MILLIONS)
<S>                                                                                           <C>
    Harris corporate expenses allocation...................................................        $1.20
                                                                                                   -----
    Company's estimated expenses:
      Finance, legal and professional......................................................         0.20
      Human resources/benefits.............................................................         0.05
      Other................................................................................         0.05
                                                                                                   -----
         Total estimated expenses..........................................................         0.30
                                                                                                   -----
    Net reduction..........................................................................        $0.90
                                                                                                   =====
</TABLE>

(c)  Represents the adjustment to reflect additional amortization expense for
     the identified intangible assets. The appraisal of the acquired business,
     after adjustment for negative goodwill, included $108.7 million of
     identified intangible assets consisting of $56.1 million of developed
     technology, $23.0 million of customer base, $9.4 million of assembled
     workforce and $20.2 million of purchased in-process research and
     development. The purchased in-process research and development related to
     various products under development that had not yet reached technological
     feasibility and had no future alternative uses. Pursuant to Regulation S-X,
     the in-process research and development has been written off against
     retained earnings and has not been reflected in the pro forma consolidated
     statement of operations. The remaining identified intangibles are being
     amortized over the following lives:

<TABLE>
<CAPTION>
                                                                                   SIX WEEKS ENDED
IDENTIFIED INTANGIBLE                                  AMOUNT            LIFE      AUGUST 13, 1999
---------------------------------------------------   -------------    --------    ---------------
                                                      (IN MILLIONS)                 (IN MILLIONS)
<S>                                                   <C>              <C>         <C>
Developed technology...............................       $56.1        11 years         $ 0.6
Customer base......................................        23.0         7 years           0.4
Assembled workforce................................         9.4         5 years           0.2
                                                                                        -----
                                                                                        $ 1.2
                                                                                        =====
</TABLE>

                                       17

<PAGE>

(d)  Represents interest expense associated with the indebtedness incurred in
     connection with the acquisition of the semiconductor business, calculated
     as follows:

<TABLE>
<CAPTION>
                                                                                              SIX WEEKS ENDED
                                                                                              AUGUST 13, 1999
                                                                                              ---------------
                                                                                               (IN MILLIONS)
<S>                                                                                           <C>
    Interest on Notes (13.25% on $200.0 million)...........................................        $ 3.1
    Estimated interest on Senior Term
      Facility (10.71% on $205.0 million)..................................................          2.5
    Estimated interest on Revolving Credit Facility
      (9.96% on $15.0 million).............................................................          0.2
                                                                                                   -----
         Total cash interest expense.......................................................          5.8
    Interest on Subordinated Holding PIK Note
      (13.50% on $30.0 million)............................................................          0.5
    Interest on Seller Holding PIK Note
      (11.13% on $90.0 million)............................................................          1.1
    Deferred financing fees................................................................          0.2
                                                                                                   -----
         Total interest expense............................................................        $ 7.6
                                                                                                   =====
</TABLE>

     Financing fees consist of $6.0 million on the Notes (amortized over
     ten years) and $6.2 million on the Senior Term Facility and Revolving
     Credit Facility (amortized over six years).

(e)  Represents the adjustment of the pro forma income tax provision related to
     the pro forma pretax adjustments computed on a stand-alone basis at an
     effective tax rate of 39%.

(f)  Represents the adjustment for the accretion of the 12% cumulative dividends
     on the 83,434 shares of the mandatorily redeemable 12% Series A Cumulative
     Compounding Preferred Stock, with a stated value of $1,000 per share. These
     shares of mandatorily redeemable 12% Series A Cumulative Compounding
     Preferred Stock were converted into shares of our Class A Common Stock upon
     the occurrence of our initial public offering.

(g)  Represents the elimination of interest expense associated with debt which
     was repaid (the Tranche B Senior Term Facility, the 11.13% Seller Holding
     PIK Note, $70.0 million of the Senior Subordinated Notes, and the 13.50%
     Subordinated PIK Note) with the proceeds of the initial public offering.

(h)  Represents the pro forma adjustment necessary to reflect the income tax
     required to result in a pro forma income tax provision based on an
     effective tax rate of 39%.

(i)  Represents the elimination of the extraordinary charges associated with the
     early repayment of debt from the proceeds of the initial public offering.
     The extraordinary charges consisted of the write-off of deferred financing
     fees and prepayment penalties.

(j)  Gives effect to the conversion of all of the outstanding shares of the 12%
     Series A Cumulative Compounding Preferred Stock into common stock at $1,000
     per share plus accumulated and unpaid dividends, based on the per share
     amount received in the initial public offering.

(k)  The following table sets forth the weighted average common shares
     outstanding as follows:

<TABLE>
<CAPTION>
                                                                                            FISCAL YEAR ENDED
                                                                                               JUNE 30, 2000
                                                                                           --------------------
                                                                                           (IN MILLIONS, EXCEPT
                                                                                            PER SHARE AMOUNT)
<S>                                                                                        <C>
       Basic:
          Shares outstanding at June 30, 2000...........................................            94.8
                                                                                                  ------
       Diluted:
          Warrants......................................................................             5.9
          Common stock options and other................................................             1.1
                                                                                                  ------
          Total diluted.................................................................             7.0
                                                                                                  ------
       Total............................................................................           101.8
                                                                                                  ======
</TABLE>

                                       18

<PAGE>

               SELECTED HISTORICAL FINANCIAL DATA AND OTHER DATA

     The following table sets forth selected historical financial data and
supplemental data for Intersil Holding and its predecessor. The historical
financial data as of and for the fiscal years 1998 and 1999 and the six weeks
ended August 13, 1999 are derived from our predecessor's audited Consolidated
Financial Statements included elsewhere in this prospectus, except for revenue
categorized by product line, which is derived from our predecessor's books and
records. The historical financial data as of and for the fiscal years 1996 and
1997, which are not included elsewhere in this prospectus, are derived from our
predecessor's unaudited and audited Consolidated Financial Statements,
respectively. The historical financial data as of and for the 46 weeks ended
June 30, 2000 are derived from our audited Consolidated Financial Statements
included elsewhere in this prospectus. This information should be read in
conjunction with the Consolidated Financial Statements included elsewhere in
this prospectus and "Management's Discussion and Analysis of Financial Condition
and Results of Operations."

<TABLE>
<CAPTION>

                                                                           PREDECESSOR                PREDECESSOR       SUCCESSOR
                                                                ---------------------------------   ---------------   -------------
                                                                                                                        46 WEEKS
                                                                          FISCAL YEARS              SIX WEEKS ENDED       ENDED
                                                                ---------------------------------   ---------------   -------------
                                                                 1996     1997     1998     1999    AUGUST 13, 1999   JUNE 30, 2000
                                                                ------   ------   ------   ------   ---------------   -------------
                                                                  (DOLLARS IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
<S>                                                             <C>      <C>      <C>      <C>      <C>               <C>
STATEMENT OF OPERATIONS DATA:
Revenue:
     Analog & Mixed-Signal....................................  $393.6   $384.4   $390.4   $352.8       $  36.3          $ 360.5
     Discrete Power...........................................   176.6    154.5    176.4    161.6          18.0            187.9
     Wireless.................................................      --      6.4     10.0     18.3           3.1             48.4
                                                                ------   ------   ------   ------       -------          -------
Total revenue.................................................  $570.2   $545.3   $576.8   $532.7       $  57.4          $ 596.8
                                                                ======   ======   ======   ======       =======          =======
Gross margin..................................................  $227.1   $199.3   $207.5   $182.9       $  17.7          $ 244.3
Research and development......................................    69.4     75.2     75.1     67.0           8.5             69.5
Selling, general and administrative...........................   103.6     99.3     98.2     84.0          10.9             97.2
Harris corporate expense allocation...........................    10.3     10.0     10.0      9.3           1.2               --
Intangible amortization.......................................     2.3      2.3      2.3      2.4           0.3             10.7
In-process research and development...........................      --       --       --       --            --             20.2
Other.........................................................      --       --       --       --            --              1.2
                                                                ------   ------   ------   ------       -------          -------
Operating income (loss).......................................    41.5     12.5     21.9     20.2          (3.2)            45.5
Loss on sale of Malaysian operation...........................      --       --       --       --            --             24.8
Interest, net.................................................    (1.0)    (0.6)    (0.9)    (1.2)         (0.1)            38.2
                                                                ------   ------   ------   ------       -------          -------
Income (loss) before income taxes and extraordinary item......    42.5     13.1     22.8     21.4          (3.1)           (17.5)
Income taxes (benefit)........................................     2.6      1.9      9.9     (6.0)         (0.1)            (0.3)
                                                                ------   ------   ------   ------       -------          -------
Income (loss) before extraordinary item.......................    39.9     11.2     12.9     27.4          (3.0)           (17.2)
Extraordinary item--loss on extinguishment of debt, net of tax
  effect......................................................      --       --       --       --            --            (25.5)
                                                                ------   ------   ------   ------       -------          -------
Net income (loss).............................................    39.9     11.2     12.9     27.4          (3.0)           (42.7)
Preferred dividends...........................................      --       --       --       --            --              5.4
                                                                ------   ------   ------   ------       -------          -------
Net income (loss) to common shareholders......................  $ 39.9   $ 11.2   $ 12.9   $ 27.4       $  (3.0)         $ (48.1)
                                                                ======   ======   ======   ======       =======          =======
BASIC AND DILUTED LOSS PER SHARE:
  Loss before extraordinary item..............................                                                           $ (0.30)
  Extraordinary item..........................................                                                             (0.33)
                                                                                                                         -------
  Net loss....................................................                                                           $ (0.63)
                                                                                                                         =======
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
Basic and diluted.............................................                                                              76.7
BALANCE SHEET DATA (END OF PERIOD):
Cash and cash equivalents.....................................  $   --   $   --   $   --   $   --       $   1.4          $ 211.9
Total assets..................................................   647.0    773.3    810.3    761.2         736.1            933.9
Long-term debt, including current portion.....................      --      1.4      4.1      4.6           4.5            116.6
Total shareholders' equity/business equity....................   520.9    646.2    699.1    658.9         657.3            679.0
</TABLE>

                                       19

<PAGE>

          MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                           AND RESULTS OF OPERATIONS

     The following discussion should be read in conjunction with, and is
qualified in its entirety by reference to the Consolidated Financial Statements,
including the notes thereto appearing elsewhere in this prospectus. Except for
historical information, the discussions in this section of the prospectus
contain forward-looking statements that involve risks and uncertainties. Actual
results could differ materially from those discussed below.

OVERVIEW

     We are a systems oriented designer and manufacturer of analog and digital
integrated circuits and discrete semiconductors for the communications and power
management end-user markets. We provide systems level solutions for the growing
integrated communications semiconductor market. Integrated communications
semiconductors enable the convergence of voice, data and video. Within
integrated communications, we are focused on several key markets including high
data rate wireless connectivity, power management and wireless and wired
communications infrastructure. We use our expertise in digital and analog
semiconductors and radio and software design to deliver chip sets, components,
software and licensable application designs for communications equipment
customers. We sell over 4,500 products to more than 28,000 customers worldwide.

BASIS OF PRESENTATION

     We were formed on August 13, 1999 through a series of transactions, in
which we and our wholly-owned subsidiary, Intersil, acquired the semiconductor
business of Harris. Intersil and its wholly-owned domestic and foreign
subsidiaries include the operations of the predecessor. Our fiscal year 2000
began on July 3, 1999 and ended on June 30, 2000.

     The total purchase price of the semiconductor business acquisition was
$614.3 million, which included transaction costs of approximately $7.8 million
and deferred financing costs of $12.2 million. The consideration paid by
Intersil Holding was $504.3 million in cash, of which $420.0 million was
financed through borrowings from the senior credit facilities, the 13.25% Senior
Subordinated Notes due 2009, the 13.50% Subordinated Holding "Pay-In-Kind" (PIK)
Note and the issuance of a $90.0 million 11.13% PIK Note to Harris.

     The acquisition was accounted for using the purchase method of accounting
and, accordingly, the operating results of the semiconductor business have been
included in Intersil's consolidated financial statements since the date of
acquisition. The total purchase price was allocated to the assets and
liabilities of the semiconductor business based upon their approximate fair
value. The fair value of the net assets acquired exceeded the purchase price
resulting in negative goodwill of $200.0 million. This negative goodwill was
allocated to the identified intangibles and property and equipment based on
their relative fair values. The most significant effects were to decrease
property, plant and equipment and to increase certain intangibles and
liabilities. Accordingly, certain financial information for the periods prior to
August 13, 1999 is not comparable to periods subsequent to August 13, 1999. All
statement of operations information for fiscal year 2000 represents the combined
results of the semiconductor business from July 3, 1999 through August 13, 1999
and Intersil Holding from August 14, 1999 through June 30, 2000.

     On February 25, 2000, we issued 22,000,000 shares of our Class A Common
Stock in a registered underwritten initial public offering at a price of $25.00
per share. See "--Liquidity and Capital Resources."

                                       20

<PAGE>

QUARTERLY RESULTS

     The following table sets forth the unaudited historical quarterly revenue
and gross margin of our three product groups:
<TABLE>
<CAPTION>

                                       FISCAL YEAR                         FISCAL YEAR
                                   ENDED JULY 3, 1998                  ENDED JULY 2, 1999
                            ---------------------------------   ---------------------------------
                              Q1       Q2       Q3       Q4       Q1       Q2       Q3       Q4
                            ------   ------   ------   ------   ------   ------   ------   ------
                                                                 (DOLLARS IN MILLIONS)
<S>                         <C>      <C>      <C>      <C>      <C>      <C>      <C>      <C>
REVENUE
Analog & Mixed-Signal.....  $ 96.3   $ 93.9   $ 95.2   $105.0   $ 79.8   $ 86.2   $ 88.5   $ 98.3
Discrete Power............    44.7     45.2     45.7     40.8     38.5     34.8     42.3     46.0
Wireless..................     2.9      2.2      2.6      2.3      4.2      3.1      4.6      6.4
                            ------   ------   ------   ------   ------   ------   ------   ------
    Total.................  $143.9   $141.3   $143.5   $148.1   $122.5   $124.1   $135.4   $150.7
                            ======   ======   ======   ======   ======   ======   ======   ======

GROSS MARGIN PERCENTAGE
Analog & Mixed-Signal.....      36%      42%      42%      44%      41%      39%      43%      43%
Discrete Power............      24       27       23       25       21       14       17       21
Wireless..................      31        5       42       57       21       26       35       50
    Total.................      32       37       36       39       34       31       35       36

<CAPTION>
                                         COMBINED
                                       FISCAL YEAR
                                   ENDED JUNE 30, 2000
                            --------------------------------
                              Q1       Q2       Q3      Q4
                            ------   ------   ------  ------
<S>                         <C>      <C>      <C>     <C>
REVENUE
Analog & Mixed-Signal.....  $ 82.8   $ 94.0   $103.4  $116.6
Discrete Power............    44.9     54.8     53.2    53.0
Wireless..................     6.3      9.3     14.3    21.6
                            ------   ------   ------  ------
    Total.................  $134.0   $158.1   $170.9  $191.2
                            ======   ======   ======  ======

GROSS MARGIN PERCENTAGE
Analog & Mixed-Signal.....      42%      45%      44%     46%
Discrete Power............      24       28       32      34
Wireless..................      35       39       45      50
    Total.................      36       39       41      43
</TABLE>

     Historically, our first fiscal quarter has been the weakest due to model
year changeovers in the automotive industry and summer holiday seasons,
primarily in Europe. Our increasing focus on integrated communications products
has resulted in a higher percentage of our sales coming from the communications
markets in the second half of our fiscal year. Revenues from integrated
communications products accounted for 53.1% of our total fourth quarter fiscal
year 2000 sales versus 39.1% of our total fourth quarter fiscal year 1999 sales.
Sales made into the communications market generally experience less seasonality
than sales of our historical mix of products.

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

     Industry demand weakened significantly in the first half of fiscal 1999 due
to widespread inventory adjustments which led to excess manufacturing capacity
and steep declines in product prices. This trend affected all three of our
product groups. Our results, and those of the industry as a whole, began to
strengthen in the third fiscal quarter of 1999, with an increase in sales of
9.1% from the second quarter to the third quarter and 11.3% from the third
quarter to the fourth quarter. We experienced sales growth of over 25% in each
of the last three quarters of fiscal year 2000 as compared to the same periods
in fiscal year 1999 due to increased demand for our communication products and
an overall improvement in market conditions. Additionally, the introduction of
our new PRISM II wireless product has accelerated growth in the Wireless product
group.

                                       21

<PAGE>

RESULTS OF OPERATIONS

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

<TABLE>
<CAPTION>
                                                                          FISCAL YEARS ENDED
                                                           -------------------------------------------------
                                                                                                  COMBINED
                                                           JULY 3, 1998      JULY 2, 1999      JUNE 30, 2000
                                                           ------------      ------------      -------------
<S>                                                        <C>               <C>               <C>
Revenue:
  Analog & Mixed-Signal...............................          67.7%             66.2%              60.7%
  Discrete Power......................................          30.6              30.4               31.4
  Wireless............................................           1.7               3.4                7.9
                                                              ------            ------            -------
     Total............................................         100.0             100.0              100.0
                                                              ------            ------            -------
Cost and Expenses:
  Cost of goods sold..................................          64.0              65.6               59.9
  Research and development............................          13.0              12.6               11.9
  Selling, general and administrative.................          18.8              17.5               16.7
  Intangible amortization.............................           0.4               0.5                1.7
  In-process research and development.................            --                --                3.1
  Other...............................................            --                --                0.2
                                                              ------            ------            -------
     Operating income.................................           3.8               3.8                6.5
     Loss on sale of Malaysian operation..............            --                --                3.8
  Interest, net.......................................          (0.2)             (0.2)               5.9
                                                              ------            ------            -------
  Income (loss) before income taxes and extraordinary
     item.............................................           4.0               4.0               (3.2)
Income taxes (benefit)................................           1.8              (1.1)              (0.1)
                                                              ------            ------            -------
Income (loss) before extraordinary item...............           2.2               5.1               (3.1)
Extraordinary item--loss on extinguishment of debt,
  net of tax effect...................................            --                --               (3.9)
                                                              ------            ------            -------
Net income (loss).....................................           2.2%              5.1%              (7.0)%
                                                              ======            ======            =======
</TABLE>

FISCAL YEAR 2000 COMPARED WITH FISCAL YEAR 1999

  Revenue

     Revenue for fiscal year 2000 increased 22.8% to $654.2 million from
$532.7 million in fiscal year 1999. This growth is the result of increased
demand for communications products and overall improved market conditions.
Wireless sales growth of 181% was driven by increased market acceptance of our
PRISM(R) products.

     Geographically, 49.2%, 22.0% and 28.8% of product sales were derived in
North America, Europe and Asia/Pacific, respectively, during fiscal year 2000,
compared to 53.5%, 24.6% and 21.9%, respectively, in fiscal year 1999. This
change in mix is the result of increased demand from Asian-based customers and
from other customers moving manufacturing facilities to Asia.

  Gross Margin

     Cost of goods sold consists primarily of purchased materials, labor and
overhead (including depreciation) associated with product manufacturing, plus
royalty, warranty and sustaining engineering expenses pertaining to products
sold. Gross margin on product sales increased 43.2% to $262.0 million in fiscal
year 2000 from $182.9 million in fiscal year 1999. As a percentage of sales,
gross margin was 40.0% in fiscal year 2000 as compared to 34.3% in fiscal year
1999. This increase was primarily due to increased capacity utilization in all
three fabrication facilities, improved product costs from yield enhancements and
manufacturing cost improvement projects. Additionally, wireless products, which
generally carry higher margins, increased as a

                                       22

<PAGE>

percentage of our total sales. Headcount reductions and a decrease in
depreciation expense resulting from a revaluation of our property and equipment
due to purchase accounting also contributed to the margin improvement.

  Research and Development ("R&D")

     R&D expenses consist primarily of salaries and selected costs of employees
engaged in product/process research, design and development activities, as well
as related subcontracting activities, prototype development, cost of design
tools and technology license agreement expenses. R&D expenses increased 16.4% to
$78.0 million in fiscal year 2000 from $67.0 million in fiscal year 1999. The
increase was the result of our continued investment in PRISM(R) chip sets and in
power management integrated circuits, focusing in the categories of
communications and computing products. As a percentage of sales, R&D expenses
declined slightly to 11.9% in fiscal year 2000 from 12.6% in fiscal year 1999.

  In-Process R&D Charge

     In connection with the acquisition of the semiconductor business of Harris,
we allocated $20.2 million of the purchase price to in-process R&D projects.
These projects were in various stages of completion ranging from 35-90%
complete. The present value of $29.0 million of in-process R&D was primarily
determined by discounting 10 year after tax cash flow projections of the
individual projects using a discount rate of 20%. This value was then reduced by
negative goodwill resulting from the acquisition.

     At the date of acquisition, the development of these projects had not yet
reached technological feasibility and the in-process R&D had no alternative
future uses. Accordingly, these costs were expensed as a one-time charge to
earnings in the combined fiscal year ended June 30, 2000.

     There is risk associated with the completion of the projects and there can
be no assurance that any will meet with either technological or commercial
success. Discussion of certain of the acquired projects can be found in the
Products and Technology portion of the Business section located elsewhere in
this prospectus.

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

     SG&A costs, which include marketing, selling, general and administrative
expenses, increased 17.1% to $109.3 million in fiscal year 2000 from
$93.3 million in fiscal year 1999. The increase was due to additional selling
costs resulting from higher sales in fiscal year 2000 and additional marketing
costs associated with our new company branding initiative. Operating expenses
include charges allocated by Harris to us for legal, financial and other
administrative expenses of $1.2 million for the six weeks ended August 13, 1999,
and $9.3 million for the twelve months ended July 2, 1999. As a percentage of
sales, SG&A costs decreased to 16.7% in fiscal year 2000 from 17.5% in fiscal
year 1999.

  Intangible Assets

     Certain intangible assets were recorded on the opening balance sheet of
Intersil as part of purchase accounting. We also recorded goodwill in June 2000
as a result of the acquisition of No Wires Needed B.V. These assets are being
amortized over their useful lives ranging from five to eleven years.

  Loss on Sale of Malaysian Operation

     On June 30, 2000, we completed the sale of our Kuala Lumpur, Malaysia-based
semiconductor assembly and test operations to ChipPAC, Inc. As consideration for
the sale we received approximately $52.5 million in cash and $15.8 million in
ChipPAC preferred convertible stock and we recognized a non-recurring, non-cash
charge of $24.8 million for loss on sale.

  Interest Expense

     In connection with the acquisition of the semiconductor business, we
entered into new credit facilities. See "--Liquidity and Capital Resources."
Interest expense related to this debt for Intersil Holding during the fiscal
year 2000 was $41.9 million, excluding interest income of $3.8 million.

                                       23

<PAGE>

  Extraordinary Item

     On February 25, 2000, we issued 22,000,000 shares of our Class A Common
Stock in a registered underwritten initial public offering. From the proceeds of
the offering, we repaid approximately $419.0 million of debt incurred through
the acquisition of the semiconductor business, which included certain prepayment
penalties and accrued interest. In connection with the early extinguishment of
debt, we recorded extraordinary charges (net of tax effect) of $25.5 million.
The extraordinary charges consisted of the write-off of deferred financing fees
and prepayment penalties.

  Tax Expense

     The tax benefit for the combined twelve months ended June 30, 2000 is not
comparable to the twelve months ended July 2, 1999, due to the differences in
our tax structure as compared to that of the semiconductor business of Harris.

  Backlog

     We had backlog at June 30, 2000 of $259.5 million compared to
$174.0 million at July 2, 1999. The increase was due to increased demand for our
integrated communications products and improved market conditions.

FISCAL YEAR 1999 COMPARED WITH FISCAL YEAR 1998

  Revenue

     Revenue for fiscal year 1999 decreased 7.6% to $532.7 million from $576.8
million in fiscal year 1998. This decrease was the result of continued soft
market conditions and resulting adverse effects on semiconductor demand. This
trend continued through the second quarter of fiscal 1999. We believe that the
principal causes for the decline were initially high inventory levels of our
products at our distributors, which decreased 17% from fiscal year 1998 to
fiscal year 1999, as well as high levels of inventory at customers. This was
followed by an overall drop in global semiconductor demand of 8.5% in calendar
year 1998. Particularly hard hit were our Discrete Power products where prices
of power metal oxide semiconductor field effect transistors, or MOSFETs,
declined by nearly 15%. Additionally, distributors and major original equipment
manufacturers reduced the amount of pipeline inventory in the channel, taking
advantage of the shorter lead-times and lower prices. During the third fiscal
quarter of 1999, we began to experience an increase in new orders, which
resulted in a 9.1% increase in sales in the third quarter versus the preceding
quarter. The positive trend continued into the fourth quarter with an increase
in sales of 11.3% from the third quarter.

     Geographically, 53.5%, 24.6% and 21.9% of product sales were derived in
North America, Europe and Asia/Pacific, respectively, during fiscal year 1999,
compared to 53.8%, 28.0% and 18.2% in fiscal year 1998.   Gross Margin

     Gross margin on product sales declined 11.9% to $182.9 million in fiscal
year 1999 from $207.5 million in fiscal year 1998. As a percent of sales, gross
margin was 34.3% in fiscal year 1999 and 36.0% in fiscal year 1998. This
decrease was substantially due to price pressure worldwide for our Discrete
Power products and a $13.2 million increase in our depreciation expense
resulting from the additional capital expenditures that went into our 8-inch
wafer fab in Mountaintop, Pennsylvania. Our gross margin decline was partially
offset by a series of cost reduction initiatives which resulted in lower
operating costs and improved pricing and terms with our suppliers of raw
materials.

  R&D

     R&D expenses decreased 10.8% to $67.0 million in fiscal year 1999 from
$75.1 million in fiscal year 1998. During fiscal year 1999, we focused our
resources on targeted applications and reduced programs that did not support our
emphasis. Major investment continued on the PRISM(R) chip set which addresses
the wireless local area network

                                       24

<PAGE>

market. R&D for products designed for the power management market was
principally focused on computing and communications which led our growth of new
product revenue during fiscal year 1999.

  SG&A

     SG&A costs decreased 13.8% to $93.3 million in fiscal year 1999 from $108.2
million in fiscal year 1998. The decrease in SG&A was primarily due to increased
efficiencies resulting from a reorganization of the internal sales force and
external sales representative firms and reduction of administrative expenses
including headcount reductions. Operating expenses include allocated charges by
Harris to us for legal, financial and other administrative expenses of
$9.3 million for fiscal year 1999 and $10.0 million for fiscal year 1998. As a
percentage of sales, SG&A costs decreased to 17.5% in fiscal year 1999 from
18.8% in fiscal year 1998.

  Tax Expenses

     The tax benefit of $6.0 million in fiscal year 1999 was primarily driven by
changes in the Malaysian tax system, resulting in fiscal year 1999 income not
being subject to tax.

  Backlog

     We had backlog at July 2, 1999 of $174.0 million compared to backlog of
about $188.5 million at July 3, 1998. The decrease in backlog was primarily due
to shorter industry lead-times.

LIQUIDITY AND CAPITAL RESOURCES

     On February 25, 2000, we issued 22,000,000 shares of Class A Common Stock
at a price of $25.00 per share. We received net proceeds from this offering,
after deducting underwriting discounts and commissions and other fees, of
approximately $513.1 million, of which $435.2 million was subsequently used to
repay debt incurred as a result of our acquisition of the semiconductor business
of Harris.

     In connection with the acquisition of the semiconductor business, we
entered into new credit facilities, which provided for a Revolving Credit
Facility in an aggregate amount up to $70.0 million. We may request, subject to
the agreement of our lenders, that the amount of the Revolving Credit Facilities
be increased to as much as $150 million. The Revolving Credit Facility will
mature in 2005 unless terminated earlier and was undrawn as of June 30, 2000.

     Our principal capital requirements are to fund working capital needs, to
meet required debt payments and to complete planned maintenance and expansion.
We anticipate that our operating cash flow and our cash on hand, together with
available borrowings under the Revolving Credit Facility, will be sufficient to
meet our working capital, capital expenditure and interest requirements on our
debt obligations for the foreseeable future. As of June 30, 2000, our total debt
and shareholders' equity was $116.6 million and $679.0 million, respectively.

     Because our business was operated as a subsidiary of Harris during fiscal
year 1998 to August 13, 1999, we do not believe our prior years' cash flows are
indicative of our business on a stand-alone basis. Net cash generated by
operating activities for the fiscal year ended June 30, 2000 was
$111.1 million. Net cash provided by investing activities for the fiscal year
ended June 30, 2000 was $13.7 million. Net cash used to repay debt for the
twelve months ended June 30, 2000 was $435.2 million. Our cash and cash
equivalents balance at June 30, 2000 was $211.9 million.

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

                                       25

<PAGE>

  Receivables and Inventories

     Trade accounts receivable less the allowance for collection losses totaled
$111.7 million at June 30, 2000 compared to $100.7 million at July 2, 1999. This
increase was due to higher product shipments from increased demand. Inventories
declined 17.8% from $153.8 million at July 2, 1999 to $126.5 million at
June 30, 2000. The inventory decrease was a result of the sale of our Malaysian
operation and a management initiative to reduce our inventory through portfolio
management and process improvements.

     Distributor reserves have fluctuated from year to year based on the level
of inventory at distributors. The reserve increased 13.8% from $6.5 million at
July 2, 1999 to $7.4 million at June 30, 2000 resulting from increasing
inventory levels at distributors in response to higher demand and overall market
improvement.

  Capital Expenditures

     Capital expenditures for the fiscal year ended June 30, 2000 were
$40.7 million compared to $38.6 million in fiscal year 1999. We do not
anticipate substantial capital expenditures in the foreseeable future.

RECENT ACCOUNTING PRONOUNCEMENTS

     In June 1999, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. (SFAS) 137, "Accounting for Derivative
Instruments and Hedging Activities--Deferral of the Effective Date of SFAS 133."
SFAS 137 amends Statement of Financial Accounting Standards No. 133, "Accounting
for Derivative Instruments and Hedging Activities," to defer its effective date
to all fiscal quarters of all fiscal years beginning after June 15, 2000.
SFAS 133 establishes accounting and reporting standards for derivative
instruments including standalone instruments, as forward currency exchange
contracts and interest rate swaps or embedded derivatives and requires that
these instruments be marked-to-market on an ongoing basis. These market value
adjustments are to be included either in the income statement or shareholders'
equity, depending on the nature of the transaction. We are required to adopt
SFAS 133 in the first quarter of our fiscal year 2001. We believe that SFAS 133
will not have a material adverse effect on our financial position or results of
operations.

     In December 1999, the Securities and Exchange Commission issued SAB
No. 101, "Revenue Recognition in Financial Statements," which provides guidance
on the recognition, presentation, and disclosure of revenue in financial
statements filed with the SEC. SAB No. 101 outlines the basic criteria that must
be met to recognize revenue and provides guidance for disclosure related to
revenue recognition policies. We believe that SAB No. 101 will not have a
material effect on our financial position or results of operations.

     In April 2000, the Financial Accounting Standards Board issued FASB
Interpretation No. 44, "Accounting for Certain Transactions Involving Stock
Compensation, an Interpretation of APB Opinion No. 25." Among other issues, this
interpretation clarifies the definition of employees for purposes of applying
Opinion No. 25, the criteria for determining whether a plan qualifies as a
non-compensatory plan, the accounting consequence of various modifications to
the terms of a previously fixed stock option or award and the accounting for an
exchange of stock compensation awards in a business combination. This
interpretation is effective July 1, 2000, but certain conclusions in the
interpretations cover specific events that occur after either December 15, 1998
or January 12, 2000. To the extent that this interpretation covers events
occurring during the period after December 15, 1998, or January 12, 2000, but
before the effective date of July 1, 2000, the effect of applying this
interpretation is recognized on a prospective basis from July 1, 2000. We are
currently reviewing our stock grants to determine the impact, if any, that may
arise from implementation of this interpretation, although we do not expect the
impact, if any, to be material to our financial statements.

                                       26

<PAGE>

MARKET RISK MANAGEMENT

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

     In August 1999, we began to use foreign exchange contracts to hedge
anticipated foreign cash flow commitments of up to six months. Hedges on
anticipated foreign cash flow commitments do not qualify for deferral and,
therefore, gains and losses on changes in the fair market value of the foreign
exchange contracts are recognized in income.

     Prior to August 1999, we used foreign exchange contracts and options to
hedge both balance sheet and off-balance sheet foreign currency commitments.
Specifically, these foreign exchange contracts offset foreign currency
denominated inventory and purchase commitments from suppliers, accounts
receivable from, and future committed sales to, customers and intercompany
loans. Foreign currency financial instruments were used to reduce the risks that
arise from doing business in international markets.

     At June 30, 2000, we had open foreign exchange contracts with a notional
amount of $30.9 million, all of which were to hedge anticipated foreign cash
flow commitments. At July 2, 1999, we had open foreign exchange contracts with a
notional amount of $22.0 million, all of which were to hedge off-balance-sheet
commitments. Additionally, during fiscal year 2000, we purchased and sold
$87.4 million of foreign exchange forward and option contracts, compared to
$120.7 million for the prior year. See Note O "Financial Instruments" in the
Notes to Consolidated Financial Statements for further information with respect
to commitments to buy or sell foreign currencies. Our hedging activities provide
only limited protection against currency exchange risks. Factors that could
impact the effectiveness of our hedging programs include accuracy of sales
estimates, volatility of currency markets and the cost and availability of
hedging instruments. A 10% adverse change in currency exchange rates for our
foreign currency derivatives held at June 30, 2000, would have an impact of
approximately $3.8 million on the fair value of these instruments. This
qualification of exposure to the market risk associated with foreign exchange
financial instruments does not take into account the offsetting impact of
changes in the fair value of our foreign denominated assets, liabilities and
firm commitments.

     As of June 30, 2000, we also had fixed rate debt of approximately
$116.6 million consisting primarily of the 13.25% Senior Subordinated Notes due
2009. For fixed rate debt, changes in interest rates generally affect the fair
market value, but not earnings or cash flows.

                                       27

<PAGE>

                               INDUSTRY OVERVIEW

     Semiconductors, which consist of integrated circuits and discrete
semiconductors, are the critical components used to create an increasing variety
of electronic products and systems. Integrated circuits operate at low power
levels and perform multiple functions to process and convey information in
electronic signal form. Integrated circuit capability is largely defined by
circuit density, which increases as its components are miniaturized. In contrast
to integrated circuits, discrete semiconductors perform a single function and
often have multiple uses in many different end-user applications.

     Worldwide Semiconductor Trade Statistics, or WSTS, forecasts strong growth
of about 17.9% for the semiconductor industry through 2003. We sell our
semiconductors into high-growth segments of the market including the
communications analog & mixed-signal market, which is forecast by the
Semiconductor Industry Association, or SIA, to grow 34.5% in calendar year 2000
from calendar year 1999, segments of the power management market, which is
forecast by SIA to grow at 70.0% in calendar year 2000 from calendar year 1999,
and the wireless local area network integrated circuit market, which is forecast
by Cahners In-Stat Group to grow 133.1% in calendar year 2000 from calendar year
1999.

SEMICONDUCTOR CLASSIFICATIONS

     The following table sets forth the worldwide semiconductor total available
market, or TAM, for each of five product functions of the semiconductor industry
according to WSTS. Our products fit within the Analog and Discrete Power
classifications listed in the table.

                          WORLDWIDE SEMICONDUCTOR TAM

<TABLE>
<CAPTION>
                                                          YEAR ENDED DECEMBER 31,
                             -----------------------------------------------------------------------------------
                             1990    1991    1992    1993     1994     1995     1996     1997     1998     1999    CAGR
                             -----   -----   -----   -----   ------   ------   ------   ------   ------   ------   ----
                                                            (DOLLARS IN BILLIONS)
<S>                          <C>     <C>     <C>     <C>     <C>      <C>      <C>      <C>      <C>      <C>      <C>
Analog.....................  $ 7.8   $ 8.3   $ 8.7   $10.7   $ 13.6   $ 16.6   $ 17.0   $ 19.8   $ 19.1   $ 22.1   12.3%
Discrete Power.............    4.3     4.4     4.5     5.2      6.3      8.2      7.8      8.1      7.4      8.2    7.4
Microcomponents............    9.2    11.4    13.9    19.1     23.8     33.4     39.8     47.8     47.3     51.7   21.1
Memory.....................   11.8    12.2    14.8    21.3     32.5     53.5     36.0     29.3     23.0     32.3   11.8
Other......................   17.5    18.2    17.9    21.1     25.7     32.7     31.3     32.2     28.8     35.1    8.0
                             -----   -----   -----   -----   ------   ------   ------   ------   ------   ------
Total......................  $50.6   $54.5   $59.8   $77.4   $101.9   $144.4   $131.9   $137.2   $125.6   $149.4   12.8
                             =====   =====   =====   =====   ======   ======   ======   ======   ======   ======
</TABLE>

     Analog integrated circuits are used to shape or condition electrical
signals, to amplify electrical signal strengths, to convert electrical signals
to and from digital "one or zero" levels, to regulate voltage levels and to
provide interfaces between other products within an electrical system. Power
semiconductors can be either discrete power devices or analog integrated
circuits. Discrete devices perform a single function, such as switching
electricity on and off. Analog integrated circuits perform multiple functions
such as controlling and regulating currents. Microcomponents include
microprocessors and microcontrollers that process data according to instructions
embedded within the semiconductors themselves. These are considered the "brains"
of the electronic system and are at the center of the system architecture.
Memory are devices that store data and instructions. The "other" category
includes all electronic devices whose functions do not include one of the four
previously mentioned product functions.

ANALOG

     Analog signals are not discrete binary numerical values, but rather
continuously variable electrical signals that represent continuous data
variables or wave signals, such as sound waves. The analog market is split into
two major segments: standard linear and mixed-signal. The standard linear market
is composed of building block products such as amplifiers, voltage regulators,
data conversion, interface circuits and comparators. These products are used in
all end systems, from computers and telecommunications, to industrial,
automotive and consumer applications. The mixed-signal market consists of more
complex analog products, which also contain some digital circuitry for timing,
information control and data flow. Mixed-signal products are often developed for
specific applications, such as video encoding, hard disk drive control, data
transmission, motor control and power management.

                                       28

<PAGE>

DISCRETE POWER

     Discrete power semiconductors, such as a transistor or diode (a device that
allows current to flow in only one direction), typically contain one active
element. These devices perform a single function such as efficiently switching
electricity on and off. Examples of discrete power semiconductors include power
metal oxide semiconductor field effect transistors, or MOSFETs, and insulated
gate bipolar transistors, or IGBTs. MOSFETs are semiconductors that convert,
switch or otherwise shape or condition electricity. IGBTs typically serve the
switch function in power conversion applications that require higher current and
voltage than power MOSFETs can handle efficiently. IGBTs combine the ease of
voltage-driven power MOSFET technology with the conduction efficiency of bipolar
transistor technology.

INDUSTRY TRENDS

     As the performance of semiconductor devices has increased and size and cost
have decreased, demand for semiconductors has expanded beyond their original
primary applications in computer systems to applications in telecommunications
systems, automotive products, consumer products and industrial automation and
control systems. In addition, system users and designers have driven the demand
for systems with increased functionality, higher levels of performance, greater
reliability and shorter design cycle times, all in smaller packages at lower
costs. These demands have resulted in increased semiconductor dollar content of
electronic products. The demand for electronic systems has also expanded
geographically with the emergence of new markets, particularly in the
Asia/Pacific region. We believe that future demand for semiconductors will be
driven by the growing trend towards use of the Internet and portable
electronics, including consumer electronics, computers and cellular telephones,
and the resulting need for semiconductors that can manage connectivity and power
for longer periods of use and that require less space.

     Today, nearly every form of communication is being revolutionized by the
growing use of digital communications to move all types of data, voice and video
around the world. Different technologies, protocols and media have evolved which
are uniquely suited to particular applications in this rapidly evolving
environment. Advances in broadband communications are accelerating the reach of
cost effective, fast data highways to both homes and offices. Communications
semiconductors will be used extensively in broadband communication
networks/facilities, portable communications devices, and in servers and
infrastructure supporting the Internet. Each of these technologies requires
specific transport and access hardware devices, including handsets and base
stations for wireless telephony, switches and routers for telecommunications and
data networking, set-top boxes for cable and satellite communications, and
digital cable and digital subscriber line, or xDSL, modems for Internet access.
The advent of the Internet as a communications medium has dramatically increased
business and consumer demand for high-speed access to multimedia and
entertainment content.

     As business and consumers increasingly rely on the Internet and intranets,
many existing networks are under significant stress. A bandwidth constraint has
emerged, particularly at the "last mile" of network infrastructures, challenging
users and industry participants in a number of communications segments. In
response to growing network demands, telecommunications, data communications and
cable network operators are making significant investments to alleviate
congestion and support emerging high bandwidth, integrated data, voice and video
services. Specific technologies addressing bandwidth capacity constraints
include cable modems and xDSL, including asymmetric digital subscriber line, or
ADSL, for residential applications, high speed digital subscriber line, or HDSL,
symmetric digital subscriber line, or SDSL, and T1/E1 for high speed network
access in commercial applications, and asynchronous transfer mode, or ATM, and
synchronous optical network, or SONET, for network backbone transmission. The
importance of the Internet as a communications medium and the increased ability
to deliver access to content available through the Internet will increase the
demand for home and small business networking solutions, provided these
networking solutions are cost-effective.

      Wireless telephony technologies are moving towards the third generation,
or 3G, of standards such as Wideband CDMA which will support more users than
current standards, provide faster data transmission and mobile Internet access,
and increase the ability to execute new wireless applications. Second
generation, or 2G, is the current digital standard supporting IS-95 CDMA and GSM
and is used widely throughout the

                                       29

<PAGE>

world. Given the significant investment in infrastructure required to move from
2G to 3G, some carriers have begun to provide an intermediate technology, known
as 2.5G, such as Edge and IS-95+, which enhances speed and capacity, but does
not provide all the capabilities of 3G. This infrastructure buildout to 2.5G and
ultimately to 3G will require the use of advanced integrated circuits that are
compatible with the new digital standards.

     In addition, these developments in communications infrastructure depend on
enhanced performance capabilities of advanced electronic systems. As electronic
systems continue to increase in performance and sophistication, they demand more
complex power management solutions. The latest generation of personal computers
rely on advances in power conversion to operate at ever-lower voltages in order
to reduce power consumption, increase efficiency and, in notebook personal
computers, prolong battery life. Further, advanced electronic systems outside of
communications applications also have greater power management requirements. All
of these systems, including efficient power supplies for communications and
computing networks and engine and chassis management in automobiles, require
advanced power management semiconductors for more complex digital signal
processors and microcontrollers and for efficient power inverters.

     The growth in Internet infrastructure, portable battery-powered computing
and communication devices and continually faster microprocessors are driving the
development of, and demand for, successively more efficient power management
integrated circuits and discrete power semiconductors.

                                       30

<PAGE>

                                    BUSINESS

GENERAL

     We are a systems oriented designer and manufacturer of analog and digital
integrated circuits and discrete semiconductors for the communications and power
management end-user markets. The majority of our revenue is derived from sales
of our analog and mixed-signal products. We use our proprietary technologies and
design capabilities to provide systems solutions for rapidly growing wireless
applications. We own over 1,250 patents and have substantial expertise in the
design and manufacturing of components that perform many of the essential
functions relating to the supply, distribution and regulation of electric power
in electronic products. Our core competencies include the design of analog,
mixed-signal, digital signal processing, radio frequency and discrete power
semiconductor products. Our products include components performing complex
communications functions, such as our PRISM(R) chip sets for wireless data
communications, digital radios and high speed converters in cellular base
stations and power management integrated circuits and discrete semiconductors
used in Internet servers and computers.

OUR BUSINESS STRATEGY

     We provide systems level solutions for the growing integrated
communications semiconductor market. Integrated communications semiconductors
enable the convergence of voice, data and video communications. Within
integrated communications, we are focused on several key markets including high
data rate wireless connectivity, power management and communications integrated
circuits for wireless and wired communications infrastructure. We use our
expertise in digital and analog semiconductors and radio and software design in
order to deliver chip sets, components, software and licensable application
designs for communications equipment customers. For fiscal year 2000, we
allocated about 92% of our research and development investment to the
development of products for the integrated communications market.

     Our business strategy emphasizes the following key elements:

     o Focus on High Growth, Integrated Communications Markets.  In light of the
       rapid expansion of communication applications and the increased
       requirement for power management in electronic systems, we focus our
       investments in these areas. We believe these markets have attractive
       growth characteristics and enable us to draw on our core competencies.
       Accordingly, we are pursuing opportunities in communications, wireless
       and power management.

     o Maintain Technology Leadership.  We focus our research and development
       investments on integrated communications. We have 220 engineers working
       on innovative wireless and power management architectures. We also have
       significant experience in analog and mixed-signal process technology and
       high volume manufacturing. In conjunction with these efforts, we will
       continue to expand our strong intellectual property position by seeking
       to increase our existing portfolio of over 1,250 patents.

     o Provide Systems Level Solutions to Our Customers.  We design and develop
       our semiconductors with a systems level approach that we believe enhances
       the value of our products as they are designed into and incorporated in
       our customers' electronic systems. This approach yields early integration
       of our products into our customers' products, provides opportunities for
       current design wins, and ultimately increases revenue as our solutions
       are incorporated within a targeted end application.

     o Focus on Partnering with Industry Leaders.  We partner with industry
       leaders in each of our target end-user markets to take our strong
       engineering and design capabilities to commercial levels. Our customer
       base of industry leaders illustrates the acceptance of our products to
       date, and we continue to partner with these customers and others to
       develop and market our next generation products. Our applications and
       design engineers support our customers' end product development.

     o Maintain High Quality Customer Service.  Quality customer service is
       critical to our customer retention and sales growth. Through our customer
       relations initiatives, we believe we distinguish ourselves from our
       competitors. Additionally, our sales force and authorized representatives
       and distributors provide customer information programs and support our
       comprehensive customer service efforts.

                                       31

<PAGE>

PRODUCTS AND TECHNOLOGY

     Our products are organized into three principal product groups: Analog &
Mixed-Signal, Discrete Power and Wireless.

<TABLE>
<CAPTION>
                                               ANALOG &                   DISCRETE
                                             MIXED-SIGNAL                  POWER                  WIRELESS
                                      --------------------------  ------------------------  ---------------------
<S>                                   <C>                         <C>                       <C>
FISCAL YEAR 2000 REVENUES...........  $396.8 million              $205.9 million            $51.5 million

PERCENTAGE OF REVENUES..............  60.7%                       31.4%                     7.9%

KEY CUSTOMERS.......................  Cisco                       Asustek                   Cisco
                                      Compaq                      Bosch                     Nokia
                                      Dell                        Compaq                    Siemens
                                      Intel                       Emerson                   Sony
                                      Siemens                                               3Com
</TABLE>

ANALOG & MIXED-SIGNAL

     Our Analog & Mixed-Signal portfolio represented 60.7% of our fiscal year
2000 revenue. We deliver leading-edge analog, mixed-signal and digital signal
processing semiconductors and groups of semiconductors that are designed to work
together, also known as chip set solutions, for today's fastest-growing
communications markets. Our design focus targets such opportunities as wired
networks, subscriber line interface circuits, or SLICs, which interface analog
and digital signals for telecom systems, and high-speed digital radios for
cellular basestations. The two analog product lines include the following:

     Signal Processing Products.  We have a portfolio of linear, mixed-signal
and digital signal processing integrated circuits optimized for high-speed
communications applications. Communications analog and mixed-signal integrated
circuits are primarily targeted at wired and wireless voice and data
communications infrastructure applications. We have developed a complete
portfolio of digital radio signal processing products and a line of 8-, 12- and
14-bit high speed data acquisition converter integrated circuits for cellular
basestations, wireless data links, wireless local loop and broadband wireless
access, which we refer to as the wireless infrastructure market. These products,
designated CommLink(TM), enable our customers to increase the amount of data
that can be transmitted, enabling the addition of high speed data transmission
to cellular communications networks. These integrated circuits enable faster
wireless data links between remote basestations and also enable more efficient
cable "headends"--the ground station for the satellite links and broadband
wireless access--which is sometimes called Wireless Cable or LMDS. Our products
support cellular standards including 2G Digital such as IS-95 CDMA and GSM, 2.5G
such as Edge and IS-95+, and 3G such as Wideband CDMA. We utilize both systems
level engineering and integrated circuit expertise to offer superior products
for wireless communications systems. This combination of expertise enabled us to
introduce the industry's first digital signal processing-based single chip, the
HSP50016, which increased the efficiency of signal chain implementation through
component reductions. We continue that leadership with the HSP50216 Quad
programmable down converter for use in 2.5G cellular basestation designs.

     New generations of high performance digital signal processing
communications integrated circuits require ever increasing performance from the
analog-to-digital and digital-to-analog converters that convert between digital
signals and analog radio frequency signals for wireless applications. We
currently market a family of 6- to 14-bit, CMOS analog-to-digital and
digital-to-analog converters in multiple speed ranges and functional
combinations in order to complement our digital radio wireless infrastructure
solutions.

     With more than 15 years of experience in their design and development, we
continue to expand our portfolio of SLICs. SLICs, which are used in many
telephone applications, serve two primary functions. First, they interface
analog voice signals with digital processors. Second, they serve the simple, yet
essential, function of ringing a telephone to signal an incoming call. Recently,
we introduced an advanced ringing SLIC, which combined both functions into a
single SLIC. Thus, the ringing SLIC acts as both an interface into the telephone
and also rings the telephone. Our newest ringing SLIC product, a voice over
internet protocol, or VoIP, product, enables the use of analog phones in the
emerging Internet telephony market. Our SLIC portfolio of advanced telecom
linecard solutions are ideal for today's universal telecom exchange

                                       32

<PAGE>

systems, including Plain Old Telephone Service, or POTS, Private Branch
Exchanges, Central Office, Loop Carrier, Fiber in the Loop and Wireless Local
Loop.

     Included in our legacy base product portfolio are operational amplifiers,
which are referred to as op amps, interface integrated circuits, industrial and
video integrated circuits and digital products which serve both defense and
commercial systems, with microprocessor, memory and data communications
products. These products typically have long life cycles and are designed into
our customers' products. These include the industry standard BiCMOS high speed
op amp and the low power instrumentation converter. This portfolio is sold to a
broad range of customers in industrial, medical, computer, avionics and test and
measurement instrumentation markets, primarily through distribution partners.
These products typically have long life cycles and are designed into our
customers' products thereby supporting long-term sales. Our end-user markets
include wireless communications, video and image processing, high-speed
satellite communications, test/measurement equipment and medical
instrumentation.

     We supply our communications products to Cisco, Dell, IBM, Lucent, Siemens
and other customers.

     Power Management Integrated Circuits.  We develop power system
architectures and provide a portfolio of computer products, file server/storage
system products, networking and VoIP products. Our power management products for
computing applications operate in a voltage range of 1 to 30 volts and are
designed into desktop personal computers, file servers and workstations. We have
also developed new power management circuits for 24x7 server networks supporting
e-commerce on the Internet.

     Our highly successful HIP6000 family of pulse width modulator controller
integrated circuits are used in about 30% of all personal computers that use
Pentium, Pentium II and Pentium III class processors. We are currently working
with motherboard manufacturers to have our pulse width modular controller
integrated circuits designed into motherboards utilizing the recently introduced
Pentium 4 processor. We expect to begin shipping products for Pentium 4
motherboards as Pentium 4 processors begin to ship in greater volumes in the
near term. Based on our current design wins, we believe that we also will have a
substantial share of the volume of pulse width modulator controller integrated
circuits used in motherboards utilizing Athlon processors.

     We have introduced an advanced architecture which delivers multiphase power
to higher speed microprocessors. This is a requirement for Intel and AMD
microprocessors above 800 MHz. This new platform of products consists of three
controllers (HIP6301, HIP6302 and HIP6303) and three gate drivers (HIP6601,
HIP6602 and HIP6603). We also offer a complete advanced configuration power
interface solution for instant on and sleep mode capability used to save energy
in personal computers.

     We provide complete power solutions for the file server and redundant array
of independent disks, or RAID, market. Internet growth, especially e-commerce,
is driving the need for high reliability/availability in these applications. Our
family of hot plug products allows repair and maintenance of a file server and
RAID without a complete shutdown of the file server.

     We are currently expanding our space-qualified portfolio by offering our
Starpower(TM) family of radiation hardened power management products for
commercial satellite applications. We are developing what we believe will be an
industry-leading radiation hardened DC/DC Converter power module line to provide
highly reliable power management in communications satellites. Our radiation
hardened integrated circuit product portfolio includes logic, memories, signal
processing components, microprocessors and custom devices, providing system
designers with a full complement of products for radiation hardened systems used
in commercial space and defense applications.

     Our power management integrated circuits are also used in industrial
control and automotive engine management systems.

     We supply our power management products to Asustek, Compaq, Dell, IBM,
Intel and other customers.

                                       33

<PAGE>

     DISCRETE POWER

     Our Discrete Power portfolio represented 31.4% of our revenue for fiscal
year 2000. Discrete Power products, coupled with our power management integrated
circuits, provide unique power management solutions for the integrated
communications market. Our MOSFETs have been designed in conjunction with our
multiphase power integrated circuits for faster, next generation computers. We
also manufacture efficient power MOSFETs used in servers supporting the
Internet. We are investing in new, efficient trench power devices for cellular
phones and portable information appliances.

     In 1980, we invented IGBTs, or insulated gate bipolar transistors, and hold
some of the fundamental patents that cover their production. We introduced our
600V SMPS, or switch mode power supply Series IGBT family of high-speed, high
efficiency IGBTs specifically tailored for operation in today's switched mode
power supplies. Our portfolio also includes radiation hardened N- and P-channel
metal oxide semiconductor field effect transistors, or MOSFETs, for
high-reliability applications such as communications satellites.

     In addition, our IGBTs, MOSFETs and rectifiers are used in automotive and
industrial applications. These include motor management, automotive ignition,
welding, instrumentation and other industrial applications. Like our base analog
and mixed-signal products, our base power MOSFETs are designed into our
customers' products with life cycles spanning several years.

     We supply our Discrete Power products to Asustek, Bosch, Compaq, Emerson
and Siemens and other customers who use our products for personal computer
motherboard power, diesel fuel injection, body and chassis controls and
industrial power supplies.

     WIRELESS

     Our Wireless portfolio represented 7.9% of our revenue for fiscal year
2000. We are the leading developer of semiconductor solutions for the emerging
wireless local area networking market. Our PRISM(R) family of chip sets
addresses the growing demand for wireless networking for use in both the home
and business providing cost effective, wireless access to high data rate
broadband communications networks. We believe we are the only supplier of an
integrated wireless networking product solution, including reference designs,
software and all integrated circuits necessary for wireless data communications
at data rates of 11 megabits-per-second.

     The PRISM II chip set is composed of five highly integrated semiconductors.
They are the 2.4GHz power amplifier, RF/IF up and down converter, IF/BV
quadrature modulator/demodulator, baseband processor and the medium access
controller. These integrated circuits represent design and manufacturing
competence in radio frequency, or RF, mixed-signal and digital technologies. The
2.4GHz power amplifier, RF/IF up and down converter, and the quadrature
modular/demodulator are designed and manufactured using a high performance RF
silicon germanium process technology. The baseband processor and medium access
controller are designed and manufactured using submicron complementary metal
oxide semiconductor, or CMOS, process technologies.

     Because we design all of the components of our wireless chip set, including
reference designs and software, we believe we provide our customers with the
best available performance and value. Providing our customers with a turnkey
wireless data radio solution enables them to have the fastest time to market for
their systems which we believe is a critical competitive advantage in this
emerging market. More than 40 companies, including Cisco, Compaq, Nokia, Samsung
and Sony, have adopted use of the PRISM(R) chip set in their products. Our PRISM
II chip set is our second-generation chip set capable of delivering high-speed
wireless networking at data rates of 11 megabits-per-second. The PRISM II chip
set incorporates advanced integrated circuit design with silicon germanium
process technology which makes the PRISM II chip set five times faster while
reducing power consumption by 50% compared to the original PRISM(R) chip set.
Since the introduction of the PRISM II chip set, we have been developing
relationships with original equipment manufacturers, including Cisco, Compaq,
Nokia, Nortel, Siemens, Sony, Symbol and 3Com, for use of the PRISM II chip set
in a variety of wireless local area network applications for home and business.

     As of May 29, 2000, we acquired privately held No Wires Needed B.V., or
NWN, for 3.35 million shares of our Class A Common Stock. Based in Bilthoven,
The Netherlands, NWN provides high performance wireless-to-broadband access
point reference designs. NWN utilizes the PRISM(R) chip set together with its
own high data rate digital controller integrated circuits allowing end users to
wirelessly connect multiple computers and hand-held or Internet appliances to a
wired broadband network. NWN also provides wireless encryption software which
enhances the security of a wireless local area network.

                                       34

<PAGE>

Additionally, NWN has designed a high data rate digital controller integrated
circuit, which is a component we believe will enhance the performance of future
generations of our PRISM(R) chip set. The NWN digital integrated circuit, which
we refer to as a medium access controller, or MAC, is compliant with the
IEEE802.11b standard and can support data rates of up to 54 megabits-per second,
which is vital for multi-channel voice and digital video in homes and offices.
The acquisition of NWN added 52 new employees.

CUSTOMERS AND APPLICATIONS

     We seek to capitalize on our core competencies by focusing on the
integrated communications market. Within the integrated communications market,
our products include communication integrated circuits, power management
semiconductors and PRISM(R) wireless local area network chip sets.

<TABLE>
<CAPTION>
                           END MARKETS                       APPLICATIONS                    KEY CUSTOMERS
                     ------------------------   --------------------------------------    -------------------
<S>                  <C>                        <C>                                       <C>
Communications       Wireless local area        Wireless local area networks providing    Cisco, Compaq,
                     networks,                  network wireless access to broadband      Dell, IBM, Lucent,
                     communications,            (cable, ethernet, xDSL, ISDN)             Nokia, Nortel,
                     telecommunications         networks, video, wired and wireless       Samsung, Siemens,
                                                telephony, home gateways, networking      Sony, Symbol, 3Com

Power Management     Networking and computing   File servers, PC motherboards,            Asustek, Compaq,
                                                printers, workstations                    Dell, IBM, Intel
</TABLE>

     Outside of our targeted end markets, our remaining category is industrial
products. Applications in this category include automotive applications such as
fuel injection and ignition circuits, industrial applications including power
supplies and defense applications such as smart munitions and tactical and
strategic missiles. We sell to, among others, DaimlerChrysler, Siemens, Boeing,
Lockheed Martin and Emerson.

SALES, MARKETING AND DISTRIBUTION

     In fiscal years 2000 and 1999, we derived about 60% and 66%, respectively,
of our sales from original equipment manufacturer, or OEM, customers through our
global sales organizations and 40% and 34%, respectively, of our sales through
distributors. We operate sales organizations in the Americas, Europe and the
Asia/Pacific region. Our sales organizations are supported by logistics
organizations. Product orders flow to our manufacturing facilities or to one of
our foundries where the product is made. Products are then shipped to the
customer either directly or indirectly via our warehouses in the United States,
Europe and Asia.

     We have dedicated direct sales organizations operating in the Americas,
Europe and Asia/Pacific regions that serve our major OEM customers. We have
strategically located our sales offices near these major OEM customers. We also
have a large network of distributors and manufacturers' representatives to
distribute our products around the world. To serve our customer base, we
maintain a small, highly focused, direct sales force selling products for each
of our targeted product areas, combined with an extensive network of
distributors and manufacturers' representatives. Our sales force is segmented by
end-user markets, thereby ensuring each salesperson has an end-user market
expertise and focus. We also maintain a dedicated marketing organization, which
supports each product area on a regional basis.

     Typically, distributors handle a wide variety of products, including
products that compete with our products, and fill orders for many customers.
Some of our sales to distributors are made under agreements allowing for market
price fluctuations and/or the right of return on some unsold merchandise.
Virtually all distribution agreements contain an industry standard stock
rotation provision allowing for minimum levels of inventory returns. In our
experience, these inventory returns can usually be resold. Manufacturers'
representatives generally do not offer products that compete directly with our
products, but may carry complementary items manufactured by others.
Manufacturers' representatives do not maintain a product inventory; instead,
their customers place large quantity orders directly with us and are referred to
distributors for smaller orders.

                                       35

<PAGE>

RESEARCH AND DEVELOPMENT

     We believe that the continued introduction of new products in our target
markets is essential to our growth. We believe that we must continue to
innovate, enhance and expand our products and services to maintain our
leadership position, and we intend to achieve this through in-house research and
development efforts and selective acquisitions. As of June 30, 2000, we had 571
employees engaged in research and development efforts. Our research and
development efforts are focused on new product development and improvements in
process technology in our growth areas of communications and power management.
For fiscal year 2000, we allocated about 92% of our research and development
investment towards development of products for the integrated communications
market.

     Our expenditures for research and development in fiscal years 1998, 1999
and 2000 were $75.1 million, $67.0 million and $78.0 million, respectively. Each
of our product areas maintains independent research and development
organizations. We work closely with our major customers in many research and
development situations to increase the likelihood that our products will be
designed directly into the customers' products and achieve rapid and lasting
market acceptance.

MANUFACTURING

     We fabricate wafers at three locations in the United States--Mountaintop,
Pennsylvania, Palm Bay, Florida, and Findlay, Ohio. We also use a number of
outside wafer fabrication foundries for the manufacture of device types where we
do not have the necessary technologies resident in house. We also utilize
advanced manufacturing processes of outside foundries for certain components of
our PRISM(R) products.

     We recently sold our principal assembly and test facility, located in Kuala
Lumpur, Malaysia, to ChipPAC and entered into a multi-year supply agreement with
ChipPAC under which the Malaysian facility became our preferred provider of
semiconductor assembly and test services. We also have limited assembly and test
capability in Palm Bay, Florida. We use a number of assembly and test
subcontractors for device types and packages that cannot be assembled and tested
at ChipPAC's facility in Kuala Lumpur.

     Our wafer fabs are among the most productive and efficient in the industry.
We believe we can continue to maintain competitive cost, further increase
productivity and enhance our process efficiency by investing in people and
assets, where necessary.

     We utilize an extensive set of manufacturing processes to fabricate our
products, including technologies such as: ULTRAFET(R), IGBT, BiCMOS, Power
BiCMOS, High Frequency Bipolar, CMOS and Rad Hard Processes. The table below
sets forth some information regarding our manufacturing facilities, products,
wafer diameter and annual wafer capacity:

                             FABRICATION FACILITIES

<TABLE>
<CAPTION>
                                                                                                 ANNUAL CAPACITY
      LOCATION                         PRODUCTS/FUNCTIONS                    WAFER DIAMETER     (6" EQUIVALENT WAFERS)
---------------------  --------------------------------------------------   ----------------    ---------------------------
<S>                    <C>                                                  <C>                 <C>
Mountaintop,           MOSFETs, IGBTs, rectifiers                                 6", 8"                  420,000
 Pennsylvania

Findlay, Ohio          Standard linear/interface integrated circuits,                 5"                  120,000
                       power integrated circuits

Palm Bay, Florida      Power integrated circuits, telecom SLICs, rad hard         4", 6"                  175,000
                       integrated circuits
</TABLE>

                                       36

<PAGE>

     Our manufacturing processes use many raw materials, including silicon
wafers and various chemicals and gases. We obtain our raw materials and supplies
from a large number of sources on a just-in-time basis. Although supplies for
the raw materials used by us are currently adequate, shortages could occur in
various essential materials due to interruption of supply or increased demand in
the industry.

BACKLOG

     Our sales are made pursuant to purchase orders that are generally booked
from one to six months in advance of delivery. Backlog is influenced by several
factors including market demand, pricing and customer order patterns in reaction
to product lead times. Although quantities actually purchased by customers may
vary between booking and delivery to the extent customer needs or industry
conditions change, our backlog has historically been a reliable indicator of our
future revenues. Our backlog was about $188.5 million at July 3, 1998, $174.0
million at July 2, 1999 and $259.5 million at June 30, 2000. We expect to ship
the backlog at June 30, 2000 within twelve months of that date.

SEASONALITY

     A lower percentage of our products is sold to the computer end-user or into
the computer market than is sold by other semiconductor manufacturers. Sales in
the computer market fluctuate more than in other semiconductor markets. As a
result, we experience less seasonal fluctuation than the semiconductor industry
as a whole. Historically, our first quarter has been the weakest due to model
year changeovers in the automotive industry and summer holiday seasons,
primarily in Europe. Our increasing focus on integrated communications products
has resulted in a higher percentage of our sales coming from the communications
markets in the second half of our fiscal year. Sales made into the
communications market generally experience less seasonality than sales of our
historical mix of products.

COMPETITION

     We compete in different markets to various degrees on the basis of price,
technical performance, product features, product system compatibility,
customized design, availability, quality and sales and technical support. Our
ability to compete successfully depends on elements both within and outside of
our control, including successful and timely development of new products and
manufacturing processes, product performance and quality, manufacturing yields,
product availability, intellectual property protection obtained by us and our
competitors, customer service, pricing, industry trends and general economic
trends.

     The following chart sets forth our principal competitors by business unit:

<TABLE>
<CAPTION>
BUSINESS UNIT               PRINCIPAL COMPETITORS
--------------------------  ----------------------------------------------------------------------------
<S>                         <C>
Analog & Mixed-Signal       Analog Devices, Linear Technology, Semtech, Texas Instruments

Discrete Power              International Rectifier, STMicroelectronics, Vishay

Wireless                    Lucent, Philips, Texas Instruments
</TABLE>

                                       37

<PAGE>

TRADEMARKS AND PATENTS

     We own rights to a number of trademarks and patents that are important to
our business. Among others, we consider Intersil, PRISM(R), ULTRAFET(R) and
CommLink to be trademarks that are material to our operations.

     Our corporate policy is to protect proprietary products by obtaining
patents for these products when practicable. We currently possess about 1,250
patents.

EMPLOYEES

     Our worldwide workforce consisted of 2,930 employees (full- and part-time)
as of June 30, 2000, of whom 730 were represented by collective bargaining
arrangements. Of our employees, 1,715 were engaged in manufacturing, 571 were
engaged in engineering, 394 were engaged in marketing and sales, 145 were
engaged in administration and 105 were engaged in operating our management
information systems. Of our employees, 1,786 were employed in the Analog &
Mixed-Signal area; 882 were employed in the Discrete Power area; and 262 were
employed in the Wireless area. We believe that our relations with our employees
are good.

PROPERTIES

     In the United States, we lease our corporate headquarters in Irvine,
California. Additional manufacturing, warehouse and office facilities are housed
in about 846,000 square feet, 445,000 square feet and 270,000 square feet of
space in properties owned by us in Palm Bay, Florida, Mountaintop, Pennsylvania
and Findlay, Ohio, respectively.

     Our primary engineering activity takes place in Palm Bay, Florida and at
our other manufacturing facilities. In addition, we have engineering activities
taking place in our corporate headquarters and in leased facilities in Durham,
North Carolina (Research Triangle Park), Branchburg, New Jersey,
San Antonio, Texas, Seattle, Washington and Bilthoven, The Netherlands.

     We maintain regional sales offices in Orange County, California, Palm Bay,
Florida; Burlington, Massachusetts; Dallas, Texas; San Jose, California; Munich,
Germany; Milan, Italy; Camberly, United Kingdom; and Taipei, Taiwan and other
sales offices around the world. All our offices are leased generally under short
term leases, except our offices in Palm Bay, Florida.

     We believe that our facilities around the world, whether owned or leased,
are well-maintained. Our manufacturing facilities contain sufficient production
capacity to meet our needs for the foreseeable future.

ENVIRONMENTAL MATTERS

     Our operations are subject to environmental laws in the countries in which
we operate that regulate, among other things, air, ground and water emissions at
our manufacturing facilities; the management and disposal of hazardous
substances; and the investigation and remediation of environmental
contamination. As with other companies engaged in like businesses, the nature of
our operations exposes us to the risk of environmental liabilities or claims. We
believe, however, that our operations are in substantial compliance with
applicable environmental requirements. Our costs to comply with environmental
regulations were about $6.3 million, $7.4 million and $4.8 million in each of
fiscal years 1998, 1999 and 2000, respectively.

     Our facilities in Findlay, Ohio have ongoing remediation projects to
respond to releases of hazardous substances that occurred prior to the
acquisition of Harris' semiconductor business. Our facilities in Mountaintop,
Pennsylvania have groundwater and subsurface soil contamination from past
operations, some of which occurred prior to Harris' acquisition of those
facilities, for which remediation has been conducted, and additional remediation
may be required. In addition, Harris' facilities in Palm Bay, Florida, a portion
of which includes our business, are listed on the National Priorities List for
clean-up under the Comprehensive Environmental Response, Compensation, and
Liability Act ("Superfund"). Remediation activities are ongoing in Palm Bay in
accordance with consent decrees entered into by Harris with the United States
Environmental Protection Agency. Harris has agreed to indemnify us for the cost
of these projects at all of our facilities,

                                       38

<PAGE>

including at Findlay, Ohio, Mountaintop, Pennsylvania and Palm Bay, Florida and
our former facility at Kuala Lumpur, Malaysia to the extent these costs exceed
financial reserve amounts at the time of our acquisition of the semiconductor
business of Harris. Based on the historical costs of these projects and because
the remediation projects are in advanced stages, we do not believe that the
future cleanup costs will be material, even without the indemnity.

     In connection with the closure of a waste storage pad at our former Kuala
Lumpur facility in Malaysia, a June 2000 environmental investigation identified
evidence of potential releases to the groundwater of hazardous substances that
were previously stored on the pad. Based on the composition of the groundwater
impacts, it appears that the hazardous substances were those used by Harris or
its predecessors, and not us. Harris has agreed to indemnify us for addressing
environmental conditions created prior to our ownership, and accordingly we put
Harris on notice of the potential environmental claim. We sold the business
which operates out of the Kuala Lumpur, Malaysia facility to ChipPAC in June
2000 (See Business--Manufacturing) and we gave ChipPAC a similar indemnity.
ChipPAC provided us with a claim for indemnification by letter dated August 1,
2000. We do not have adequate information to determine the extent of the impacts
to groundwater, but we do not believe future cleanup costs, if needed, will be
material even without the Harris indemnity.

     Future laws or regulations and changes in existing environmental laws or
regulations may subject our operations to different, additional or more
stringent standards. While historically the cost of compliance with
environmental laws has not had a material adverse effect on our business,
financial condition or results of operations, we cannot predict with certainty
our future costs of compliance because of changing standards and requirements.
We cannot assure you that material costs will not be incurred in connection with
the future compliance with environmental laws or with future cleanup costs
related to currently unknown contamination.

LEGAL PROCEEDINGS

     From time to time we are involved in legal proceedings arising in the
ordinary course of business. We are presently co-defendants with Harris in a
suit brought by Ericsson alleging patent infringement, which is pending in the
Sherman Division of the United States District Court for the Eastern District of
Texas. Ericsson alleges infringement of four of its patents relating to
telephone subscriber line interface circuits. The suit was initially directed
against Harris; we were joined as defendants in this action on September 1,
1999. Ericsson seeks an injunction (requiring the co-defendants to stop making,
using or selling telephone subscriber line interface circuits which utilize
Ericsson's patents) plus damages, including lost profits and/or a reasonable
royalty, costs of suit, treble damages, prejudgment interest and attorneys'
fees. However, to the extent our liability for damages from this litigation, if
any, arises out of the conduct of the semiconductor business by Harris prior to
closing, this liability will be covered by Harris' agreement in connection with
the acquisition of the semiconductor business to provide us with certain
indemnities.

     In addition, Harris is a defendant in an action brought by Geisting &
Associates seeking to recover commissions and receivables allegedly lost as a
result of the termination of Geisting as a sales representative for our PRISM
chip set. The action is pending in the United States District Court for the
Middle District of Florida-Orlando. While Intersil has not been named as a
defendant, we could be liable for any judgment entered against Harris on the
pending claims, and we are conducting the defense of the action. Geisting seeks
damages, including lost profits, and attorneys' fees.

     We believe that there is no litigation pending that could have,
individually or in the aggregate, a material adverse effect on our business,
financial condition or results of operations.

                                       39

<PAGE>

                                   MANAGEMENT

DIRECTORS AND EXECUTIVE OFFICERS

     The following table sets forth certain information regarding the persons
who are members of our Board of Directors, key employees or executive officers.
With the exception of Messrs. Conn, Peeters and Pokelwaldt, who joined as
directors on April 19, 2000, each of our directors has served as director since
our formation on June 2, 1999. Our directors will continue to hold office until
the next annual meeting of shareholders or until a successor has been elected
and qualified. With one exception, each of our officers has served as an officer
since our formation, and each of our officers will hold office until the first
meeting of directors after its next annual meeting of shareholders or until a
successor has been elected and qualified.

<TABLE>
<CAPTION>
NAME                                         AGE                                TITLE
------------------------------------------   ---   ---------------------------------------------------------------
<S>                                          <C>   <C>
Gregory L. Williams.......................   47    Chief Executive Officer, Director

Daniel J. Heneghan........................   44    Vice President, Chief Financial Officer and Assistant Secretary

Larry W. Sims.............................   43    Vice President, Marketing and Sales

Lawrence J. Ciaccia.......................   41    Vice President, General Manager, PRISM(R) Wireless

W. Russell Morcom.........................   54    Vice President, General Manager, Discrete Power

Stephen M. Moran..........................   43    Vice President, General Counsel and Secretary

Julie B. Forbes...........................   43    Vice President, Human Resources

Robert W. Conn............................   58    Director

Gary E. Gist..............................   53    Director

Jan Peeters...............................   49    Director

Robert N. Pokelwaldt......................   64    Director

James A. Urry.............................   45    Director
</TABLE>

     Gregory L. Williams, Chief Executive Officer, Director.  Mr. Williams is
our Chief Executive Officer and one of our directors. From October 1998 to
August 1999, Mr. Williams was President of the semiconductor business at Harris.
From January 1998 to October 1998, Mr. Williams was Vice President and General
Manager of the Power Products Division at Harris. From 1984 to 1998,
Mr. Williams also served as Vice President and Assistant General Manager of the
Semiconductor Components Group, Vice President and General Manager of the Power
Products Division, and Vice President and Director of Automotive World Marketing
at Motorola Semiconductor, and from 1977 to 1984, Mr. Williams served with
General Electric Company.

     Daniel J. Heneghan, Vice President, Chief Financial Officer and Assistant
Secretary.  Mr. Heneghan is our Vice President, Chief Financial Officer and
Assistant Secretary. From 1996 to August 1999, Mr. Heneghan was Vice President
and Controller of the semiconductor business at Harris. From 1994 to 1996,
Mr. Heneghan was Vice President of Digital Products of the semiconductor
business at Harris. Mr. Heneghan also served at various times as Division
Controller of the semiconductor business at Harris, Director of Planning at
Harris, Director of Finance at Harris and Senior Financial Analyst with Royal
Crown Cola.

     Larry W. Sims, Vice President, Marketing and Sales.  Mr. Sims is our Vice
President, Marketing and Sales. From August 1998 to August 1999, Mr. Sims was
Vice President, Sales of the semiconductor business at Harris. From 1979 to
1998, Mr. Sims served in various sales management positions at Motorola
Semiconductor.

     Lawrence J. Ciaccia, Vice President, General Manager, PRISM(R) Wireless.
Mr. Ciaccia is our Vice President and General Manager, PRISM(R) Wireless
Products Business Unit. From February 1998 to December 1999, Mr. Ciaccia was
Vice President and Director of Engineering for the PRISM(R) Wireless Products
business at Harris. From 1997 to 1998 Mr. Ciaccia was Director of Strategic and
Product Marketing for the Multimedia Products business at Harris. Mr. Ciaccia
also served at various times from 1993 to 1997 as Director of Engineering for
several different semiconductor businesses at Harris.

     W. Russell Morcom, Vice President, General Manager, Discrete
Power.  Mr. Morcom is our Vice President and General Manager, Discrete Power.
From 1997 to August 1999, Mr. Morcom was Vice

                                       40

<PAGE>

President and General Manager, Operations and Quality of the semiconductor
business at Harris. From 1991 to 1997, Mr. Morcom was Vice President and General
Manager, Semiconductor Products Division of the semiconductor business of
Harris.

     Julie B. Forbes, Vice President, Human Resources.  Ms. Forbes joined our
company as Vice President, Human Resources in August 1999. Prior to joining us,
Ms. Forbes was the Vice President and Director of Human Resources for the
Satellite Communications Group of Motorola from 1998 to 1999. From 1992 until
1998, Ms. Forbes served in various other Human Resources positions in the
Semiconductor Products Sector of Motorola.

     Stephen M. Moran, Vice President, General Counsel and Secretary.  Mr. Moran
joined our company as Vice President, General Counsel, and Secretary in January
of 2000. Prior to joining us, Mr. Moran served with Toshiba America, Inc. from
September 1996 until January 2000 and served as the Vice President and General
Counsel for Toshiba America Electronic Components, Inc. (Toshiba America's
Semiconductor Company) from January 1998 to January 2000. From March 1992 until
September 1996, Mr. Moran was the General Counsel of ITT Cannon, Inc., an ITT
Industries corporation.

     Robert W. Conn, Director.  Dr. Conn is one of our directors. Dr. Conn has
been the Dean of the Jacobs School of Engineering, University of California, San
Diego, and the Walter J. Zable Endowed Chair in Engineering since 1994. Prior to
joining University of California, San Diego, Dr. Conn served as Professor of
Engineering and Applied Sciences and founding Director of the Institute of
Plasma and Fusion Research at the University of California, Los Angeles. Dr.
Conn has been editor of the journal Fusion Engineering and Design, since 1986.
Dr. Conn recently served as a member of the President's Committee of Advisors on
Science and Technology Panel on Energy R&D Policy for the 21st Century, which
service ended in 1998.

     Gary E. Gist, Director.  Mr. Gist is one of our directors. Mr. Gist has
served as the President and Chief Executive Officer of Palomar Technological
Companies since 1995, a corporation made up of a diverse group of companies that
focus on designing and manufacturing electronic products including the following
companies: HID Corporation, AML Wireless Systems, Inc., Palomar Display
Products, Inc., Palomar Products, Inc. and Palomar Technologies, Inc. Prior to
1995, he was Division Manager of the Technology Products Division of Hughes
Industrial Electronics Company.

     Jan Peeters, Director.  Mr. Peeters is one of our directors. Mr. Peeters is
the founder, Chairman, President, Chief Executive Officer and a major
shareholder of Olameter Inc., a communications and data management service
provider which he formed in 1998. Mr. Peeters was a founder, Vice-Chairman,
President and Chief Executive Officer of Fonorola Inc. where he held the
position of President and Chief Executive Officer since 1990 and the position of
Vice-Chairman since 1994, until that company was sold to Call-Net Enterprises in
June 1998. Mr. Peeters serves on the Board of Directors of Call-Net Enterprises
and Cogeco, Inc.

     Robert N. Pokelwaldt, Director.  Mr. Pokelwaldt is one of our directors.
Mr. Pokelwaldt retired as the Chairman and Chief Executive Officer of YORK
International Corporation, an independent supplier of heating, ventilating, air
conditioning, and refrigeration products in the U.S. and internationally in
November 1999. He became President and Chief Executive Officer of YORK in 1991,
and Chairman of YORK in January 1993. Mr. Pokelwaldt joined YORK as President of
Applied Systems Worldwide, a YORK Division, in 1988, and two years later was
appointed President and Chief Operating Officer of YORK International. Mr.
Pokelwaldt serves on the Board of Directors of Mohawk Industries, Susquehanna
Pfaltzgraff, Inc. and Carpenter Technology.

     James A. Urry, Director.  Mr. Urry is one of our directors. Mr. Urry has
been with Citibank, N.A. since 1981 serving as a Vice President since 1986. He
has been a Vice President of Citicorp Venture Capital Ltd., which is an
affiliate of ours, since 1989. He is also a Director of Airxcel, Inc., Hancor
Holding Corporation, IKS Corporation, Palomar Technological Companies and York
International Corporation.

     Our Board of Directors currently consists of six directors, determined as
follows: our chief executive officer, one individual designated by Sterling, up
to two independent directors designated by Sterling (to the extent permitted by
applicable law as determined in Sterling's sole discretion) and, in the event
the Board includes two independent directors designated by Sterling, one
additional individual designated by Sterling.

                                       41

<PAGE>

The holders of a majority of the outstanding shares of Class A Common Stock
(including any shares of Class A Common Stock held by Sterling) have the right
to veto the election of any independent directors designated by Sterling. Under
our Shareholders' Agreement, each of our shareholders prior to the initial
public offering (owning in the aggregate 18,554,703 shares, or approximately
41%, of the outstanding Class A Common Stock, our only class of voting stock,
and 49,746,482 shares, or 100%, of Class B Common Stock which are convertible
into shares of Class A Common Stock on a one-to-one basis) agrees to take all
action necessary (including voting his, her or its shares, calling special
meetings and executing and delivering written consents) to ensure our Board of
Directors will be composed at all times as described in this paragraph.

DIRECTOR COMPENSATION AND ARRANGEMENTS

     Those directors who are employed by us or by Citicorp Venture Capital Ltd.
do not receive compensation for their services as directors. All other directors
receive cash in the amount of $10,000 per year and $1,500 and $1,000,
respectively, per board and committee meeting attended and non-cash compensation
of a one-time appointment grant of options to purchase 7,500 shares of our
Class A Common Stock and an annual grant of options to purchase 5,000 shares of
our Class A Common Stock. All directors will be reimbursed for travel and other
expenses incurred in attending meetings of the Board of Directors or its
committees.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION; AUDIT COMMITTEE

     James A. Urry and Gary E. Gist are the members of our Compensation
Committee. Jan Peeters, Gary E. Gist, and Robert N. Pokelwaldt are the members
of our Audit Committee.

                                       42

<PAGE>

     EXECUTIVE COMPENSATION

     The following table sets forth certain information concerning the
compensation received by our five most highly compensated officers for services
rendered in fiscal years 1999 and 2000.

                           SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
                                                                                   LONG-TERM COMPENSATION
                                                                                 ---------------------------
                                                                                    AWARDS
                                              ANNUAL COMPENSATION                -------------      PAYOUTS
                                   ------------------------------------------      SECURITIES     ----------
       NAME AND          FISCAL                               OTHER ANNUAL         UNDERLYING        LTIP         ALL OTHER
  PRINCIPAL POSITION      YEAR      SALARY     BONUS(1)    COMPENSATION(2)(3)      OPTIONS(4)       PAYOUTS     COMPENSATION(5)
----------------------   ------    --------    --------    ------------------    -------------    ----------    ---------------

<S>                      <C>       <C>         <C>         <C>                   <C>              <C>           <C>
Gregory L. Williams...    2000     $399,615    $ 49,559         $430,052            140,000         $    0          $29,312
 Chief Executive          1999      318,615      20,531            6,925                  0              0           12,207
 Officer

Larry W. Sims             2000      239,231      41,698          421,239             63,334              0            6,666
  Vice President,         1999      185,769     117,953           47,174                  0              0            1,889
  Marketing and Sales

George L. Gidzinski...    2000      190,769      22,173                0             63,334         19,620           10,899
  Vice President and      1999      133,269      46,683            3,264                  0         28,350           15,128
  General Manager,
  Analog and
  Mixed-Signal

W. Russell Morcom.....    2000      186,923      51,360                0             63,334         49,050           16,099
  Vice President and      1999      170,000     113,623           10,798                  0         70,875           57,114
  General Manager,
  Discrete Power

Daniel J. Heneghan....    2000      179,712      44,287                0             63,334         17,249           10,405
  Vice President,         1999      121,980      44,121            1,920                  0         24,924           23,774
  Chief Financial
  Officer and
  Assistant Secretary
</TABLE>

------------------
(1) This category includes Annual Incentive Plan bonus for all officers and a
    sales incentive compensation bonus for Mr. Sims. It also includes a
    disruption bonus for Mr. Heneghan in the amount of $25,000 in fiscal year
    2000 and a disruption and signing bonus for Mr. Sims in the amount of
    $65,000 in fiscal 1999.

(2) Except for Mr. Williams and Mr. Sims, none of the executive officers named
    in the Summary Compensation Table received personal benefits in excess of
    $50,000 or 10% of annual salary and bonus for fiscal year 2000.
    Mr. Williams' and Mr. Sims' personal benefits for fiscal year 2000 included
    relocation expenses and applicable taxes associated with their relocation to
    the corporate office in Irvine, California.

(3) Except for Mr. Sims, none of the executive officers named in the Summary
    Compensation Table received personal benefits in excess of the lesser of
    $50,000 or 10% of annual salary and bonus for fiscal year 1999. Mr. Sims'
    personal benefits for fiscal year 1999 included relocation expenses and
    applicable taxes associated with his relocation to Melbourne, Florida. The
    other amounts reported represent dividend equivalent payments on outstanding
    performance shares granted under Harris' Stock Incentive Plan for which the
    performance period had not expired.

(4) All stock options were granted under the Intersil Holding Corporation 1999
    Equity Compensation Plan. The stock option grants terminate ten years from
    the date of grant and vest over a five year period--20% upon each of the
    first five anniversary dates of the grant.

(5) Amounts reported reflect contributions and allocations to defined
    contribution retirement plans and the value of insurance premiums for term
    life insurance and disability insurance.

                                       43

<PAGE>

     The following table provides information concerning stock options granted
to the executive officers named in the Summary Compensation Table during fiscal
year 2000.

<TABLE>
<CAPTION>
                                                                                                           POTENTIAL REALIZABLE
                                                   OPTIONS GRANTED IN LAST FISCAL YEAR                          VALUE AT
                                       ------------------------------------------------------------        ASSUMED ANNUAL RATES
                                                         PERCENTAGE OF                                            OF STOCK
                                                          ALL OPTIONS                                       PRICE APPRECIATION
                                       NUMBER OF          GRANTED TO                                           FOR OPTION
                                       SECURITIES       ALL EMPLOYEES                                            TERM (4)
                                       UNDERLYING         IN FISCAL         EXERCISE      EXPIRATION    ------------------------
                NAME                   OPTIONS (1)        YEAR (2)           PRICE         DATE (3)         5%           10%
------------------------------------   -----------    -----------------    ----------    ----------    ----------    ----------
<S>                                    <C>            <C>                  <C>           <C>           <C>           <C>
Gregory L. Williams.................     140,000             4.4%            $25.00       2/24/2010    $2,201,131    $5,578,099
Larry W. Sims.......................      63,334             2.0              25.00       2/24/2010       995,760     2,523,452
George L. Gidzinski.................      63,334             2.0              25.00       2/24/2010       995,760     2,523,452
W. Russell Morcom...................      63,334             2.0              25.00       2/24/2010       995,760     2,523,452
Daniel J. Heneghan..................      63,334             2.0              25.00       2/24/2010       995,760     2,523,452
</TABLE>

------------------
(1) These options vest in twenty-percent increments on the first five
    anniversaries of the grant date of February 24, 2000.
(2) A total of 3,177,184 options were granted to Intersil employees under the
    Intersil Stock Option Plan in fiscal year 2000.
(3) The options will expire ten years after the grant date of February 24, 2000.
(4) Represents the potential realizable value of the underlying shares of
    Intersil common stock at the expiration date based on an assumed annual
    appreciation rate of 5% and 10%, set by the Securities and Exchange
    Commission. The amounts shown are not intended to forecast future
    appreciation in the price of our Class A Common Stock.

     The following table sets forth information regarding the number and value
of options held by the executive officers named in the Summary Compensation
Table at the end of fiscal year 2000.

                    OPTION VALUES AT END OF LAST FISCAL YEAR

<TABLE>
<CAPTION>
                                                                 NUMBER OF SECURITIES                NET VALUE OF
                                                                UNDERLYING UNEXERCISED         UNEXERCISED IN-THE-MONEY
                                                                 OPTIONS AT YEAR-END            OPTIONS AT YEAR-END(1)
                                                             ----------------------------    ----------------------------
                                                             EXERCISABLE    UNEXERCISABLE    EXERCISABLE    UNEXERCISABLE
                                                             -----------    -------------    -----------    -------------
<S>                                                          <C>            <C>              <C>            <C>
Gregory L. Williams.......................................         --          140,000             --        $ 4,068,400
Larry W. Sims.............................................         --           63,334             --          1,840,486
George L. Gidzinski.......................................         --           63,334             --          1,840,486
W. Russell Morcom.........................................         --           63,334             --          1,840,486
Daniel J. Heneghan........................................         --           63,334             --          1,840,486
</TABLE>

------------------
(1) Reflects net pre-tax amounts determined by subtracting the exercise price
    from $54.06 per share, the fair market value of common stock at the end of
    fiscal year 2000.

EMPLOYMENT AGREEMENTS

     We and Intersil entered into an employment agreement with Mr. Williams for
him to serve as our Chief Executive Officer and a member of our Board of
Directors. His employment agreement provides for an annual base salary of
$425,000, subject to increases and annual performance bonuses at the discretion
of the Board of Directors. The agreement also provides for Mr. Williams to
receive our standard benefits. The term of the agreement is 60 months from
August 13, 1999, subject to automatic renewal for successive one year terms,
unless either we give or Mr. Williams gives prior notice of non-renewal.
Mr. Williams is subject to a noncompetition covenant during the term of his
agreement and for a period of one year following termination or expiration of
the agreement.

                                       44

<PAGE>

RETIREMENT AND SAVINGS PROGRAM

     We provide retirement benefits to substantially all employees primarily
through a retirement plan having profit-sharing and savings elements.
Contributions by us to the retirement plan are based on profits and employees'
savings with no other funding requirements. We are able to make additional
contributions to the fund at our discretion. We also have non-contributory
defined benefit pension plans which are fully funded.

     Retirement benefits also include an unfunded limited healthcare plan for
U.S.-based retirees and employees on long-term disability. We accrue the
estimated cost of these medical benefits, which are not material, during an
employee's active service life.

1999 EQUITY COMPENSATION PLAN

     We adopted the 1999 Equity Compensation Plan, effective August 13, 1999,
which we refer to as the Plan. Under the Plan, we may grant awards covering up
to 7,500,000 shares of Class A Common Stock to key employees, directors and
consultants of the company and our subsidiaries. Options to acquire 2,954,184
shares of Class A Common Stock are the only awards which have been granted under
the Plan as of June 30, 2000. The Plan authorizes us to grant either (1) options
intended to constitute incentive stock options under the Internal Revenue Code
of 1986, as amended, (2) non-qualified stock options, (3) shares of restricted
stock, (4) stock appreciation rights or (5) phantom share awards. Under the
Plan, a committee of the Board of Directors will determine the exercise price of
each option granted, provided that the minimum exercise price for an incentive
stock option will be the fair market value of the underlying stock on the date
the option is granted. The maximum term of any option will be ten years from the
date of grant. Options granted will be exercisable at the determination of the
committee of the Board of Directors. Within any calendar year, an employee may
not receive options to purchase more than 666,667 shares of Class A Common
Stock.

     A grant of restricted stock represents the right to become the owner of
that stock upon the lapse of restrictions, which will usually require the
performance of substantial additional services by the recipient of the grant. If
the restrictions are not satisfied, the restricted stock is forfeited. If the
restrictions are satisfied, the individual in question becomes the owner of
those shares. In the interim, the individual is entitled to any dividends that
may be paid on the restricted shares and is allowed to vote them. The individual
cannot, however, sell, assign or otherwise transfer the subject shares.

     A stock appreciation right entitles the recipient to a payment, in cash or
in shares of Class A Common Stock of an amount equal to the excess of the fair
market value of Class A Common Stock on the date the stock appreciation right is
exercised over the "exercise price" of the stock appreciation right, which will
usually be the fair market value of the Class A Common Stock on the date the
stock appreciation right is granted.

     A phantom stock award entitles the recipient to a payment in cash or in
shares of Class A Common Stock of an amount equal to the value of the underlying
Class A Common Stock as of the date of settlement specified in the award or
appreciation in the value of the underlying Class A Common Stock over the period
from the grant of the phantom share award to the date of settlement specified in
the award.

     The terms and conditions of grants of restricted stock, stock appreciation
rights and phantom stock awards will be governed by the Plan and by the terms of
the agreement making the grant or award, as determined by the committee of the
Board of Directors.

     Any Class A Common Stock awarded as restricted stock, awarded upon exercise
of an option or a stock appreciation right or awarded in settlement of a phantom
stock award will count against the 7,500,000 share overall limit under the Plan.

EMPLOYEE STOCK PURCHASE PLAN

     In connection with our initial public offering, we adopted the Intersil
Holding Corporation Employee Stock Purchase Plan, which we refer to as the
Employee Stock Purchase Plan. Pursuant to the Employee Stock Purchase Plan, our
employees and employees of related participating employers such as Choice-
Microsystems, Inc. have an opportunity to purchase up to 1,333,334 shares of our
Class A Common Stock at

                                       45

<PAGE>

a discount. All such employees who render more than 20 hours of service per week
for more than five months per calendar year, other than those who own 5% or more
of our outstanding securities, are eligible to participate in the Employee Stock
Purchase Plan. The Employee Stock Purchase Plan will expire 10 years from its
effective date. The Employee Stock Purchase Plan is intended to comply with the
provisions of Section 423 of the Internal Revenue Code of 1986.

     Employees purchase shares pursuant to the Employee Stock Purchase Plan by
electing to have a percentage of their base compensation withheld from their
paychecks for the duration of a six month purchase period. We hold such
compensation in notional accounts for the benefit of the participating
employees. At the end of each purchase period, the money that has accumulated in
each employee's notional account will be used to buy shares of our Class A
Common Stock at a price equal to no less than 85% of the lesser of the fair
market value of the stock on the first day of the purchase period and the fair
market value of the stock on the last day of the purchase period. Within any one
calendar year, an employee may not purchase more than $25,000 worth of our Class
A Common Stock under the Employee Stock Purchase Plan, and no more than 16,667
shares may be purchased by an employee on any purchase date.

                 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     Citicorp Mezzanine Partners, L.P. contributed $30.0 million in cash to us
in exchange for the 13.5% Subordinated PIK Note due 2010 and warrants to
purchase 3,703,707 shares of our Class A Common Stock. The 13.5% Subordinated
PIK Note due 2010 was repaid in full with the proceeds of our initial public
offering and, as a result of early repayment, the number of shares subject to
such warrants was reduced to 2,222,224 shares. We contributed the $30.0 million
from Citicorp Mezzanine Partners, L.P. to Intersil as a capital contribution.
The general partner of Citicorp Mezzanine Partners, L.P. is an affiliate of
Citicorp Venture Capital Ltd. Citicorp Venture Capital Ltd. owns an interest in
Sterling, one of our principal shareholders.

     Sterling, Harris and certain members of our senior management entered into
a Shareholders' Agreement containing certain agreements among the shareholders
regarding our capital stock and corporate governance. We exercised our option
under the Shareholders' Agreement to repurchase from Sterling Holding Company,
LLC a total of 1,833,333 shares of Class A Common Stock for an aggregate
purchase price of $137,500 to reissue to our employees. See "Description of
Capital Stock--Shareholders' Agreement."

     We purchased from Harris selected portions of the semiconductor business.
Harris entered into with us various agreements, including the Intellectual
Property Agreement, the Patent Assignment and Services Agreement, the License
Assignment Agreement, the Secondary Trademark Assignment and License Agreement,
the Harris Trademark License Agreement and the Royalty Agreement.

     o The Intellectual Property Agreement provides for the assignment by Harris
       to us of its entire ownership, right, title and interest in some
       intangible property rights owned by Harris and specific to the
       semiconductor business.

     o The Patent Assignment and Services Agreement provides for the assignment
       by Harris to us, subject to pre-existing license rights, of about 1,300
       patent rights. Harris has retained the rights to some patents for up to
       three years before assigning their entire right, title and interest
       therein to us (provided that the patents are not in litigation at the
       time, and no royalties are owed on licenses to the patents). During the
       interim preceding the assignment of these retained patents, Harris has
       granted us a worldwide, royalty-free, non-exclusive license to these
       patents, without the right to sublicense.

     o The License Assignment Agreement provides for the assignment by Harris to
       us of certain license agreements that may be assigned without the consent
       of third party licensors and licensees and also provides that Harris will
       provide us with the economic benefit of certain other material license
       agreements that may not be assigned without the consent of third party
       licensors and licensees.

     o The Secondary Trademark Assignment and License Agreement provides for the
       assignment by Harris to us of some trademarks related to products of the
       semiconductor business and provides that we grant back to Harris
       worldwide, non-exclusive, royalty-free licenses recognizing transitional
       use of some visible trademarks assigned by Harris to us.

                                       46

<PAGE>

     o The Harris Trademark License Agreement provides for the grant by Harris
       to us of non-exclusive, royalty-free licenses recognizing transitional
       use of some visible trademarks and product-embedded trademarks, which
       embedded trademarks will not be eliminated until the relevant product is
       discontinued.

     o The Royalty Agreement provides for our payment to Harris of 2% of the
       revenue generated by the sales of the PRISM(R)chip sales until
       August 13, 2004.

     In June 2000, we sold our assembly and test facilities in Malaysia along
with related intellectual property to ChipPAC in exchange for $52.5 million in
cash and preferred stock of ChipPAC that has an aggregate liquidation preference
of $17.5 million. We also assigned to ChipPAC patents, copyrights and technical
information used exclusively in or associated exclusively with our assembly and
test facilities in Malaysia and granted ChipPAC a worldwide, nonexclusive,
royalty-free license under other of our patents, copyrights and technical
information that is also used in or related to the operation of the assembly and
test facilities in Malaysia. Any intellectual property rights in the bonding
diagrams, test programs, mask works and test boards uniquely related to our
products for which ChipPAC will provide packaging and test services under the
supply agreement are licensed to ChipPAC only for use in providing those
services. We also entered into a long term joint services agreement with ChipPAC
in connection with the sale under which each party is required to assist the
other in a smooth transition of each party's operations following the sale.

     Under our supply agreement with ChipPAC, we have agreed to continue to use
the Malaysian facility to provide 100% (until June 30, 2003), 90% (from July 1,
2003 to June 30, 2004) and 80% (from July 1, 2004 to June 30, 2005) of our
semiconductor package configuration assembly and test requirements for all
products assembled and tested at the Malaysian facility on the date of the
supply agreement and any new or additional products we may develop after that
date. In addition, ChipPAC will ensure that we are allocated 100% of the
utilized capacity that was in place on the date of the supply agreement.

     One of the principal shareholders of ChipPAC is an affiliate of Sterling,
our principal shareholder.

     The terms of the agreements listed above were the result of arms-length
negotiations and in our opinion are no less favorable to us than those that
could be obtained from non-affiliated parties.

                                       47

<PAGE>

                         PRINCIPAL AND SELLING SHAREHOLDERS

     The following table sets forth information regarding the beneficial
ownership of each holder of 5% or more of the outstanding shares of our Class A
Common Stock (the only voting class of stock) and Class B Common Stock, each
director and each executive officer named in the Summary Compensation Table, and
all directors and officers as a group, as of June 30, 2000. The table does not
include shares of our Class A Common Stock issuable upon conversion of the
warrants issued in connection with (i) the 13.5% Subordinated Holding PIK Note
due 2010 and (ii) the 13.25% Senior Subordinated Notes due 2009.

     The number of shares deemed outstanding after this offering includes the
shares of Class A Common Stock that we are offering for sale in this offering
but assumes no exercise by the underwriters of their over-allotment option.
Unless otherwise indicated, the address of each person owning more than 5% of
our outstanding shares is c/o Intersil Holding Corporation, 7585 Irvine Center
Drive, Suite 100, Irvine, California 92618.


<TABLE>
<CAPTION>
                                                                              CLASS A COMMON STOCK(1)
                                                  -------------------------------------------------------------------------------
                                                      SHARES OWNED         SHARES                    SHARES OWNED
                                                   PRIOR TO OFFERING      OFFERED(2)                AFTER OFFERING(3)
                                                  --------------------    ---------   -------------------------------------------
NAME OF BENEFICIAL OWNER                            NUMBER     PERCENT     NUMBER         NUMBER                PERCENT
------------------------------------------------- ----------   -------    ---------   --------------------   --------------------
<S>                                               <C>          <C>        <C>         <C>                    <C>
Sterling Holding Company, LLC(6)(7) ............. 10,738,026    23.98%    6,218,535         4,519,491                 9.46%

Harris Corporation(8) ...........................    892,806     2.00%           --           892,806                 1.87%
  1025 W. NASA Boulevard
  Melbourne, Florida 32919

Gregory L. Williams(9) ..........................  2,090,056     4.67%      299,967         1,790,089                 3.75%

W. Russell Morcom(10) ...........................    573,570     1.28%       85,350           488,220                 1.02%

Larry W. Sims(11) ...............................    541,750     1.21%       57,913           483,837                 1.01%

George L. Gidzinski(12) .........................    461,098     1.03%           --           461,098                    *

Daniel J. Heneghan(13) ..........................    392,685        *        58,902           333,783                    *

Karl McCalley ...................................    285,006        *        53,514           231,492                    *

Ray D. Odom(14) .................................    357,074        *        53,106           303,968                    *

Julie B. Forbes(15) .............................    277,486        *        40,714           236,772                    *

Lawrence J. Ciaccia(16) .........................    355,238        *        50,000           305,238                    *

Stephen M. Moran.................................     33,334        *            --            33,334                    *

James A. Urry(17) ...............................     32,024        *            --            32,024                    *

Gary E. Gist(18) ................................      4,708        *            --             4,708                    *

Robert W. Conn...................................         --       --            --                --                   --

Jan Peeters......................................      3,034        *            --             3,034                    *

Robert N. Pokelwaldt.............................         --       --            --                --                   --

All directors and executive officers as a
group (15 persons) ..............................  5,407,063    12.08%      699,466         4,707,597                  9.85

The Gregory L. Williams and Linda
  H. Williams Trust dated 1/28/00 FBO
  A Family Member. ..............................     66,667        *        13,333            53,334                    *

The Gregory L. Williams and Linda
  H. Williams Trust dated 1/28/00 FBO
  A Family Member. ..............................     66,667        *        13,333            53,334                    *

The Gregory L. Williams and Linda
  H. Williams Trust dated 1/28/00 FBO
  Certain Family Members. .......................     26,667        *         5,333            21,334                    *

W. Russell Morcom Irrevocable Trust
  dated 12/23/99 FBO A Family Member ............     66,667        *        10,000            56,667                    *

W. Russell Morcom Irrevocable Trust
  dated 12/23/99 FBO A Family Member ............     66,667        *        10,000            56,667                    *

LS Parents Trust No. 00-1 .......................     13,334        *        13,334                --                   --

ES Parents Trust No. 00-1 .......................     13,334        *        13,334                --                   --

Phillip McCalley ................................     21,272        *         2,000            19,272                    *

Irrevocable Trust U/T/D 12/29/99 for the benefit
of a family member of Mr. Odom ..................     13,334        *           666            12,668                    *

Irrevocable Trust U/T/D 12/29/99 for the benefit
of a family member of Mr. Odom ..................     13,334        *           666            12,668                    *


<CAPTION>
                                                             CLASS B COMMON STOCK(4)
                                                   -------------------------------------------   PERCENT OF ALL COMMON STOCK
NAME OF BENEFICIAL OWNER                               NUMBER                PERCENT             OWNED AFTER OFFERING(3)(5)
-------------------------------------------------  --------------------   --------------------   ---------------------------
<S>                                                <C>                    <C>                    <C>
Sterling Holding Company, LLC(6)(7) .............       45,214,898                90.89%              51.00%

Harris Corporation(8) ...........................        4,531,584                 9.11%               5.56%
  1025 W. NASA Boulevard
  Melbourne, Florida 32919

Gregory L. Williams(9) ..........................               --                   --                1.84%

W. Russell Morcom(10) ...........................               --                   --                   *

Larry W. Sims(11) ...............................               --                   --                   *

George L. Gidzinski(12) .........................               --                   --                   *

Daniel J. Heneghan(13) ..........................               --                   --                   *

Karl McCalley ...................................               --                   --                   *

Ray D. Odom(14) .................................               --                   --                   *

Julie B. Forbes(15) .............................               --                   --                   *

Lawrence J. Ciaccia(16) .........................               --                   --                   *

Stephen M. Moran.................................               --                   --                   *

James A. Urry(17) ...............................               --                   --                   *

Gary E. Gist(18) ................................               --                   --                   *

Robert W. Conn...................................               --                   --                  --

Jan Peeters......................................               --                   --                   *

Robert N. Pokelwaldt.............................               --                   --                  --

All directors and executive officers
as a group (15 persons) .........................               --                   --                4.83%

The Gregory L. Williams and Linda
  H. Williams Trust dated 1/28/00 FBO
  A Family Member. ..............................               --                   --                   *

The Gregory L. Williams and Linda
  H. Williams Trust dated 1/28/00 FBO
  A Family Member. ..............................               --                   --                   *

The Gregory L. Williams and Linda
  H. Williams Trust dated 1/28/00 FBO
  Certain Family Members. .......................               --                   --                   *

W. Russell Morcom Irrevocable Trust
  dated 12/23/99 FBO A Family Member ............               --                   --                   *

W. Russell Morcom Irrevocable Trust
  dated 12/23/99 FBO A Family Member ............               --                   --                   *

LS Parents Trust No. 00-1 .......................               --                   --                  --

ES Parents Trust No. 00-1 .......................               --                   --                  --

Phillip McCalley ................................               --                   --                   *

Irrevocable Trust U/T/D 12/29/99 for the benefit
of a family member of Mr. Odom...................               --                   --                   *

Irrevocable Trust U/T/D 12/29/99 for the benefit
of a family member of Mr. Odom ..................               --                   --                   *
</TABLE>

                                       48

<PAGE>

------------------
 *   Less than 1%.

 (1) Does not include shares of Class A Common Stock issuable upon conversion of
     Class B Common Stock. A holder of Class B Common Stock may convert any or
     all of his shares into an equal number of shares of Class A Common Stock,
     provided that such conversion would be permitted only to the extent that
     the holder of shares to be converted would be permitted under applicable
     law to hold the total number of shares of Class A Common Stock which would
     be held after giving effect to the conversion.

 (2) Does not include shares of Class B Common Stock issuable upon conversion of
     Class A Common Stock. A holder of Class A Common Stock may convert any or
     all of his shares into an equal number of shares of Class B Common Stock.

 (3) Percentages are derived using (i) the number of shares of Class A Common
     Stock and common stock outstanding as of June 30, 2000 and (ii) the
     3,000,000 shares we expect to issue in connection with this offering.

 (4) All shares to be sold in this offering will be shares of Class A Common
     Stock.

 (5) Represents the percentage of the total number of shares of Class A Common
     Stock and Class B Common Stock combined.

 (6) An affiliate of Credit Suisse First Boston Corporation owns an interest in
     Sterling and could have the right to acquire up to 1,070,177 shares of
     Class A Common Stock.

 (7) Citicorp Venture Capital Ltd. owns an interest in Sterling and could have
     the right to acquire up to 42,055,184 shares of Class A or Class B Common
     Stock. Citicorp Mezzanine Partners, L.P., the general partner of which is
     an affiliate of Citicorp Venture Capital, contributed $30.0 million in cash
     to our company in exchange for the 13.5% Subordinated Holding PIK Note due
     2010 and warrants to purchase 3,703,707 shares of our Class A Common Stock.
     We contributed the $30.0 million to Intersil as a capital contribution.
     Upon repayment of the 13.5% Subordinated PIK Note due 2010, the warrants
     became exercisable for 2,222,224 shares of our Class A Common Stock.

 (8) The shares reported by Harris are owned by Manatee Investment Corporation,
     a wholly owned subsidary of Harris. Harris may be deemed to beneficially
     own these shares.

 (9) Includes 2,053,116 shares owned by Gregory L. Williams and Linda H.
     Williams. Does not include 66,667 shares owned by the Gregory L. Williams
     and Linda H. Williams Trust dated 1/28/00 FBO a family member, 66,667
     shares held by the Gregory L. Williams and Linda H. Williams Trust dated
     1/28/00 FBO a family member and 26,667 shares owned by the Gregory L.
     Williams and Linda H. Williams Trust dated 1/28/00 FBO certain family
     members for which Mr. Williams disclaims beneficial ownership. Includes
     21,798 shares owned by DLJSC, as Trustee for Gregory L. Williams IRA
     Account. Includes currently exercisable options to purchase 15,142 shares
     of our Class A Common Stock.

(10) Includes 569,027 shares owned by W. Russell Morcom Revocable Trust. Does
     not include 66,667 owned by W. Russell Morcom Irrevocable Trust FBO a
     family member dated 12/23/99 and 66,667 shares owned by W. Russell Morcom
     Irrevocable Trust FBO a family member dated 12/23/99 for which Mr. Morcom
     disclaims beneficial ownership. Includes currently exercisable options to
     purchase 4,543 shares of our Class A Common Stock.

(11) Includes 437,207 shares owned by Larry W. Sims and Elizabeth Sims, 100,000
     shares owned by Lesgrat No. 00-1, a trust holding shares on behalf of its
     beneficial owners. Does not include 13,334 shares owned by Larry and
     Elizabeth Sims, LS Parents Trust No. 00-1 for which Mr. Sims disclaims
     beneficial ownership and 13,334 shares owned by ES Parents Trust No. 00-1
     for which Mr. Sims disclaims beneficial ownership. Includes currently
     exercisable options to purchase 4,543 shares of our Class A Common Stock.

(12) Includes currently exercisable options to purchase 4,543 shares of our
     Class A Common Stock.

(13) Includes 389,656 shares owned by Daniel J. Heneghan and Barbara Heneghan.
     Includes currently exercisable options to purchase 3,029 shares of our
     Class A Common Stock.

(14) Does not include 13,334 shares owned by an Irrevocable Trust U/T/D 12/29/99
     for the benefit of a family member and 13,334 shares owned by an
     Irrevocable Trust U/T/D 12/29/99 for the benefit of a family member for
     which Mr. Odom disclaims beneficial ownership. Includes currently
     exercisable options to purchase 3,029 shares of our Class A Common Stock.

(15) Includes 126,259 shares owned by Julie B. Forbes Trust D/T/D 3/23/00,
     126,258 shares owned by the Peter K. Forbes Trust D/T/D 3/23/00, 9,456
     shares owned by the Peter K. Forbes and Julie B. Forbes Trust dated 1/20/00
     FBO a family member and 9,456 shares owned by Peter K. Forbes and Julie B.
     Forbes Trust dated 1/20/00 FBO a family member. Includes currently
     exercisable options to purchase 6,057 shares of our Class A Common Stock.

(16) Includes 288,570 shares owned by Lawrence J. Ciaccia and Marcia R. Ciaccia
     and 66,668 shares owned by the Lawrence J. Ciaccia and Marcia R. Ciaccia
     Trust dated 1/20/00.

(17) James A. Urry, who is one of our directors, is affiliated with Sterling in
     the capacities described under "Management--Directors and Executive
     Officers" and footnote (6) above. All shares reported for Mr. Urry are held
     by Sterling, but do not include all shares held by Sterling, which Mr. Urry
     may be deemed to beneficially own as a result of his affiliation with
     Sterling. Mr. Urry disclaims beneficial ownership of all shares held by
     Sterling, except for those shares reported for Mr. Urry, which Mr. Urry has
     the right to acquire in exchange for an ownership interest in Sterling.

(18) Gary E. Gist owns an interest in Sterling and could have the right to
     exchange that interest for up to 38,186 shares of our common stock.

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

     Sterling, our principal shareholder, also owns 7.1% of Class A Common Stock
and 100% of Class B Common Stock of Fairchild Semiconductor International, Inc.,
one of our competitors. Fairchild Semiconductor Corporation is a wholly owned
subsidiary of Fairchild Semiconductor International, Inc.

                                       49

<PAGE>

                            DESCRIPTION OF CAPITAL STOCK

     Our capital stock consists of 600,000,000 authorized shares of common
stock, par value $.01 per share, divided into two classes consisting of (a)
300,000,000 shares of Class A Common Stock, of which 44,801,748 shares are
outstanding and (b) 300,000,000 shares of Class B Common Stock, of which
49,746,482 shares are outstanding. Our capital stock also consists of 100,000
authorized shares of preferred stock, par value $.01 per share, none of which is
issued or outstanding.

     The following description of the terms and provisions of our capital stock
is not complete, and you should read our Bylaws and Restated Certificate of
Incorporation, which have been filed as exhibits to the Registration Statement
of which this prospectus is a part.

CLASS A COMMON STOCK

     The holders of Class A Common Stock are entitled to one vote for each share
held of record on all matters submitted to a vote of the shareholders other than
elections of directors. Our Restated Certificate of Incorporation provides for
cumulative voting for directors. With cumulative voting, at each election for
directors, each holder of Class A Common Stock is entitled to as many votes as
would equal the number of shares he or she holds multiplied by the number of
directors to be elected. The holder may cast all of his or her votes for a
single candidate or may distribute them among any number of candidates. Under
cumulative voting, a minority holder has a greater possibility of influencing
the election of directors because, for example, the minority holder can increase
the number of votes such holder may cast for an individual director. The holders
of Class A Common Stock will be entitled to such dividends as may be declared at
the discretion of our Board of Directors out of funds legally available for that
purpose. The holders of Class A Common Stock will be entitled to share ratably
with holders of Class B Common Stock in the net assets of our company upon
liquidation after payment or provision for all liabilities. A holder of Class A
Common Stock may convert any or all of his shares into an equal number of shares
of Class B Common Stock. We have never paid and we do not anticipate declaring
or paying any cash dividends on shares of our Class A Common Stock in the
foreseeable future. As of June 30, 2000, there were 163 holders of record of our
Class A Common Stock.

CLASS B COMMON STOCK

     Except as required by law, the holders of Class B Common Stock have no
voting rights. The holders of Class B Common Stock will be entitled to such
dividends as may be declared at the discretion of our Board of Directors out of
funds legally available for that purpose. The holders of Class B Common Stock
will be entitled to share ratably with holders of Class A Common Stock in the
net assets of our company upon liquidation after payment or provision for all
liabilities. A holder of Class B Common Stock may convert any or all of his
shares into an equal number of shares of Class A Common Stock, provided that
such conversion would be permitted only to the extent that the holder of such
shares to be converted certifies to us in writing that the holder would be
permitted under applicable law to hold the total number of shares of Class A
Common Stock which would be held after giving effect to the conversion. We have
never paid and we do not anticipate declaring or paying any cash dividends on
shares of our Class B Common Stock in the foreseeable future. As of June 30,
2000, there were 2 holders of record of our Class B Common Stock.

PREFERRED STOCK

     Under our Restated Certificate of Incorporation, our Board of Directors has
the authority to issue up to 100,000 shares of preferred stock, but only in
connection with the adoption of a shareholder rights plan. A shareholder rights
plan may only be adopted by our Board of Directors with the approval of holders
of a majority of outstanding shares of Class A Common Stock or with the
unanimous consent of our Board of Directors, unless Sterling and its affiliates
hold less than 15% of our outstanding common stock, in which case approval by a
majority of our Board of Directors is required. See "--Other Provisions of Our
Restated Certificate of Incorporation." If our Board of Directors has such
requisite authority, it will be authorized to issue preferred stock in
connection with a shareholder rights plan in one or more series, and to fix the
voting powers, designations, preferences, and relative, participating, optional
or other special rights and

                                       50

<PAGE>

qualifications, limitations and restrictions of each series, including dividend
rights, conversion rights, voting rights, terms of redemption, liquidation
preferences, and the number of shares constituting any series. The ability of
our Board of Directors to issue preferred stock could have the effect of making
it more difficult for a third party to acquire, or discouraging a third party
from acquiring, a majority of our outstanding Class A Common Stock. Our Board of
Directors' ability to establish the preferences and rights of the shares of any
series of preferred stock may also afford holders of any preferred stock
preferences, powers and rights (including voting rights) senior to the rights of
holders of our Class A Common Stock. We have no present plans to issue any
shares of preferred stock.

OTHER PROVISIONS OF OUR RESTATED CERTIFICATE OF INCORPORATION

     Our Restated Certificate of Incorporation contains provisions affecting the
rights of our shareholders and the powers of our Board of Directors, including
the following:

     o We are not subject to the provisions of Section 203 of the General
       Corporation Law of Delaware regulating takeovers. Section 203 generally
       makes it more difficult for a third party to take control of a company by
       prohibiting a third party owning more than 15% of the company's stock
       from entering into transactions with the company unless the board of
       directors or shareholders unaffiliated with the third party approve
       either the third party or the transaction at issue, before the third
       party becomes a 15% owner or the third party acquires at least 85% of the
       company's stock.

     o A shareholder rights plan can be adopted only with the consent of holders
       of a majority of outstanding Class A Common Stock or with the unanimous
       consent of our Board of Directors, except that if Sterling's and its
       affiliates' ownership is less than 15% of our outstanding common stock,
       then a shareholder rights plan can be adopted with the consent of a
       majority of our Board of Directors. A shareholder rights plan generally
       makes it more difficult for a hostile bidder to take control of a company
       by providing existing shareholders with special rights which would make
       it uneconomical for the third party to acquire additional interests. If
       our Board of Directors is authorized to and decides to implement a
       shareholder rights plan, the plan adopted by the Board may deter
       acquisitions which you might deem to be in your best interests.

     o Our Board of Directors must have no fewer than three and no more than
       seven members and may not be divided into classes. The term of each
       member of the Board of Directors expires at each annual shareholders'
       meeting. Having a minimum number of Directors ensures that cumulative
       voting will operate to protect the interests of minority shareholders,
       since with a smaller Board it would take a greater percentage of votes to
       elect one director. Similarly, by prohibiting a classified Board, our
       Restated Certificate of Incorporation ensures that shareholders may
       replace the entire Board at each annual election.

     o Shareholders may act by written consent, without a meeting and without
       notice or a vote. This provision enables shareholders to act on matters
       subject to a shareholder vote without waiting until the next annual or
       special meeting of shareholders.

     o Each of the provisions of our Restated Certificate of Incorporation
       described above, and the provision described above under "Preferred
       Stock" that limits the Board of Directors' ability to issue preferred
       stock other than in connection with a shareholder rights plan, may be
       amended only with the approval of holders of 75% of our outstanding Class
       A Common Stock. Amending other provisions requires approval by holders of
       a majority of our outstanding Class A Common Stock. The provision
       requiring a supermajority vote also cannot be amended without the consent
       of holders of 75% of the Class A Common Stock. If a third party--that is,
       a person or entity other than our principal shareholders or members of
       our management--acquires more than 40% of the Class A Common Stock, then
       the holders of a majority of the Class A Common Stock could amend the
       foregoing provisions. If, after any transfer by Sterling or its
       affiliates, Sterling and its affiliates together own less than 15% of our
       outstanding common stock, then holders of a majority of the Class A
       Common Stock can amend the supermajority provisions. The effect of each
       supermajority provision is that holders of 25% or more of our Class A
       Common Stock could block amendments to our Restated Certificate of
       Incorporation affecting the provisions described above.

                                       51

<PAGE>

WARRANTS RELATING TO THE ISSUANCE OF THE UNITS

     We originally issued and sold warrants, referred to as the Warrants, to
Credit Suisse First Boston Corporation, J.P. Morgan Securities, Inc. and Salomon
Smith Barney Inc. pursuant to a private placement by Intersil Holding and
Intersil of 200,000 units, each unit consisting of $1,000 principal amount of
13.25% Senior Subordinated Notes due 2009 and one Warrant to purchase 18.5185
shares of Class A Common Stock at an exercise price (the "Exercise Price") of
$0.0015. The Exercise Price and the number of shares of Common Stock issuable
upon exercise of a Warrant may be subject to adjustment. The Warrants initially
entitle the holders to acquire, in the aggregate 3,703,707 shares of Class A
Common Stock.

     The Warrants may be exercised at any time after August 13, 2000; provided,
however, that the holder of Warrants will be able to exercise the Warrants only
if a shelf registration statement relating to the Class A Common Stock
underlying the Warrants is effective or the exercise of those Warrants is exempt
from the registration requirements of the Securities Act of 1933, or the
Securities Act, and such securities are qualified for sale or exempt from
qualification under the applicable securities laws of the states or other
jurisdictions in which such holders reside. We have filed a shelf registration
statement to cover the Warrants for resale and the issuance of the Class A
Common Stock upon exercise of the Warrants, and the Securities and Exchange
Commission has declared it effective. Unless earlier exercised, the Warrants
will expire on August 15, 2009 (the "Expiration Date"). We will give notice of
expiration not less than 90 nor more than 120 days prior to the Expiration Date
to the registered holders of the then outstanding Warrants. If we fail to give
the expiration notice, the Warrants will nevertheless expire and become void on
the Expiration Date.

WARRANTS RELATING TO THE 13.5% SUBORDINATED HOLDING PIK NOTE

     In connection with our issuance of the 13.5% Subordinated Holding PIK Note,
we issued to Citicorp Mezzanine Partners, L.P. warrants to purchase Class A
Common Stock. These warrants now entitle the holders to purchase up to
2,222,224 shares of our Class A Common Stock upon exercise of the warrants
beginning on August 13, 2001 and ending on August 15, 2009 at an exercise price
of $0.0015 per share, subject to anti-dilution adjustments.

SHAREHOLDERS' AGREEMENT

     Prior to our initial public offering, the then-existing shareholders of our
company entered into a Securities Purchase and Holders Agreement, which we refer
to as the Shareholders' Agreement, containing agreements among the shareholders
with respect to our capital stock and corporate governance.

     The Shareholders' Agreement contains provisions which restrict Citicorp
Venture Capital Ltd., or CVC, and its permitted transferees from effecting a
transfer of 50% or more of the shares of common stock owned by them without
offering the other parties to the Shareholders' Agreement an equal opportunity
to participate in the transaction or transactions. In addition, CVC and its
affiliates have the right to have observers present at meetings of our Board of
Directors if they are not represented on our Board of Directors as long as they
own at least 5% of the common stock then outstanding. The Shareholders'
Agreement continues to subject some of our executive officers' common stock to a
risk of repurchase by the Company.

REGISTRATION RIGHTS AGREEMENT

     In connection with their entry into the Shareholders' Agreement, the
then-existing shareholders of our company also entered into a Registration
Rights Agreement (the "Registration Rights Agreement"). According to the
Registration Rights Agreement, upon the written request of CVC and subject to
our option to defer action for 180 days, we will prepare and file a registration
statement with the Securities and Exchange Commission concerning the
distribution of all or part of the shares held by CVC and use our best efforts
to cause such registration statement to become effective. If at any time we file
a registration statement for our common stock because of a request by CVC or
otherwise, we will use our best efforts to allow the other parties to the
Registration Rights Agreement to have their shares of our common stock (or a
portion of their shares under circumstances set forth in the Registration Rights
Agreement) included in the registered offering. We are not bound by this
requirement if we file a registration statement on Form S-8, Form S-4 or any
similar form in connection with an exchange offer or an offering solely to our
employees or existing

                                       52

<PAGE>

shareholders, or a registration statement registering a unit offering consisting
of a public offering of our debt and equity securities in which (i) not more
than twenty percent of the gross proceeds received from the sale of those
securities is attributed to the equity securities and (ii) after the public
offering, we do not have a class of equity securities required to be registered
under the Securities Exchange Act of 1934. Most registration expenses of the
selling shareholders will be paid by us. We will not pay expenses relating to
underwriting commissions, brokerage fees and transfer taxes applicable to the
shares sold by the shareholders or in certain cases the fees and expenses of any
accountants or other representatives retained by a selling shareholder.

TRANSFER AGENT AND REGISTRANT

     The Transfer Agent and Registrar for the Class A Common Stock is Equiserve
Trust Company.

                                       53

<PAGE>

                      DESCRIPTION OF CERTAIN INDEBTEDNESS

     The following is a summary of certain indebtedness of Intersil and of
Intersil Holding. To the extent such summary contains descriptions of documents
relating to the notes, the senior credit facilities and other loan documents,
such descriptions do not purport to be complete and are qualified in their
entirety by reference to such documents, which are available upon request to us.

NOTES

     On August 13, 1999, Intersil and Intersil Holding issued 200,000 units,
each unit consisting of $1,000 principal amount of the Notes of Intersil and one
warrant to purchase 18.518535 shares of Class A Common Stock, in connection with
the unit offering for gross proceeds of approximately $200.0 million. The Notes
were issued under an indenture dated as of August 13, 1999 (the "Indenture")
between Intersil and United States Trust Company of New York, as Trustee. The
warrants were issued under the Warrant Agreement between us and United States
Trust Company of New York, as warrant agent. The net proceeds of the unit
offering, together with the net proceeds of certain other funds, were used to
pay the cash consideration for the acquisition of the semiconductor business
from Harris and pay related fees and expenses. Under the terms of the Notes, we
were permitted, but were not required, to redeem up to $70.0 million principal
amount of the Notes with the net cash proceeds of our initial public offering at
a price of 113.25% of the principal amount of the Notes, plus accrued and unpaid
interest on the Notes. The amount repaid with the proceeds of our initial public
offering included $70.0 million of the principal amount of the Notes plus a
prepayment premium and accrued and unpaid interest thereon.

     The Notes were initially in the principal amount of $200.0 million and
mature on August 15, 2009. Interest on the Notes accrues at 13.25% per annum and
is payable semiannually in arrears on February 15 and August 15, commencing
February 15, 2000. Subject to certain covenants set forth in the Indenture,
Intersil may issue more Notes under the Indenture in an unlimited principal
amount. Any additional Notes that are actually issued will be treated as issued
and outstanding Notes (and as the same class as the initial Notes) for most
purposes. The Notes are unsecured senior subordinated obligations of Intersil,
are subordinated in right of payment to all existing and future Senior
Indebtedness (as defined in the Indenture) of Intersil, and are senior in right
of payment to all future Subordinated Indebtedness (as defined in the Indenture)
of Intersil. The Notes are guaranteed by Intersil Holding and each Subsidiary
Guarantor (as defined in the Indenture). The Guaranties are senior subordinated
obligations of Intersil Holding and the relevant Subsidiary Guarantor.

     On or after August 15, 2004, the Notes may be redeemed at the option of
Intersil, in whole or in part, at the following redemption prices (expressed as
percentages of principal amount at maturity), plus accrued and unpaid interest,
if redeemed during the 12 months beginning August 15 of the years
indicated below:

<TABLE>
<CAPTION>
YEAR                                                                                 PERCENTAGE
----------------------------------------------------------------------------------   ----------
<S>                                                                                  <C>
2004..............................................................................     106.625%
2005..............................................................................     104.969
2006..............................................................................     103.313
2007..............................................................................     101.656
2008 and thereafter...............................................................     100.000
</TABLE>

     Upon a Change of Control (as defined in the Indenture), each holder of
Notes may require Intersil to repurchase all or any portion of the holder's
Notes at a purchase price equal to 101% of the principal amount plus accrued and
unpaid interest to the date of purchase.

     The Indenture contains certain covenants that, among other things, limit
(i) the incurrence of additional debt by Intersil and certain of its
subsidiaries, (ii) the payment of dividends on capital stock of Intersil and the
purchase, redemption or retirement of capital stock or subordinated
indebtedness, (iii) investments, (iv) certain transactions with affiliates, (v)
sales of assets, including capital stock of subsidiaries, and (vi) certain
consolidations, mergers and transfers of assets. The Indenture also prohibits
certain restrictions on distributions from certain subsidiaries. All of these
limitations and prohibitions, however, are subject to a number of important
qualifications.

                                       54

<PAGE>

SENIOR CREDIT FACILITIES

     General.  Intersil entered into senior credit facilities with a syndicate
of certain financial institutions, as lenders, Credit Suisse First Boston, New
York branch, as the Administrative Agent, Salomon Smith Barney Inc., as
Syndication Agent, and Morgan Guaranty Trust Company of New York, as
Documentation Agent. The description below is only a summary of the principal
terms of the senior credit facilities and related loan documents.

     Intersil has available up to $70.0 million of aggregate borrowing capacity,
consisting of a secured $70.0 million revolving line of credit (the "Revolving
Credit Facility"). Intersil may request, subject to lender approval, that the
amount of the Revolving Credit Facility be increased to an amount not to exceed
$150.0 million.

     Guaranties; Security.  Intersil's obligations under the senior credit
facilities are unconditionally guaranteed, jointly and severally, by Intersil
Holding and each of Intersil's existing and subsequently acquired or organized
domestic subsidiaries. Intersil's obligations and those of the guarantors under
the senior credit facilities are secured by a pledge of all of Intersil's
capital stock and by substantially all of the assets of Intersil Holding,
Intersil and each of Intersil's existing and subsequently acquired or organized
domestic (and, to the extent no adverse tax consequences will result, foreign)
subsidiaries. No foreign subsidiary is required to guarantee the senior credit
facilities and less than two-thirds of the capital stock of certain foreign
subsidiaries is required to be pledged to secure the senior credit facilities.

     Amortization; Interest; Fees; Maturity.  The Revolving Credit Facility is
available until 2005 unless terminated earlier under the terms of the senior
credit facilities.

     Borrowings under the senior credit facilities bear interest at a rate equal
to, at Intersil's option, either (i) the base rate (which is based on the prime
rate most recently announced by the Administrative Agent or the Federal Funds
rate plus one-half of 1%) or (ii) the applicable London interbank offered rate,
in each case plus the applicable margin. In addition, the senior credit
facilities are subject to a commitment fee of 0.50% per annum of the undrawn
portion of the Revolving Credit Facility, and letter of credit fees regarding
each letter of credit outstanding under the senior credit facilities equal to
(i) the applicable margin over the Adjusted LIBOR Rate (as defined in the Credit
Agreement) in effect for loans under the Revolving Credit Facility and
(ii) 0.25% per annum on the face amount of all outstanding letters of credit.

     Prepayments.  Voluntary prepayments may be made in whole or in part without
premium or penalty.

     Covenants and Events of Default.  The senior credit facilities contain,
among other things, covenants restricting Intersil's ability and its
subsidiaries' ability to dispose of assets, merge, pay dividends, repurchase or
redeem capital stock and indebtedness (including the notes), incur indebtedness
or guaranties, create liens, enter into agreements with negative pledge clauses,
make certain investments or acquisitions, enter into sale and leaseback
transactions, enter into transactions with affiliates, change Intersil's
business or make fundamental changes, and otherwise restrict corporate actions.
The senior credit facilities also contain a number of financial maintenance
covenants.

     The senior credit facilities also include events of default usual for these
types of credit facilities and transactions, including but not limited to
nonpayment of principal or interest, violation of covenants, incorrectness of
representations and warranties, cross defaults and cross acceleration,
bankruptcy, material judgments, ERISA, actual or asserted invalidity of the
guaranties or the security documents and certain changes of control of Intersil.
The occurrence of any event of default could result in the acceleration of
Intersil's and the guarantors' obligations under the senior credit facilities,
which could materially and adversely affect holders of Class A Common Stock.

                                       55

<PAGE>

                        SHARES ELIGIBLE FOR FUTURE SALE

     Upon consummation of this offering, 50,237,649 shares of Class A Common
Stock will be outstanding (excluding 7,500,000 shares issuable upon exercise of
employee stock options, of which 3,177,184 were issued and outstanding at August
24, 2000) and 49,746,482 shares of Class B Common Stock will be outstanding.
Class A and Class B shares are convertible into the other on a one-for-one
basis. 43,096,424 shares of Class A Common Stock, which includes the 10,000,000
shares sold in this offering (assuming the underwriters do not exercise their
over-allotment option), the 23,000,000 shares sold in our initial public
offering, the 2,423,608 shares issued in connection with the exercise of
warrants, the 4,322,816 shares issued in connection with the exercise of options
and the 3,350,000 shares issued to certain shareholders of NWN will be freely
tradable without further registration under the Securities Act, unless held by
an "affiliate" of our company as that term is defined in Rule 144. All of the
remaining 7,141,225 shares of Class A Common Stock and the 49,746,482 shares of
Class B Common Stock, are "restricted securities," as such term is defined under
Rule 144 promulgated under the Securities Act of 1933. These shares are
restricted securities because they were issued in private transactions not
involving a public offering and may not be sold in the absence of registration
other than in accordance with Rule 144 or another exemption from registration
under the Securities Act and will be available for resale under Rule 144, as
described below. In addition, we can currently issue up to 665,000 shares of our
Class A Common Stock in connection with future acquisitions, all of which will
be freely tradable upon issuance.

LOCK-UP AGREEMENTS

     Our directors, executive officers and various shareholders, including the
selling shareholders, have entered into lock-up agreements which generally
provide that these holders will not offer, sell, contract to sell, grant any
option to purchase or otherwise dispose of our common stock or any securities
exercisable for or convertible into our common stock owned by them for a period
of 90 days after consummation of the offering without the prior written consent
of the representatives of the underwriters. In addition, shareholders who
received our common stock in the acquisition of NWN have entered into lock-up
agreements which restrict the disposition of 131,844 shares of common stock and
79,106 shares of common stock prior to August 23, 2001 and August 23, 2002,
respectively. A total of 296,540 shares of common stock received in the
acquisition are held by us in escrow until May 29, 2001. The lock-up agreements
executed by our employees and directors also cover any shares they may acquire
upon the exercise of options. Shares subject to lock-up agreements may not be
sold until these agreements expire or are waived by Credit Suisse First Boston
Corporation.

RULE 144

     In general, under Rule 144 as currently in effect, if a minimum of one year
has elapsed since the later of the date of acquisition of the restricted
securities from the issuer or from an affilate of the issuer, a person (or
persons whose shares of Class A Common Stock are aggregated), including persons
who may be deemed our affiliates, would be entitled to sell within any
three-month period a number of shares of Class A Common Stock that does not
exceed the greater of:

     o one percent of the then-outstanding shares of Class A Common Stock, which
       will equal approximately 502,376 shares immediately after this
       offering; or

     o the average weekly trading volume during the four calendar weeks
       preceding the date on which notice of the sale is filed with the
       Securities and Exchange Commission.

     Sales under Rule 144 are also subject to restrictions as to the manner of
sale, notice requirements and the availability of current public information
about our company. In addition, under Rule 144(k), if a period of at least two
years has elapsed since the later of the date restricted securities were
acquired from our company or the date they were acquired from an affiliate of
our company, a shareholder who is not an affiliate of our company at the time of
sale and who has not been an affiliate of our company for at least three months
prior to the sale would be entitled to sell shares of Class A Common Stock in
the public market

                                       56

<PAGE>

immediately without compliance with the foregoing requirements under Rule 144,
unless otherwise restricted. Rule 144 does not require the same person to have
held the securities for the applicable periods.

     The remaining 56,887,707 shares of Class A Common Stock (including shares
of Class A Common Stock issued upon conversion of the 49,746,482 outstanding
shares of Class B Common Stock) will be "restricted securities" and will be
available for sale in the open market after the expiration of the 90-day lock-up
period described above, subject to the volume and other limitations under
Rule 144.

REGISTRATION RIGHTS

     Beginning August 14, 2000, some of our shareholders have the right to cause
us to register the sale of their shares under the Securities Act and our other
current shareholders may have the right to have their shares covered by the
registration statement. See "Description of Capital Stock--Registration Rights
Agreement."

EMPLOYEE PLANS

     We filed a registration statement under the Securities Act to register
8,833,334 shares to be issued pursuant to our employee benefit plans. As a
result, any shares issued pursuant to the exercise of options or rights under
the 1999 Equity Compensation Plan or the Intersil Holding Corporation Employee
Stock Purchase Plan will also be freely tradable in the public market. However,
shares held by affiliates will still be subject to the volume limitation, manner
of sale, notice and public information requirements of Rule 144.

     As of August 24, 2000, we had granted options to purchase 3,177,184 shares
of common stock (of which 235,311 had been exercised), and we had reserved
4,322,816 shares of common stock for possible future issuance pursuant to the
exercise of stock options issued under the 1999 Equity Compensation Plan.

     We have also reserved 1,333,334 shares of common stock for possible future
issuance under our Employee Stock Purchase Plan. See "Risk Factors--Risks
Relating to Future Sales," "Management--1999 Equity Compensation Plan" and
"Management--Employee Stock Purchase Plan."

                                       57

<PAGE>

          UNITED STATES TAX CONSEQUENCES TO NON-UNITED STATES HOLDERS

     The following is a general discussion of the material United States federal
income and estate tax consequences of the ownership and disposition of the Class
A Common Stock applicable to Non-United States Holders of such Class A Common
Stock. A "Non-United States Holder" is any holder that for United States federal
income tax purposes is not a United States person. For purposes of this
discussion, the term "United States person" means: (i) a citizen or resident of
the United States; (ii) a corporation or other entity taxable as a corporation
created or organized in the United States or under the laws of the United States
or of any political subdivision thereof; (iii) an estate the income of which is
included in gross income for United States federal income tax purposes
regardless of its source; or (iv) a trust if its administration is subject to
the primary supervision of a United States court and one or more United States
persons have the authority to control all substantial decisions of the trust. If
a partnership holds our Class A Common Stock, the tax treatment of a partner
generally will depend upon the status of the partner and upon the activities of
the partnership. Partners of partnerships holding our Class A Common Stock
should consult their tax advisors.

     This discussion does not address all aspects of United States federal
income and estate taxation that may be relevant in light of such Non-United
States Holder's particular facts and circumstances (such as being a U.S.
expatriate) and does not address any tax consequences arising under the laws of
any state, local or non-United States taxing jurisdiction. Furthermore, the
following discussion is based on current provisions of the Internal Revenue Code
of 1986, as amended (the "Code") and administrative and judicial interpretations
thereof, all as in effect on the date hereof, and all of which are subject to
change, possibly with retroactive effect.

     We have not and will not seek a ruling from the Internal Revenue Service
with respect to the United States federal income and estate tax consequences
described below, and as a result, there can be no assurance that the IRS will
not disagree with or challenge any of the conclusions set forth in this
discussion.

     Investors are urged to consult their own tax advisors with respect to the
tax consequences of the ownership and disposition of our common stock, including
the application and effect of the laws of any state, local, foreign or other
taxing jurisdiction.

DIVIDENDS

     We have never paid, and do not have any current plans to pay cash dividends
on our Class A Common Stock. Cash dividends would constitute dividends for
United States tax purposes to the extent paid from our current and accumulated
earnings and profits, as determined under United States federal income tax
principles. To the extent those dividends exceeded our current and accumulated
earnings and profits, the dividends will constitute a return of capital and
would first reduce a Holder's basis, but not below zero, and then would be
treated as gain from the sale of stock. Should we ever pay a cash dividend, any
dividend paid to a Non-United States Holder of Class A Common Stock generally
would be subject to United States withholding tax at the then-effective U.S.
withholding tax rate (currently 30% of the gross amount of the dividend) or such
lower rate as may be specified by an applicable tax treaty. Dividends received
by a Non-United States Holder that are effectively connected with a United
States trade or business conducted by such Non-United States Holder or, if a tax
treaty applies, attributable to a United States permanent establishment of such
Non-United States Holder, would be exempt from such withholding tax, provided
such Non-United States Holder complies with applicable certification and
disclosure requirements. However, any such effectively connected or attributable
dividends, net of deductions and credits, would be taxed at the same graduated
rates that apply to United States persons (all or a portion of those dividends,
in the case of a corporate Non-United States Holder, may be subject to the
branch profits tax at the rate of 30% (or a lower treaty rate, if applicable)).

     Dividends may be subject to backup withholding at the rate of 31% unless
the Non-United States Holder certifies to required information in accordance
with United States Treasury Regulations applicable to withholding and
information reporting. Currently, backup withholding does not apply to dividends
paid to a Non-United States Holder at an address outside the United States.
However, under final regulations regarding withholding and information
reporting, which will generally be effective for payments made after December
31, 2000, payment of dividends to a Non-United States Holder at an address
outside the United States may be subject to backup withholding unless such
Non-United States Holder satisfies applicable certification

                                       58

<PAGE>

requirements. Backup withholding, if applied, is not an additional tax. Rather,
the tax liability of the person subject to backup withholding will be reduced by
the amount of tax withheld. If withholding results in an overpayment of taxes, a
refund may be obtained, provided that the required information is furnished to
the IRS.

     Generally, we must report annually to the IRS the amount of dividends paid,
the name and address of the recipient, and the amount, if any, of tax withheld.
A similar report is sent to the holder. Pursuant to tax treaties or other
agreements, the IRS may make such reports available to tax authorities in the
recipient's country of residence.

GAIN ON DISPOSITION OF COMMON STOCK

     A Non-United States Holder generally will not be subject to United States
federal income tax on any gain realized upon the sale or other disposition of
its common stock unless: (i) the gain is effectively connected with a United
States trade or business of the Non-United States Holder (all or a portion of
which gain, in the case of a corporate Non-United States Holder, may be subject
to the branch profits tax at the rate of 30% (or lower treaty rate, if
applicable)), (ii) the Non-United States Holder is an individual who holds the
common stock as a capital asset (within the meaning of Section 1221 of the Code)
and who is present in the United States for a period or periods aggregating 183
days or more during the taxable year in which the sale or disposition occurs and
other conditions are met, or (iii) we are or have been a "United States real
property holding corporation" for United States federal income tax purposes at
any time within the shorter of the five-year period preceding the disposition or
the Non-United States Holder's holding period of its common stock. We have
determined that we are not, and do not believe that we are likely to become, a
"United States real property holding corporation" for United States federal
income tax purposes. However, no assurance can be provided that we will not
become a United States real property holding corporation. If we were to become a
United States real property holding corporation, gains realized by a Non-United
States Holder that did not directly or indirectly own more than 5% of our common
stock at any time during the shorter of the five-year period preceding the
disposition or the Holder's holding period generally would not be subject to
United States federal income tax as a result of the status of our company as a
United States real property holding corporation, provided that our common stock
was regularly traded on an established securities market.

     The payment of the proceeds of a sale of common stock to or through the
United States office of a broker is currently subject to both information
reporting and backup withholding at the rate of 31% unless the Non-United States
Holder certifies its non-United States status under penalties of perjury or
otherwise establishes an exemption. Generally, the payment of proceeds of a
disposition by a Non-United States Holder of common stock outside the United
States to or through a foreign office of a broker will not be subject to backup
withholding. However, such payments will be subject to information reporting if
the broker is a United States person or has certain other connections to the
United States unless the Non-United States Holder establishes an exemption in
accordance with United States Treasury Regulations regarding withholding and
information reporting, as applicable.

     The final regulations regarding withholding and information reporting as to
payments made after December 31, 2000 unify current certification procedures and
forms and clarify reliance standards. Except as noted above with respect to
foreign brokers that are partnerships, the final regulations generally do not
significantly alter the substantive withholding and information reporting
requirements but do alter the procedures for claiming the benefits of an income
tax treaty and change the certification procedures relating to the receipt by
intermediaries of payments on behalf of the beneficial owner of shares of common
stock. Non-United States Holders should consult their own tax advisors regarding
the effect, if any, of the final regulations on their particular situations.

ESTATE TAX

     Common stock owned or treated as owned at the time of death by an
individual who is not a citizen or resident of the United States for federal
estate tax purposes will be included in such individual's estate for United
States federal estate tax purposes, unless an applicable estate tax treaty
applies other rules, and as a result may be subject to United States federal
estate tax.

                                       59

<PAGE>

                                    UNDERWRITING

     Under the terms and subject to the conditions contained in an underwriting
agreement dated               , 2000, we and the selling shareholders have
agreed to sell to the underwriters named below, for whom Credit Suisse First
Boston Corporation is acting as representative, the following respective numbers
of shares of common stock:

<TABLE>
<CAPTION>
                                                                 NUMBER
UNDERWRITER                                                     OF SHARES
-------------------------------------------------------------   ---------
<S>                                                             <C>
Credit Suisse First Boston Corporation.......................

                                                               ----------
     Total...................................................  10,000,000
                                                               ==========
</TABLE>

     The underwriting agreement provides that the underwriters are obligated to
purchase all the shares of common stock in the offering if any are purchased,
other than those shares covered by the over-allotment option described below.
The underwriting agreement also provides that if an underwriter defaults the
purchase commitments of non-defaulting underwriters may be increased or the
offering of common stock may be terminated.

     We and Sterling have granted to the underwriters a 30-day option to
purchase on a pro rata basis up to 500,000 additional shares from us and
1,000,000 additional outstanding shares from Sterling at the public
offering price less the underwriting discounts and commissions. The option may
be exercised only to cover any over-allotments of common stock.

     The underwriters propose to offer the shares of common stock initially at
the public offering price on the cover page of this prospectus and to selling
group members at that price less a concession of $        per share. The
underwriters and selling group members may allow a discount of $        per
share on sales to other broker/dealers. After the public offering, the
public offering price and concession and discount to broker/dealers may be
changed by the representatives.

     The following table summarizes the compensation and estimated expenses we
and the selling shareholders will pay.

<TABLE>
<CAPTION>
                                                              PER SHARE                        TOTAL
                                                      --------------------------     --------------------------
                                                        WITHOUT         WITH           WITHOUT         WITH
                                                         OVER-          OVER-           OVER-          OVER-
                                                       ALLOTMENT      ALLOTMENT       ALLOTMENT      ALLOTMENT
                                                      -----------    -----------     -----------    -----------
<S>                                                   <C>            <C>             <C>            <C>
Underwriting Discounts and Commissions paid by
  us...............................................   $              $               $              $
Expenses payable by us.............................   $              $               $              $
Underwriting Discounts and Commissions paid by
  selling shareholders.............................   $              $               $              $
Expenses payable by the selling shareholders.......   $              $               $              $
</TABLE>

     We have agreed that we will not offer, sell, contract to sell, pledge or
otherwise dispose of, directly or indirectly, or file with the Securities and
Exchange Commission a registration statement under the Securities Act relating
to, any shares of our common stock or securities convertible into or
exchangeable or exercisable for any shares of our common stock, or publicly
disclose the intention to make any such offer, sale, pledge, disposition or
filing, without the prior written consent of Credit Suisse First Boston
Corporation for a period of 90 days after the date of this prospectus, except
issuances pursuant to the conversion or exchange of convertible or exchangeable
securities or the exercise of warrants or options, in each case outstanding on
the date hereof, grants of employee stock options pursuant to the terms of a
plan in effect on the date hereof, issuances pursuant to the exercise of such
options, the filing of registration statements on Form S-8 and amendments
thereto in connection with those stock options or our employee stock purchase
plans in existence on the date hereof and the issuance of shares or options in
acquisitions in which the acquiror of such shares agrees to the foregoing
restrictions.

     Our officers, directors and various shareholders, including the selling
shareholders, have agreed that they will not offer, sell, contract to sell,
pledge or otherwise dispose of, directly or indirectly, any shares of our common
stock or securities convertible into or exchangeable or exercisable for any
shares of our common stock, enter into a transaction which would have the same
effect, or enter into any swap, hedge or other

                                       60

<PAGE>

arrangement that transfers, in whole or in part, any of the economic
consequences of ownership of our common stock, whether any such aforementioned
transaction is to be settled by delivery of our common stock or such other
securities, in cash or otherwise, or publicly disclose the intention to make any
such offer, sale, pledge or disposition, or to enter into any such transaction,
swap, hedge or other arrangement, without, in each case, the prior written
consent of Credit Suisse First Boston Corporation for a period of 90 days after
the date of this prospectus.

     We and, to a limited extent, the selling shareholders have agreed to
indemnify the underwriters against liabilities under the Securities Act, or
contribute to payments which the underwriters may be required to make in that
respect.

     Our Class A Common Stock is traded on The Nasdaq Stock Market's National
Market, under the symbol "ISIL."

     Credit Suisse First Boston, New York branch, an affiliate of Credit Suisse
First Boston Corporation, is a lender and the Administrative Agent under our
senior credit facilities. An affiliate of Credit Suisse First Boston Corporation
owns an interest in Sterling Holding Company LLC, our principal shareholder, and
could have the right to exchange that interest for up to 1,070,177 shares of our
common stock as of June 30, 2000. No underwriter has the right, directly or
indirectly, to designate any member of our board of directors.

     In connection with the offering, the underwriters may engage in stabilizing
transactions, over-allotment transactions, syndicate covering transactions,
penalty bids and passive market making in accordance with Regulation M under the
Exchange Act.

     o Stabilizing transactions permit bids to purchase the underlying security
       so long as the stabilizing bids do not exceed a specified maximum.

     o Over-allotment involves sales by the underwriters of shares in excess of
       the number of shares the underwriters are obligated to purchase, which
       creates a syndicate short position. The short position may be either a
       covered short position or a naked short position. In a covered short
       position, the number of shares over-allotted by the underwriters is not
       greater than the number of shares that they may purchase in the
       over-allotment option. In a naked short position, the number of shares
       involved is greater than the number of shares in the over-allotment
       option. The underwriters may close out any short position by either
       exercising their over-allotment option and/or purchasing shares in the
       open market.

     o Syndicate covering transactions involve purchases of the common stock in
       the open market after the distribution has been completed in order to
       cover syndicate short positions. In determining the source of shares to
       close out the short position, the underwriters will consider, among other
       things, the price of shares available for purchase in the open market as
       compared to the price at which they may purchase shares through the
       over-allotment option. If the underwriters sell more shares than could be
       covered by the over-allotment option--a naked short position--that
       position can only be closed out by buying shares in the open market. A
       naked short position is more likely to be created if the underwriters are
       concerned that there may be downward pressure on the price of the shares
       in the open market after pricing that could adversely affect investors
       who purchase in the offering.

     o Penalty bids permit the representatives to reclaim a selling concession
       from a syndicate member when the common stock originally sold by the
       syndicate member is purchased in a stabilizing or syndicate covering
       transaction to cover syndicate short positions.

     o In passive market making, market makers in the common stock who are
       underwriters or prospective underwriters may, subject to limitations,
       make bids for or purchases of the common stock until the time, if any, at
       which a stabilizing bid is made.

These stabilizing transactions, syndicate covering transactions and penalty bids
may have the effect of raising or maintaining the market price of the common
stock or preventing or retarding a decline in the market price of the common
stock. As a result, the price of the common stock may be higher than the price
that might otherwise exist in the open market. These transactions may be
effected on The Nasdaq National Market or otherwise and, if commenced, may be
discontinued at any time.

                                       61

<PAGE>

                          NOTICE TO CANADIAN RESIDENTS

RESALE RESTRICTIONS

     The distribution of the common stock in Canada is being made only on a
private placement basis exempt from the requirement that we and the selling
shareholders prepare and file a prospectus with the securities regulatory
authorities in each province where trades of common stock are made. Any resale
of the common stock in Canada must be made under applicable securities laws,
which will vary depending on the relevant jurisdiction, and which may require
resales to be made under available statutory exemptions or under a discretionary
exemption granted by the applicable Canadian securities regulatory authority.
Purchasers are advised to seek legal advice prior to any resale of the common
stock.

REPRESENTATIONS OF PURCHASERS

     By purchasing common stock in Canada and accepting a purchase confirmation
a purchaser is representing to us, the selling shareholders and the dealer from
whom the purchase confirmation is received that:

     o the purchaser is entitled under applicable provincial securities laws to
       purchase the common stock without the benefit of a prospectus qualified
       under those securities laws,

     o where required by law, that the purchaser is purchasing as principal and
       not as agent, and

     o the purchaser has reviewed the text above under Resale Restrictions.

RIGHTS OF ACTION (ONTARIO PURCHASERS)

     The securities being offered are those of a foreign issuer and Ontario
purchasers will not receive the contractual right of action prescribed by
Ontario securities law. As a result, Ontario purchasers must rely on other
remedies that may be available, including common law rights of action for
damages or rescission or rights of action under the civil liability provisions
of the U.S. federal securities laws.

ENFORCEMENT OF LEGAL RIGHTS

     All of the issuer's directors and officers as well as the experts named
herein and the selling shareholders may be located outside of Canada and, as a
result, it may not be possible for Canadian purchasers to effect service of
process within Canada upon the issuer or such persons. All or a substantial
portion of the assets of the issuer and such persons may be located outside of
Canada and, as a result, it may not be possible to satisfy a judgment against
the issuer or such persons in Canada or to enforce a judgment obtained in
Canadian courts against such issuer or persons outside of Canada.

NOTICE TO BRITISH COLUMBIA RESIDENTS

     A purchaser of common stock to whom the Securities Act (British Columbia)
applies is advised that the purchaser is required to file with the British
Columbia Securities Commission a report within ten days of the sale of any
common stock acquired by the purchaser pursuant to this offering. The report
must be in the form attached to British Columbia Securities Commission Blanket
Order BOR #95/17, a copy of which may be obtained from us. Only one such report
must be filed for common stock acquired on the same date and under the same
prospectus exemption.

TAXATION AND ELIGIBILITY FOR INVESTMENT

     Canadian purchasers of common stock should consult their own legal and tax
advisors with respect to the tax consequences of an investment in the common
stock in their particular circumstances and about the eligibility of the common
stock for investment by the purchaser under relevant Canadian legislation.

                                       62

<PAGE>

                                    LEGAL MATTERS

     The validity of the Class A Common Stock will be passed upon for us by
Dechert, Philadelphia, Pennsylvania. Dechert beneficially owns 80,300 shares of
our Class A Common Stock. Members of Dechert who provided legal advice in
connection with this offering beneficially own 2,500 shares of our Class A
Common Stock. The underwriters have been represented by Cravath, Swaine & Moore,
New York, New York.

                                    EXPERTS

     Ernst & Young LLP, independent auditors, have audited the Intersil Holding
Corporation (Successor) consolidated financial statements at June 30, 2000, and
for the 46 weeks then ended and the consolidated financial statements of the
Harris Semiconductor Business (Predecessor) at June 2, 1999, and for each of the
two years in the period ended July 2, 1999 and the six weeks in the period ended
August 13, 1999, as set forth in their report. We have included our financial
statements in the prospectus and elsewhere in the registration statement in
reliance on Ernst & Young LLP's report, given on their authority as experts in
accounting and auditing.

                      WHERE YOU CAN FIND MORE INFORMATION

     We file annual, quarterly and special reports and other information with
the Securities and Exchange Commission. You may read and copy any reports or
other information filed by us at the Securities and Exchange Commission's public
reference room at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549 and at the SEC's regional offices located at Northwestern
Atrium Center, 500 West Madison Street, Suite 1400, Chicago, IL 60661 and Seven
World Trade Center, 13th Floor, New York, NY 10048. Copies of this material can
be obtained from the Public Reference Section of the SEC upon payment of fees
prescribed by the SEC. You may call the Securities and Exchange Commission at
1-800-SEC-0330 for further information contained in the public reference room.
Our filings with the Securities and Exchange Commission will also be available
to the public from commercial document retrieval services and at the Securities
and Exchange Commission's Web site at "http://www.sec.gov."

     We have filed with the SEC a registration statement on Form S-1 under the
Securities Act, covering the shares of Class A Common Stock to be offered
pursuant to this prospectus. This prospectus, which is a part of the
registration statement, does not contain all of the information included in the
registration statement. Any statement made in this prospectus concerning the
contents of any contract, agreement or other document is not necessarily
complete. For further information regarding our company and the Class A Common
Stock offered by this prospectus, please reference the registration statement,
including its exhibits. If we have filed any contract, agreement or other
document as an exhibit to the registration statement, you should read the
exhibit for a more complete understanding of the documents or matter involved.

     Copies of the registration statement, including all related exhibits and
schedules, may be inspected without charge at the public reference facilities
maintained by the SEC, or obtained at prescribed rates from the Public Reference
Section of the SEC at the address set forth above. In addition, you may request
a copy of any of these filings, at no cost, by writing or telephoning us at the
following address or phone number: Intersil Holding Corporation, 7585 Irvine
Center Drive, Suite 100, Irvine, California 92618; the telephone number at that
address is (949) 341-7062.

                                       63

<PAGE>

                         INDEX TO FINANCIAL STATEMENTS
                          INTERSIL HOLDING CORPORATION

<TABLE>
<CAPTION>
                                                                                                              PAGE
                                                                                                              ----
<S>                                                                                                           <C>
Independent Certified Public Accountants' Report...........................................................    F-2

Consolidated Statements of Operations and Comprehensive Income.............................................    F-3

Consolidated Balance Sheets................................................................................    F-4

Consolidated Statements of Cash Flows......................................................................    F-5

Consolidated Statement of Shareholders' Equity.............................................................    F-6

Notes to Consolidated Financial Statements.................................................................    F-7
</TABLE>

                                      F-1

<PAGE>

                INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS' REPORT

The Board of Directors
Intersil Holding Corporation

We have audited the accompanying consolidated balance sheet of Harris
Semiconductor Business (Semiconductor Business) (Predecessor), which was wholly
owned by Harris Corporation, as of July 2, 1999 and the related statement of
operations, comprehensive income and cash flows for each of the two fiscal years
in the period ended July 2, 1999 and the six weeks ended August 13, 1999,
respectively. We have also audited the accompanying consolidated balance sheet
of Intersil Holding Corporation (Successor) as of June 30, 2000 and the related
statements of operations, comprehensive income, shareholders' equity, and cash
flows for the 46 weeks ended June 30, 2000. Our audits also included the
financial statement schedule listed at Item 16. These financial statements and
financial statement schedule are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements and
financial statement schedule based on our audits.

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

The accompanying Predecessor consolidated financial statements were prepared on
the basis of presentation as described in Note A. The results of operations are
not necessarily indicative of the results of operations that would be recorded
by Semiconductor Business on a stand-alone basis.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of Intersil Holding
Corporation as the Successor and Predecessor companies at June 30, 2000 and
July 2, 1999 and the consolidated results of their operations and their cash
flows for each of the two years in the period ended July 2, 1999 and for the six
weeks and 46 weeks ended August 13, 1999 and June 30, 2000, respectively, on the
basis described in Note A, in conformity with accounting principles generally
accepted in the United States. Also, in our opinion, the related financial
statement schedule, when considered in relation to the basic financial
statements taken as a whole, present fairly in all material respects the
information set forth therein.

Jacksonville, Florida                                          Ernst & Young LLP
July 21, 2000

                                      F-2

<PAGE>

                          INTERSIL HOLDING CORPORATION

                     CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
                                                                          PREDECESSOR               PREDECESSOR        SUCCESSOR
                                                                  ----------------------------    ---------------    --------------
                                                                       FISCAL YEAR ENDED          SIX WEEKS ENDED    46 WEEKS ENDED
                                                                  ----------------------------    ---------------    --------------
                                                                  JULY 3, 1998    JULY 2, 1999    AUGUST 13, 1999    JUNE 30, 2000
                                                                  ------------    ------------    ---------------    --------------
                                                                     (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S>                                                               <C>             <C>             <C>                <C>
REVENUE
  Product sales................................................     $576,836        $532,718         $  57,336          $596,849

COSTS AND EXPENSES
  Cost of product sales........................................      369,332         349,776            39,681           352,513
  Research and development.....................................       75,125          67,079             8,499            69,456
  Selling, general and administrative..........................       98,184          83,998            10,908            97,227
  Harris corporate expense allocation..........................        9,962           9,303             1,164                --
  Intangible amortization......................................        2,292           2,414               326            10,686
  In-process research and development..........................           --              --                --            20,239
  Other........................................................           --              --                --             1,178
                                                                    --------        --------         ---------          --------
Operating income (loss)........................................       21,941          20,148            (3,242)           45,550
  Loss on sale of Malaysian operation..........................           --              --                --            24,825
  Interest expense.............................................           43             129                --            41,924
  Interest income..............................................         (957)         (1,360)             (111)           (3,720)
                                                                    --------        --------         ---------          --------
  Income (loss) before income taxes and
     extraordinary item........................................       22,855          21,379            (3,131)          (17,479)
  Income taxes (benefit).......................................        9,944          (6,027)             (102)             (289)
                                                                    --------        --------         ---------          --------
  Net income (loss) before extraordinary item..................       12,911          27,406            (3,029)          (17,190)
  Extraordinary item--loss on extinguishment of debt, net of
     tax effect................................................           --              --                --           (25,518)
                                                                    --------        --------         ---------          --------
NET INCOME (LOSS)..............................................       12,911          27,406            (3,029)          (42,708)
Preferred dividends............................................           --              --                --             5,391
                                                                    --------        --------         ---------          --------
Net income (loss) to common shareholders.......................     $ 12,911        $ 27,406         $  (3,029)         $(48,099)
                                                                    ========        ========         =========          ========
BASIC AND DILUTED LOSS PER SHARE:
  Loss before extraordinary item...............................                                                         $  (0.30)
  Extraordinary item...........................................                                                         $  (0.33)
                                                                                                                        --------
  Net loss.....................................................                                                         $  (0.63)
                                                                                                                        ========
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING (IN MILLIONS):
  Basic and diluted............................................                                                             76.7
                                                                                                                        ========
</TABLE>

                CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

<TABLE>
<CAPTION>
                                                                          PREDECESSOR               PREDECESSOR        SUCCESSOR
                                                                  ----------------------------    ---------------    --------------
                                                                       FISCAL YEAR ENDED          SIX WEEKS ENDED    46 WEEKS ENDED
                                                                  ----------------------------    ---------------    --------------
                                                                  JULY 3, 1998    JULY 2, 1999    AUGUST 13, 1999    JUNE 30, 2000
                                                                  ------------    ------------    ---------------    --------------
                                                                                  (IN THOUSANDS)
<S>                                                               <C>             <C>             <C>                <C>
Net income (loss)..............................................     $ 12,911        $ 27,406          $(3,029)          $(42,708)
Other comprehensive income (loss):
  Currency translation adjustments.............................       (1,851)           (574)           2,475              1,636
                                                                    --------        --------          -------           --------
Comprehensive income (loss)....................................     $ 11,060        $ 26,832          $  (554)          $(41,072)
                                                                    ========        ========          =======           ========
</TABLE>

                See Notes to Consolidated Financial Statements.

                                      F-3

<PAGE>

                          INTERSIL HOLDING CORPORATION

                          CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                                                     PREDECESSOR       SUCCESSOR
                                                                                                     ------------    -------------
                                                                                                     JULY 2, 1999    JUNE 30, 2000
                                                                                                     ------------    -------------
                                                                                                            (IN THOUSANDS)
<S>                                                                                                  <C>             <C>
ASSETS
Current Assets
  Cash and cash equivalents.......................................................................     $     --        $ 211,940
  Trade receivables, less allowances for collection loss ($582 as of July 2, 1999 and $1,341 as of
    June 30, 2000)................................................................................      100,674          111,695
  Inventories.....................................................................................      153,822          126,481
  Prepaid expenses................................................................................        3,725           10,645
  Income tax receivable...........................................................................        1,527            1,254
  Deferred income taxes...........................................................................        3,476           25,768
                                                                                                       --------        ---------
       Total Current Assets.......................................................................      263,224          487,783
Other Assets
  Property, plant and equipment, less allowance for depreciation ($582,616 as of July 2, 1999 and
    $36,699 as of June 30, 2000)..................................................................      410,530          225,484
  Intangibles, less accumulated amortization ($19,929 as of July 2, 1999 and $10,686
    as of June 30, 2000)..........................................................................       45,368          190,150
  Other...........................................................................................       42,057           30,521
                                                                                                       --------        ---------
       Total Other Assets.........................................................................      497,955          446,155
                                                                                                       --------        ---------
Total Assets......................................................................................     $761,179        $ 933,938
                                                                                                       ========        =========
LIABILITIES AND SHAREHOLDERS' EQUITY/BUSINESS EQUITY
Current Liabilities
  Trade payables..................................................................................     $ 31,068        $  36,991
  Retirement plan accruals........................................................................       13,640            6,228
  Accrued compensation............................................................................       19,283           32,398
  Accrued interest and sundry taxes...............................................................        3,193           10,512
  Other accrued items.............................................................................       16,418           22,734
  Distributor reserves............................................................................        6,542            7,366
  Unearned service income.........................................................................          567              129
  Long-term debt--current portion.................................................................          360              404
                                                                                                       --------        ---------
       Total Current Liabilities..................................................................       91,071          116,762
Other Liabilities
  Deferred income taxes...........................................................................        7,022           21,992
  Long-term debt..................................................................................        4,207          116,188
Shareholders' Equity/Business Equity
  Preferred Stock, $1,000 par value, 100,000 shares authorized, no shares issued or outstanding at
    June 30, 2000.................................................................................           --               --
  Class A Common Stock, $.01 par value, voting; 300,000,000 shares authorized, 44,773,152 shares
    issued and outstanding at June 30, 2000.......................................................           --              448
  Class B Common Stock, $.01 par value, non-voting; 300,000,000 shares authorized, 49,746,482
    shares issued and outstanding at June 30, 2000................................................           --              497
  Additional paid-in capital......................................................................           --          719,123
  Business equity.................................................................................      661,388               --
  Retained deficit................................................................................           --          (42,708)
  Accumulated other comprehensive (loss) income...................................................       (2,509)           1,636
                                                                                                       --------        ---------
       Total Shareholders' Equity/Business Equity.................................................      658,879          678,996
                                                                                                       --------        ---------
       Total Liabilities and Shareholders' Equity/Business Equity.................................     $761,179        $ 933,938
                                                                                                       ========        =========
</TABLE>

                See Notes to Consolidated Financial Statements.

                                      F-4

<PAGE>

                          INTERSIL HOLDING CORPORATION

                     CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                          PREDECESSOR               PREDECESSOR
                                                                  ----------------------------    ---------------
                                                                                                    SIX WEEKS
                                                                       FISCAL YEAR ENDED               ENDED
                                                                  ----------------------------    ---------------
                                                                  JULY 3, 1998    JULY 2, 1999    AUGUST 13, 1999
                                                                  ------------    ------------    ---------------
                                                                                  (IN THOUSANDS)
<S>                                                               <C>             <C>             <C>
OPERATING ACTIVITIES:
  Net income (loss)............................................     $ 12,911        $ 27,406         $  (3,029)
Adjustments to reconcile net income (loss) to net cash provided
  by operating activities
    Depreciation...............................................       65,036          78,217             8,747
    Amortization...............................................        2,295           2,414               326
    Provisions for inventory obsolescence......................        7,317           3,894             1,919
    Write-off of in-process research and development...........           --              --                --
    Write-off of unearned compensation.........................           --              --                --
    Loss on sale of Malaysian operation........................           --              --                --
    Non-current deferred income taxes..........................         (461)          1,896            (4,756)
  Changes in assets and liabilities:
    Trade receivables..........................................        1,270          10,001            14,532
    Inventories................................................      (17,176)         22,516            (3,568)
    Prepaid expenses...........................................          506             933               674
    Trade payables and accrued liabilities.....................      (14,399)        (13,950)          (18,705)
    Unearned service income....................................          (32)            319                --
    Income taxes...............................................       (3,866)         (4,486)            4,430
    Other......................................................       (5,070)        (17,911)            2,812
                                                                    --------        --------         ---------
      Net cash provided by operating activities................       48,331         111,249             3,382
INVESTING ACTIVITIES:
Proceeds from sale of Malaysian operation......................           --              --                --
Cash paid for acquired business................................           --          (1,335)               --
Property, plant and equipment..................................      (90,184)        (38,563)           (1,887)
                                                                    --------        --------         ---------
      Net cash provided by (used in) investing activities......      (90,184)        (39,898)           (1,887)
FINANCING ACTIVITIES:
  Proceeds from offering.......................................           --              --                --
  Proceeds from exercise of stock options......................           --              --                --
  Proceeds from borrowings.....................................        2,750             800                --
  Payments of borrowings.......................................          (83)           (302)              (32)
  Net cash transfer and billings from (to) parent..............       41,844         (67,030)           (1,198)
                                                                    --------        --------         ---------
      Net cash provided by (used in) financing activities......       44,511         (66,532)           (1,230)
  Effect of exchange rates on cash and cash equivalents........       (2,658)         (4,819)            1,177
                                                                    --------        --------         ---------
      Net increase in cash and cash equivalents................           --              --             1,442
      Cash and cash equivalents at the beginning of the
         period................................................           --              --                --
                                                                    --------        --------         ---------
      Cash and cash equivalents at the end of the period.......     $     --        $     --         $   1,442
                                                                    ========        ========         =========
SUPPLEMENTAL DISCLOSURES--NON-CASH ACTIVITIES:
  Exchange of preferred stock for common stock...................................................................
  Common Stock issued in acquisition of No Wires Needed B.V......................................................
  Additional paid-in capital from tax benefit on
    exercise of non-qualified stock options......................................................................

<CAPTION>

                                                                     SUCCESSOR
                                                                 -----------------
                                                                   46 WEEKS ENDED
                                                                 -----------------
                                                                  JUNE 30, 2000
                                                                 -----------------
<S>                                                               <C>
OPERATING ACTIVITIES:
  Net income (loss)............................................      $ (42,708)
Adjustments to reconcile net income (loss) to net cash provided
  by operating activities
    Depreciation...............................................         50,602
    Amortization...............................................         10,686
    Provisions for inventory obsolescence......................         23,906
    Write-off of in-process research and development...........         20,239
    Write-off of unearned compensation.........................            878
    Loss on sale of Malaysian operation........................         24,825
    Non-current deferred income taxes..........................         (4,680)
  Changes in assets and liabilities:
    Trade receivables..........................................        (24,991)
    Inventories................................................         (5,668)
    Prepaid expenses...........................................         (7,737)
    Trade payables and accrued liabilities.....................         43,036
    Unearned service income....................................           (437)
    Income taxes...............................................          2,290
    Other......................................................         20,898
                                                                     ---------
      Net cash provided by operating activities................        111,139
INVESTING ACTIVITIES:
Proceeds from sale of Malaysian operation......................         52,500
Cash paid for acquired business................................             --
Property, plant and equipment..................................        (38,813)
                                                                     ---------
      Net cash provided by (used in) investing activities......         13,687
FINANCING ACTIVITIES:
  Proceeds from offering.......................................        513,114
  Proceeds from exercise of stock options......................          1,985
  Proceeds from borrowings.....................................             --
  Payments of borrowings.......................................       (435,204)
  Net cash transfer and billings from (to) parent..............             --
                                                                     ---------
      Net cash provided by (used in) financing activities......         79,895
  Effect of exchange rates on cash and cash equivalents........           (158)
                                                                     ---------
      Net increase in cash and cash equivalents................        204,563
      Cash and cash equivalents at the beginning of the
         period................................................          7,377
                                                                     ---------
      Cash and cash equivalents at the end of the period.......      $ 211,940
                                                                     =========
SUPPLEMENTAL DISCLOSURES--NON-CASH ACTIVITIES:
  Exchange of preferred stock for common stock.................      $  89,400
                                                                     =========
  Common Stock issued in acquisition of No Wires Needed B.V....      $ 111,348
                                                                     =========
  Additional paid-in capital from tax benefit on
    exercise of non-qualified stock options....................      $   2,132
                                                                     =========
</TABLE>

                See Notes to Consolidated Financial Statements.

                                      F-5

<PAGE>

                          INTERSIL HOLDING CORPORATION

                 CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY

<TABLE>
<CAPTION>
                                                                                                          ACCUMULATED
                                                            COMMON STOCK       ADDITIONAL                    OTHER
                                                         ------------------     PAID-IN      RETAINED    COMPREHENSIVE
                                                         CLASS A    CLASS B     CAPITAL      DEFICIT        INCOME          TOTAL
                                                         -------    -------    ----------    --------    -------------    --------
                                                                                      (IN THOUSANDS)
<S>                                                      <C>        <C>        <C>           <C>         <C>              <C>
Initial capitalization at August 14, 1999.............    $ 158      $ 509      $  5,935     $     --       $    --       $  6,602
Net (loss)............................................       --         --            --      (42,708)           --        (42,708)
Shares issued in initial public offering..............      220         --       512,894           --            --        513,114
Shares issued under Stock Option Plan.................        2         --         4,115           --            --          4,117
Shares sold to certain executives and foreign
  employees...........................................       --         --           878           --          (878)            --
Write-off of unearned compensation....................       --         --            --           --           878            878
Shares issued for acquisition of No Wires Needed
  B.V.................................................       30         --       111,318           --            --        111,348
Exchange of preferred stock...........................       26         --        89,374           --            --         89,400
Exchange of common stock..............................       12        (12)           --           --            --             --
Preferred dividends...................................       --         --        (5,391)          --            --         (5,391)
Foreign currency translation..........................       --         --            --           --         1,636          1,636
                                                          -----      -----      --------     --------       -------       --------
Balance at June 30, 2000..............................    $ 448      $ 497      $719,123     $(42,708)      $ 1,636       $678,996
                                                          =====      =====      ========     ========       =======       ========
</TABLE>

                See Notes to Consolidated Financial Statements.

                                      F-6

<PAGE>

                          INTERSIL HOLDING CORPORATION

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

  YEARS ENDED JULY 3, 1998 AND JULY 2, 1999, SIX WEEKS ENDED AUGUST 13, 1999,
                        AND 46 WEEKS ENDED JUNE 30, 2000

NOTE A--ORGANIZATION AND BASIS OF PRESENTATION

ORGANIZATION

     Intersil Holding Corporation (Intersil Holding or Successor) was formed on
August 13, 1999 through a series of transactions in which Intersil Holding and
its wholly-owned subsidiary, Intersil Corporation (Intersil), acquired the
semiconductor business (semiconductor business or Predecessor) of Harris
Corporation (Harris) (the acquisition). Intersil Holding currently has no
operations but holds common stock related to its investment in Intersil.
Intersil and its wholly-owned domestic and foreign subsidiaries include the
operations of the Predecessor.

BASIS OF PRESENTATION

     The accompanying Successor consolidated financial statements subsequent to
August 13, 1999 include the accounts of Intersil Holding and Intersil
(collectively, the Company). All material intercompany transactions have been
eliminated in consolidation. The consolidated balance sheet as of July 2, 1999
and the consolidated statements of operations, comprehensive income and cash
flows for the fiscal years ended July 3, 1998 and July 2, 1999 and the six weeks
ended August 13, 1999 include the accounts of the semiconductor business, the
Predecessor company.

     Accordingly, the consolidated financial statements include the power,
communications, space and defense product lines of Harris' Semiconductor
Business that were purchased in the transaction. The transaction did not include
Harris' semiconductor suppression business or photomask operations or certain
patents in the memory field that were retained by Harris. The semiconductor
business, which was wholly-owned by Harris, designs, manufactures and sells
discrete semiconductors and standard and custom integrated circuits to the
semiconductor markets. The semiconductor business' manufacturing facilities
perform manufacturing operations related to other Harris Semiconductor Product
Lines. The semiconductor business was not a separate legal entity and the assets
and liabilities associated with the semiconductor business were components of a
larger business.

     The Predecessor's consolidated statements of operations include all
revenues and costs attributable to the semiconductor business. For cost of
sales, material costs are directly attributable to a product line and are
charged accordingly. Indirect costs are assigned using activity based costing.
Operating expenses (engineering, marketing, and administration & general) have
been allocated to the product lines based on sales or labor, as appropriate.
Harris corporate expense allocations were based on a percentage of the
semiconductor business' net sales. Interest expense was provided on direct
borrowings of the semiconductor business. Interest expense of Harris has not
been allocated to the Semiconductor Business.

     All of the allocations and estimates in the Predecessor's combined
statements of operations are based on assumptions that management believes are
reasonable under the circumstances. However, these allocations and estimates are
not necessarily indicative of the costs that would have resulted if the
Semiconductor Business had been operated on a stand alone basis.

     The semiconductor business sells products to other affiliated operations of
Harris. Sales to these operations are not material.

ACQUISITION OF HARRIS' SEMICONDUCTOR BUSINESS

     The total purchase price of the semiconductor business acquisition was
$614.3 million, which included transaction costs of approximately $7.8 million
and deferred financing costs of $12.2 million (Note H). The consideration paid
by Intersil Holding was $504.3 million in cash of which $420.0 million was
financed

                                      F-7

<PAGE>

                          INTERSIL HOLDING CORPORATION

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

  YEARS ENDED JULY 3, 1998 AND JULY 2, 1999, SIX WEEKS ENDED AUGUST 13, 1999,
                        AND 46 WEEKS ENDED JUNE 30, 2000

NOTE A--ORGANIZATION AND BASIS OF PRESENTATION--(CONTINUED)

through borrowings from the senior credit facilities, the 13.25% Senior
Subordinated Notes and 13.5% Subordinated Holding "Pay-In-Kind" (PIK) Note and
the issuance of a $90.0 million PIK Note note to Harris.

     The acquisition was accounted for using the purchase method of accounting
and, accordingly, the operating results of the Semiconductor Business have been
included in Intersil's consolidated financial statements since the date of
acquisition. The total purchase price was allocated to the assets and
liabilities of the Semiconductor Business based upon their approximate fair
values. The fair values of the net assets acquired exceeded the purchase price
resulting in negative goodwill. This negative goodwill was allocated to the
identified intangibles and property and equipment based on their relative fair
values as follows (in millions).

<TABLE>
<S>                                                <C>
Purchase price:

  Cash paid to Harris...........................       $ 504.3
  13.5% Subordinated PIK Note...................          90.0
  Transaction costs and fees....................          20.0
                                                       -------
Total purchase price............................       $ 614.3
                                                       =======
</TABLE>

<TABLE>
<CAPTION>
                                                                      ALLOCATION OF
                                                   FAIR VALUE OF      EXCESS FAIR       ADJUSTED
                                                   ACQUIRED ASSETS      VALUE          FAIR VALUE
                                                   ---------------    -------------    -------------
<S>                                                <C>                <C>              <C>
Net current assets..............................       $ 160.6           $    --          $ 160.6
Other...........................................          17.2                --             17.2
Property and equipment..........................         481.0            (153.2)           327.8
Developed Technology............................          80.0             (23.9)            56.1
Customer base...................................          33.0             (10.0)            23.0
In-process research and development.............          29.0              (8.8)            20.2
Assembled workforce.............................          13.5              (4.1)             9.4
                                                       -------           -------          -------
                                                       $ 814.3           $(200.0)         $ 614.3
                                                       =======           =======          =======
Excess fair value of net assets acquired over
  purchase price................................       $ 200.0
                                                       =======
</TABLE>

     The appraisal of the acquired semiconductor business included $20.2 million
of purchased in-process research and development, which was related to various
products under development. This valuation represents the 10 year after-tax cash
flow of this in-process technology using a discount rate of 20%. The acquired
technology had not yet reached technological feasibility and had no future
alternative uses. Accordingly, it was written off at the time of the
acquisition. The remaining identified intangibles (developed technology,
customer base and assembled workforce) are being amortized over 5 to 11 years.

     In connection with the acquisition of the semiconductor business, Intersil
formulated a restructuring plan that included the termination of the employment
of 372 employees of the semiconductor business. At

                                      F-8

<PAGE>

                          INTERSIL HOLDING CORPORATION

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

  YEARS ENDED JULY 3, 1998 AND JULY 2, 1999, SIX WEEKS ENDED AUGUST 13, 1999,
                        AND 46 WEEKS ENDED JUNE 30, 2000

NOTE A--ORGANIZATION AND BASIS OF PRESENTATION--(CONTINUED)

August 13, 1999, Intersil recorded $11.0 million in severance benefits and this
is included in the allocation of the acquisition cost. The severance includes
the following:

<TABLE>
<CAPTION>
                                                                        NO. OF
                              LOCATION                                  EMPLOYEES     AMOUNTS
---------------------------------------------------------------------   ---------    -------------
                                                                                     (IN MILLIONS)
<S>                                                                     <C>          <C>
Europe...............................................................       17           $ 5.6
Malaysia.............................................................      262             1.9
North America........................................................       93             3.5
                                                                           ---           -----
                                                                           372           $11.0
                                                                           ===           =====
</TABLE>

      For the 46 weeks ended June 30, 2000, approximately $10.1 million of these
restructuring costs had been paid out. As of June 30, 2000, the restructuring
liability was $0.9 million. Intersil Holding will complete the restructing plan
by the end of August 2000.

NOTE B--SIGNIFICANT ACCOUNTING POLICIES

     FISCAL YEAR--The 1998 fiscal year includes the 53 weeks ended July 3, 1998;
fiscal year 1999 includes the 52 weeks ended July 2, 1999; and fiscal year 2000
includes the six weeks ended August 13, 1999 and the 46 weeks ended June 30,
2000.

     CASH AND CASH EQUIVALENTS--Intersil Holding considers all highly liquid
investments with a maturity of three months or less when purchased to be cash
equivalents.

     INVENTORIES--Inventories are carried at the lower of standard cost, which
approximates actual cost, determined by the First-In-First-Out (FIFO) method, or
market.

     PROPERTY, PLANT AND EQUIPMENT--Machinery and equipment are carried on the
basis of cost. The estimated useful lives of buildings range between 5 and
50 years. The estimated useful lives of machinery and equipment range between 3
and 10 years. Depreciation is computed by the straight-line method using the
estimated useful life of the asset.

     REVENUE RECOGNITION--Revenue is recognized from sales to all customers,
including distributors, when a product is shipped. Sales to distributors are
made under agreements which provide the distributors rights of return and price
protection on unsold merchandise they hold. Accordingly, sales are reduced for
estimated returns from distributors and estimated future price reductions of
unsold merchandise held by distributors. Product sales to two distributors for
the fiscal years ended July 3, 1998 and July 2, 1999, and the six weeks ended
August 13, 1999 and 46 weeks ended June 30, 2000 amounted to 19.0%, 16.6%, 29.3%
and 15.7%, respectively, of total product sales.

     RESEARCH AND DEVELOPMENT--Research and development costs, consisting of the
cost of designing, developing, and testing new or significantly enhanced
products, are expensed as incurred.

     RETIREMENT BENEFITS--Intersil Holding provides retirement benefits to
substantially all employees primarily through a retirement plan having
profit-sharing and savings elements. Contributions by Intersil Holding to the
retirement plan are based on profits and employees' savings with no other
funding requirements. Intersil Holding may make additional contributions to the
fund at its discretion.

                                      F-9

<PAGE>

                          INTERSIL HOLDING CORPORATION

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

  YEARS ENDED JULY 3, 1998 AND JULY 2, 1999, SIX WEEKS ENDED AUGUST 13, 1999,
                        AND 46 WEEKS ENDED JUNE 30, 2000

NOTE B--SIGNIFICANT ACCOUNTING POLICIES--(CONTINUED)

     The savings element of the retirement plan is a defined contribution plan,
which is qualified under Internal Revenue Service Code Section 401(k). All
employees of the Company may elect to participate in the 401(k) retirement plan
(the "401(k) plan"). Under the 401(k) plan, participating employees may defer a
portion of their pretax earnings up to certain limits prescribed by the Internal
Revenue Service. The Company provides matching contributions under the
provisions of the plan. Employees fully vest in the Company's matching
contributions upon the completion of 7 years of service.

     Retirement benefits also include an unfunded limited healthcare plan for
U.S.-based retirees and employees on long-term disability. Intersil Holding
accrues the estimated cost of these medical benefits, which are not material,
during an employee's active service life.

     Retirement plans expense was $15.6 million in 1998, $14.8 million in 1999,
$1.4 million for the six weeks ended August 13, 1999 and $10.4 million for the
46 weeks ended June 30, 2000.

     INCOME TAXES--For the Predecessor financial statements, the semiconductor
business was included with its parent, Harris, in a consolidated federal income
tax return. Harris required each of its businesses to provide for taxes on
financial statement pre-tax income or loss at applicable statutory tax rates.
United States local amounts receivable or payable for current and prior years'
income taxes were treated as intercompany transactions and were recorded in the
Semiconductor Business equity. Intersil Holding follows the liability method of
accounting for income taxes. International current income taxes payable and
deferred income taxes resulting from temporary differences between the financial
statements and the tax basis of assets and liabilities of Intersil Holding's
international subsidiaries are separately classified on the balance sheet.

     ASSET IMPAIRMENT--Intersil Holding accounts for long-lived asset impairment
under Statement of Financial Accounting Standards No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of."
The Company recognizes impairment losses on long-lived assets used in operations
when indicators of impairment are present and the undiscounted cash flows
estimated to be generated by those assets are less than the assets' carrying
amounts. The impairment loss is measured by comparing the fair value of the
asset to its carrying amount. Fair value is estimated based on discounted future
cash flows. Long-lived assets to be disposed of are recorded at the lower of
their carrying amount or estimated fair value less cost to sell.

     INTANGIBLES--Intangibles resulting from acquisitions are being amortized by
the straight-line method over five to 11 years. Recoverability of intangibles is
assessed using estimated undiscounted cash flows of related operations.
Intangibles that are not expected to be recovered through future undiscounted
cash flows are charged to expense when identified. Amounts charged to expense
are amounts in excess of the fair value of the intangible asset. Fair value is
determined by calculating the present value of estimated expected future cash
flows using a discount rate commensurate with the risks involved.

     FUTURES AND FORWARD CONTRACTS--When Intersil Holding sells products outside
the United States or enters into purchase commitments, the transactions are
frequently denominated in currencies other than U.S. dollars. To minimize the
impact on revenue and cost from currency fluctuations, Intersil Holding enters
into currency exchange agreements that qualify for hedge accounting treatment.
It is Intersil Holding's policy not to speculate in foreign currencies. Currency
exchange agreements are designated as, and are effective as, hedges of foreign
currency commitments. In addition, these agreements are consistent with the
designated currency of the underlying transaction and mature on or before the
underlying transaction. Gains and losses on currency exchange agreements that
qualify as hedges are deferred and recognized as an adjustment of the carrying
amount of the hedged asset, liability or commitment. Gains and losses on
currency exchange

                                      F-10

<PAGE>

                          INTERSIL HOLDING CORPORATION

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

  YEARS ENDED JULY 3, 1998 AND JULY 2, 1999, SIX WEEKS ENDED AUGUST 13, 1999,
                        AND 46 WEEKS ENDED JUNE 30, 2000

NOTE B--SIGNIFICANT ACCOUNTING POLICIES--(CONTINUED)

agreements that do not qualify as hedges are recognized in operations based on
changes in the fair market value of the currency exchange agreement.

     FOREIGN CURRENCY TRANSLATION--The functional currency for the Malaysian
subsidiary was the U.S. dollar, and for other international subsidiaries it is
the local currency. Assets and liabilities are translated at current rates of
exchange, and income and expense items are translated at the weighted average
exchange rate for the year. The resulting translation adjustments are recorded
as a separate component of shareholders' equity (Business Equity in the
Predecessor's financial statements). Cumulative translation gains (losses) were
$(0.6) million and $1.6 million at July 2, 1999 and June 30, 2000, respectively.

     LOSS PER SHARE--Loss per share is computed and presented in accordance with
SFAS No. 128, "Earnings per Share" and the Securities and Exchange Commission
Staff Accounting Bulletin No. 98. Net loss per common share is presented for the
46 weeks ended June 30, 2000 only because it is not meaningful for earlier
periods since the Company did not have common stock outstanding for any of the
earlier periods.

     USE OF ESTIMATES--These statements have been prepared in conformity with
accounting principles generally accepted in the United States and require
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from those
estimates.

     RECLASSIFICATIONS--Certain prior year amounts have been reclassified to
conform with current year classifications.

NOTE C--ACCOUNTING PRONOUNCEMENTS

     In June 1999, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards No. (SFAS) 137, "Accounting for
Derivative Instruments and Hedging Activities--Deferral of the Effective Date of
FASB Statement No. 133." SFAS 137 amends SFAS 133, "Accounting for Derivative
Instruments and Hedging Activities," to defer its effective date to all fiscal
quarters of all fiscal years beginning after June 15, 2000. SFAS 133 establishes
accounting and reporting standards for derivative instruments including
standalone instruments, such as forward currency exchange contracts and interest
rate swaps or embedded derivatives and requires that these instruments be
marked-to-market on an ongoing basis. These market value adjustments are to be
included either in the income statement or shareholders' equity, depending on
the nature of the transaction. The Company is required to adopt SFAS 133 in the
first quarter of its fiscal year 2001. We believe that SFAS 133 will not have a
material adverse effect on the Company's financial position or results of
operations.

     In December 1999, the Securities and Exchange Commission issued SAB
No. 101. "Revenue Recognition in Financial Statements," which provides guidance
on the recognition, presentation, and disclosures of revenue in financial
statements filed with the SEC. SAB No. 101 outlines the basic criteria that must
be met to recognize revenue and provides guidance for disclosures related to
revenue recognition policies. We believe that SAB No. 101 will not have a
material adverse effect on the Company's financial position or results of
operations.

                                      F-11

<PAGE>

                          INTERSIL HOLDING CORPORATION

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

  YEARS ENDED JULY 3, 1998 AND JULY 2, 1999, SIX WEEKS ENDED AUGUST 13, 1999,
                        AND 46 WEEKS ENDED JUNE 30, 2000

NOTE C--ACCOUNTING PRONOUNCEMENTS--(CONTINUED)

     In April 2000, the Financial Accounting Standards Board issued FASB
Interpretation No. 44, "Accounting for Certain Transactions Involving Stock
Compensation, an Interpretation of APB Opinion No. 25." Among other issues, that
interpretation clarifies the definition of employees for purposes of applying
Opinion No. 25, the criteria for determining whether a plan qualifies as a
non-compensatory plan, the accounting consequence of various modifications to
the terms of a previously fixed stock option or award and the accounting for an
exchange of stock compensation awards in a business combination. This
interpretation is effective July 1, 2000, but certain conclusions in the
interpretation cover specific events that occur after either December 15, 1998
or January 12, 2000. To the extent that this interpretation covers events
occurring during the period after December 15, 1998, or January 12, 2000, but
before the effective date of July 1, 2000, the effect of applying this
interpretation is recognized on a prospective basis from July 1, 2000. We are
currently reviewing stock grants to determine the impact, if any, that may arise
from implementation of this interpretation, although we do not expect the
impact, if any, to be material to our financial statements.

NOTE D--INVENTORIES

     Inventories are summarized below (in thousands):

<TABLE>
<CAPTION>
                                                                              (PREDECESSOR)     (SUCCESSOR)
                                                                              -------------    -------------
                                                                                JULY 2,         JUNE 30,
                                                                                 1999             2000
                                                                              -------------    -------------
<S>                                                                           <C>              <C>
Finished products..........................................................     $  58,041        $  45,064
Work in process............................................................       102,457           96,278
Raw materials and supplies.................................................        11,441            7,072
                                                                                ---------        ---------
                                                                                  171,939          148,414
Less inventory reserves....................................................        18,117           21,933
                                                                                ---------        ---------
                                                                                $ 153,822        $ 126,481
                                                                                =========        =========
</TABLE>

     At July 2, 1999 and June 30, 2000 Intersil Holding was committed to
purchase $22.5 million and $24.9 million, respectively of inventory from
suppliers. Management believes the cost of this inventory approximates current
market value.

                                      F-12

<PAGE>

                          INTERSIL HOLDING CORPORATION

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

    YEARS ENDED JULY 3, 1998, JULY 2, 1999, SIX WEEKS ENDED AUGUST 13, 1999,
                      AND THE 46 WEEKS ENDED JUNE 30, 2000

NOTE E--PROPERTY, PLANT AND EQUIPMENT

     Property, plant and equipment are summarized below (in thousands):

<TABLE>
<CAPTION>
                                                                                  (PREDECESSOR)     (SUCCESSOR)
                                                                                  -------------    -------------
                                                                                    JULY 2,         JUNE 30,
                                                                                     1999             2000
                                                                                  -------------    -------------
<S>                                                                               <C>              <C>
Land...........................................................................     $   3,966        $   3,860
Buildings......................................................................       266,364           78,940
Machinery and equipment........................................................       722,816          179,383
                                                                                    ---------        ---------
                                                                                      993,146          262,183
Less allowances for depreciation...............................................       582,616           36,699
                                                                                    ---------        ---------
                                                                                    $ 410,530        $ 225,484
                                                                                    =========        =========
</TABLE>

NOTE F--INTANGIBLES

     Intangibles are summarized below (in thousands):

<TABLE>
<CAPTION>
                                                                                    (PREDECESSOR)     (SUCCESSOR)
                                                                                    -------------    -------------
                                                                    PERIOD OF        JULY 2,          JUNE 30,
                                                                   AMORTIZATION        1999             2000
                                                                   -------------    -------------    -------------
<S>                                                                <C>              <C>              <C>
Developed technology............................................       11 years        $    --         $  56,925
Customer base...................................................        7 years             --            23,482
Assembled workforce.............................................        5 years             --             9,606
Goodwill........................................................      5-7 years         65,297           110,823
                                                                                       -------         ---------
                                                                                        65,297           200,836
Less accumulated amortization...................................                        19,929            10,686
                                                                                       -------         ---------
                                                                                       $45,368         $ 190,150
                                                                                       =======         =========
</TABLE>

                                      F-13

<PAGE>

                          INTERSIL HOLDING CORPORATION

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

    YEARS ENDED JULY 3, 1998, JULY 2, 1999, SIX WEEKS ENDED AUGUST 13, 1999,
                      AND THE 46 WEEKS ENDED JUNE 30, 2000

NOTE G--LOSS PER SHARE

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

<TABLE>
<CAPTION>
                                                                                 (SUCCESSOR)
                                                                              -----------------
                                                                                JUNE 30, 2000
                                                                              -----------------
<S>                                                                           <C>
Numerator:
  Net loss available to common shareholders (numerator for basic and
     diluted earnings per share)...........................................       $ (48,099)
                                                                                  =========
Denominator:
  Denominator for basic earnings per share-weighted average common
     shares................................................................          76,745
  Effect of dilutive securities:
     Stock options.........................................................              --
     Warrants..............................................................              --
                                                                                  ---------
  Denominator for diluted earnings per share-adjusted weighted average
     shares................................................................          76,745
                                                                                  =========
Basic and diluted loss per share...........................................       $   (0.63)
                                                                                  =========
</TABLE>

     The effect of dilutive securities is not included in the computation for
the 46 weeks ended June 30, 2000 because to do so would be antidilutive.

NOTE H--LONG-TERM DEBT

LONG-TERM DEBT

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

<TABLE>
<CAPTION>
                                                                             (PREDECESSOR)     (SUCCESSOR)
                                                                             -------------    --------------
                                                                             JULY 2, 1999     JUNE 30, 2000
                                                                             -------------    --------------
<S>                                                                          <C>              <C>
13.25% Senior Subordinated Notes..........................................      $    --          $112,384
Other.....................................................................        4,567             4,208
                                                                                -------          --------
                                                                                  4,567           116,592
Less current portion......................................................          360               404
                                                                                -------          --------
                                                                                $ 4,207          $116,188
                                                                                =======          ========
</TABLE>

                                      F-14

<PAGE>

                          INTERSIL HOLDING CORPORATION

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

    YEARS ENDED JULY 3, 1998, JULY 2, 1999, SIX WEEKS ENDED AUGUST 13, 1999,
                      AND THE 46 WEEKS ENDED JUNE 30, 2000

NOTE H--LONG-TERM DEBT--(CONTINUED)

     Scheduled future principal payments under Intersil Holding's and Intersil's
indebtedness are as follows (in thousands):

<TABLE>
<S>                                                                        <C>
2001....................................................................   $    404
2002....................................................................        416
2003....................................................................        429
2004....................................................................        388
2005....................................................................        373
Thereafter..............................................................    114,582
                                                                           --------
                                                                           $116,592
                                                                           ========
</TABLE>

  13.25% Senior Subordinated Notes and Warrants

     On August 13, 1999, in connection with the acquisition of the Semiconductor
Business, Intersil completed an offering of 200,000 units consisting of $200
million of its 13.25% Senior Subordinated Notes due 2009 and warrants to
purchase 3,703,707 shares of Class A Common Stock of Intersil Holding. Each unit
consisted of $1,000 principal amount of 13.25% Senior Subordinated Notes of
Intersil and one warrant to purchase 18.5185 shares of Class A Common Stock of
Intersil Holding. The total gross proceeds from the sale of the 13.25% Senior
Subordinated Notes were $194.0 million, net of $6.0 million of deferred
financing fees. The $6.0 million deferred financing fees were treated as
additional interest related to the 13.25% Senior Subordinated Notes and
amortized over the life of the 13.25% Senior Subordinated Notes on an effective
yield method.

     The 13.25% Senior Subordinated Notes are unsecured and are fully and
unconditionally guaranteed by Intersil Holding and all of Intersil's current and
future domestic subsidiaries. The 13.25% Senior Subordinated Notes are not
guaranteed by Intersil's foreign subsidiaries. The 13.25% Senior Subordinated
Notes require semi-annual interest payments beginning on February 15, 2000
through maturity on August 15, 2009. The 13.25% Senior Subordinated Notes may be
redeemed at the option of Intersil Holding after August 15, 2004 upon the
payment of certain redemption premiums, although up to 35% of the 13.25% Senior
Subordinated Notes can be redeemed prior to August 15, 2002 with the proceeds of
certain equity offerings and upon the payment of certain redemption premiums.
The 13.25% Senior Subordinated Notes contain various restrictive covenants,
including limitations on the incurrence of additional indebtedness, restrictions
and limitations on payment of dividends, making investments, engaging in
transactions with affiliates, consolidating, merging or transfering assets and
restrictions and limitations on the sales of certain assets, among others. The
13.25% Senior Subordinated Notes also require the maintenance of certain ratios.

     Each warrant entitles the holder to purchase 18.5185 shares of Intersil
Holding Class A Common Stock at a price of $.001 per share. The warrants are
exercisable beginning on the first anniversary of their issue date (August 13,
1999) and expire on August 15, 2009. Warrant holders have no voting rights. The
warrants were preliminarily valued at $0.3 million and will be treated as
additional interest related to the 13.25% Senior Subordinated Notes and
amortized over the life of the 13.25% Senior Subordinated Notes on an effective
yield method.

  Extinguishment of Debt

     On August 13, 1999, in connection with the acquisition of the semiconductor
business, Intersil entered into senior credit facilities with a syndicate of
financial institutions. The senior credit facilities include a $205.0 million
funded term loan facility (the "Tranche B Senior Term Facility") and a revolving
line of

                                      F-15

<PAGE>

                          INTERSIL HOLDING CORPORATION

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

    YEARS ENDED JULY 3, 1998, JULY 2, 1999, SIX WEEKS ENDED AUGUST 13, 1999,
                      AND THE 46 WEEKS ENDED JUNE 30, 2000

NOTE H--LONG-TERM DEBT--(CONTINUED)

credit (the "Revolving Credit Facility"). The Revolving Credit Facility provides
for up to $70.0 million of which no amounts were outstanding as of June 30,
2000.

     The Revolving Credit Facility bears interest ranging from LIBOR + 2.00% to
LIBOR + 3.25%, depending on the results of applicable ratios. The Revolving
Credit Facility matures in 2005.

     The senior credit facilities are unconditionally guaranteed, jointly and
severally, by Intersil Holding, Intersil and existing and subsequently acquired
or organized domestic subsidiaries. The Company's obligations and those of the
guarantors under the Senior Credit Facilities are secured by a pledge of all of
Intersil's capital stock and by substantially all of the assets of Intersil
Holding, Intersil and each of Intersil's existing and subsequently acquired or
organized domestic (and, to the extent no adverse consequences will result,
foreign) subsidiaries. The senior credit facilities contain various restrictive
covenants, including, incurrence of indebtedness, payment of dividends, making
certain investments and acquisitions, disposing of assets, among others. The
senior credit facilities also require the maintenance of certain ratios.

     Also on August 13, 1999, in connection with the acquisition of the
semiconductor business, Intersil Holding issued to Harris a $90.0 million 11.13%
Seller Holding PIK Note and issued to Citicorp Mezzanine Partners, L.P. a
$30.0 million 13.5% Subordinated Holding PIK Note.

     On February 25, 2000, the Company issued 22,000,000 shares of common stock
at a price of $25.00 per share. From the proceeds of the initial public
offering, the Company paid off approximately $419.0 million of debt incurred
through the acquisition of the semiconductor business, including all amounts
then outstanding under the Tranche B Senior Term Facility, the 11.13% Seller
Holding PIK Note and the 13.5% Subordinated PIK Note. In connection with the
early extinguishment of debt, the Company recorded extraordinary charges (net of
tax) of $25.5 million.

     Other

     The other debt consists of five loans made by agencies of the Commonwealth
of Pennsylvania with maturity dates ranging from 2003 to 2017 and are secured by
Intersil's manufacturing facility in Mountaintop, Pennsylvania, which has a net
carrying value of $4.6 million at July 2, 1999 and $4.2 million at June 30,
2000, respectively. The weighted average interest rate for this debt was 3.0% at
July 2, 1999 and June 30, 2000.

NOTE I--PREFERRED STOCK

     Intersil Holding has 100,000 shares of preferred stock authorized, stated
value of $1,000 per share. The rights of holders of preferred stock will be
stipulated at the time of issuance as determined pursuant to the adoption of a
shareholder rights plan. On August 13, 1999, Intersil Holding sold 83,434 shares
of its 12% Series A Cumulative Compounding Preferred Stock to certain buyers,
including Sterling Holding Company, LLC, Harris and certain members of
management. The $83.4 million received from the sale was used as a cash equity
contribution from Intersil Holding to Intersil for the acquisition of the
semiconductor business.

     On August 13, 1999, Intersil Holding granted to certain members of
management options to purchase 766.67 shares of Series A Preferred Stock at an
option price of $250 per share, and a sign-on bonus in the aggregate amount of
$575,025, representing the difference between the stated par value and the
option price. The preferred stock options vest immediately. Intersil Holding
recorded compensation expense for the $575,025 as of the grant date.

                                      F-16

<PAGE>

                          INTERSIL HOLDING CORPORATION

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

    YEARS ENDED JULY 3, 1998, JULY 2, 1999, SIX WEEKS ENDED AUGUST 13, 1999,
                      AND THE 46 WEEKS ENDED JUNE 30, 2000

NOTE I--PREFERRED STOCK--(CONTINUED)

     Concurrent with the initial public offering, Intersil Holding exchanged all
outstanding shares of its 12% Series A Cumulative Compounding Preferred Stock
plus accrued and unpaid dividends for approximately 2.6 million shares of its
Class A Common Stock. Also, the outstanding options to purchase 766.67 shares of
Series A Preferred Stock were exchanged for options to purchase 40,881 shares of
Class A Common Stock.

NOTE J--LEASE COMMITMENTS

     Total rental expense amounted to $6.3 million in fiscal year 1998,
$6.3 million in fiscal year 1999, $0.6 million for the six weeks ended
August 13, 1999 and $5.0 million for the six weeks ended June 30, 2000. Future
minimum rental commitments under noncancelable operating leases, primarily used
for land and office buildings amounted to approximately $11.8 million at
June 30, 2000. These commitments for the years following 2000 (which exclude the
estimated rental expense for annually renewable contracts) are: 2001--
$2.4 million, 2002--$1.6 million, 2003--$1.0 million, 2004--$0.6 million,
2005--$0.5 million and $5.7 million thereafter.

NOTE K--BUSINESS EQUITY

     Changes in the business equity of the Predecessor's financial statements
are summarized as follows (in thousands):

<TABLE>
<CAPTION>
                                                                                 FISCAL YEAR ENDED        SIX WEEKS ENDED
                                                                            ---------------------------   ---------------
                                                                            JULY 3, 1998   JULY 2, 1999   AUGUST 13, 1999
                                                                            ------------   ------------   ---------------
<S>                                                                         <C>            <C>            <C>
Balance at beginning of period............................................    $646,173       $699,077        $ 658,879
Net income (loss).........................................................      12,911         27,406           (3,029)
Foreign currency translation adjustments..................................      (1,851)          (574)           2,475
Net cash transfers and billings from (to) Harris Corporation..............      41,844        (67,030)          (1,198)
Purchase price elimination................................................          --             --         (657,127)
                                                                              --------       --------        ---------
Balance at end of period..................................................    $699,077       $658,879        $      --
                                                                              ========       ========        =========
</TABLE>

NOTE L--COMMON STOCK

     On February 25, 2000, Intersil Holding completed the filing of a
registration statement with the Securities and Exchange Commission for a public
offering of shares of its Class A Common Stock. Intersil Holding issued
22,000,000 shares of its Class A Common Stock at a price of $25.00 per share.
The net proceeds of this offering, after deducting underwriting discounts and
commissions, were approximately $513.1 million. In connection with the public
offering, Intersil Holding effected a 1-for-1.5 reverse stock split of its Class
A and Class B Common Stock as of February 23, 2000. All references to common
shares in the accompanying financial statements reflect Intersil Holding's
reverse stock split, retroactively applied to all periods presented.

                                      F-17

<PAGE>

                          INTERSIL HOLDING CORPORATION

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
    YEARS ENDED JULY 3, 1998, JULY 2, 1999, SIX WEEKS ENDED AUGUST 13, 1999,

                      AND THE 46 WEEKS ENDED JUNE 30, 2000

NOTE L--COMMON STOCK--(CONTINUED)

     Intersil Holding is authorized to issue 600.0 million shares of Intersil
Holding common stock, par value $0.01 per share, divided into two classes
consisting of 300.0 million shares of Intersil Holding Class A Common Stock and
300.0 million shares of Intersil Holding Class B Common Stock. Holders of
Class A Common Stock are entitled to one vote for each share held and holders of
Class B Common Stock have no voting rights. A holder of either class of Intersil
Holding common stock may convert any or all shares into an equal number of
shares of the other class of Intersil Holding common stock.

     On August 13, 1999, Intersil Holding sold 15.76 million shares of Class A
Common Stock and 50.91 million shares of Class B Common Stock for approximately
$5.0 million. The $5.0 million proceeds, along with the $83.4 million proceeds
from the sale of Series A Preferred Stock were used as a cash equity
contribution from Intersil Holding to Intersil for the acquisition of the
semiconductor business.

     On August 13, 1999, in connection with the issuance of the 13.5%
Subordinated Holding PIK Note, Intersil Holding issued to Citicorp Mezzanine
Partners, L.P. warrants to purchase 3,703,707 shares of its Class A Common Stock
at an exercise price of $.001 per share, subject to certain anti-dilution
adjustments. These warrants may be exercised at any time after August 13, 2001
and expire on August 15, 2009. As Intersil Holding has prepaid in full the 13.5%
Subordinated Holding PIK Note within 24 months after issuance, the warrants have
become exercisable for 2,222,224 shares of Intersil Holding Class A Common
Stock. The warrants were valued at $0.3 million and were treated as additional
interest related to the 13.5% Subordinated Holding PIK Note.

     On May 29, 2000, Intersil Holding acquired 100% of the outstanding capital
stock of Bilthoven, The Netherlands-based No Wires Needed B.V. ("NWN").
Consideration for the acquisition of NWN was 3.35 million shares of Intersil
Holding Class A Common Stock valued at $111.3 million at the date of closing.
(Note Q)

     During the 46 weeks ended June 30, 2000, Intersil Holding recorded $0.9
million of unearned compensation for the excess of the fair value of the Class A
Common Stock over the grant price for stock sold to certain executives by the
majority shareholder of Intersil Holding. Upon the Company's initial public
offering, the stock sold became fully vested and the unearned compensation was
written off.

     Intersil Holding had an option to purchase 1,161,905 shares from a majority
shareholder at $0.075 per share pursuant to an agreement executed at the initial
capitalization. Intersil Holding repurchased the 1,161,905 shares in January
2000.

     In the third quarter of fiscal year 2000, approximately 1.2 million shares
of Class B Common Stock were exchanged for an equivalent number of Class A
Common Stock. The exchanged Class B Common Stock is included in the authorized
and unissued shares.

                                      F-18

<PAGE>

                          INTERSIL HOLDING CORPORATION

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

    YEARS ENDED JULY 3, 1998, JULY 2, 1999, SIX WEEKS ENDED AUGUST 13, 1999,
                      AND THE 46 WEEKS ENDED JUNE 30, 2000

NOTE M--INCOME TAXES

     The provisions for income taxes are summarized below (pro forma for
predecessor financial statements) (in thousands):

<TABLE>
<S>                                                                                   <C>
SUCCESSOR (46 WEEKS ENDED JUNE 30, 2000)
Current taxes:
          Federal..................................................................    $   --
          State....................................................................        --
          Foreign..................................................................     4,391
                                                                                       ------
                                                                                        4,391
Deferred taxes:
          Federal..................................................................    (4,198)
          State....................................................................      (482)
          Foreign..................................................................        --
                                                                                       ------
                                                                                       (4,680)
                                                                                       ------

Income tax benefit.................................................................    $ (289)
                                                                                       ======
</TABLE>

<TABLE>
<CAPTION>
                                                                                                            SIX WEEKS
                                                                                                              ENDED
                                                                                 FISCAL YEAR ENDED        --------------
                                                                             ---------------------------    AUGUST 13,
PREDECESSOR                                                                  JULY 3, 1998   JULY 2, 1999      1999
-----------                                                                  ------------   ------------  --------------
<S>                                                                         <C>            <C>            <C>
United States (benefit)...................................................     $4,221        $ (6,626)       $   (399)
International.............................................................      4,910           1,605             352
State and local (benefit).................................................        813          (1,006)            (55)
                                                                               ------        --------        --------
                                                                               $9,944        $ (6,027)       $   (102)
                                                                               ======        ========        ========
</TABLE>

     The benefit related to tax deductions for the Company's stock option plans
is recorded as an increase to additional paid in capital when realized. For the
46 weeks ended June 30, 2000, the Company realized tax benefits of approximately
$2.1 million related to its stock option plans.

     In the year 2000, the Malaysian taxing authority converted its income tax
system to a self-assessment system. The new self-assessment system requires
Malaysian corporate taxpayers to begin making estimated tax payments in year
2000 based on year 2000 estimated taxable income. Previously, Malaysian
corporate taxpayers submitted tax payments following the year of assessment. In
fiscal year 1999, the Semiconductor Business made Malaysian taxing payments
based on fiscal year 1998's taxable income. As a result of the change in the
Malaysian taxing system, the semiconductor business was not required to make tax
payments on its fiscal year 1999 Malaysian taxable income, and therefore has not
provided a tax provision for Malaysian taxes for the fiscal year ended July 2,
1999, which would have amounted to approximately $15.1 million. The Malaysian
tax holiday is effective for Intersil's fiscal year ended July 2, 1999 only, and
does not impact the six weeks ended August 13, 1999 or the 46 weeks ended
June 30, 2000.

                                      F-19

<PAGE>

                          INTERSIL HOLDING CORPORATION

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

    YEARS ENDED JULY 3, 1998, JULY 2, 1999, SIX WEEKS ENDED AUGUST 13, 1999,
                      AND THE 46 WEEKS ENDED JUNE 30, 2000

NOTE M--INCOME TAXES--(CONTINUED)

     The components of deferred income tax assets (liabilities) are as follows
(in thousands):

<TABLE>
<CAPTION>
                                                                          (PREDECESSOR)            (SUCCESSOR)
                                                                      ---------------------   ----------------------
                                                                          JULY 2, 1999            JUNE 30, 2000
                                                                      ---------------------   ----------------------
                                                                      CURRENT   NON-CURRENT   CURRENT    NON-CURRENT
                                                                      -------   -----------   --------   -----------
<S>                                                                   <C>       <C>           <C>        <C>
Receivables.........................................................  $   --      $    --     $    239    $      --
Inventory...........................................................      --           --        8,664           --
Fixed Assets........................................................      --           --           --      (21,590)
Intangibles.........................................................      --           --           --      (14,363)
Accrued Expenses....................................................      --           --       18,582           --
NOL Carryforward....................................................      --           --           --       13,961
Depreciation........................................................      --       (7,022)          --           --
All other--net......................................................   3,476           --       (1,717)          --
                                                                      -------     -------     --------    ---------
                                                                      $3,476      $(7,022)    $ 25,768    $ (21,992)
                                                                      =======     =======     ========    =========
</TABLE>

     A reconciliation of the statutory United States income tax rate to the
Company's effective income tax rate follows:

<TABLE>
<CAPTION>
                                                                 (PREDECESSOR)           (PREDECESSOR)      (SUCCESSOR)
                                                          ---------------------------   ---------------   ---------------
                                                               FISCAL YEAR ENDED        SIX WEEKS ENDED   46 WEEKS ENDED
                                                          ---------------------------   ---------------   ---------------
                                                          JULY 3, 1998   JULY 2, 1999   AUGUST 13, 1999   JUNE 30, 2000
                                                          ------------   ------------   ---------------   ---------------
<S>                                                       <C>            <C>            <C>               <C>
Statutory U.S. income tax rate..........................       35.0%          35.0%           35.0%             35.0%
State taxes.............................................        2.3           (3.1)            1.1               1.1
International income....................................        5.2          (61.9)          (29.7)              7.6
Research credits........................................       (2.9)          (2.7)            2.2               0.8
In-process research and development.....................         --             --              --             (16.5)
Subpart F...............................................         --             --              --              (7.6)
Goodwill amortization...................................        3.5            4.0            (4.9)             (1.2)
Effect of sale of Malaysian operations..................         --             --              --             (18.0)
Other items.............................................         .4            0.5            (0.5)             (0.5)
                                                             ------         ------           -----             -----
Effective income tax rate...............................       43.5%         (28.2)%           3.2%              0.7%
                                                             ======         ======           =====             =====
</TABLE>

     United States income taxes have not been provided on undistributed earnings
of international subsidiaries because of Intersil Holding's intention to
reinvest these earnings. The determination of unrecognized deferred U.S. tax
liability for the undistributed earnings of international subsidiaries is not
practicable.

     Pretax income (loss) of international subsidiaries was $10.2 million in
fiscal year 1998, $41.9 million in fiscal year 1999, $(1.6) million for the six
weeks ended August 13, 1999 and $21.6 million for the 46 weeks ended June 30,
2000.

     Income taxes paid were $14.8 million in fiscal year 1998, $3.4 million in
fiscal year 1999, $0.2 million for the six weeks ended August 13, 1999 and
$0.6 million for the 46 weeks ended June 30, 2000.

     The Company has a tax year-end of December 31 for federal and state income
tax purposes and has estimated that as of December 31, 1999, it had a cumulative
federal and state operating loss carryforward of $17.0 million. The federal net
operating loss carryforwards will expire in 2020. The state net operating loss
carryforwards will expire in varying amounts beginning in 2005. Calculated as of
June 30, 2000, the

                                      F-20

<PAGE>

                          INTERSIL HOLDING CORPORATION

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

    YEARS ENDED JULY 3, 1998, JULY 2, 1999, SIX WEEKS ENDED AUGUST 13, 1999,
                      AND THE 46 WEEKS ENDED JUNE 30, 2000

NOTE M--INCOME TAXES--(CONTINUED)

Company recorded a deferred tax asset associated with federal and state net
operating loss carryforwards of $14.0 million.

     The federal and state net operating loss and tax credit carryforwards could
be subject to limitation if, within any three year period prior to the
expiration of the applicable carryforward period, there is a greater than 50%
change in ownership of the Company.

     No valuation allowance has been provided in connection with the net
deferred tax asset as the Company expects to be able to utilize its deferred tax
assets against future taxable income. Based on the Company's projected taxable
income and estimates of future profitability, management has concluded that
operating income will more likely than not be sufficient to give rise to income
tax expense to cover all deferred tax assets.

NOTE N--GEOGRAPHIC INFORMATION

     Intersil Holding operates exclusively in the semiconductor industry.
Substantially all revenues result from the sale of semiconductor products. All
intercompany revenues and balances have been eliminated.

     A summary of the operations by geographic area is summarized below (in
thousands):

<TABLE>
<CAPTION>
                                                                   (PREDECESSOR)           (PREDECESSOR)      (SUCCESSOR)
                                                            ---------------------------   ---------------   ---------------
                                                                 FISCAL YEAR ENDED        SIX WEEKS ENDED   46 WEEKS ENDED
                                                            ---------------------------   ---------------   ---------------
                                                            JULY 3, 1998   JULY 2, 1999   AUGUST 13, 1999   JUNE 30, 2000
                                                            ------------   ------------   ---------------   ---------------
<S>                                                         <C>            <C>            <C>               <C>
United States operations
  Net sales...............................................    $563,180       $519,555        $  54,664         $ 574,867
  Long-lived assets.......................................     386,333        371,448          366,386           333,668
International
  Net sales...............................................      13,656         13,163            2,672            21,982
  Long-lived assets.......................................     122,397        121,330          118,277           112,487
</TABLE>

     Export sales included in U.S. operations were, $258.4 million in fiscal
year 1998, $254.8 million in fiscal year 1999, $30.4 million for the six weeks
ended August 13, 1999 and $340.3 million for the 46 weeks ended June 30, 2000.

NOTE O--FINANCIAL INSTRUMENTS

     The carrying values of accounts receivable, accounts payable and short-term
debt approximates fair value due to the short-term maturities of these assets
and liabilities. The fair value of long-term debt is based on quoted market
prices or pricing models using prevailing financial market information at the
date of measurement.

     Letters of credit are issued by Intersil during the ordinary course of
business through major financial institutions as required by certain vendor
contracts. As of June 30, 2000, Intersil had outstanding letters of credit
totaling $2.7 million.

     Intersil Holding markets its products for sale to customers, including
distributors, primarily in the United States, Europe and Asia/Pacific. Credit is
extended based on an evaluation of the customer's financial condition and
collateral is generally not required. Intersil Holding maintains an allowance
for losses based upon the expected collectibility of all accounts receivable.
Intersil Holding believes it is adequately reserved with regard to receivables
from its domestic and international customers.

                                      F-21

<PAGE>

                          INTERSIL HOLDING CORPORATION

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

    YEARS ENDED JULY 3, 1998, JULY 2, 1999, SIX WEEKS ENDED AUGUST 13, 1999,
                      AND THE 46 WEEKS ENDED JUNE 30, 2000

NOTE O--FINANCIAL INSTRUMENTS--(CONTINUED)

     In August 1999, Intersil Holding began to use foreign exchange contracts to
hedge anticipated foreign cash flow commitments up to six months. Hedges on
anticipated foreign cash flow commitments do not qualify for deferral and
therefore, gains and losses on changes in the fair market value of the foreign
exchange contracts are recognized in income. Total net gains on foreign exchange
contracts for the 46 weeks ended June 30, 2000 were $3.2 million. At June 30,
2000, open foreign exchange contracts were $30.9 million, all of which were to
hedge anticipated foreign cash flow commitments. For the year ended June 30,
2000, Intersil Holding purchased and sold $87.4 million of foreign exchange
forward contracts.

     Prior to August 1999, Intersil Holding used foreign exchange contracts and
options to hedge intercompany accounts and off-balance-sheet foreign currency
commitments. Specifically, these foreign exchange contracts offset foreign
currency denominated inventory and purchase commitments from suppliers, accounts
receivable from and future committed sales to customers and firm committed
operating expenses. Foreign currency financial instruments were used to reduce
the risks that arise from doing business in international markets. Such
contracts generally had a term of one year or less. At July 2, 1999, open
foreign exchange contracts were $22.0 million, all of which were to hedge
off-balance-sheet commitments. Additionally, for the year ended July 2, 1999,
the Semiconductor Business purchased and sold $120.7 million of foreign exchange
forward contracts.

     Deferred gains and losses are included on a net basis in the Consolidated
Balance Sheets as other assets and are recorded in operations as part of the
underlying transaction when recognized. At July 2, 1999, Intersil Holding had
deferred foreign exchange contract losses on future commitments of approximately
$28.6 million.

     Total open foreign exchange contracts and options at July 2, 1999 and
June 30, 2000, are described in the table below:

JULY 2, 1999

COMMITMENTS TO BUY FOREIGN CURRENCIES

<TABLE>
<CAPTION>
                                                                      CONTRACT AMOUNT
                                                                ---------------------------    DEFERRED    MATURITIES
CURRENCY                                                        FOREIGN CURRENCY     U.S.       GAINS      (IN MONTHS)
-------------------------------------------------------------   ----------------    -------    --------    -----------
                                                                                        (IN THOUSANDS)
<S>                                                             <C>                 <C>        <C>         <C>
Malaysian Ringgit............................................          80,589       $19,000     $2,208         1-2
</TABLE>

COMMITMENTS TO SELL FOREIGN CURRENCIES

<TABLE>
<CAPTION>
                                                                      CONTRACT AMOUNT
                                                                ---------------------------    DEFERRED    MATURITIES
CURRENCY                                                        FOREIGN CURRENCY     U.S.       GAINS      (IN MONTHS)
-------------------------------------------------------------   ----------------    -------    --------    -----------
                                                                                        (IN THOUSANDS)
<S>                                                             <C>                 <C>        <C>         <C>
French Franc.................................................          10,900       $ 1,857     $  138         1-2
British Pound................................................             691         1,094          2           1
</TABLE>

                                      F-22

<PAGE>

                          INTERSIL HOLDING CORPORATION

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

    YEARS ENDED JULY 3, 1998, JULY 2, 1999, SIX WEEKS ENDED AUGUST 13, 1999,
                      AND THE 46 WEEKS ENDED JUNE 30, 2000

NOTE O--FINANCIAL INSTRUMENTS--(CONTINUED)

JUNE 30, 2000

OPTIONS TO SELL FOREIGN CURRENCIES

<TABLE>
<CAPTION>
                                                                                 CONTRACT AMOUNT
                                                                           ---------------------------    MATURITIES
CURRENCY                                                                   FOREIGN CURRENCY     U.S.      (IN MONTHS)
------------------------------------------------------------------------   ----------------    -------    -----------
                                                                                           (IN THOUSANDS)
<S>                                                                        <C>                 <C>        <C>
Euro....................................................................           3,000       $ 2,883        5-6
</TABLE>

COMMITMENTS TO SELL FOREIGN CURRENCIES

<TABLE>
<CAPTION>
                                                                                 CONTRACT AMOUNT
                                                                           ---------------------------    MATURITIES
CURRENCY                                                                   FOREIGN CURRENCY     U.S.      (IN MONTHS)
------------------------------------------------------------------------   ----------------    -------    -----------
                                                                                            (IN THOUSANDS)
<S>                                                                        <C>                 <C>        <C>
Euro....................................................................          16,500       $15,697        1-6
British Pound...........................................................           2,300         3,572        1-6
Japanese Yen............................................................       1,190,000        11,655        1-7
</TABLE>

NOTE P--EMPLOYEE BENEFIT PLANS

  Equity Compensation Plan

     On November 5, 1999, Intersil Holding adopted the 1999 Equity Compensation
Plan (the "Plan"), which became effective on August 13, 1999, for salaried
officers and key employees. The Plan authorizes the grant of options for up to
7.5 million shares of Intersil Holding Class A Common Stock and can include
(i) options intended to constitute incentive stock options under the Internal
Revenue Code, (ii) non-qualified stock options, (iii) restricted stock,
(iv) stock appreciation rights, and (v) phantom share awards. The exercise price
of each option granted under the Plan shall be determined by a committee of the
Board of Directors (the "Board"). The maximum term of any option shall be ten
years from the date of grant for incentive stock options and ten years and one
day from the date of grant for non-qualified stock options. Options granted
under the Plan are exercisable at the determination of the Board, currently
vesting ratably over approximately 5 years. Employees receiving options under
the Plan may not receive in any one year period options to purchase more than
666,667 shares of common stock. During the 46 weeks ended June 30, 2000,
Intersil Holding granted 1,596,793 options to acquire Intersil Holding Class A
Common Stock at a price of $2.25 per share, 1,239,291 options at a price of
$25.00 per share, and 118,100 options at an average price of $45.65 per share.
The Company accounts for its Equity Compensation Plan in accordance with
Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to
Employees." As such, compensation expense is recorded on the date of grant only
if the current market price of the underlying stock exceeds the exercise price.
During the 46 weeks ended June 30, 2000, the Company recorded no deferred
compensation. Had compensation cost for the Company's stock option plan been
determined consistent with SFAS Statement No. 123, the Company would have
reported a net loss of $43.7 million for the 46 weeks ended June 30, 2000.

     The Company estimates the fair value of each option as of the date of grant
using a Black-Scholes pricing model with the following weighted average
assumptions.

                                      F-23

<PAGE>

                          INTERSIL HOLDING CORPORATION

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

    YEARS ENDED JULY 3, 1998, JULY 2, 1999, SIX WEEKS ENDED AUGUST 13, 1999,
                      AND THE 46 WEEKS ENDED JUNE 30, 2000

NOTE P--EMPLOYEE BENEFIT PLANS--(CONTINUED)

<TABLE>
<CAPTION>
                                                                                  JUNE 30, 2000
                                                                                  -------------
<S>                                                                               <C>
Expected volatility............................................................         0.5
Dividend yield.................................................................          --
Risk-free interest rate........................................................        6.25%
Expected life, in years........................................................           7
</TABLE>

     A summary of the status of the Company's stock option plan as of June 30,
2000, and changes during the 46 weeks then ended are presented in the
table below.

<TABLE>
<CAPTION>
                                                                             JUNE 30, 2000
                                                                       --------------------------
                                                                                         WEIGHTED
                                                                                         AVERAGE
                                                                                         EXERCISE
                                                                         SHARES           PRICE
                                                                       --------------    --------
                                                                       (IN THOUSANDS)
<S>                                                                    <C>               <C>
Outstanding at beginning of period..................................           --         $   --
Granted.............................................................        3,177          15.41
Exercised...........................................................         (194)         10.21
Canceled............................................................          (28)         15.20
                                                                           ------         ------
Outstanding at end of period........................................        2,955         $15.76
                                                                           ======         ======
Exercisable at end of period........................................          191         $ 2.25
                                                                           ======         ======
Weighted average fair value of options granted......................                      $ 5.07
                                                                                          ======
</TABLE>

     Information with respect to stock options outstanding and stock options
exercisable at June 30, 2000, is as follows:

<TABLE>
<CAPTION>
                                                                OPTIONS OUTSTANDING
                                                      ---------------------------------------      OPTIONS EXERCISABLE
                                                                     WEIGHTED-                   ------------------------
                                                                     AVERAGE
                                                                     REMAINING      WEIGHTED-                   WEIGHTED-
                                                                     CONTRACTUAL    AVERAGE                     AVERAGE
                                                                                    EXERCISE                    EXERCISE
                                                       NUMBER          LIFE          PRICE       NUMBER          PRICE
                  EXERCISE PRICE                      OUTSTANDING                                EXERCISABLE
---------------------------------------------------   -----------    -----------    ---------    -----------    ---------
                                                          (IN                                        (IN
                                                      THOUSANDS)                                 THOUSANDS)
<S>                                                   <C>            <C>            <C>          <C>            <C>
$2.25..............................................      1,458           9.19        $  2.25         191          $2.25
$25.00.............................................      1,156           9.65        $ 25.00          --             --
$28.50-$42.13......................................        208           9.89        $ 36.62          --             --
$42.94-$58.50......................................        133           9.89        $ 47.40          --             --
</TABLE>

  Employee Stock Purchase Plan

       In February 2000, Intersil Holding adopted the Employee Stock Purchase
  Plan ("the ESPP") whereby eligible employees can purchase shares of Intersil
  Holding's common stock. Intersil has received 1,333,334 shares of common stock
  for issuance under the Plan. The ESPP permits employees to purchase common
  stock through payroll deductions, which may not exceed 10% of an employee's
  compensation, at a price not less than 85% of the market value of the stock on
  specified dates. In no event, may any participant purchase more than $25,000
  worth of shares in any calendar year and no more than 16,667 shares may be

                                      F-24

<PAGE>

                          INTERSIL HOLDING CORPORATION

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

    YEARS ENDED JULY 3, 1998, JULY 2, 1999, SIX WEEKS ENDED AUGUST 13, 1999,
                      AND THE 46 WEEKS ENDED JUNE 30, 2000

NOTE P--EMPLOYEE BENEFIT PLANS--(CONTINUED)

  purchased by an employee on any purchase date. Unless sooner terminated by the
  Board, the ESPP shall terminate upon the earliest of (1) February 28, 2010,
  (2) the date on which all shares available for issuance under the ESPP shall
  have been sold pursuant to purchase rights exercised under the ESPP, or
  (3) the date on which all purchase rights are exercised in connection with a
  Corporate Transaction (as defined in the ESPP). As of June 30, 2000, no shares
  have been issued under the ESPP.

NOTE Q--ACQUISITION OF NO WIRES NEEDED B.V.

     On May 29, 2000, Intersil Holding acquired 100% of the outstanding capital
stock of Bilthoven, The Netherlands-based No Wires Needed B.V. ("NWN").
Consideration for the acquisition of NWN was 3.35 million shares of Intersil
Holding Class A Common Stock valued at $111.3 million at the date of closing.
The NWN acquisition has been accounted for by the purchase method of accounting
and, accordingly, the results of operations of NWN have been included in the
accompanying consolidated financial statements since the acquisition date. The
preliminary purchase price exceeded the fair value of the net tangible assets
acquired by approximately $109.0 million. NWN had completed all in-process
research and development programs prior to its acquisition. Therefore, none of
the preliminary purchase price in excess of the fair value of the net tangible
assets was allocated to purchase in-process research and development. The
preliminary purchase price in excess of fair value of net tangible assets was
allocated to goodwill, which will be amortized on a straight-line basis over
seven years.

     The following unaudited pro forma consolidated results of operations are
presented as if the NWN acquisition occurred on August 14, 1999 (in millions,
except per share data):

<TABLE>
<CAPTION>
                                                                                46 Weeks Ended
                                                                                June 30, 2000
                                                                                --------------
<S>                                                                             <C>
Product sales................................................................       $603.2
Net loss before extraordinary item...........................................        (31.7)
Net loss.....................................................................        (57.3)
Net loss to common shareholders..............................................        (62.7)
Net loss per basic and diluted share:........................................        (0.79)
</TABLE>

     The pro forma results of operations include adjustments to give affect to
additional depreciation and amortization related to the increased value of
acquired assets and identifiable intangibles. The unaudited pro forma
information is not necessarily indicative of the results of operations that
would have occurred had the acquisition actually been made at the beginning of
the period presented or the future results of the combined operations.

NOTE R-- SALE OF INTERSIL'S KUALA LUMPUR, MALAYSIA-BASED SEMICONDUCTOR ASSEMBLY
        AND TEST OPERATIONS

     On June 30, 2000, Intersil Holding completed the sale of its Kuala Lumpur,
Malaysia-based semiconductor assembly and test operations to ChipPAC, Inc.
("ChipPAC") which, under a multi-year supply agreement, will supply integrated
circuit (IC) assembly and test services to Intersil Holding. Under the terms of
the transaction, ChipPAC acquired all of Intersil's Kuala Lumpur assets,
including a 524,000 square foot semiconductor assembly and test facility,
wireless and analog/mixed-signal capabilities, product distribution center as
well as the operation's management team and approximately 2,900 employees. As
consideration for the sale, Intersil received approximately $52.5 million in
cash and $15.8 million in

                                      F-25

<PAGE>

                          INTERSIL HOLDING CORPORATION

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

    YEARS ENDED JULY 3, 1998, JULY 2, 1999, SIX WEEKS ENDED AUGUST 13, 1999,
                      AND THE 46 WEEKS ENDED JUNE 30, 2000

NOTE R-- SALE OF INTERSIL'S KUALA LUMPUR, MALAYSIA-BASED SEMICONDUCTOR ASSEMBLY
        AND TEST OPERATIONS--(CONTINUED)

ChipPAC preferred convertible stock. Intersil Holding recognized a non-recurring
charge of $24.8 million for the loss on sale in connection with the transaction.

NOTE S-- FINANCIAL INFORMATION FOR GUARANTOR AND NON-GUARANTOR SUBSIDIARIES

     Intersil Holding is a holding company for Intersil. All of the operations
are conducted through Intersil and its wholly-owned domestic and foreign
subsidiaries. On August 13, 1999, in connection with the acquisition, Intersil
issued the Notes and entered into the Senior Credit Facilities (Note H), which
are fully and unconditionally guaranteed on a joint and several basis by
Intersil Holding (Parent), Intersil and all of Intersil's wholly-owned current
and future domestic subsidiaries (the "Guarantor Subsidiaries"). Intersil's
wholly-owned foreign subsidiaries are not guarantors (the "Non-Guarantor
Subsidiaries"). In management's opinion, separate financial statements of the
Guarantor Subsidiaries and the Non-Guarantor Subsidiaries are not material
to investors.

     The condensed consolidated financial information presented below includes
the Predecessor consolidated balance sheet as of July 2, 1999 and the
Predecessor consolidated statements of operations and cash flows for the fiscal
years ended July 3, 1998, and July 2, 1999, and the six weeks ended August 13,
1999 for the Predecessor Guarantor and Non-Guarantor Subsidiaries. The condensed
consolidated balance sheet as of June 30, 2000 and the condensed consolidated
statements of income operations and cash flows for the 46 weeks ended
June 30, 2000 reflect the Parent, Guarantor Subsidiaries and Non-Guarantor
Subsidiaries.

                                      F-26

<PAGE>

                          INTERSIL HOLDING CORPORATION

          SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

                            YEAR ENDED JULY 3, 1998

<TABLE>
<CAPTION>
                                                                                    PREDECESSOR
                                                            ------------------------------------------------------------
                                                                              FOREIGN
                                                            GUARANTOR       NON-GUARANTOR    ELIMINATING
                                                            SUBSIDIARIES    SUBSIDIARIES      ENTRIES       CONSOLIDATED
                                                            ------------    -------------    -----------    ------------
                                                                                  (IN THOUSANDS)
<S>                                                         <C>             <C>              <C>            <C>
REVENUE
  Product sales..........................................     $609,136        $ 418,721       $(451,021)      $576,836

COSTS AND EXPENSES
  Cost of product sales..................................      402,892          388,729        (422,289)       369,332
  Research and development...............................       74,466              659              --         75,125
  Selling, general and administrative....................       79,547           18,637              --         98,184
  Harris corporate expense allocations...................       10,941             (979)             --          9,962
  Goodwill amortization..................................        2,292               --              --          2,292
                                                              --------        ---------       ---------       --------
Operating income (loss)..................................       38,998           11,675         (28,732)        21,941
  Interest net...........................................       40,793           (5,325)        (36,382)          (914)
                                                              --------        ---------       ---------       --------
  Income (loss) before income taxes......................       (1,795)          17,000           7,650         22,855
  Income taxes (benefit).................................         (887)          (1,418)         12,249          9,944
                                                              --------        ---------       ---------       --------
  NET INCOME (LOSS)......................................     $   (908)       $  18,418       $  (4,599)      $ 12,911
                                                              ========        =========       =========       ========
</TABLE>

                            YEAR ENDED JULY 2, 1999

<TABLE>
<CAPTION>
                                                                                    PREDECESSOR
                                                            ------------------------------------------------------------
                                                                              FOREIGN
                                                            GUARANTOR       NON-GUARANTOR    ELIMINATING
                                                            SUBSIDIARIES    SUBSIDIARIES      ENTRIES       CONSOLIDATED
                                                            ------------    -------------    -----------    ------------
                                                                                   (IN THOUSANDS)
<S>                                                         <C>             <C>              <C>            <C>
REVENUE
  Product sales..........................................     $524,142        $ 480,981       $(472,405)      $532,718

COSTS AND EXPENSES
  Cost of product sales..................................      379,282          337,287        (366,793)       349,776
  Research and development...............................       67,316             (237)             --         67,079
  Selling, general and administrative....................       65,866           18,132              --         83,998
  Harris corporate expense allocations...................       10,115             (812)             --          9,303
  Goodwill amortization..................................        2,414               --              --          2,414
                                                              --------        ---------       ---------       --------
Operating income (loss)..................................         (851)         126,611        (105,612)        20,148
  Interest, net..........................................       33,894           (4,975)        (30,150)        (1,231)
                                                              --------        ---------       ---------       --------
  Income (loss) before income taxes......................      (34,745)         131,586         (75,462)        21,379
  Income taxes (benefit).................................      (39,176)          10,313          22,836         (6,027)
                                                              --------        ---------       ---------       --------
  NET INCOME (LOSS)......................................     $  4,431        $ 121,273       $ (98,298)      $ 27,406
                                                              ========        =========       =========       ========
</TABLE>

                                      F-27

<PAGE>

                          INTERSIL HOLDING CORPORATION

          SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

                        SIX WEEKS ENDED AUGUST 13, 1999

<TABLE>
<CAPTION>
                                                                                    PREDECESSOR
                                                            ------------------------------------------------------------
                                                                              FOREIGN
                                                            GUARANTOR       NON-GUARANTOR    ELIMINATING
                                                            SUBSIDIARIES    SUBSIDIARIES      ENTRIES       CONSOLIDATED
                                                            ------------    -------------    -----------    ------------
                                                                                  (IN THOUSANDS)
<S>                                                         <C>             <C>              <C>            <C>
REVENUE
  Product sales..........................................     $ 39,470        $ 129,546       $(111,680)      $ 57,336
COSTS AND EXPENSES
  Cost of product sales..................................       37,484          139,292        (137,095)        39,681
  Research and development...............................        8,511              (12)             --          8,499
  Selling, general and administrative....................        8,986            1,778             144         10,908
  Harris corporate expense allocations...................        1,393              (85)           (144)         1,164
  Intangible amortization................................          326               --              --            326
                                                              --------        ---------       ---------       --------
Operating income (loss)..................................      (17,230)         (11,427)         25,415         (3,242)
  Interest, net..........................................         (161)              50              --           (111)
                                                              --------        ---------       ---------       --------
  Income (loss) before income taxes......................      (17,069)         (11,477)         25,415         (3,131)
  Income taxes (benefit).................................       (4,943)             (15)          4,856           (102)
                                                              --------        ---------       ---------       --------
  NET INCOME (LOSS)......................................     $(12,126)       $ (11,462)      $  20,559       $ (3,029)
                                                              ========        =========       =========       ========
</TABLE>

                          46 WEEKS ENDED JUNE 30, 2000

<TABLE>
<CAPTION>
                                                                               SUCCESSOR
                                                ------------------------------------------------------------------------
                                                                              FOREIGN
                                                            GUARANTOR       NON-GUARANTOR    ELIMINATING
                                                 PARENT     SUBSIDIARIES    SUBSIDIARIES      ENTRIES       CONSOLIDATED
                                                --------    ------------    -------------    -----------    ------------
                                                                             (IN THOUSANDS)
<S>                                             <C>         <C>             <C>              <C>            <C>
REVENUE
  Product sales..............................   $     --      $568,091        $ 527,695       $(498,937)      $596,849
COSTS AND EXPENSES
  Cost of product sales......................         --       362,807          499,438        (509,732)       352,513
  Research and development...................         --        69,341              115              --         69,456
  Selling, general and administrative........        123        75,609           21,495              --         97,227
  Harris corporate expense allocation........         --            --               --              --             --
  Intangible amortization....................         --         9,124            1,562              --         10,686
  In-process research and development........         --        20,239               --              --         20,239
  Other......................................        300           878               --              --          1,178
                                                --------      --------        ---------       ---------       --------
Operating income (loss)......................       (423)       30,093            5,085          10,795         45,550
  Loss on sale of Malaysian operation........         --        24,825               --              --         24,825
  Interest, net..............................      7,855        30,404              (91)             36         38,204
  Equity in subsidiary (loss)................    (19,960)           --               --          19,960             --
                                                --------      --------        ---------       ---------       --------
  Income (loss) before income taxes and
    extraordinary item.......................     11,682       (25,136)           5,176          (9,201)       (17,479)
  Income taxes (benefit).....................         --           193             (482)             --           (289)
                                                --------      --------        ---------       ---------       --------
  Income (loss) before extraordinary item....     11,682       (25,329)           5,658          (9,201)       (17,190)
  Extraordinary item--loss on extinguishment
    of debt, net of tax effect...............       (568)      (24,950)              --              --        (25,518)
                                                --------      --------        ---------       ---------       --------
  Net income (loss)..........................     11,114       (50,279)           5,658          (9,201)       (42,708)
  Preferred dividends........................      5,391         5,391               --          (5,391)         5,391
                                                --------      --------        ---------       ---------       --------
  NET INCOME (LOSS) TO COMMON SHAREHOLDERS...   $  5,723      $(55,670)       $   5,658       $  (3,810)      $(48,099)
                                                ========      ========        =========       =========       ========
</TABLE>

                                      F-28

<PAGE>

                          INTERSIL HOLDING CORPORATION

               SUPPLEMENTAL CONDENSED CONSOLIDATING BALANCE SHEET

                                  JULY 2, 1999

<TABLE>
<CAPTION>
                                                                                    PREDECESSOR
                                                            ------------------------------------------------------------
                                                                              FOREIGN
                                                            GUARANTOR       NON-GUARANTOR    ELIMINATING
                                                            SUBSIDIARIES    SUBSIDIARIES      ENTRIES       CONSOLIDATED
                                                            ------------    -------------    -----------    ------------
                                                                                   (IN THOUSANDS)
<S>                                                         <C>             <C>              <C>            <C>
ASSETS
  Trade receivables, net.................................     $ 97,043        $   3,631       $      --       $100,674
  Intercompany balances..................................     (139,993)          19,554         120,439             --
  Inventories............................................       86,986           86,049         (19,213)       153,822
  Other current assets...................................        7,782              946              --          8,728
  Property, plant and equipment, net.....................      291,645          118,885              --        410,530
  Intangibles, net.......................................       45,368               --              --         45,368
  Investment in subsidiaries.............................       10,907           72,195         (83,102)            --
  Other non-current assets...............................       39,721            2,336              --         42,057
                                                              --------        ---------       ---------       --------
    Total Assets.........................................     $439,459        $ 303,596       $  18,124       $761,179
                                                              ========        =========       =========       ========
LIABILITIES AND BUSINESS EQUITY
  Trade payables.........................................     $ 21,503        $   9,565       $      --       $ 31,068
  Compensation and benefits..............................       26,120            6,803              --         32,923
  Other current liabilities..............................       42,778           (8,254)         (7,444)        27,080
  Other non-current liabilities..........................       11,229               --              --         11,229
  Business Equity........................................      337,829          295,482          25,568        658,879
                                                              --------        ---------       ---------       --------
    Total Liabilities and Business Equity................     $439,459        $ 303,596       $  18,124       $761,179
                                                              ========        =========       =========       ========
</TABLE>

                                 JUNE 30, 2000

<TABLE>
<CAPTION>
                                                                            SUCCESSOR
                                             ------------------------------------------------------------------------
                                                                           FOREIGN
                                                          GUARANTOR      NON-GUARANTOR    ELIMINATING
                                              PARENT     SUBSIDIARIES    SUBSIDIARIES       ENTRIES      CONSOLIDATED
                                             --------    ------------    -------------    -----------    ------------
                                                                          (IN THOUSANDS)
<S>                                          <C>         <C>             <C>              <C>            <C>
ASSETS
  Cash and cash equivalents...............   $     --     $  200,237       $  11,703      $        --      $211,940
  Trade receivables, net..................         --        104,769           6,926               --       111,695
  Intercompany balances...................         --         (3,009)          3,009               --            --
  Inventories.............................         --        126,313             168               --       126,481
  Other current assets....................         --         37,295             372               --        37,667
  Property, plant and equipment, net......         --        223,852           1,632               --       225,484
  Intangibles, net........................         --         80,888         109,262               --       190,150
  Investment in subsidiaries..............    719,768        323,526           1,370       (1,044,664)           --
  Other non-current assets................         --         28,927           1,594                         30,521
                                             --------     ----------       ---------      -----------      --------
    Total Assets..........................   $719,768     $1,122,798       $ 136,036      $(1,044,664)     $933,938
                                             ========     ==========       =========      ===========      ========
LIABILITIES AND SHAREHOLDERS' EQUITY
  Trade payables..........................   $     --     $   32,953       $   4,038      $        --      $ 36,991
  Compensation and benefits...............         --         35,254           3,372               --        38,626
  Other current liabilities...............         --         35,823           5,322               --        41,145
  Long-term debt..........................         --        116,188              --               --       116,188
  Other non-current liabilities...........         --         21,992              --               --        21,992
  Common stock............................        945             --              --               --           945
  Additional paid-in capital..............    718,823            300              --               --       719,123
  Retained deficit........................         --        880,288         121,668       (1,044,664)      (42,708)
  Accumulated other comprehensive income..         --             --           1,636               --         1,636
                                             --------     ----------       ---------      -----------      --------
    Total Liabilities and Shareholders'
      Equity..............................   $719,768     $1,122,798       $ 136,036      $(1,044,664)     $933,938
                                             ========     ==========       =========      ===========      ========
</TABLE>

                                      F-29

<PAGE>

                          INTERSIL HOLDING CORPORATION

          SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

                            YEAR ENDED JULY 3, 1998

<TABLE>
<CAPTION>
                                                                                    PREDECESSOR
                                                            ------------------------------------------------------------
                                                                             FOREIGN
                                                            GUARANTOR       NON-GUARANTOR    ELIMINATING
                                                            SUBSIDIARIES    SUBSIDIARIES      ENTRIES       CONSOLIDATED
                                                            ------------    -------------    -----------    ------------
                                                                                   (IN THOUSANDS)
<S>                                                         <C>             <C>              <C>            <C>
OPERATING ACTIVITIES:
  Net income (loss)......................................     $   (908)        $18,418        $  (4,599)      $ 12,911
Adjustments to reconcile net income (loss) to net cash
  provided by (used in) operating activities
  Depreciation and amortization..........................       51,295          16,036               --         67,331
  Provision for inventory obsolescence...................        7,317              --               --          7,317
  Changes in working capital.............................     (162,132)         12,669          110,235        (39,228)
                                                              --------         -------        ---------       --------
    Net cash provided by (used in) operating
      activities.........................................     (104,428)         47,123          105,636         48,331

INVESTING ACTIVITIES:
Property, plant and equipment............................      (49,762)        (40,422)              --        (90,184)
                                                              --------         -------        ---------       --------
    Net cash used in investing activities................      (49,762)        (40,422)              --        (90,184)

FINANCING ACTIVITIES:
  Proceeds from borrowings...............................        2,750              --               --          2,750
  Payments of borrowings.................................          (83)             --               --            (83)
  Net cash transfer and billings from (to) parent........      151,523          (4,043)        (105,636)        41,844
                                                              --------         -------        ---------       --------
    Net cash provided by (used in) financing
      activities.........................................      154,190          (4,043)        (105,636)        44,511
Effect of exchange rates on cash.........................           --          (2,658)              --         (2,658)
                                                              --------         -------        ---------       --------
Net increase in cash.....................................           --              --               --             --
Cash at the beginning of the period......................           --              --               --             --
                                                              --------         -------        ---------       --------
Cash at the end of the period............................     $     --         $    --        $      --       $     --
                                                              ========         =======        =========       ========
</TABLE>

                            YEAR ENDED JULY 2, 1999

<TABLE>
<CAPTION>
                                                                                    PREDECESSOR
                                                            ------------------------------------------------------------
                                                                              FOREIGN
                                                             GUARANTOR      NON-GUARANTOR    ELIMINATING
                                                            SUBSIDIARIES    SUBSIDIARIES      ENTRIES       CONSOLIDATED
                                                            ------------    -------------    -----------    ------------
                                                                                   (IN THOUSANDS)
<S>                                                         <C>             <C>              <C>            <C>
OPERATING ACTIVITIES:
  Net income (loss)......................................    $    4,431       $ 121,273       $ (98,298)      $ 27,406
Adjustments to reconcile net income (loss) to net cash
  provided by (used in) operating activities
  Depreciation and amortization..........................        59,615          21,016              --         80,631
  Provision for inventory obsolescense...................         3,894              --              --          3,894
  Changes in working capital.............................       144,087          19,084        (163,853)          (682)
                                                             ----------       ---------       ---------       --------
    Net cash provided by (used in) operating
      activities.........................................       212,027         161,373        (262,151)       111,249

INVESTING ACTIVITIES:
Cash paid for acquired business..........................        (1,335)             --              --         (1,335)
Property, plant and equipment............................       (21,648)        (16,915)             --        (38,563)
                                                             ----------       ---------       ---------       --------
    Net cash used in investing activities................       (22,983)        (16,915)             --        (39,898)

FINANCING ACTIVITIES:
  Proceeds from borrowings...............................           800              --              --            800
  Payments of borrowings.................................          (302)             --              --           (302)
  Net cash transfer and billings from (to) parent........      (189,542)       (139,639)        262,151        (67,030)
                                                             ----------       ---------       ---------       --------
    Net cash provided by (used in) financing
      activities.........................................      (189,044)       (139,639)        262,151        (66,532)
Effect of exchange rates on cash.........................            --          (4,819)             --         (4,819)
                                                             ----------       ---------       ---------       --------
Net increase in cash.....................................            --              --              --             --
Cash at the beginning of the period......................            --              --              --             --
                                                             ----------       ---------       ---------       --------
Cash at the end of the period............................    $       --       $      --       $      --       $     --
                                                             ==========       =========       =========       ========
</TABLE>

                                      F-30

<PAGE>

                          INTERSIL HOLDING CORPORATION

          SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

                        SIX WEEKS ENDED AUGUST 13, 1999

<TABLE>
<CAPTION>
                                                                                    PREDECESSOR
                                                            ------------------------------------------------------------
                                                                              FOREIGN
                                                             GUARANTOR      NON-GUARANTOR    ELIMINATING
                                                            SUBSIDIARIES    SUBSIDIARIES      ENTRIES       CONSOLIDATED
                                                            ------------    -------------    -----------    ------------
                                                                                  (IN THOUSANDS)
<S>                                                         <C>             <C>              <C>            <C>
OPERATING ACTIVITIES:
  Net income (loss)......................................    $  (11,462)      $ (12,126)      $  20,559       $ (3,029)
Adjustments to reconcile net income (loss) to net cash
  provided by (used in) operating activities
  Depreciation and amortization..........................         2,380           6,693              --          9,073
  Provision for inventory obsolescense...................         1,919              --              --          1,919
  Non-current deferred income taxes......................            --           4,815          (9,571)        (4,756)
  Changes in working capital.............................       208,945         128,451        (337,221)           175
                                                             ----------       ---------       ---------       --------
    Net cash provided by (used in) operating
       activities........................................       201,782         127,833        (326,233)         3,382
INVESTING ACTIVITIES:
Property, plant and equipment............................        (1,020)           (867)             --         (1,887)
                                                             ----------       ---------       ---------       --------
    Net cash used in investing activities................        (1,020)           (867)             --         (1,887)
FINANCING ACTIVITIES:
  Payments of borrowings.................................            --           4,535          (4,567)           (32)
  Net cash transfer and billings from (to) parent........      (200,497)       (131,501)        330,800         (1,198)
                                                             ----------       ---------       ---------       --------
    Net cash provided by (used in) financing
       activities........................................      (200,497)       (126,966)        326,233         (1,230)
Effect of exchange rates on cash.........................         1,177              --              --          1,177
                                                             ----------       ---------       ---------       --------
Net increase in cash.....................................         1,442              --              --          1,442
Cash at the beginning of the period......................            --              --              --             --
                                                             ----------       ---------       ---------       --------
Cash at the end of the period............................    $    1,442       $      --       $      --       $  1,442
                                                             ==========       =========       =========       ========
</TABLE>

                          46 WEEKS ENDED JUNE 30, 2000

<TABLE>
<CAPTION>
                                                                                 SUCCESSOR
                                                 -------------------------------------------------------------------------
                                                                                FOREIGN
                                                               GUARANTOR      NON-GUARANTOR    ELIMINATING
                                                  PARENT      SUBSIDIARIES    SUBSIDIARIES      ENTRIES       CONSOLIDATED
                                                 ---------    ------------    -------------    -----------    ------------
                                                                              (IN THOUSANDS)
<S>                                              <C>          <C>             <C>              <C>            <C>
OPERATING ACTIVITIES:
  Net income (loss)...........................   $  11,114     $  (50,279)      $   5,658        $(9,201)      $  (42,708)
Adjustments to reconcile net income (loss) to
  net cash provided by (used in) operating
  activities
  Depreciation and amortization...............          --         52,500           8,788             --           61,288
  Provision for inventory obsolescense........          --         23,906              --             --           23,906
  Write-off of in-process research and
    development...............................          --         20,239              --             --           20,239
  Write-off of unearned compensation..........         878             --              --             --              878
  Loss on sale of Malaysian operations........          --             --          24,825             --           24,825
  Non-current deferred income taxes...........          --         (4,680)             --             --           (4,680)
  Changes in working capital..................    (527,091)       622,854         (77,573)         9,201           27,391
                                                 ---------     ----------       ---------        -------       ----------
    Net cash provided by (used in) operating
      activities..............................    (515,099)       664,540         (38,302)            --          111,139
INVESTING ACTIVITIES:
Sale of Malaysian operation...................          --             --          52,500             --           52,500
Property, plant and equipment.................          --        (35,031)         (3,782)            --          (38,813)
                                                 ---------     ----------       ---------        -------       ----------
    Net cash provided by (used in) investing
      activities..............................          --        (35,031)         48,718             --           13,687
FINANCING ACTIVITIES:
Proceeds from offering........................     513,114             --              --             --          513,114
Proceeds from exercise of stock options.......       1,985             --              --             --            1,985
Payments of borrowings........................          --       (435,204)             --             --         (435,204)
                                                 ---------     ----------       ---------        -------       ----------
  Net cash provided by (used in) financing
    activities................................     515,099       (435,204)             --             --           79,895
Effect of exchange rates on cash and cash
  equivalents.................................          --             --            (158)            --             (158)
                                                 ---------     ----------       ---------        -------       ----------
Net increase in cash and cash equivalents.....          --        194,305          10,258             --          204,563
Cash at the beginning of the period...........          --          5,932           1,445             --            7,377
                                                 ---------     ----------       ---------        -------       ----------
Cash and cash equivalents at the end of the
  period .....................................   $      --     $  200,237       $  11,703        $    --       $  211,940
                                                 =========     ==========       =========        =======       ==========
</TABLE>

                                      F-31

<PAGE>

NOTE T--QUARTERLY FINANCIAL DATA (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                      QUARTERS ENDED
                                                                    ---------------------------------------------------
                                                                    OCTOBER 1,    DECEMBER 31,    MARCH 31,    JUNE 30,
                                                                      1999          1999            2000        2000
                                                                    ----------    ------------    ---------    --------
                                                                                       (IN MILLIONS)
<S>                                                                 <C>           <C>             <C>          <C>
Net sales........................................................     $134.0         $158.1        $ 170.9      $191.2
Gross margin.....................................................       48.3           61.7           69.4        82.6
Income (loss) before extraordinary item..........................      (23.1)          (1.7)           2.8         1.8
Extraordinary item...............................................         --             --          (25.5)         --
                                                                      ------         ------        -------      ------
Net income (loss)................................................     $(23.1)        $ (1.7)       $ (22.7)     $  1.8
                                                                      ======         ======        =======      ======
Net income (loss) to common shareholders.........................     $(24.5)        $ (4.2)       $ (24.2)     $  1.8
Per Share (Basic):
  Income (loss) before extraordinary item........................     $(0.37)        $(0.06)       $  0.02      $ 0.02
  Extraordinary item.............................................         --             --          (0.34)         --
                                                                      ------         ------        -------      ------
  Net income (loss)..............................................     $(0.37)        $(0.06)       $ (0.32)     $ 0.02
                                                                      ======         ======        =======      ======
Per Share (Diluted):
  Income (loss) before extraordinary item........................     $(0.37)        $(0.06)       $  0.02      $ 0.02
  Extraordinary item.............................................         --             --          (0.34)         --
                                                                      ------         ------        -------      ------
  Net income (loss)..............................................     $(0.37)        $(0.06)       $ (0.32)     $ 0.02
                                                                      ======         ======        =======      ======
</TABLE>

                                      F-32

<PAGE>


                                  [INTERSIL LOGO]


<PAGE>
                                    PART II

                     INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 13.  OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

     The following expenses (other than the SEC filing fee, the NASD filing fee
and the Nasdaq National Market listing fee) are estimated:

<TABLE>
<CAPTION>
SEC Registration Fee................................................................................   $  162,232
<S>                                                                                                    <C>
NASD Filing Fee.....................................................................................       30,500
Nasdaq National Market Listing Fee..................................................................       35,000
Accounting Fees.....................................................................................       *
Printing and Engraving Expenses.....................................................................       *
Legal Fees and Expenses (other than blue sky).......................................................       *
Blue Sky Fees and Expenses..........................................................................       *
Transfer Agent and Registrar Fees...................................................................       *
Miscellaneous Fees and Expenses.....................................................................       *
                                                                                                       ----------
  Total.............................................................................................   $   *
                                                                                                       ==========
</TABLE>

------------------
* To be completed by amendment.

ITEM 14.  INDEMNIFICATION OF DIRECTORS AND OFFICERS

     As permitted by the Delaware General Corporation Law, the Restated
Certificate of Incorporation of the Issuer provides that directors of the Issuer
shall not be personally liable to the Issuer or its shareholders for monetary
damages for breach of fiduciary duty as a director, except for liability (i) for
any breach of the director's duty of loyalty to the Issuer or its shareholders,
(ii) for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law, (iii) under Section 174 of the
Delaware General Corporation Law, relating to prohibited dividends or
distributions or the repurchase or redemption of stock, or (iv) for any
transaction from which the director derives an improper personal benefit. In
addition, the By-laws of the Issuer provide for indemnification of the Issuer's
officers and directors to the fullest extent permitted under Delaware law.
Section 145 of the Delaware General Corporation Law provides that a corporation
may indemnify any persons, including officers and directors, who were or are, or
are threatened to be made, parties to any threatened, pending or completed legal
action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of such corporation), by
reason of the fact that such person was an officer, director, employee or agent
of such corporation or is or was serving at the request of such corporation as
an officer, director, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise. The indemnity may include expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by such person in connection with such action,
suit or proceeding, provided such person acted in good faith and in a manner he
reasonably believed to be in or not opposed to the corporation's best interests
and, for criminal proceedings, had no reasonable cause to believe that his
conduct was unlawful. A Delaware corporation may indemnify officers and
directors in an action by or in the right of the corporation under the same
conditions, except that no indemnification is permitted without judicial
approval if the officer or director is adjudged to be liable to the corporation.
Where an officer or director is successful on the merits or otherwise in the
defense of any action referred to above, the corporation must indemnify him
against the expenses that such officer or director actually and reasonably
incurred. Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers or persons controlling an
Issuer pursuant to the foregoing provisions, the Issuer has been informed that
in the opinion of the Commission such indemnification is against public policy
as expressed in the Securities Act and is therefore unenforceable.

     The directors and officers of the Issuer are insured against certain
liabilities under the Issuer's directors' and officers' liability insurance.

                                      II-1

<PAGE>

     The Underwriting Agreement filed as Exhibit 1.01 to this Registration
Statement provides for indemnification by the underwriters of the Issuer and its
officers and directors for some liabilities that arise under the Securities Act
or otherwise.

     The foregoing summary of the Delaware General Corporation Law and of the
Certificate of Incorporation and By-laws of the Issuer is qualified in its
entirety by reference to the relevant provisions of the Delaware General
Corporation Law and of the Issuer's Certificate of Incorporation and By-laws,
which are filed as exhibits to this Registration Statement.

ITEM 15.  RECENT SALES OF UNREGISTERED SECURITIES

     On August 13, 1999, pursuant to an Amended and Restated Master Transaction
Agreement, Intersil and Intersil Holding acquired selected portions of the
semiconductor business of Harris (the "Acquisition"). In connection with the
Acquisition, (i) Intersil Holding issued an 11.13% subordinated promissory note
to Harris in the principal amount of $90.0 million; (ii) Harris paid about $9.0
million in cash to Intersil Holding to purchase shares of 12% Series A
Cumulative Compounding Preferred Stock ("Intersil Holding Preferred Stock") and
shares of common stock ("Intersil Holding Common Stock"); (iii) Intersil Holding
sold to Sterling Holding Company, LLC shares of Intersil Holding Preferred Stock
and Intersil Holding Common Stock and to senior management and other key
employees and certain other investors shares of Intersil Holding Common Stock
for a total of about $81.0 million in cash, (iv) Citicorp Mezzanine Partners,
L.P. contributed $30.0 million in cash to Intersil Holding in exchange for a
13.5% subordinated promissory note and warrants to purchase about 3,703,707
shares of Class A Common Stock of Intersil Holding. In addition, Intersil
Holding granted to senior managers a sign-on bonus in the aggregate amount of
about $574,000, in the form of options to purchase Intersil Holding Preferred
Stock. Intersil Holding has determined that the issuance of the subordinated
notes, the Intersil Holding Preferred Stock, the Intersil Holding Common Stock,
the warrants, the options to purchase Intersil Holding Preferred Stock were
exempt from registration under Section 4(2) of the Securities Act of 1933, as
amended.

     Also in connection with the Acquisition, Intersil offered Senior
Subordinated Notes due 2009, the old notes, to "qualified institutional buyers"
(as defined in Rule 144A under the Securities Act). That offering was
consummated on August 13, 1999 with the sale of 200,000 units, each unit
consisting of one 13 1/4% Senior Subordinated Note due 2009 of Intersil with a
principal amount of $1,000 and one warrant to purchase 18,5185 shares of
Intersil Holding's Class A Common Stock. An exchange offer registration
statement filed by Intersil became effective on January 12, 2000 with respect to
the exchange of the old notes for registered notes having substantially
identical terms, the new notes. A registration statement was filed by Intersil
Holding on November 20, 1999 to register the warrants and the shares of Common
Stock issuable upon exercise of the warrants.

     Pursuant to the 1999 Equity Compensation Plan, Intersil Holdings granted
certain salaried officers and key employees options to acquire 1,549,333 shares
of Intersil Holding Class A Common Stock, effective as of August 14, 1999. The
options vest 20% per year over five years, and 20% became immediately vested
upon the initial public offering. Intersil Holding has determined that the
issuance of the options to purchase Intersil Holding Common Stock were exempt
from registration under Section 4(2) of the Securities Act of 1933, as amended.

ITEM 16.  EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

     (a) Exhibits:

     Incorporated by reference to the Exhibit Index following page II-4 hereto.

     (b) Financial Statement Schedules:

     Schedule I Condensed Financial Information of Registrant

     The information required by Schedule I is included in the notes to the
Consolidated Financial Statements.

                                      II-2

<PAGE>

                                  SCHEDULE II
                       VALUATION AND QUALIFYING ACCOUNTS
                                (IN THOUSANDS $)

<TABLE>
<CAPTION>
                                                                          ADDITIONS
                                                                          CHARGED      ADDITIONS                 BALANCE
                                                            BALANCE AT    TO COSTS     CHARGED      DEDUCTION       AT
                                                            BEGINNING       AND        TO OTHER       FROM       END OF
                                                            OF PERIOD     EXPENSES     ACCOUNTS     RESERVES      PERIOD
                                                            ----------    ---------    ---------    ---------    ---------
<S>                                                         <C>           <C>          <C>          <C>          <C>
Valuation and qualifying accounts deducted from the
  assets to which they apply:

ALLOWANCE FOR UNCOLLECTIBLE ACCOUNTS
  2000...................................................    $    582      $   423       $ 395       $    59      $ 1,341
  1999...................................................    $    571      $   487       $  --       $   476      $   582
  1998...................................................    $  1,336      $   324       $  --       $ 1,089      $   571

INVENTORY RESERVE
  2000...................................................    $ 18,117      $38,074       $ 573       $34,831      $21,933
  1999...................................................    $ 24,482      $ 8,373       $ 257       $14,995      $18,117
  1998...................................................    $ 31,736      $ 9,846       $ 120       $17,220      $24,482

DISTRIBUTOR RESERVES
  2000...................................................    $  6,542      $37,408       $  --       $36,584      $ 7,366
  1999...................................................    $  6,189      $52,965       $  --       $52,612      $ 6,542
  1998...................................................    $ 11,278      $66,062       $  --       $71,151      $ 6,189
</TABLE>

     All other schedules for which provision is made in the applicable
accounting regulation of the Securities and Exchange Commission are not required
under the related instructions or are inapplicable and therefore have been
omitted.

ITEM 17.  UNDERTAKINGS

     Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.

     The undersigned registrant hereby undertakes that:

          (1) for the purpose of determining any liability under the Securities
     Act of 1933, the information omitted from the form of prospectus filed as
     part of this registration statement in reliance upon Rule 430A and
     contained in the form of prospectus filed by the registrant pursuant to
     Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to
     be a part of this registration statement as of the time it was declared
     effective; and

          (2) for the purpose of determining any liability under the Securities
     Act of 1933, each post-effective amendment that contains a form of
     prospectus shall be deemed to be a new registration statement relating to
     the securities offered therein, and the offering of such securities at that
     time shall be deemed to be the initial bona fide offering thereof.

                                      II-3

<PAGE>

                                   SIGNATURES

     Pursuant to the requirements of the Securities Act of 1933, as amended, the
below-named Registrant has duly caused this Registration Statement to be signed
on its behalf by the undersigned, thereunto duly authorized, in the City of
Irvine, State of California, on the 25th day of August, 2000.

                                          INTERSIL HOLDING CORPORATION

                                          By: GREGORY L. WILLIAMS
                                            ------------------------------------
                                              Gregory L. Williams
                                              Chief Executive Officer and
                                              Director

                               POWER OF ATTORNEY

     KNOWN TO ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Gregory L. Williams, Daniel J. Heneghan
and Stephen M. Moran, each his attorney-in-fact, with full power of substitution
and resubstitution, for him in any and all capacities, to sign any or all
amendments or post-effective amendments to this Registration Statement or any
Registration Statement for the same offering that is effective upon filing
pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and to
file the same with exhibits thereto and other documents in connection therewith
or in connection with the registration of common stock under the Securities
Exchange Act of 1934, as amended, with the Securities and Exchange Commission,
granting unto such attorney-in-fact and agent full power and authority to do and
perform each and every act and thing requisite and necessary in connection with
such matters and hereby ratifying and confirming all that each attorney-in-fact,
or his agent or substitute, may do or cause to be done by virtue hereof.

     Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed below by the following persons in
the capacities at the above-named Registrant on August 25, 2000.

<TABLE>
<CAPTION>
                      SIGNATURE                                               TITLE
------------------------------------------------------    ---------------------------------------------
<S>                                                       <C>
GREGORY L. WILLIAMS                                       Chief Executive Officer and Director
------------------------------------------------------    (principal executive officer)
Gregory L. Williams


DANIEL J. HENEGHAN                                        Vice President, Chief Financial Officer
------------------------------------------------------    and Assistant Secretary (principal financial
Daniel J. Heneghan                                        and accounting officer)


ROBERT W. CONN                                            Director
------------------------------------------------------
Robert W. Conn


GARY E. GIST                                              Director
------------------------------------------------------
Gary E. Gist


JAN PEETERS                                               Director
------------------------------------------------------
Jan Peeters


ROBERT N. POKELWALDT                                      Director
------------------------------------------------------
Robert N. Pokelwaldt


JAMES A. URRY                                             Director
------------------------------------------------------
James A. Urry
</TABLE>

<PAGE>

                                 EXHIBIT INDEX

<TABLE>
<CAPTION>
 EXHIBIT
   NO.                                                    DESCRIPTION
----------  -------------------------------------------------------------------------------------------------------
<S>         <C>
   1.01     Form of Underwriting Agreement.*
   2.01     Amended and Restated Master Transaction Agreement dated as of June 2, 1999, by and among Intersil
            Holding Corporation ("Holding"), Intersil Corporation ("Intersil") and Harris Corporation ("Harris")
            (incorporated by reference to Exhibit 2.01 to the Registration Statement on Form S-1 previously filed
            by Intersil Holding Corporation on November 10, 1999 (Registration No. 333-90857) ("Registration
            Statement on Form S-1")).
   2.02     Agreement Concerning Deferred Closings dated as of August 13, 1999, by and among Harris and Intersil
            (incorporated by reference to Exhibit 2.02 to the Registration Statement on Form S-1).
   2.03     Transition Services Agreement dated as of August 13, 1999, by and among Intersil and Harris
            (incorporated by reference to Exhibit 2.03 to the Registration Statement on Form S-1).
   2.04     Share Sale Agreement dated August 13, 1999, between Harris Airport Systems (Malaysia) Sdn. Bhd., Harris
            Solid State (Malaysia) Sdn. Bhd. and Sapphire Worldwide Investments, Inc. (incorporated by reference to
            Exhibit 2.04 to the Registration Statement on Form S-1).
   2.05     Agreement for the Sale and Purchase of the Business and Assets of Harris Semiconductor Limited dated as
            of August 13, 1999, between Harris Semiconductor Limited and Intersil Limited (incorporated by
            reference to Exhibit 2.05 to the Registration Statement on Form S-1).
   2.06     Asset Purchase Agreement dated as of August 20, 1999, between Harris Semiconductor Design & Sales Pte.
            Ltd. and Intersil Pte. Ltd. (incorporated by reference to Exhibit 2.06 to the Registration Statement on
            Form S-1).
   2.07     Purchase Agreement of Corporate Quotas of a Limited Liability Company, dated as of August 13, 1999,
            between Harris Semiconductor BV, Harris Semiconductor Limited and Intersil (incorporated by reference
            to Exhibit 2.07 to the Registration Statement on Form S-1).
   2.08     Assignment of Shares, dated as of August 13, 1999, between Intersil and Harris for the transfer by
            Harris of all of its shares of Harris Semiconducteurs, Sarl to Intersil (incorporated by reference to
            Exhibit 2.08 to the Registration Statement on Form S-1).
   2.09     Share Transfer Agreement, dated as of August 1, 1999, between Harris and Intersil for the transfer of
            stock of Harris Semiconductor Y.H. (incorporated by reference to Exhibit 2.09 to the Registration
            Statement on Form S-1).
   2.10     Equity Purchase Agreement, dated as of August 13, 1999, between Harris Advanced Technology (Malaysia)
            Sdn. Bhd. and Harris Airport Systems (M) Sdn. Bhd. (incorporated by reference to Exhibit 2.10 to the
            Registration Statement on Form S-1).
   2.11     Agreement Re: China Subsidiaries, dated as of August 13, 1999, between Harris and Intersil
            (incorporated by reference to Exhibit 2.11 to the Registration Statement on Form S-1).
   2.12     Agreement Re: Anshan Joint Venture, dated as of August 13, 1999, between Harris Advanced Technology
            (Malaysia) Sdn. Bhd. and Harris Airport Systems (M) Sdn. Bhd. (incorporated by reference to Exhibit
            2.12 to the Registration Statement on Form S-1).
   2.13     Agreement Re: Guangzhou Joint Venture, dated as of August 13, 1999, between Harris Advanced Technology
            (Malaysia) Sdn. Bhd. and Harris Airport Systems (M) Sdn. Bhd. (incorporated by reference to Exhibit
            2.13 to the Registration Statement on Form S-1).
   2.14     Agreement Re: Suzhou Harris, dated as of August 13, 1999, between Harris Advanced Technology (Malaysia)
            Sdn. Bhd. and Harris Airport Systems (M) Sdn. Bhd. (incorporated by reference to Exhibit 2.14 to the
            Registration Statement on Form S-1).
   2.15     Intellectual Property Agreement, dated as of August 13, 1999, among Harris, Harris Semiconductor
            Patents, Inc. and Holding (incorporated by reference to Exhibit 2.15 to the Registration Statement on
            Form S-1).
</TABLE>


<PAGE>

<TABLE>
<CAPTION>
 EXHIBIT
   NO.                                                    DESCRIPTION
----------  -------------------------------------------------------------------------------------------------------
<S>         <C>
   2.16     Patent Assignment and Services Agreement, dated as of August 13, 1999, among Harris, Harris
            Semiconductor Patents, Inc. and Holding (incorporated by reference to Exhibit 2.16 to the Registration
            Statement on Form S-1).
   2.17     License Assignment Agreement, dated as of August 13, 1999, among Harris, Harris Semiconductor Patents,
            Inc. and Holding (incorporated by reference to Exhibit 2.17 to the Registration Statement on Form S-1).
   2.18     Harris Trademark License Agreement, dated as of August 13, 1999, among Harris, HAL Technologies, Inc.
            and Holding (incorporated by reference to Exhibit 2.18 to the Registration Statement on Form S-1).
   2.19     Secondary Trademark Assignment and License Agreement, dated as of August 13, 1999, between Harris and
            Holding (incorporated by reference to Exhibit 2.19 to the Registration Statement on Form S-1).
   2.20     PRISM(R) Intellectual Property Assignment, dated August 13, 1999, between Holding and Intersil
            (incorporated by reference to Exhibit 2.20 to the Post-Effective Amendment No. 1 to the Registration
            Statement on Form S-1).
   2.21     Tax Sharing Agreement, dated as of August 13, 1999, among Holding, Intersil and Choice Microsystems,
            Inc. (incorporated by reference to Exhibit 2.21 to the Registration Statement on Form S-1).
   2.22     Royalty Agreement, dated as of August 13, 1999, among Harris and Intersil (incorporated by reference to
            Exhibit 2.22 to the Registration Statement on Form S-1).
   2.23     Option Agreement, dated as of August 13, 1999, among Intersil and Intersil PRISM, LLC. (incorporated by
            reference to Exhibit 2.23 to the Registration Statement on Form S-1).
   2.24     Stock Purchase Agreement among ChipPAC Limited, ChipPAC, Inc., Sapphire Worldwide Investments, Inc. and
            Intersil Corporation dated as of June 30, 2000 (incorporated by reference to Exhibit 2.1 to the Current
            Report on Form 8-K previously filed by ChipPAC, Inc. on July 14, 2000 (Commission File No.
            333-91641)).
   2.25     Share Purchase Agreement dated April 27, 2000 by and among Holding, Intersil B.V., No Wires Needed
            B.V., Gilde It Fund B.V., Parnib B.V., 3Com Corporation, Kennet I L.P., Hans B. Van Der Hoek and the
            shareholders named therein (incorporated by reference to Exhibit 2.25 to the Report on Form 10-K
            previously filed by Intersil Holding Corporation on August 17, 2000).
   2.26     Amendment No. 1 to the Share Purchase Agreement dated April 27, 2000 by and among Holding, Intersil
            B.V., No Wires Needed B.V., Gilde It Fund B.V., Parnib B.V., 3Com Corporation, Kennet I L.P., Hans B.
            Van Der Hoek and the shareholders named therein (incorporated by reference to Exhibit 2.26 to the
            Report on Form 10-K previously filed by Intersil Holding Corporation on August 17, 2000).
   3.01     Restated Certificate of Incorporation of Holding (incorporated by reference to Exhibit 3.01 to the
            Post-Effective Amendment No. 1 to the Registration Statement on Form S-1).
   3.02     Bylaws of Holding (incorporated by reference to Exhibit 3.02 to the Registration Statement on Form
            S-1).
   4.01     Specimen Certificate of Holding's Class A Common Stock (incorporated by reference to Exhibit 4.01 to
            Amendment No. 2 to the Registration Statement on Form S-1 (Registration Number 333-95199)).
   4.02     Amended and Restated Registration Rights Agreement, dated as of January 21, 2000, by and among Holding,
            Sterling Holding Company, L.L.C., Manatee Investment Corporation, Citicorp Mezzanine Partners, L.P. and
            the management investors named therein (incorporated by reference to Exhibit 4.02 to the Registration
            Statement on Form 8-A previously filed by Intersil Holding Corporation on February 18, 2000).
   5.01     Opinion of Dechert.*
</TABLE>


<PAGE>

<TABLE>
<CAPTION>
 EXHIBIT
   NO.                                                    DESCRIPTION
----------  -------------------------------------------------------------------------------------------------------
<S>         <C>
  10.01     Warrant Agreement, dated as of August 13, 1999, between Holding and United States Trust Company of New
            York (incorporated by reference to Exhibit 4.01 to the Registration Statement on Form S-1).
  10.02     Purchase Agreement, dated as of August 6, 1999, between Intersil, Holding, Harris Semiconductor, LLC,
            Harris Semiconductor (Ohio), LLC, Harris Semiconductor (Pennsylvania), LLC, Choice Microsystems, Inc.,
            Credit Suisse First Boston Corporation, J. P. Morgan Securities Inc. and Salomon Smith Barney Inc.
            (incorporated by reference to Exhibit 4.02 to the Registration Statement on Form S-1).
  10.03     Registration Rights Agreement, dated as of August 6, 1999, between Intersil, Holding, Harris
            Semiconductor, LLC, Harris Semiconductor (Ohio), LLC, Harris Semiconductor (Pennsylvania), LLC, Choice
            Microsystems, Inc., Credit Suisse First Boston Corporation, J. P. Morgan Securities Inc. and Salomon
            Smith Barney Inc. (incorporated by reference to Exhibit 4.03 to the Registration Statement on Form
            S-1).
  10.04     Indenture, dated as of August 13, 1999, among Intersil, Holding, Harris Semiconductor, LLC, Harris
            Semiconductor (Ohio), LLC, Harris Semiconductor (Pennsylvania), LLC, Choice Microsystems, Inc. and
            United States Trust Company of New York for 13 1/4% Senior Subordinated Notes due 2009 (incorporated by
            reference to Exhibit 10.01 to the Registration Statement on Form S-1).
  10.05     Form of 13 1/4% Senior Subordinated Notes due 2009 (included in Exhibit 10.01).
  10.06     Credit Agreement, dated as of August 13, 1999, among Intersil, the Lender Parties thereto, Credit
            Suisse First Boston, as the Administrative Agent, Salomon Smith Barney, as Syndication Agent, and
            Morgan Guaranty Trust Company of New York, as Documentation Agent (incorporated by reference to Exhibit
            10.03 to the Registration Statement on Form S-1).
  10.07     Amendment No. 1 and Waiver, dated as of January 28, 2000, to the Credit Agreement, dated as of August
            13, 1999, among Intersil, Holding, Credit Suisse First Boston, as the Administrative Agent, Salomon
            Smith Barney, Syndication Agent, and Morgan Guaranty Trust Company of New York, as Documentation Agent
            (incorporated by reference to Exhibit 10.07 to the Amendment No. 2 to the Registration Statement on
            Form S-1).
  10.08     Subordinated Credit Agreement, dated as of August 13, 1999, among Holding and Citicorp Mezzanine
            Partners, L.P. for 13 1/2% Subordinated Pay-In-Kind Note due 2010 (incorporated by reference to Exhibit
            10.04 to the Registration Statement on Form S-1).
  10.09     Form of 13 1/2% Subordinated Pay-In-Kind Note due 2010 (included in Exhibit 10.04).
  10.10     Indenture, dated as of August 13, 1999, among Holding and United States Trust Company of New York for
            11.13% Subordinated Pay-In-Kind Notes due 2010 (incorporated by reference to Exhibit 10.06 to the
            Registration Statement on Form S-1).
  10.11     Form of 11.13% Subordinated Pay-In-Kind Note due 2010 (included in Exhibit 10.06).
  10.12     Securities Purchase and Holders Agreement, dated as of August 13, 1999, among Holding, Sterling Holding
            Company, LLC, Manatee Investment Corporation, Intersil Prism LLC, Citicorp Mezzanine Partners, L.P.,
            William N. Stout and the management investors named therein (incorporated by reference to Exhibit 10.09
            to the Registration Statement on Form S-1).
  10.13     Option Award Agreement, dated as of August 13, 1999 (incorporated by reference to Exhibit 10.10 to the
            Registration Statement on Form S-1).
  10.14     Employment Agreement, dated as of August 9, between Intersil and Gregory L. Williams (incorporated by
            reference to Exhibit 10.11 to the Registration Statement on Form S-1).
  10.15     Agreement between Harris and Local Union No. 1907 International Brotherhood of Electrical Workers,
            AFL-CIO (Findlay, OH Facility), effective as of July 1, 1996 (incorporated by reference to Exhibit
            10.12 to the Registration Statement on Form S-1).
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
 EXHIBIT
   NO.                                                    DESCRIPTION
----------  -------------------------------------------------------------------------------------------------------
<S>         <C>
  10.16     Agreement between Harris and Local Union 177 International Union of Electronic, Electrical, Salaried,
            Machine and Furniture Workers, AFL-CIO (Mountaintop, PA Facility), effective December 1, 1998
            (incorporated by reference to Exhibit 10.13 to the Registration Statement on Form S-1).
  10.17     Machinery and Equipment Loan Agreement, dated September 9, 1996, between Commonwealth of Pennsylvania,
            Department of Community and Economic Development and Harris (incorporated by reference to Exhibit 10.14
            to the Registration Statement on Form S-1).
  10.18     Machinery and Equipment Loan Agreement, dated as of November 3, 1998, between Commonwealth of
            Pennsylvania, Department of Community and Economic Development and Harris (incorporated by reference to
            Exhibit 10.15 to the Registration Statement on Form S-1).
  10.19     Master Agreement, dated as of December 2, 1997, between Harris Semiconductor and Optum Software
            (incorporated by reference to Exhibit 10.16 to the Registration Statement on Form S-1).
  10.20     Purchase Agreement, dated as of March 14, 1997, between Harris Semiconductor and Praxair, Inc.
            (incorporated by reference to Exhibit 10.17 to the Registration Statement on Form S-1).
  10.21     Asset Purchase Agreement, dated as of July 2, 1999, by and among Align-Rite International, Inc.,
            Align-Rite, Inc. and Harris (incorporated by reference to Exhibit 10.18 to the Registration Statement
            on Form S-1).
  10.22     Bill of Sale and Assignment, dated as of July 2, 1999, by Harris in favor of Align-Rite International,
            Inc. and Align-Rite, Inc. (incorporated by reference to Exhibit 10.19 to the Registration Statement on
            Form S-1).
  10.23     Lease Agreement, dated as of July 2, 1999, by and among Harris Corporation Semiconductor Business Unit
            and Align-Rite, Inc. (incorporated by reference to Exhibit 10.20 to the Registration Statement on Form
            S-1).
  10.24     Photomask Supply and Strategic Alliance Agreement, dated as of July 2, 1999, by and among Harris,
            Align-Rite International, Inc. and Align-Rite, Inc. (incorporated by reference to Exhibit 10.21 to the
            Registration Statement on Form S-1).
  10.25     Site Services Agreement, dated as of July 2, 1999, by and among Harris Corporation Semiconductor
            Business Unit and Align-Rite, Inc. (incorporated by reference to Exhibit 10.22 to the Registration
            Statement on Form S-1).
  10.26     Software License Agreement, dated as of July 31, 1984, between Harris and Consilium Associates, Inc.
            (incorporated by reference to Exhibit 10.23 to the Registration Statement on Form S-1).
  10.27     Addendum Software License and Maintenance Agreement, dated as of October 27, 1995, between Harris and
            Consilium, Inc. (incorporated by reference to Exhibit 10.24 to the Registration Statement on Form S-1).
  10.28     Specialty Gas Supply Agreement, dated as of October 15, 1996, between Air Products and Chemicals, Inc.
            and Harris (incorporated by reference to Exhibit 10.25 to the Registration Statement on Form S-1).
  10.29     Silicon Wafer Purchase Agreement, dated as of January 1, 1997, between Mitsubishi Silicon America
            Corporation and Harris (incorporated by reference to Exhibit 10.26 to the Registration Statement on
            Form S-1).
  10.30     Nitrogen Supply Agreement, dated as of September 22, 1992, between Harris Corporation Semiconductor
            Sector and Liquid Air Corporation Merchant Gases Division (incorporated by reference to Exhibit 10.27
            to the Registration Statement on Form S-1).
  10.31     Nitrogen Supply System Agreement, Amendment Number 1, dated as of September 15, 1996, between Air
            Liquide America Corporation and Harris Corporation Semiconductor Sector (incorporated by reference to
            Exhibit 10.28 to the Registration Statement on Form S-1).
</TABLE>


<PAGE>

<TABLE>
<CAPTION>
 EXHIBIT
   NO.                                                    DESCRIPTION
----------  -------------------------------------------------------------------------------------------------------
<S>         <C>
  10.32     Site Subscription Agreement, dated as of July 1, 1993, between Harris Semiconductor Sector of Harris
            and Cadence Design Systems, Inc. (incorporated by reference to Exhibit 10.29 to the Registration
            Statement on Form S-1).
  10.33     Site Subscription Addendum, dated December 19, 1997, between Harris Semiconductor Sector of Harris and
            Cadence Design Systems, Inc. (incorporated by reference to Exhibit 10.30 to the Registration Statement
            on Form S-1).
  10.34     HMCD--HSS Memorandum of Agreement, dated March 26, 1999, between Harris Microwave Communication
            Division and Harris Semiconductor Sector (incorporated by reference to Exhibit 10.31 to the
            Registration Statement on Form S-1).
  10.35     Investment Agency Appointment and Participation Authorization, dated September 3, 1999, between
            Intersil, Intersil Corporation Master Trust and T. Rowe Price Trust Company (incorporated by reference
            to Exhibit 10.32 to the Registration Statement on Form S-1).
  10.36     Investment Agency Appointment and Participation Authority, dated September 3, 1999, between Intersil
            Corporation Master Trust and T. Rowe Price Trust Company (incorporated by reference to Exhibit 10.33 to
            the Registration Statement on Form S-1).
  10.37     Investment Advisory Agreement (Equity Growth Fund), dated September 3, 1999, between T. Rowe Price
            Associates, Inc. and Intersil Corporation Retirement Committee (incorporated by reference to Exhibit
            10.34 to the Registration Statement on Form S-1).
  10.38     Investment Advisory Agreement (Equity Income Fund), dated September 3, 1999, between T. Rowe Price
            Associates, Inc. and Intersil Corporation Retirement Committee (incorporated by reference to Exhibit
            10.35 to the Registration Statement on Form S-1).
  10.39     Intersil Corporation Retirement Plan (Non-Union), dated September 3, 1999 (incorporated by reference to
            Exhibit 10.36 to the Registration Statement on Form S-1).
  10.40     Intersil Corporation Retirement Plan (Union), dated September 3, 1999 (incorporated by reference to
            Exhibit 10.37 to the Registration Statement on Form S-1).
  10.41     Commercial Supply Agreement, dated December 3, 1998, by and between Texas Instruments Incorporated and
            Harris (incorporated by reference to Exhibit 10.38 to the Registration Statement on Form S-1).
  10.42     Military Supply Agreement, dated December 3, 1998, by and between Texas Instruments Incorporated and
            Harris (incorporated by reference to Exhibit 10.39 to the Registration Statement on Form S-1).
  10.43     Intellectual Property Agreement, dated December 3, 1998, by and between Texas Instruments Incorporated,
            Harris, Harris Advanced Technology (Malaysia) Sdn. Bhd. and Harris Southwest Properties, Inc.
            (incorporated by reference to Exhibit 10.40 to the Registration Statement on Form S-1).
  10.44     Asset Transfer Agreement, dated December 3, 1998, by and between Texas Instruments Incorporated and
            Harris Advanced Technology (Malaysia) Sdn. Bhd. (incorporated by reference to Exhibit 10.41 to the
            Registration Statement on Form S-1).
  10.45     Military Asset Purchase Agreement, dated October 23, 1998, by and between Texas Instruments
            Incorporated, Harris, Harris Advanced Technology (Malaysia) Sdn. Bhd. and Harris Southwest Properties,
            Inc. (incorporated by reference to Exhibit 10.42 to the Registration Statement on Form S-1).
  10.46     Commercial Asset Purchase Agreement, dated October 23, 1998, by and between Texas Instruments
            Incorporated, Harris, Harris Advanced Technology (Malaysia) Sdn. Bhd. and Harris Southwest Properties,
            Inc. (incorporated by reference to Exhibit 10.43 to the Registration Statement on Form S-1).
  10.47     Certificate of Leasehold Property for Land Office No. 7668 by Harris Advanced Technology (M) Sdn. Bhd.
            (incorporated by reference to Exhibit 10.44 to the Registration Statement on Form S-1).
</TABLE>


<PAGE>

<TABLE>
<CAPTION>
 EXHIBIT
   NO.                                                    DESCRIPTION
----------  -------------------------------------------------------------------------------------------------------
<S>         <C>
  10.48     State Lease for Lot No. 7716 by Harris Advanced Technology (Malaysia) Sdn. Bhd. (incorporated by
            reference to Exhibit 10.45 to the Registration Statement on Form S-1).
  10.49     Certificate of Leasehold Property for Land Office No. 7666 by Harris Advanced Technology (M) Sdn. Bhd.
            (incorporated by reference to Exhibit 10.46 to the Registration Statement on Form S-1).
  10.50     Amendment No. 1, dated as of December 13, 1999, to the Securities Purchase and Holders Agreement by and
            among Holding, Sterling Holding Company, LLC, Manatee Investment Corporation, Citicorp Mezzanine
            Partners, L.P. and the management investors named therein.
  10.51     Amendment No. 2, dated as of May 31, 2000, to the Securities Purchase and Holders Agreement, by and
            among Holding, Sterling Holding Company, LLC, Manatee Investment Corporation, Citicorp Mezzanine
            Partners, L.P. and the management investors named therein.
  10.52     Supply Agreement entered into as of June 30, 2000 by and between ChipPAC Limited and lntersil
            Corporation (incorporated by reference to Exhibit 10.33 to the Registration Statement on Form S-1
            previously filed by ChipPAC, Inc. on July 14, 2000 (Registration No. 333-39428)).
  10.53     Intellectual Property Agreement entered into as of June 30, 2000 between Intersil Corporation and
            ChipPAC Limited (incorporated by reference to Exhibit 10.32 to the Registration Statement on Form S-1
            previously filed by ChipPAC, Inc. on July 14, 2000 (Registration No. 333-39428)).
  10.54     Intersil Holding Corporation 1999 Equity Compensation Plan, effective as of August 13, 1999
            (incorporated by reference to Exhibit 10.54 to the Report on Form 10-K previously filed by Intersil
            Holding Corporation on August 17, 2000).
  10.55     The Intersil Holding Corporation Employee Stock Purchase Plan, effective as of February 25, 2000
            (incorporated by reference to Exhibit 10.55 to the Report on Form 10-K previously filed by Intersil
            Holding Corporation on August 17, 2000).
  21.01     Subsidiaries of Holding (incorporated by reference to Exhibit 21.01 to the Report on Form 10-K
            previously filed by Intersil Holding Corporation on August 17, 2000).
  23.01     Consent of Dechert (included in Exhibit 5.01).*
  23.02     Consent of Ernst & Young LLP.**
  24.01     Power of Attorney (included on Signature Page).**
  27.01     Financial Data Schedule.**
</TABLE>

------------------
 * To be filed.
** Filed herewith.
[{"type": "S-1", "sequence": "1", "filename": "0001.txt", "description": "REGISTRATION STATEMENT", "secsgml_size_bytes": 493574}]
{"company-data": {"conformed-name": "INTERSIL HOLDING CO", "cik": "0001096325", "assigned-sic": "3674", "irs-number": "593590018", "state-of-incorporation": "DE", "fiscal-year-end": "1230"}, "filing-values": {"form-type": "S-1", "act": "33", "file-number": "333-44606", "film-number": "710526"}, "business-address": {"street1": "7585 IRVINE CENTER DR", "street2": "SUITE 100", "city": "IRVINE", "state": "CA", "zip": "92618", "phone": "9493417062"}, "mail-address": {"street1": "7585 IRVINE CENTER DR", "street2": "SUITE 100", "city": "IRVINE", "state": "CA", "zip": "92618"}}
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 28, 2000.

                                                     REGISTRATION NO. 333-
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

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

                                    FORM S-1
                             REGISTRATION STATEMENT
                                     UNDER
                           THE SECURITIES ACT OF 1933

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

                          INTERSIL HOLDING CORPORATION
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE                                    3674                                   59-3590018
    (STATE OR OTHER JURISDICTION OF             (PRIMARY STANDARD INDUSTRIAL                     (IRS EMPLOYER
     INCORPORATION OR ORGANIZATION)             CLASSIFICATION CODE NUMBER)                   IDENTIFICATION NO.)
------------------------

                            7585 IRVINE CENTER DRIVE
                                   SUITE 100
                            IRVINE, CALIFORNIA 92618
                                 (949) 341-7062
  (ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
                   REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)

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

                             STEPHEN M. MORAN, ESQ.
                 VICE PRESIDENT, GENERAL COUNSEL AND SECRETARY
                            7585 IRVINE CENTER DRIVE
                                   SUITE 100
                            IRVINE, CALIFORNIA 92618
                                 (949) 341-7040
 (NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
                             OF AGENT FOR SERVICE)

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

                                With Copies to:
CHRISTOPHER G. KARRAS, ESQ.                                       KRIS F. HEINZELMAN, ESQ.
                           DECHERT                                                 CRAVATH, SWAINE & MOORE
                   4000 BELL ATLANTIC TOWER                                            WORLDWIDE PLAZA
                       1717 ARCH STREET                                               825 EIGHTH AVENUE
               PHILADELPHIA, PENNSYLVANIA 19103                                    NEW YORK, NEW YORK 10019
                        (215) 994-4000                                                  (212) 474-1000
------------------------

    APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the effective date of this Registration Statement.

    If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. / /

    If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration number of the earlier effective
registration statement for the same offering. / / ______

    If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / / ______

    If delivery of the prospectus is expected to be made pursuant to Rule 434,
check the following box. / / ______

                        CALCULATION OF REGISTRATION FEE
PROPOSED MAXIMUM   PROPOSED MAXIMUM
                                                                           OFFERING PRICE       AGGREGATE
               TITLE OF EACH CLASS OF                    AMOUNT TO BE          PER               OFFERING         AMOUNT OF
            SECURITIES TO BE REGISTERED                 REGISTERED(1)         SHARE              PRICE(1)        REGISTRATION FEE
Class A Common Stock, par value $.01 per share......  11,500,000 shares        $53.4375         $614,531,250         $162,232
(1) Estimated solely for the purpose of calculating the registration fee
    pursuant to Rule 457(a) under the Securities Act of 1933, based on the
    average of the high and low selling prices of the Class A Common Stock on
    August 24, 2000.

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

    THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.

--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE
SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.

                  SUBJECT TO COMPLETION, DATED AUGUST 25, 2000

                                10,000,000 Shares

                          INTERSIL HOLDING CORPORATION

                              Class A Common Stock

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

     We are selling 3,000,000 shares and the selling shareholders named under
"Principal and Selling Shareholders" are selling 7,000,000 shares of our
Class A Common Stock. We will not receive any of the proceeds from shares of our
Class A Common Stock sold by the selling shareholders. We have granted the
underwriters an option to purchase a maximum of 500,000 additional shares and
one of the selling shareholders has granted the underwriters an option to
purchase a maximum of 1,000,000 additional shares to cover overallotments of
shares, if any.

     Our Class A Common Stock is listed on The Nasdaq Stock Market's National
Market under the symbol "ISIL." The last reported sale price of our Class A
Common Stock on August 24, 2000 was $52.00 per share.

     INVESTING IN OUR CLASS A COMMON STOCK INVOLVES RISKS. SEE "RISK FACTORS" ON
PAGE 6.
UNDERWRITING                           PROCEEDS TO
                                      PRICE TO       DISCOUNTS AND        PROCEEDS            SELLING
                                       PUBLIC        COMMISSIONS        TO INTERSIL         SHAREHOLDERS
                                     -----------     -------------     ----------------     ------------
Per Share........................              $                $                   $                  $
Total............................    $               $                 $                    $
Delivery of the shares of Class A Common Stock will be made on or about
        , 2000.

     Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
adequacy or accuracy of this prospectus. Any representation to the contrary is a
criminal offense.

CREDIT SUISSE FIRST BOSTON

                The date of this prospectus is August    , 2000.
TABLE OF CONTENTS
Page
                                                 ----
INDUSTRY DATA..................................     i
SUMMARY........................................     1
RISK FACTORS...................................     6
FORWARD-LOOKING STATEMENTS.....................    14
USE OF PROCEEDS................................    14
DIVIDEND POLICY................................    14
PRICE RANGE OF COMMON STOCK....................    15
CAPITALIZATION.................................    15
UNAUDITED PRO FORMA COMBINED CONDENSED
  STATEMENT OF OPERATIONS......................    16
SELECTED HISTORICAL FINANCIAL DATA AND OTHER
  DATA.........................................    19
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
  FINANCIAL CONDITION AND RESULTS OF
  OPERATIONS...................................    20
INDUSTRY OVERVIEW..............................    28
BUSINESS.......................................    31
Page
                                                 ----
MANAGEMENT.....................................    40
CERTAIN RELATIONSHIPS AND RELATED
  TRANSACTIONS.................................    46
PRINCIPAL AND SELLING SHAREHOLDERS.............    48
DESCRIPTION OF CAPITAL STOCK...................    50
DESCRIPTION OF CERTAIN INDEBTEDNESS............    54
SHARES ELIGIBLE FOR FUTURE SALE................    56
UNITED STATES TAX CONSEQUENCES
  TO NON-UNITED STATES HOLDERS.................    58
OTHER RESTRICTIONS ON RESALE...................
UNDERWRITING...................................    60
NOTICE TO CANADIAN RESIDENTS...................    62
LEGAL MATTERS..................................    63
EXPERTS........................................    63
WHERE YOU CAN FIND MORE
  INFORMATION..................................    63
INDEX TO FINANCIAL STATEMENTS..................   F-1
-----------------------

     YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS DOCUMENT OR TO
WHICH WE HAVE REFERRED YOU. WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH
INFORMATION THAT IS DIFFERENT. THIS DOCUMENT MAY ONLY BE USED WHERE IT IS LEGAL
TO SELL THESE SECURITIES. THE INFORMATION IN THIS DOCUMENT MAY ONLY BE ACCURATE
ON THE DATE OF THIS DOCUMENT.

                                 INDUSTRY DATA

     In this document, we rely on and refer to information regarding the
semiconductor market and its segments and competitors from Dataquest,
International Data Corporation, Cahners In-Stat Group, Semiconductor Industry
Association, Worldwide Semiconductor Trade Statistics, Venture Development
Corporation, Johari Associates, market research reports, analyst reports and
other publicly available sources. The listed market research firms are not aware
of and have not consented to being named in this document. Although we believe
that this information is reliable, we have not independently verified the
accuracy and completeness of the information.

                                       i
SUMMARY

     This summary may not contain all of the information that may be important
to you. You should read this entire prospectus, including the financial data and
related notes, before making an investment decision.

                                    INTERSIL

     We are a systems oriented designer and manufacturer of analog and digital
integrated circuits and discrete semiconductors for the communications and power
management end-user markets.

     o Wireless--We are the industry leader in providing wireless local area
       networking semiconductor sets, which we refer to as our PRISM(R) chip
       set, based upon data published by Dataquest and Cahners In-Stat Group.
       The PRISM(R) chip set is our fastest growing product, which has
       applications in the wireless networking of voice, video and data for
       business and home and in transmitting data to and from broadband home
       data gateways to multiple end-user applications. The PRISM(R) chip set is
       also used to provide wireless connectivity to wired ethernet networks.

     o Analog & Mixed-Signal--Our analog and mixed-signal semiconductors are
       used in wireless and wired data and voice communications products. Our
       products include integrated circuits which perform multiple power
       management tasks, industry standard signal processing products that
       manage power in desktop and laptop computers and Internet servers, and a
       portfolio of standard analog products such as analog-to-digital and
       digital-to-analog converters.

     o Discrete Power--Our discrete semiconductors perform single power
       management functions such as switching electricity on or off or
       conditioning power used in communications, computing and automotive
       applications.

Business Strategy

     We provide systems level solutions for the growing integrated
communications semiconductor market. Integrated communications semiconductors
enable the convergence of voice, data and video. Within integrated
communications, we are focused on several key markets including high data rate
wireless connectivity, power management and wireless and wired communications
infrastructure. We use our expertise in digital and analog semiconductors and
radio and software design to deliver chip sets, components, software and
licensable application designs for communications equipment customers. For
fiscal year 2000, we allocated about 92% of our research and development
investment to the development of products for the integrated communications
market.

Sales and Manufacturing

     We currently sell to many industry leaders in our targeted markets
including Alcatel, Asustek, Cisco, Compaq, Dell, Ericsson, Hewlett-Packard,
Nokia, Siemens, Sony and 3Com. We have been doing business with many of these
industry leaders for more than ten years. No single customer represents more
than 5% of our total revenues. Our products are sold worldwide with about 49.2%,
22.0% and 28.8% of our revenues for fiscal year 2000 being derived from North
America, Europe and Asia/Pacific, respectively. We own wafer fabrication
facilities, which we refer to as fabs, that manufacture analog and discrete
semiconductors in Florida, Ohio and Pennsylvania. We contract with key suppliers
that use sub-micron complementary metal oxide semiconductors, or CMOS, and
silicon germanium semiconductor wafer fabrication processes to produce
components of our PRISM(R) chip sets.

Recent Developments

     In June 2000, we acquired No Wires Needed B.V., or NWN, in an all-stock
transaction. Based in Bilthoven, The Netherlands, NWN provides high performance
wireless-to-broadband access point reference designs. NWN combines the PRISM(R)
chip set with its own high data rate digital controller integrated circuit to
allow end users to wirelessly connect multiple computers and hand-held or
Internet appliances to a wired broadband network. NWN also provides wireless
encryption software which enhances the security of a wireless local area
network. We believe NWN's high data rate digital controller integrated circuit
will enhance the performance of future generations of our PRISM(R) chip set.

     In May 2000, we sold our assembly and test facilities in Malaysia to
ChipPAC, Inc. and entered into a multi-year supply agreement with ChipPAC under
which the Malaysian facility became our preferred provider of semiconductor
assembly and test services.

     Our principal executive office is located at 7585 Irvine Center Drive,
Suite 100, Irvine, California 92618, and our telephone number is (949) 341-7062.
THE OFFERING

     The offering information provided below assumes that the underwriters'
over-allotment option is not exercised and excludes:

     o shares of common stock reserved for issuance under our 1999 Equity
       Compensation Plan, under which options to purchase 2,954,894 shares were
       outstanding as of June 30, 2000 at a weighted average exercise price of
       $15.76 per share.

     o warrants outstanding to purchase 5,925,931 shares as of June 30, 2000 at
       an exercise price of $0.0015 per share.

     o options to purchase 40,886 shares of common stock, resulting from the
       conversion of options to purchase shares of our previously outstanding
       preferred stock.
Class A Common Stock offered..............     3,000,000  shares by us
                                               7,000,000  shares by the selling shareholders

  Total offering..........................    10,000,000  shares
                                              ==========
Common stock to be outstanding after this
  offering................................    50,237,649  shares of Class A Common Stock
                                              ----------
                                              49,746,482  shares of Class B Common Stock
                                              ----------

Total.....................................    99,984,131  shares of common stock
                                              ==========

Voting rights.............................   Owners of Class A Common Stock are entitled to one vote per share on
                                             all matters submitted to a vote of our shareholders. Our Restated
                                             Certificate of Incorporation provides for cumulative voting in
                                             elections of directors. Owners of Class B Common Stock have no voting
                                             rights.

Other rights..............................   Except as to voting and conversion rights, each class of common stock
                                             has the same rights. Shares of each class of common stock are
                                             convertible on a one-for-one basis into shares of the other class of
                                             common stock at the option of the owner.

Use of proceeds...........................   We will not receive any of the proceeds from the sale of shares by the
                                             selling shareholders. We intend to use the net proceeds from the sale
                                             of shares by us for general corporate purposes, including expenditures
                                             for research and development of new products and sales and marketing
                                             efforts. In addition, we may use a portion of the net proceeds to
                                             acquire complementary products, technologies or businesses, or to retire
                                             portions of our outstanding debt. See "Use
                                             of Proceeds."

Nasdaq National Market symbol.............   ISIL
RISK FACTORS

     Investing in the Class A Common Stock involves substantial risks. See the
"Risk Factors" section of this prospectus for a description of some of the risks
you should carefully consider before investing in the Class A Common Stock.

                                       2
SUMMARY HISTORICAL, PRO FORMA AND OTHER DATA

     We were formed on August 13, 1999 through a series of transactions in which
we and our wholly-owned subsidiary, Intersil, acquired the semiconductor
business of Harris Corporation, or Harris. Our financial statements include the
results of operations of our predecessor. Our acquisition of the semiconductor
business of Harris was accounted for using the purchase method of accounting. As
a result, our results of operations for periods subsequent to the acquisition
are not comparable to the results of operations for periods prior to the
acquisition.

     The following summary historical financial data for the fiscal years ended
July 3, 1998 and July 2, 1999 for Intersil Holding were derived from our
predecessor's audited consolidated financial statements included elsewhere in
this prospectus, except for revenue categorized by product line (Analog &
Mixed-Signal, Discrete Power and Wireless), which were derived from our
predecessor's books and records. The summary historical combined financial data
for the fiscal year ended June 30, 2000 (six weeks ended August 13, 1999
(Predecessor) and 46 weeks ended June 30, 2000 (Successor)) have been derived
from our predecessor's audited consolidated financial statements and from our
audited consolidated financial statements included elsewhere in this prospectus.
The summary pro forma financial information for the combined fiscal year ended
June 30, 2000 (six weeks ended August 13, 1999 (Predecessor) and 46 weeks ended
June 30, 2000 (Successor)) were derived from our pro forma unaudited
consolidated financial statements included elsewhere in this prospectus. The pro
forma adjustments give effect to the acquisition of the semiconductor business
of Harris and to our subsequent initial public offering as if they had occurred
on July 3, 1999.

     During the predecessor period covered by our consolidated financial
statements, our activities were conducted as part of Harris' overall operations.
Accordingly, our consolidated financial statements contain various allocations
for costs and expenses attributable to services provided by Harris. Therefore,
the Consolidated Statement of Operations may not be indicative of the results of
operations that would have resulted if we had operated on a stand-alone basis.

     Since the information in the tables below is a summary, you should read the
following tables in conjunction with other information contained under the
captions "Unaudited Pro Forma Combined Condensed Financial Statements,"
"Capitalization," "Selected Historical Financial Data and Other Data,"
"Forward-Looking Statements," "Management's Discussion and Analysis of Financial
Condition and Results of Operations," and with our financial statements and
related notes and other financial information contained elsewhere in this
prospectus.

                                       3
SUCCESSOR
                                                               PREDECESSOR                 ----------------------------
                                                       ----------------------------        FISCAL YEAR ENDED JUNE 30,
                                                            FISCAL YEAR ENDED                          2000
                                                       ----------------------------        ----------------------------
                                                       JULY 3, 1998    JULY 2, 1999        COMBINED      PRO FORMA(1)
                                                       ------------    ------------        ----------    --------------
                                                                   (IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
STATEMENT OF OPERATIONS DATA:
Revenue:
  Analog & Mixed-Signal.............................      $390.4          $352.8             $396.8          $396.8
  Discrete Power....................................       176.4           161.6              205.9           205.9
  Wireless..........................................        10.0            18.3               51.5            51.5
                                                          ------          ------             ------          ------
Total revenue.......................................      $576.8          $532.7             $654.2          $654.2
                                                          ======          ======             ======          ======

Gross margin........................................      $207.5          $182.9             $262.0          $263.7
Research and development............................        75.1            67.0               78.0            78.0
Selling, general and administrative.................        98.2            84.0              108.1           108.4
Harris corporate expense allocation.................        10.0             9.3                1.2              --
Intangible amortization.............................         2.3             2.4               11.0            12.2
In-process research and development.................          --              --               20.2            20.2
Other...............................................          --              --                1.2             1.2
                                                          ------          ------             ------          ------
Operating income....................................        21.9            20.2               42.3            43.7
Loss on sale of Malaysian operation.................          --              --               24.8            24.8
Interest, net.......................................        (0.9)           (1.2)              38.1            13.3
                                                          ------          ------             ------          ------
Income (loss) before income taxes and extraordinary
  item..............................................        22.8            21.4              (20.6)            5.6
Income taxes (benefit)..............................         9.9            (6.0)              (0.4)            2.2
                                                          ------          ------             ------          ------
Net income (loss) before extraordinary item.........        12.9            27.4              (20.2)            3.4
Extraordinary item--loss on extinguishment of debt,
  net of tax effect.................................          --              --              (25.5)             --
                                                          ------          ------             ------          ------
Net income (loss)...................................        12.9            27.4              (45.7)            3.4
Preferred dividends.................................          --              --                5.4              --
                                                          ------          ------             ------          ------
Net income (loss) to common shareholders............      $ 12.9          $ 27.4             $(51.1)         $  3.4
                                                          ======          ======             ======          ======

BASIC AND DILUTED NET INCOME (LOSS) PER COMMON
  SHARE(2):
  Income (loss) before extraordinary item...........                                         $(0.34)         $ 0.03
  Extraordinary item................................                                          (0.33)             --
                                                                                             ------          ------
  Net income (loss).................................                                         $(0.67)         $ 0.03
                                                                                             ======          ======

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING(2):
  Basic.............................................            76.7            97.8
 Diluted............................................            76.7           104.8

SUPPLEMENTAL DATA:
Depreciation........................................      $ 65.0          $ 78.2             $ 59.3          $ 57.6
Capital expenditures................................        90.2            38.6               40.7            40.7
4
AS OF
                                                                                                   JUNE 30, 2000
                                                                                               ---------------------
                                                                                                             AS
                                                                                               ACTUAL    ADJUSTED(3)
                                                                                               ------    -----------
                                                                                               (IN MILLIONS)
BALANCE SHEET DATA:
Cash and cash equivalents...................................................................   $211.9     $   359.9
Total assets................................................................................    933.9       1,081.9
Long-term debt, including current portion...................................................    116.6         116.6
Total shareholders' equity..................................................................    679.0         827.0
------------------

 (1) The pro forma information presented is a summary only and should be read in
     conjunction with "Unaudited Pro Forma Combined Condensed Financial
     Statements" included elsewhere in the prospectus. The pro forma adjustments
     give effect to the acquisition of the semiconductor business of Harris and
     to our subsequent initial public offering as if they had occurred on
     July 3, 1999.

 (2) Pro forma net income per common share and weighted average common shares
     outstanding include 3,000,000 shares issued in connection with this
     offering (assuming the underwriters do not exercise their over-allotment
     option).

 (3) Gives effect to the issuance of 3,000,000 shares at an assumed price per
     share of $52.00, (which was the last reported sale price on The Nasdaq
     National Market on August 24, 2000) net of assumed fees and expenses
     associated with this offering.

                                       5
RISK FACTORS

     You should carefully consider the risks described below before deciding to
invest in the Class A Common Stock. The risks described below are not the only
ones facing our company. Additional risks not now known to us or that we
currently deem immaterial may also impair our business operations.

FLUCTUATION OF OPERATING RESULTS--OUR FUTURE OPERATING RESULTS ARE LIKELY TO
FLUCTUATE AND THEREFORE MAY FAIL TO MEET EXPECTATIONS WHICH COULD CAUSE THE
PRICE OF THE CLASS A COMMON STOCK TO DECLINE.

     Our operating results have varied widely in the past and are likely to do
so in the future. In addition, our operating results may not follow any past
trends. Our future operating results will depend on many factors, many of which
are beyond our control, and may fail to meet our expectations for a number of
reasons, including those set forth in these risk factors. Any failure to meet
expectations could cause the price of the Class A Common Stock to significantly
fluctuate or decline.

     Factors that could cause our operating results to fluctuate that relate to
our internal operations include:

     o the need for continual and rapid introductions of new products;

     o changes in our product mix;

     o our inability to adjust our fixed costs in the face of any declines in
       sales; and

     o the availability of production capacity and fluctuations in the
       manufacturing yields at our facilities.

     Factors that could cause our operating results to fluctuate that depend on
our suppliers and customers include:

     o the timing of significant product orders, order cancellations and
       reschedulings;

     o the availability of production capacity and fluctuations in the
       manufacturing yields at third parties' facilities that manufacture our
       devices; and

     o the cost of raw materials and manufacturing services from our suppliers.

     Factors that could cause our operating results to fluctuate that relate to
our industry include:

     o the cyclical nature of the semiconductor industry;

     o the new and evolving nature of the wireless local area network market and
       the possibility that wireless local area network technology may not be
       adopted on a widespread basis or may be replaced by a competing
       technology; and

     o intense competitive pricing pressures.

CYCLICAL INDUSTRY--DOWNTURNS IN THE BUSINESS CYCLE COULD REDUCE THE REVENUES AND
PROFITABILITY OF OUR BUSINESS.

     The semiconductor industry is highly cyclical. In 1998, the semiconductor
industry experienced a downturn. Our markets may experience other, possibly more
severe and prolonged, downturns in the future. We may also experience
significant changes in our operating income margins as a result of variations in
sales, changes in product mix, price competition for orders and costs associated
with the need for continual and rapid introduction of new products.

     The markets for our products depend on continued demand for integrated
communications, industrial, automotive and consumer electronics products. There
can be no assurance that these end-user markets will not experience changes in
demand that will adversely affect our business, financial conditions or results
of operations.

                                       6
NEW PRODUCT DEVELOPMENT AND TECHNOLOGICAL CHANGE--OUR INABILITY TO INTRODUCE NEW
PRODUCTS COULD RESULT IN DECREASED REVENUES AND LOSS OF MARKET SHARE TO
COMPETITORS; NEW TECHNOLOGIES COULD ALSO REDUCE THE DEMAND FOR OUR PRODUCTS.

     Rapidly changing technology and industry standards, along with frequent new
product introductions, characterize the semiconductor industry. Our success in
our markets depends on our ability to design, develop, manufacture, assemble,
test, market and support new products and enhancements on a timely and
cost-effective basis. There can be no assurance that we will successfully
identify new product opportunities and develop and bring new products to market
in a timely and cost-effective manner or that products or technologies developed
by others will not render our products or technologies obsolete or
noncompetitive. A fundamental shift in technology in our product markets could
have a material adverse effect on us.

DEPENDENCE ON SOURCES OF SUPPLY--PRODUCTION TIME AND THE COST OF OUR PRODUCTS
COULD INCREASE IF WE WERE TO LOSE ONE OF OUR LIMITED NUMBER OF SUPPLIERS OR IF
ONE OF THOSE SUPPLIERS INCREASED THE PRICES OF RAW MATERIALS.

     Our operating results could be adversely affected if we were unable to
obtain adequate supplies of raw materials in a timely manner or if the costs of
raw materials increased significantly. Our manufacturing operations depend upon
obtaining adequate supplies of raw materials on a timely basis. We purchase raw
materials, such as silicon wafers, from a limited number of suppliers on a
just-in-time basis. From time to time, suppliers may extend lead times, limit
supplies or increase prices due to capacity constraints or other factors.

DEPENDENCE ON OUTSIDE FOUNDRIES--BECAUSE WE DEPEND ON THIRD PARTY FOUNDRIES TO
MANUFACTURE, ASSEMBLE AND TEST SOME OF OUR PRODUCTS, WE MAY EXPERIENCE DELAYS
BEYOND OUR CONTROL IN DELIVERING THOSE PRODUCTS TO OUR CUSTOMERS.

     We use outside wafer fabrication foundries for the manufacture of device
types where we do not have the necessary technologies resident in house. We also
use advanced manufacturing processes of outside foundries for certain components
of our PRISM(R) products. We intend to continue to rely on third party foundries
and other specialist suppliers for some of our manufacturing requirements and
most of our assembly and testing requirements. However, these third party
foundries are not obligated to supply products to us for any specific period, in
any specific quantity or at any specific price, except with respect to a five-
year supply agreement with ChipPAC for test and assembly services and as may be
provided in a particular purchase order that has been accepted by one of them.
As a result, we cannot directly control semiconductor delivery schedules, which
could lead to product shortages, quality assurance problems and increases in the
cost of our products. We may experience delays in the future and we cannot be
sure that we will be able to obtain semiconductors within the time frames and in
the volumes required by us at an affordable cost or at all. Any disruption in
the availability of semiconductors or any problems associated with the delivery,
quality or cost of the fabrication, assembly and testing of our products could
significantly hinder our ability to deliver our products to our customers and
may result in a decrease in sales of our products. If the third party foundries
we currently use are unable to provide our products, we may be required to seek
new foundries, and we cannot be certain that their services will be available at
favorable terms or that sufficient capacity will be available.

     In addition, the manufacture of our products is a highly complex and
precise process, requiring production in a highly controlled environment.
Changes in manufacturing processes or the inadvertent use of defective or
contaminated materials by a third party foundry could adversely affect the
foundry's ability to achieve acceptable manufacturing yields and product
reliability. If the third party foundries we currently use do not achieve
adequate yields or product reliability, our customer relationships could suffer.
This could ultimately lead to a loss of sales of our products and have a
negative effect on our business, financial condition or results of operations.

                                       7
DEPENDENCE ON CHIPPAC--BECAUSE WE DEPEND ON CHIPPAC TO PROVIDE US WITH ASSEMBLY
AND TEST SERVICES, WE MAY BE ADVERSELY AFFECTED IF CHIPPAC FAILS TO PERFORM
ADEQUATELY.

     We depend on ChipPAC for the assembly and testing of most of our
semiconductors. In connection with the sale of our assembly and test facilities
in Malaysia to ChipPAC, we entered into a five-year supply agreement with
ChipPAC under which the Malaysian facility became our preferred provider of
semiconductor assembly and test services. Any disruption in the availability of
semiconductors associated with the assembly and testing of our products by
ChipPAC could significantly hinder our ability to deliver our products to our
customers and may result in a decrease in sales of our products. In addition,
our business, financial condition or results of operations could be adversely
affected if ChipPAC is unable to obtain adequate supplies of raw materials in a
timely manner or if ChipPAC's costs of raw materials increase significantly. See
"Certain Relationships and Related Transactions."

MANUFACTURING RISKS--DELAYS IN PRODUCTION AT NEW FACILITIES, IN IMPLEMENTING NEW
PRODUCTION TECHNIQUES OR IN CURING PROBLEMS ASSOCIATED WITH TECHNICAL EQUIPMENT
MALFUNCTIONS MAY LOWER YIELDS AND REDUCE OUR REVENUES.

     Our manufacturing processes are highly complex, require advanced and costly
equipment and are continuously being modified in an effort to improve yields and
product performance. Impurities or other difficulties in the manufacturing
process can lower yields. Our manufacturing efficiency will be an important
factor in our future profitability and we cannot assure you that we will be able
to maintain our manufacturing efficiency or increase manufacturing efficiency to
the same extent as our competitors.

     In addition, as is common in the semiconductor industry, we have from time
to time experienced difficulty in beginning production at new facilities or in
effecting transitions to new manufacturing processes. As a consequence, we have
suffered delays in product deliveries and reduced yields. We may experience
manufacturing problems in achieving acceptable yields or experience product
delivery delays in the future as a result of, among other things, capacity
constraints, construction delays, upgrading or expanding existing facilities or
changing our process technologies, any of which could result in a loss of future
revenues. Our operating results could also be adversely affected by the increase
in fixed costs and operating expenses related to increases in production
capacity if revenues do not increase proportionately.

CONTROLLING SHAREHOLDERS--A LIMITED NUMBER OF PERSONS INDIRECTLY CONTROL US AND
MAY EXERCISE THEIR CONTROL IN A MANNER ADVERSE TO YOUR INTERESTS.

     As of June 30, 2000, Sterling Holding Company, LLC, or Sterling, and some
of our key employees owned about 40% of the outstanding Class A Common Stock,
our only class of voting stock, and about 91% of the outstanding Class B Common
Stock, which is convertible into shares of Class A Common Stock on a one-for-one
basis. By virtue of this stock ownership, they have the power to direct our
affairs and will be able to determine the outcome of all matters required to be
submitted to shareholders for approval, including the election of a majority of
our directors, any merger, consolidation or sale of all or substantially all of
our assets, and the amendment of our Restated Certificate of Incorporation.
Sterling also has a significant equity investment in Fairchild Semiconductor,
one of our competitors. An affiliate of Sterling is a principal shareholder of
ChipPAC. Because a limited number of persons control us, transactions could be
difficult or impossible to complete without the support of those persons. It is
possible that these persons will exercise control over us in a manner adverse to
your interests. See "Principal and Selling Shareholders."

COMPETITION--OUR BUSINESS IS VERY COMPETITIVE, AND INCREASED COMPETITION COULD
REDUCE GROSS MARGINS AND THE VALUE OF AN INVESTMENT IN OUR COMPANY.

     The semiconductor industry, and the semiconductor product markets
specifically, are highly competitive. Competition is based on price, product
performance, quality, reliability and customer service. The gross margins
realizable in our markets can differ across regions, depending on the economic
strength of end-product markets in those regions. Even in strong markets, price
pressures may emerge as competitors attempt to gain more market share by
lowering prices. Competition in the various markets in which we participate
comes from companies of various sizes, many of which are larger and have greater
financial and other resources than we have and thus can better withstand adverse
economic or market conditions. Competitors

                                       8
include manufacturers of standard semiconductors, application-specific
integrated circuits and fully customized integrated circuits, as well as
customers who develop their own integrated circuit products. In addition,
companies not currently in direct competition with us may introduce competing
products in the future.

RESTRICTIONS AND COVENANTS IN OUR DEBT INSTRUMENTS--RESTRICTIONS IMPOSED BY OUR
SENIOR CREDIT FACILITIES AND THE INDENTURE GOVERNING THE 13.25% SENIOR
SUBORDINATED NOTES DUE 2009 LIMIT INTERSIL'S ABILITY TO ENGAGE IN OR ENTER INTO
BUSINESS, OPERATING AND FINANCING ARRANGEMENTS, WHICH COULD ADVERSELY AFFECT OUR
ABILITY TO TAKE ADVANTAGE OF POTENTIALLY PROFITABLE BUSINESS OPPORTUNITIES.

     The operating and financial restrictions and covenants in our debt
instruments, including the senior credit facilities and the indenture governing
the 13.25% Senior Subordinated Notes due 2009, or the Notes, may adversely
affect our ability to finance our future operations or capital needs or engage
in other business activities that may be in our interest.

     Intersil's senior credit facilities require it to maintain certain
financial ratios which become more restrictive over time. Intersil's ability to
comply with these ratios may be affected by events beyond our control. A breach
of any of these covenants or Intersil's inability to comply with the required
financial ratios could result in a default under Intersil's senior credit
facilities. In the event of any of these defaults, the lenders under Intersil's
senior credit facilities could elect to declare all borrowings outstanding,
together with accrued interest and other fees, to be due and payable, to require
us to apply all of Intersil's available cash to repay these borrowings or to
prevent Intersil from making debt service payments on the Notes, any of which
would be an event of default under the Notes. The indenture governing the Notes
restricts, among other things, the incurrence of additional debt, the payment of
dividends on the Class A Common Stock and other capital stock of Intersil,
investments, sales of assets and certain consolidations, mergers and transfers
of assets. See "Description of Certain Indebtedness."

HOLDING COMPANY STRUCTURE--AS A HOLDING COMPANY, WE ARE TOTALLY DEPENDENT ON
DIVIDENDS FROM OUR OPERATING SUBSIDIARIES TO MEET OUR DEBT OBLIGATIONS OR,
SHOULD WE SO CHOOSE, PAY DIVIDENDS. TO THE EXTENT WE DO NOT RECEIVE DIVIDENDS
FROM INTERSIL, WE COULD HAVE DIFFICULTY SATISFYING OUR OBLIGATIONS.

     We are a holding company whose only material asset is the capital stock of
Intersil. We conduct no business (other than in connection with our ownership of
the capital stock of Intersil and certain other administrative obligations), and
depend on distributions from Intersil to meet our obligations. Because of
Intersil's ability to incur substantial indebtedness and our dependence upon the
operating performance of Intersil to generate distributions to us, there can be
no assurance that any of these distributions will be adequate to fund our
obligations when due. In addition, the senior credit facilities, the Notes and
applicable Federal and state law impose restrictions on the payment of dividends
and the making of loans by Intersil to us. As a result of the foregoing
restrictions, we may be required to:

     o refinance our indebtedness;

     o seek additional debt or equity financing;

     o cause Intersil to refinance all or a portion of its indebtedness with
       indebtedness containing covenants allowing us to gain access to
       Intersil's cash flow or assets;

     o cause Intersil to obtain modifications of the covenants restricting our
       access to cash flow or assets of Intersil contained in Intersil's
       financing documents, including, without limitation, the senior credit
       facilities and the indenture governing the Notes;

     o merge Intersil with us, which merger would be subject to compliance with
       applicable debt covenants and the consents of certain lenders; or

     o pursue a combination of the foregoing actions.

     The measures we may undertake to gain access to sufficient cash flow to
meet our future debt service requirements will depend on general economic and
financial market conditions, as well as our financial condition and the
financial condition of Intersil and other relevant factors existing at the time.
No assurance

                                       9
can be given that any of the foregoing measures can be accomplished, and the
failure to do so could have a material adverse effect on the value of the Class
A Common Stock.

CURRENCY EXCHANGE RATE FLUCTUATIONS--FLUCTUATIONS IN THE EXCHANGE RATE OF THE
U.S. DOLLAR AND FOREIGN CURRENCIES COULD INCREASE OPERATING EXPENSES AND
NEGATIVELY AFFECT OUR FINANCIAL PERFORMANCE AND RESULTS OF OPERATIONS.

     While we and our subsidiaries transact business primarily in U.S. dollars
and most of our revenues are denominated in U.S. dollars, a portion of our costs
and revenues is denominated in other currencies, such as the Euro and the
Japanese Yen. As a result, changes in the exchange rates of these currencies or
any other applicable currencies to the U.S. dollar will affect our costs of
goods sold and operating margins and could result in exchange losses. The impact
of future exchange rate fluctuations on our results of operations cannot be
accurately predicted. From time to time, we have engaged in, and may continue to
engage in, exchange rate hedging activities in an effort to mitigate the impact
of exchange rate fluctuations. However, any hedging technique that we may
implement may not be effective or may result in foreign exchange hedging losses.
In the past, we have incurred foreign exchange hedging losses, including
$13.3 million during fiscal year 1998 and $11.4 million during fiscal year 1999.
In fiscal year 2000, foreign exchange hedging resulted in a gain of $3.9
million.

RISKS ASSOCIATED WITH INTERNATIONAL OPERATIONS--OUR INTERNATIONAL OPERATIONS
SUBJECT US TO RISKS NOT FACED BY DOMESTIC COMPETITORS WHICH INCLUDE UNFAVORABLE
POLITICAL, REGULATORY, LABOR AND TAX CONDITIONS IN OTHER COUNTRIES.

     We cannot be certain to what extent our future operations and earnings may
be adversely affected by the risks related to, or any other problems arising
from, operating in international markets. We generate approximately one-half of
our revenue from outside the United States. Risks inherent in doing business on
an international level include:

     o economic and political instability;

     o trade restrictions;

     o foreign currency fluctuations; and

     o unexpected changes in the laws and policies of the United States and of
       the countries in which we manufacture and sell our products.

DEPENDENCE ON INTELLECTUAL PROPERTY--WE USE A SIGNIFICANT AMOUNT OF INTELLECTUAL
PROPERTY IN OUR BUSINESS. IF WE ARE UNABLE TO PROTECT THIS INTELLECTUAL
PROPERTY, WE COULD LOSE OUR RIGHT TO EXCLUSIVE USE OF KEY TECHNOLOGY, RESULTING
IN DECREASED REVENUES.

     Our future success and competitive position depend in part upon our ability
to obtain and maintain proprietary technology used in our principal products. We
rely on intellectual property rights, including, but not limited to, rights
existing under patent, trade secret, trademark, maskwork and copyright law, to
protect this technology. Some of our technology is not covered by any patent or
patent application, and there are risks that:

     o some of the approximately 1,250 patents that we own and other patents
       that we license from Harris may be invalidated, circumvented, challenged
       or licensed to others;

     o the license rights granted by Harris, or the patents that we own, will
       not provide competitive advantages to us; or

     o some of our pending or future patent applications will not be issued
       within the scope of the claims sought by us, if at all.

Further, others may develop technologies that are similar or superior to our
technology, duplicate our technology or design around our patents. In addition,
effective patent, trademark, copyright, maskwork and trade secret protection may
be unavailable, limited or not applied for in certain foreign countries.

                                       10
We also seek to protect our proprietary technology, including technology
that may not be patented or patentable, in part by confidentiality agreements
and, if applicable, inventors' rights agreements with our collaborators,
advisors, employees and consultants. There can be no assurance that these
agreements will not be breached or that we will have adequate remedies for any
breach.

     Some of our current licenses to use others' technology are scheduled to
expire periodically over the next several years, unless extended. In particular,
we have access to a portfolio of patents under cross-license agreements that
begin to expire in December of the year 2000. We will need to negotiate renewals
of these agreements or obtain the technology from alternative sources. There is
no guarantee that we will be able to obtain renewals on substantially similar
terms as those that currently exist.

DEPENDENCE ON INTELLECTUAL PROPERTY ACQUIRED FROM HARRIS--WE HAVE ACQUIRED
SUBSTANTIALLY ALL OF OUR INTELLECTUAL PROPERTY FROM HARRIS. TO THE EXTENT OUR
USE OF THIS INTELLECTUAL PROPERTY INFRINGES THE INTELLECTUAL PROPERTY RIGHTS OF
OTHERS, WE MAY BE REQUIRED TO CEASE OUR USE OR SALE OF AFFECTED PRODUCTS.

     Under our intellectual property agreement with Harris, Harris has limited,
royalty-free, worldwide, nonexclusive license rights (without right to
sublicense) to some of our technology. Under our patent assignment and services
agreements with Harris, Harris will retain the ownership and rights to certain
patents until August 13, 2002 after which time the patents will be assigned to
us, provided the patents are not the subject of litigation at that time, and
with the provision that any binding obligations on third parties to make royalty
or other payments respecting the patents will be retained by Harris.
Furthermore, the license agreements under which third parties are licensed to
use our intellectual property (or intellectual property that is assigned to us)
and under which Harris is cross-licensed to the third party's intellectual
property, may not be assignable to us. For this situation, Harris agreed to
partially indemnify us for limited periods in limited situations against claims
that our activities infringe upon the intellectual property rights of others.
The extent and duration of this indemnification may be insufficient to shield us
from the need to make monetary payments to third parties or to facilitate the
continued manufacture, use or sale of some affected products.

INTELLECTUAL PROPERTY UPON WHICH WE RELY MAY INFRINGE ON OTHER PARTIES'
INTELLECTUAL PROPERTY RIGHTS--WE MAY HAVE TO PAY OTHERS FOR INFRINGING THEIR
INTELLECTUAL PROPERTY RIGHTS OR DEFEND OURSELVES IN A LITIGATION, RESULTING IN
SIGNIFICANT EXPENSE TO US.

     Vigorous protection and pursuit of intellectual property rights or
positions characterize the semiconductor industry. This vigor and pursuit have
resulted in significant and often protracted and expensive litigation. We may
from time to time be notified of claims that we may be infringing third party
patents or other intellectual property rights. A countersuit has been brought
against Harris by Ericsson, one of its competitors and one of our customers,
alleging infringement by Harris of four of Ericsson's patents relating to
telephone subscriber line interface circuits. We have been joined as a defendent
in this action. Because this litigation was filed prior to our acquisition of
the semiconductor business of Harris, we believe our liability from this
litigation, if any, is covered by Harris' agreement to provide us with limited
indemnities. We do not believe that this litigation will have a material adverse
effect on our business, financial condition or results of operations. It is
still possible, however, that this litigation will be resolved in a manner that
is materially adverse to us.

     If necessary or desirable, we may, from time to time, seek licenses to
patents or other intellectual property rights. However, we cannot be certain
that we will obtain these licenses or that the terms of any offered licenses
will be acceptable to us, and the acquisition of any license could require
expenditure of substantial time and other resources. Furthermore, some licenses
or other rights to intellectual property of third parties that we use, such as
software, may not be freely assignable by Harris to us. Our failure to obtain a
license from a third party for technology we use could cause us to incur
substantial liabilities and to suspend the manufacture or shipment of products
or our use of processes requiring the technology. Litigation could result in
significant expense to us, adversely affecting sales of the challenged product
or technology and diverting the efforts of our technical and management
personnel, whether or not the litigation is determined in our favor. In the
event of an adverse outcome in any litigation, we may be required to:

     o pay substantial damages and incur significant attorneys' fees;

     o cease the manufacture, use, sale or importation of infringing products;

                                       11
o expend significant resources to develop or acquire non-infringing
       technology;

     o discontinue the use of some processes; or

     o obtain licenses to intellectual property covering the infringing
       technology.

ADDITIONAL BORROWINGS AVAILABLE--WE AND OUR SUBSIDIARIES WILL BE ABLE TO INCUR
SUBSTANTIALLY MORE DEBT, WHICH COULD FURTHER EXACERBATE THE RISKS
DESCRIBED BELOW.

     We and our subsidiaries may be able to incur substantial additional
indebtedness in the future. Although the indenture governing the Notes contains
restrictions on the incurrence of additional indebtedness, these restrictions
are subject to a number of qualifications and exceptions and the indebtedness
incurred in compliance with these restrictions could be substantial. Also, these
restrictions do not prevent us from incurring obligations that do not constitute
indebtedness. As of June 30, 2000, Intersil's senior credit facilities provided
for additional borrowings of up to $70.0 million, all of which would be
permitted under the indenture governing the Notes. To the extent new debt is
added to our and our subsidiaries' currently anticipated debt levels, it could:

     o require us to dedicate a substantial portion of our cash flow from
       operations to payments on our indebtedness, thereby reducing the
       availability of our cash flow to fund working capital, capital
       expenditures, research and development efforts and other general
       corporate purposes;

     o increase our vulnerability to adverse general economic or industry
       conditions;

     o limit our flexibility in planning for, or reacting to, changes in our
       business or the industry in which we operate;

     o prevent us from raising the funds necessary to repurchase all the Notes
       tendered to us upon the occurrence of certain changes of control in our
       ownership, which would constitute a default under the indenture governing
       the Notes; and

     o place us at a competitive disadvantage compared to our competitors that
       have less debt.

     See "Capitalization," "Selected Historical Financial Data and Other Data"
and "Description of Certain Indebtedness."

RISKS RELATING TO FUTURE ACQUISITIONS--WE MAY NOT BE ABLE TO CONSUMMATE FUTURE
ACQUISITIONS, AND THOSE ACQUISITIONS WHICH WE DO COMPLETE MAY BE DIFFICULT TO
INTEGRATE AND RESULT IN INCREASED DEBT AND LIABILITIES.

     We plan to pursue acquisitions of related businesses. We might not be able
to consummate acquisitions, or, if we complete any acquisition, we may not
realize any of the benefits anticipated from these acquisitions. Financing for
acquisitions may not be available and, depending on the terms of these
acquisitions, financing could be restricted by the terms of our senior credit
facilities and the indenture governing the Notes. The process of integrating
acquired operations into our existing operations may result in unforeseen
operating difficulties and may require significant financial resources that
would otherwise be available for the ongoing development or expansion of our
existing operations. Possible future acquisitions could result in the incurrence
of additional debt, contingent liabilities and amortization expenses related to
goodwill and other intangible assets, all of which could have a material adverse
effect on our business, financial condition or results of operations.

ENVIRONMENTAL LIABILITIES AND OTHER GOVERNMENTAL REGULATIONS--REGULATORY MATTERS
COULD FORCE US TO EXPEND SIGNIFICANT CAPITAL AND INCUR SUBSTANTIAL COSTS.

     We are subject to various environmental laws relating to the management,
disposal and remediation of hazardous materials and the discharge of pollutants
into the environment. We are also subject to laws relating to workplace safety
and worker health which, among other things, regulate employee exposure to
hazardous substances. Harris agreed to indemnify us for substantially all
environmental liabilities in excess of financial reserve amounts related to
events or activities occurring before our acquisition of the semiconductor
business. The nature of our ongoing operations exposes us to the risk of
liabilities with respect to environmental

                                       12
matters, including those relating to the on- and off-site disposal and release
of hazardous materials, and there can be no assurance that material costs will
not be incurred in connection with such liabilities.

     Based on our experience, we believe that the future cost of compliance with
existing environmental and health and safety laws (and liability for known
environmental conditions) even without the Harris indemnity will not have a
material adverse effect on our business, financial condition or results of
operations. However, we cannot predict:

     o what environmental or health and safety legislation or regulations will
       be enacted in the future;

     o how existing or future laws or regulations will be enforced, administered
       or interpreted; or

     o the amount of future expenditures which may be required to comply with
       these environmental or health and safety laws or to respond to future
       cleanup matters or other environmental claims.

     See "Business--Environmental Matters."

RISKS RELATING TO FUTURE SALES OF OUR SHARES--ALL OF OUR OUTSTANDING SHARES OF
COMMON STOCK MAY BE SOLD INTO THE MARKET IN THE NEAR FUTURE, AND FUTURE SALES OF
THOSE SHARES COULD DEPRESS THE MARKET PRICE OF OUR CLASS A COMMON STOCK.

     Immediately after this offering, the public market for our Class A Common
Stock will include 43,096,424 shares of freely tradable Class A Common Stock,
assuming the over-allotment option is not exercised. At that time, there will be
an additional 7,141,225 shares of Class A Common Stock outstanding and
49,746,482 shares of Class B Common Stock outstanding, which are convertible
into shares of Class A Common Stock on a one-for-one basis.

     Our directors, executive officers and various shareholders, including the
selling shareholders, have entered into lock-up agreements which generally
provide that these holders will not offer, sell, contract to sell, grant any
option to purchase or otherwise dispose of our common stock or any securities
exercisable for or convertible into our common stock owned by them for a period
of 90 days after consummation of this offering without the prior written consent
of Credit Suisse First Boston Corporation. In addition, shareholders who
received our common stock in the acquisition of NWN have entered into lock-up
agreements which restrict the disposition of 131,844 shares of common stock, and
79,106 shares of common stock prior to August 23, 2001 and August 23, 2002,
respectively.

     Beginning August 13, 2000, warrants issued in connection with the Notes
that initially entitle their holders to acquire in the aggregate 3,703,707
shares of Class A Common Stock became exercisable. We have filed a shelf
registration statement to cover the warrants for resale and the issuance of the
Class A Common Stock upon exercise of these warrants. This registration
statement has been declared effective by the U.S. Securities and Exchange
Commission. Any common stock issued in connection with these warrants will be
freely tradable in the open market. Unless earlier exercised, these warrants
will expire on August 15, 2009.

     Beginning August 14, 2000, some of our existing shareholders have the right
to cause us to register the sale of their shares under the Securities Act and
some other current shareholders may have the right to cause us to register their
shares for resale if we choose to file a registration statement. Registration of
the sale of these shares of our common stock would permit their sale into the
market without regard to the legal restrictions on transfer mentioned above. If
our existing shareholders sell a large number of shares, the market price of the
Class A Common Stock could decline, as these sales may be viewed by the public
as an indication of an upcoming or recently occurring shortfall in our financial
performance. Moreover, the perception in the public market that these
shareholders might sell shares of Class A Common Stock could depress the market
price of the Class A Common Stock.

     We filed a registration statement with the Securities and Exchange
Commission on April 18, 2000 under which we registered 4.0 million shares of our
Class A Common Stock for issuance in connection with future acquisitions. As of
June 30, 2000, we had issued 3.35 million shares of Class A Common Stock under
this registration statement in connection with our acquisition of NWN. Any
shares issued pursuant to this registration will be freely tradeable without
restriction under the Securities Act and would result in dilution to our
existing shareholders. See "Shares Eligible for Future Sale."

                                       13
FORWARD-LOOKING STATEMENTS

     This prospectus includes forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933. These statements relate to analyses
and other information which are based on forecasts of future results and
estimates of amounts that are not yet determinable. These statements also relate
to our future prospects, developments and business strategies.

     These forward-looking statements are identified by their use of terms and
phrases such as "anticipate," "believe," "could," "estimate," "expect,"
"intend," "may," "plan," "predict," "project," "will" and similar terms and
phrases, including references to assumptions. These statements are contained in
sections entitled "Summary," "Risk Factors," "Management's Discussion and
Analysis of Financial Condition and Results of Operations," "Business" and other
sections of this prospectus.

     These forward-looking statements involve known and unknown risks,
uncertainties and other factors that may cause actual results to be materially
different. These factors include, but are not limited to, the following: changes
in general economic and business conditions; changes in current pricing levels;
changes in political, social and economic conditions and local regulations;
changes in technology and the development of new technology; foreign currency
fluctuations; reductions in sales to any significant customers; changes in sales
mix; industry capacity; competition; disruptions of established supply channels;
manufacturing capacity constraints; and the availability, terms and deployment
of capital. Our risks are more specifically described in the "Risk Factors"
section of this prospectus. If one or more of these risks or uncertainties
materialize, or if underlying assumptions prove incorrect, our actual results
may vary materially from those expected, estimated or projected.

     We do not undertake to update our forward-looking statements or risk
factors to reflect future events or circumstances.

                                USE OF PROCEEDS

     The net proceeds received by us from the sale of Class A Common Stock in
this offering, assuming the underwriters do not exercise their over-allotment
option, and after deducting the underwriting discount and estimated offering
expenses of $8.0 million, will be approximately $148.0 million, assuming an
offering price of $52.00 per share (the last reported sale price on The Nasdaq
National Market on August 24, 2000). We intend to use the net proceeds received
by us from the sale of Class A Common Stock in this offering for general
corporate purposes, including expenditures for research and development of new
products and sales and marketing efforts. In addition, we may use a portion of
the net proceeds to acquire complementary products, technologies or businesses,
or to retire portions of our outstanding debt.

     The sale of Class A Common Stock in this offering by the selling
shareholders will be for their own accounts, and we will not receive any of the
proceeds from such sale.

                                DIVIDEND POLICY

     We have never paid a cash dividend and do not anticipate declaring or
paying any cash dividends on shares of our common stock in the foreseeable
future. In addition, any determination to declare and pay dividends will be made
by our board of directors in light of our earnings, financial position, capital
requirements, contractual limitations contained in our debt instruments and such
other factors as the board of directors deems relevant. See "Description of
Certain Indebtedness" and "Description of Capital Stock."

                                       14
PRICE RANGE OF COMMON STOCK

     Our Class A Common Stock has been traded on the Nasdaq Stock Market's
National Market since February 23, 2000 under the symbol "ISIL." Prior to that
time, there was no public market for our common stock, and there is currently no
public market for our Class B Common Stock. The following table sets forth, for
the periods indicated, the high and low closing prices per share of our Class A
Common Stock as reported in Nasdaq Stock Market trading.
HIGH      LOW
                                                                                        ------    ------
First quarter of 2000 (from February 23, 2000 to March 31, 2000).....................   $66.00    $46.50

Second quarter of 2000 (from April 1, 2000 to June 30, 2000).........................   $58.50    $27.50

Third quarter of 2000 (from July 1, 2000 to August 24, 2000).........................   $67.00    $42.56
On August 24, 2000, the last reported sale price for our Class A Common
Stock was $52.00 per share. As of August 11, 2000, there were about 8,900
holders of record of our Class A Common Stock.

                                 CAPITALIZATION

     The following table sets forth our capitalization as of June 30, 2000 on an
actual basis and as adjusted for the issuance of shares in this offering. This
table should be read in conjunction with "Unaudited Pro Forma Combined Condensed
Financial Statements," "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and our Consolidated Financial Statements
included elsewhere in this prospectus.
AS OF JUNE 30, 2000
                                                                                  ------------------------
                                                                                  ACTUAL    AS ADJUSTED(2)
                                                                                  ------    --------------
                                                                                       (IN MILLIONS)
Cash and cash equivalents......................................................   $211.9        $359.9
                                                                                  ======        ======
Long-term debt, including current portion:
  Senior Credit Facilities:
     Revolving Credit Facility(1)..............................................   $   --        $   --
  13.25% Senior Subordinated Notes due 2009....................................    112.4         112.4
     Other.....................................................................      4.2           4.2
                                                                                  ------        ------
          Total long-term debt.................................................    116.6         116.6
                                                                                  ------        ------
Shareholders' equity:
  Common stock.................................................................      0.9           1.0
  Additional paid-in capital...................................................    719.1         867.1
  Retained deficit.............................................................    (42.7)        (42.7)
  Accumulated other comprehensive income.......................................      1.7           1.7
                                                                                  ------        ------
          Total shareholders' equity...........................................    679.0         827.0
                                                                                  ------        ------
               Total capitalization............................................   $795.6        $943.7
                                                                                  ======        ======
------------------
(1) The Revolving Credit Facility provides for maximum borrowings of up to $70.0
    million.

(2) Gives effect to the issuance of 3,000,000 shares at an assumed price per
    share of $52.00, which was the last reported sale price on The Nasdaq
    National Market on August 24, 2000, net of assumed fees and expenses
    associated with this offering.

                                       15
UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENT OF OPERATIONS

     The following Unaudited Pro Forma Combined Condensed Statement of
Operations (six weeks ended August 13, 1999 (Predecessor) and 46 weeks ended
June 30, 2000 (Successor)) are based on or derived from historical Consolidated
Financial Statements included elsewhere in this prospectus. The acquisition of
the semiconductor business of Harris was consummated on August 13, 1999.

     The Unaudited Pro Forma Combined Condensed Statement of Operations gives
effect to the transactions as if they had occurred on July 3, 1999. The
transactions and the related adjustments are described in the accompanying
notes. The pro forma statement of operations does not purport to represent what
our results of operations would actually have been had the transactions in fact
occurred on July 3, 1999 nor do they purport to project the results of
operations for any future period.

     The acquisition of the semiconductor business has been accounted for using
the purchase method of accounting. After the acquisition of the semiconductor
business, the total purchase price of the acquisition was allocated to the
tangible and intangible assets and liabilities of the semiconductor business
based upon their respective fair values. In the opinion of our management, all
adjustments that are necessary to present fairly the pro forma data have been
made.

     The Unaudited Pro Forma Combined Condensed Statement of Operations should
be read in conjunction with the Consolidated Financial Statements and notes
thereto as of June 30, 2000 and July 2, 1999 and for the fiscal year ended
July 2, 1999, the six weeks ended August 13, 1999, and the 46 weeks ended
June 30, 2000 included elsewhere in this prospectus. See "Forward-Looking
Statements" and "Management's Discussion and Analysis of Financial Condition and
Results of Operations."

         UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENT OF OPERATIONS
FISCAL YEAR ENDED JUNE 30, 2000
                                                       ----------------------------------------------------------------------
                                                       46 WEEKS ENDED      SIX WEEKS ENDED
                                                       JUNE 30, 2000       AUGUST 13, 1999       HARRIS           INITIAL
                                                       --------------    -------------------    SEMICONDUCTOR     PUBLIC
                                                       HISTORICAL         HISTORICAL            ACQUISITION      OFFERING
                                                       (SUCCESSOR)       (PREDECESSOR)          ADJUSTMENTS      ADJUSTMENTS
                                                       --------------    -------------------    -------------    ------------
                                                                      (IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
Sales:
    Product sales...................................       $596.8               $57.4               $  --           $   --
Costs and Expenses:
    Cost of product sales...........................        352.5                39.7                (1.7)(a)           --
    Research and development........................         69.5                 8.5                  --               --
    Selling, general and administrative.............         97.2                10.9                 0.3 (b)           --
    Harris corporate expense allocation.............           --                 1.2                (1.2)(b)           --
    Intangible amortization.........................         10.7                 0.3                 1.2 (c)           --
    In-process research and development.............         20.2                  --                  --               --
    Other...........................................          1.2                  --                  --               --
                                                           ------               -----               -----           ------
Operating income (loss).............................         45.5                (3.2)                1.4               --
    Loss on sale of Malaysian operation.............         24.8                  --                  --               --
    Interest, net...................................         38.2                (0.1)                7.6 (d)        (32.4)(g)
                                                           ------               -----               -----           ------
Income (loss) before income taxes and extraordinary
  item..............................................        (17.5)               (3.1)               (6.2)            32.4
Income taxes (benefit)..............................         (0.3)               (0.1)               (2.4)(e)          5.0 (h)
                                                           ------               -----               -----           ------
Net income (loss) before extraordinary item.........        (17.2)               (3.0)               (3.8)            27.4
Extraordinary item--loss on extinguishment of debt,
  net of tax effect.................................        (25.5)                 --                  --             25.5 (i)
                                                           ------               -----               -----           ------
Net income (loss)...................................        (42.7)               (3.0)               (3.8)            52.9
Preferred dividends.................................          5.4                  --                 1.2 (f)         (6.6)(j)
                                                           ------               -----               -----           ------
Net income (loss) to common shareholders............       $(48.1)              $(3.0)              $(5.0)          $ 59.5
                                                           ======               =====               =====           ======
Net income per common share (k):
  Basic.............................................
  Diluted...........................................
PRO FORMA
                                                      ---------
Sales:
    Product sales...................................   $ 654.2
Costs and Expenses:
    Cost of product sales...........................     390.5
    Research and development........................      78.0
    Selling, general and administrative.............     108.4
    Harris corporate expense allocation.............        --
    Intangible amortization.........................      12.2
    In-process research and development.............      20.2
    Other...........................................       1.2
                                                       -------
Operating income (loss).............................      43.7
    Loss on sale of Malaysian operation.............      24.8
    Interest, net...................................      13.3
                                                       -------
Income (loss) before income taxes and extraordinary
  item..............................................       5.6
Income taxes (benefit)..............................       2.2
                                                       -------
Net income (loss) before extraordinary item.........       3.4
Extraordinary item--loss on extinguishment of debt,
  net of tax effect.................................        --
                                                       -------
Net income (loss)...................................       3.4
Preferred dividends.................................        --
                                                       -------
Net income (loss) to common shareholders............   $   3.4
                                                       =======
Net income/loss per common share (k):
  Basic.............................................   $  0.04
  Diluted...........................................      0.03
See accompanying Notes to Unaudited Pro Forma Combined Condensed Statement of
                                  Operations.

                                       16
NOTES TO UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENT OF OPERATIONS

     The unaudited pro forma combined consolidated statement of operations gives
effect to the following adjustments:

(a)  The total purchase price of $614.3 million was allocated to the assets and
     liabilities of the semiconductor business based upon their approximate fair
     value. The fair value of the net assets acquired exceeded the purchase
     price resulting in negative goodwill. This negative goodwill was allocated
     to property and equipment and identified intangible assets based on their
     relative fair value as follows:
ALLOCATION
                                                                       FAIR VALUE OF      OF EXCESS     ADJUSTED
                                                                       ASSETS ACQUIRED    FAIR VALUE    FAIR VALUE
                                                                       ---------------    ----------    ----------
                                                                                      (IN MILLIONS)
Net current assets...........................................       $ 160.6         $     --       $160.6
       Other amounts................................................          17.2               --         17.2
       Property and equipment.......................................         481.0           (153.2)       327.8
       Developed technology.........................................          80.0            (23.9)        56.1
       Customer base................................................          33.0            (10.0)        23.0
       In-process research and development..........................          29.0             (8.8)        20.2
       Assembled workforce..........................................          13.5             (4.1)         9.4
                                                                           -------         --------       ------
                                                                             814.3         $ (200.0)      $614.3
                                                                                           ========       ======
       Purchase price...............................................         614.3
                                                                           -------
       Excess fair value............................................       $ 200.0
                                                                           =======
As a result of the allocation of negative goodwill to property and
    equipment, the net book carrying value at August 13, 1999 of $403.7 million
    was reduced by $75.9 million to the fair value of $327.8 million. Therefore,
    for pro forma purposes, depreciation expense was reduced by $1.7 million for
    the six weeks ended August 13, 1999.

(b)  Historically, Harris allocated corporate headquarters expenses to the
     semiconductor business based on the semiconductor business' net sales as a
     percentage of Harris' net sales. This pro forma adjustment represents the
     elimination of this allocation and our estimate of the cost of replacing
     these services as a stand-alone company, calculated as follows:
SIX WEEKS ENDED
                                                                                              AUGUST 13, 1999
                                                                                              ---------------
                                                                                               (IN MILLIONS)
Harris corporate expenses allocation...................................................        $1.20
                                                                                                   -----
    Company's estimated expenses:
      Finance, legal and professional......................................................         0.20
      Human resources/benefits.............................................................         0.05
      Other................................................................................         0.05
                                                                                                   -----
         Total estimated expenses..........................................................         0.30
                                                                                                   -----
    Net reduction..........................................................................        $0.90
                                                                                                   =====
(c)  Represents the adjustment to reflect additional amortization expense for
     the identified intangible assets. The appraisal of the acquired business,
     after adjustment for negative goodwill, included $108.7 million of
     identified intangible assets consisting of $56.1 million of developed
     technology, $23.0 million of customer base, $9.4 million of assembled
     workforce and $20.2 million of purchased in-process research and
     development. The purchased in-process research and development related to
     various products under development that had not yet reached technological
     feasibility and had no future alternative uses. Pursuant to Regulation S-X,
     the in-process research and development has been written off against
     retained earnings and has not been reflected in the pro forma consolidated
     statement of operations. The remaining identified intangibles are being
     amortized over the following lives:
SIX WEEKS ENDED
IDENTIFIED INTANGIBLE                                  AMOUNT            LIFE      AUGUST 13, 1999
---------------------------------------------------   -------------    --------    ---------------
                                                      (IN MILLIONS)                 (IN MILLIONS)
Developed technology...............................       $56.1        11 years         $ 0.6
Customer base......................................        23.0         7 years           0.4
Assembled workforce................................         9.4         5 years           0.2
                                                                                        -----
                                                                                        $ 1.2
                                                                                        =====
17
(d)  Represents interest expense associated with the indebtedness incurred in
     connection with the acquisition of the semiconductor business, calculated
     as follows:
SIX WEEKS ENDED
                                                                                              AUGUST 13, 1999
                                                                                              ---------------
                                                                                               (IN MILLIONS)
Interest on Notes (13.25% on $200.0 million)...........................................        $ 3.1
    Estimated interest on Senior Term
      Facility (10.71% on $205.0 million)..................................................          2.5
    Estimated interest on Revolving Credit Facility
      (9.96% on $15.0 million).............................................................          0.2
                                                                                                   -----
         Total cash interest expense.......................................................          5.8
    Interest on Subordinated Holding PIK Note
      (13.50% on $30.0 million)............................................................          0.5
    Interest on Seller Holding PIK Note
      (11.13% on $90.0 million)............................................................          1.1
    Deferred financing fees................................................................          0.2
                                                                                                   -----
         Total interest expense............................................................        $ 7.6
                                                                                                   =====
Financing fees consist of $6.0 million on the Notes (amortized over
     ten years) and $6.2 million on the Senior Term Facility and Revolving
     Credit Facility (amortized over six years).

(e)  Represents the adjustment of the pro forma income tax provision related to
     the pro forma pretax adjustments computed on a stand-alone basis at an
     effective tax rate of 39%.

(f)  Represents the adjustment for the accretion of the 12% cumulative dividends
     on the 83,434 shares of the mandatorily redeemable 12% Series A Cumulative
     Compounding Preferred Stock, with a stated value of $1,000 per share. These
     shares of mandatorily redeemable 12% Series A Cumulative Compounding
     Preferred Stock were converted into shares of our Class A Common Stock upon
     the occurrence of our initial public offering.

(g)  Represents the elimination of interest expense associated with debt which
     was repaid (the Tranche B Senior Term Facility, the 11.13% Seller Holding
     PIK Note, $70.0 million of the Senior Subordinated Notes, and the 13.50%
     Subordinated PIK Note) with the proceeds of the initial public offering.

(h)  Represents the pro forma adjustment necessary to reflect the income tax
     required to result in a pro forma income tax provision based on an
     effective tax rate of 39%.

(i)  Represents the elimination of the extraordinary charges associated with the
     early repayment of debt from the proceeds of the initial public offering.
     The extraordinary charges consisted of the write-off of deferred financing
     fees and prepayment penalties.

(j)  Gives effect to the conversion of all of the outstanding shares of the 12%
     Series A Cumulative Compounding Preferred Stock into common stock at $1,000
     per share plus accumulated and unpaid dividends, based on the per share
     amount received in the initial public offering.

(k)  The following table sets forth the weighted average common shares
     outstanding as follows:
FISCAL YEAR ENDED
                                                                                               JUNE 30, 2000
                                                                                           --------------------
                                                                                           (IN MILLIONS, EXCEPT
                                                                                            PER SHARE AMOUNT)
Basic:
          Shares outstanding at June 30, 2000...........................................            94.8
                                                                                                  ------
       Diluted:
          Warrants......................................................................             5.9
          Common stock options and other................................................             1.1
                                                                                                  ------
          Total diluted.................................................................             7.0
                                                                                                  ------
       Total............................................................................           101.8
                                                                                                  ======
18
SELECTED HISTORICAL FINANCIAL DATA AND OTHER DATA

     The following table sets forth selected historical financial data and
supplemental data for Intersil Holding and its predecessor. The historical
financial data as of and for the fiscal years 1998 and 1999 and the six weeks
ended August 13, 1999 are derived from our predecessor's audited Consolidated
Financial Statements included elsewhere in this prospectus, except for revenue
categorized by product line, which is derived from our predecessor's books and
records. The historical financial data as of and for the fiscal years 1996 and
1997, which are not included elsewhere in this prospectus, are derived from our
predecessor's unaudited and audited Consolidated Financial Statements,
respectively. The historical financial data as of and for the 46 weeks ended
June 30, 2000 are derived from our audited Consolidated Financial Statements
included elsewhere in this prospectus. This information should be read in
conjunction with the Consolidated Financial Statements included elsewhere in
this prospectus and "Management's Discussion and Analysis of Financial Condition
and Results of Operations."
PREDECESSOR                PREDECESSOR       SUCCESSOR
                                                                ---------------------------------   ---------------   -------------
                                                                                                                        46 WEEKS
                                                                          FISCAL YEARS              SIX WEEKS ENDED       ENDED
                                                                ---------------------------------   ---------------   -------------
                                                                 1996     1997     1998     1999    AUGUST 13, 1999   JUNE 30, 2000
                                                                ------   ------   ------   ------   ---------------   -------------
                                                                  (DOLLARS IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
STATEMENT OF OPERATIONS DATA:
Revenue:
     Analog & Mixed-Signal....................................  $393.6   $384.4   $390.4   $352.8       $  36.3          $ 360.5
     Discrete Power...........................................   176.6    154.5    176.4    161.6          18.0            187.9
     Wireless.................................................      --      6.4     10.0     18.3           3.1             48.4
                                                                ------   ------   ------   ------       -------          -------
Total revenue.................................................  $570.2   $545.3   $576.8   $532.7       $  57.4          $ 596.8
                                                                ======   ======   ======   ======       =======          =======
Gross margin..................................................  $227.1   $199.3   $207.5   $182.9       $  17.7          $ 244.3
Research and development......................................    69.4     75.2     75.1     67.0           8.5             69.5
Selling, general and administrative...........................   103.6     99.3     98.2     84.0          10.9             97.2
Harris corporate expense allocation...........................    10.3     10.0     10.0      9.3           1.2               --
Intangible amortization.......................................     2.3      2.3      2.3      2.4           0.3             10.7
In-process research and development...........................      --       --       --       --            --             20.2
Other.........................................................      --       --       --       --            --              1.2
                                                                ------   ------   ------   ------       -------          -------
Operating income (loss).......................................    41.5     12.5     21.9     20.2          (3.2)            45.5
Loss on sale of Malaysian operation...........................      --       --       --       --            --             24.8
Interest, net.................................................    (1.0)    (0.6)    (0.9)    (1.2)         (0.1)            38.2
                                                                ------   ------   ------   ------       -------          -------
Income (loss) before income taxes and extraordinary item......    42.5     13.1     22.8     21.4          (3.1)           (17.5)
Income taxes (benefit)........................................     2.6      1.9      9.9     (6.0)         (0.1)            (0.3)
                                                                ------   ------   ------   ------       -------          -------
Income (loss) before extraordinary item.......................    39.9     11.2     12.9     27.4          (3.0)           (17.2)
Extraordinary item--loss on extinguishment of debt, net of tax
  effect......................................................      --       --       --       --            --            (25.5)
                                                                ------   ------   ------   ------       -------          -------
Net income (loss).............................................    39.9     11.2     12.9     27.4          (3.0)           (42.7)
Preferred dividends...........................................      --       --       --       --            --              5.4
                                                                ------   ------   ------   ------       -------          -------
Net income (loss) to common shareholders......................  $ 39.9   $ 11.2   $ 12.9   $ 27.4       $  (3.0)         $ (48.1)
                                                                ======   ======   ======   ======       =======          =======
BASIC AND DILUTED LOSS PER SHARE:
  Loss before extraordinary item..............................                                                           $ (0.30)
  Extraordinary item..........................................                                                             (0.33)
                                                                                                                         -------
  Net loss....................................................                                                           $ (0.63)
                                                                                                                         =======
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
Basic and diluted.............................................                                                              76.7
BALANCE SHEET DATA (END OF PERIOD):
Cash and cash equivalents.....................................  $   --   $   --   $   --   $   --       $   1.4          $ 211.9
Total assets..................................................   647.0    773.3    810.3    761.2         736.1            933.9
Long-term debt, including current portion.....................      --      1.4      4.1      4.6           4.5            116.6
Total shareholders' equity/business equity....................   520.9    646.2    699.1    658.9         657.3            679.0
19
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                           AND RESULTS OF OPERATIONS

     The following discussion should be read in conjunction with, and is
qualified in its entirety by reference to the Consolidated Financial Statements,
including the notes thereto appearing elsewhere in this prospectus. Except for
historical information, the discussions in this section of the prospectus
contain forward-looking statements that involve risks and uncertainties. Actual
results could differ materially from those discussed below.

OVERVIEW

     We are a systems oriented designer and manufacturer of analog and digital
integrated circuits and discrete semiconductors for the communications and power
management end-user markets. We provide systems level solutions for the growing
integrated communications semiconductor market. Integrated communications
semiconductors enable the convergence of voice, data and video. Within
integrated communications, we are focused on several key markets including high
data rate wireless connectivity, power management and wireless and wired
communications infrastructure. We use our expertise in digital and analog
semiconductors and radio and software design to deliver chip sets, components,
software and licensable application designs for communications equipment
customers. We sell over 4,500 products to more than 28,000 customers worldwide.

BASIS OF PRESENTATION

     We were formed on August 13, 1999 through a series of transactions, in
which we and our wholly-owned subsidiary, Intersil, acquired the semiconductor
business of Harris. Intersil and its wholly-owned domestic and foreign
subsidiaries include the operations of the predecessor. Our fiscal year 2000
began on July 3, 1999 and ended on June 30, 2000.

     The total purchase price of the semiconductor business acquisition was
$614.3 million, which included transaction costs of approximately $7.8 million
and deferred financing costs of $12.2 million. The consideration paid by
Intersil Holding was $504.3 million in cash, of which $420.0 million was
financed through borrowings from the senior credit facilities, the 13.25% Senior
Subordinated Notes due 2009, the 13.50% Subordinated Holding "Pay-In-Kind" (PIK)
Note and the issuance of a $90.0 million 11.13% PIK Note to Harris.

     The acquisition was accounted for using the purchase method of accounting
and, accordingly, the operating results of the semiconductor business have been
included in Intersil's consolidated financial statements since the date of
acquisition. The total purchase price was allocated to the assets and
liabilities of the semiconductor business based upon their approximate fair
value. The fair value of the net assets acquired exceeded the purchase price
resulting in negative goodwill of $200.0 million. This negative goodwill was
allocated to the identified intangibles and property and equipment based on
their relative fair values. The most significant effects were to decrease
property, plant and equipment and to increase certain intangibles and
liabilities. Accordingly, certain financial information for the periods prior to
August 13, 1999 is not comparable to periods subsequent to August 13, 1999. All
statement of operations information for fiscal year 2000 represents the combined
results of the semiconductor business from July 3, 1999 through August 13, 1999
and Intersil Holding from August 14, 1999 through June 30, 2000.

     On February 25, 2000, we issued 22,000,000 shares of our Class A Common
Stock in a registered underwritten initial public offering at a price of $25.00
per share. See "--Liquidity and Capital Resources."

                                       20
QUARTERLY RESULTS

     The following table sets forth the unaudited historical quarterly revenue
and gross margin of our three product groups:
FISCAL YEAR                         FISCAL YEAR
                                   ENDED JULY 3, 1998                  ENDED JULY 2, 1999
                            ---------------------------------   ---------------------------------
                              Q1       Q2       Q3       Q4       Q1       Q2       Q3       Q4
                            ------   ------   ------   ------   ------   ------   ------   ------
                                                                 (DOLLARS IN MILLIONS)
REVENUE
Analog & Mixed-Signal.....  $ 96.3   $ 93.9   $ 95.2   $105.0   $ 79.8   $ 86.2   $ 88.5   $ 98.3
Discrete Power............    44.7     45.2     45.7     40.8     38.5     34.8     42.3     46.0
Wireless..................     2.9      2.2      2.6      2.3      4.2      3.1      4.6      6.4
                            ------   ------   ------   ------   ------   ------   ------   ------
    Total.................  $143.9   $141.3   $143.5   $148.1   $122.5   $124.1   $135.4   $150.7
                            ======   ======   ======   ======   ======   ======   ======   ======

GROSS MARGIN PERCENTAGE
Analog & Mixed-Signal.....      36%      42%      42%      44%      41%      39%      43%      43%
Discrete Power............      24       27       23       25       21       14       17       21
Wireless..................      31        5       42       57       21       26       35       50
    Total.................      32       37       36       39       34       31       35       36
COMBINED
                                       FISCAL YEAR
                                   ENDED JUNE 30, 2000
                            --------------------------------
                              Q1       Q2       Q3      Q4
                            ------   ------   ------  ------
REVENUE
Analog & Mixed-Signal.....  $ 82.8   $ 94.0   $103.4  $116.6
Discrete Power............    44.9     54.8     53.2    53.0
Wireless..................     6.3      9.3     14.3    21.6
                            ------   ------   ------  ------
    Total.................  $134.0   $158.1   $170.9  $191.2
                            ======   ======   ======  ======

GROSS MARGIN PERCENTAGE
Analog & Mixed-Signal.....      42%      45%      44%     46%
Discrete Power............      24       28       32      34
Wireless..................      35       39       45      50
    Total.................      36       39       41      43
Historically, our first fiscal quarter has been the weakest due to model
year changeovers in the automotive industry and summer holiday seasons,
primarily in Europe. Our increasing focus on integrated communications products
has resulted in a higher percentage of our sales coming from the communications
markets in the second half of our fiscal year. Revenues from integrated
communications products accounted for 53.1% of our total fourth quarter fiscal
year 2000 sales versus 39.1% of our total fourth quarter fiscal year 1999 sales.
Sales made into the communications market generally experience less seasonality
than sales of our historical mix of products.

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

     Industry demand weakened significantly in the first half of fiscal 1999 due
to widespread inventory adjustments which led to excess manufacturing capacity
and steep declines in product prices. This trend affected all three of our
product groups. Our results, and those of the industry as a whole, began to
strengthen in the third fiscal quarter of 1999, with an increase in sales of
9.1% from the second quarter to the third quarter and 11.3% from the third
quarter to the fourth quarter. We experienced sales growth of over 25% in each
of the last three quarters of fiscal year 2000 as compared to the same periods
in fiscal year 1999 due to increased demand for our communication products and
an overall improvement in market conditions. Additionally, the introduction of
our new PRISM II wireless product has accelerated growth in the Wireless product
group.

                                       21
RESULTS OF OPERATIONS

     The following table sets forth our statement of operations data for the
periods indicated as a percentage of revenue:
FISCAL YEARS ENDED
                                                           -------------------------------------------------
                                                                                                  COMBINED
                                                           JULY 3, 1998      JULY 2, 1999      JUNE 30, 2000
                                                           ------------      ------------      -------------
Revenue:
  Analog & Mixed-Signal...............................          67.7%             66.2%              60.7%
  Discrete Power......................................          30.6              30.4               31.4
  Wireless............................................           1.7               3.4                7.9
                                                              ------            ------            -------
     Total............................................         100.0             100.0              100.0
                                                              ------            ------            -------
Cost and Expenses:
  Cost of goods sold..................................          64.0              65.6               59.9
  Research and development............................          13.0              12.6               11.9
  Selling, general and administrative.................          18.8              17.5               16.7
  Intangible amortization.............................           0.4               0.5                1.7
  In-process research and development.................            --                --                3.1
  Other...............................................            --                --                0.2
                                                              ------            ------            -------
     Operating income.................................           3.8               3.8                6.5
     Loss on sale of Malaysian operation..............            --                --                3.8
  Interest, net.......................................          (0.2)             (0.2)               5.9
                                                              ------            ------            -------
  Income (loss) before income taxes and extraordinary
     item.............................................           4.0               4.0               (3.2)
Income taxes (benefit)................................           1.8              (1.1)              (0.1)
                                                              ------            ------            -------
Income (loss) before extraordinary item...............           2.2               5.1               (3.1)
Extraordinary item--loss on extinguishment of debt,
  net of tax effect...................................            --                --               (3.9)
                                                              ------            ------            -------
Net income (loss).....................................           2.2%              5.1%              (7.0)%
                                                              ======            ======            =======
FISCAL YEAR 2000 COMPARED WITH FISCAL YEAR 1999

  Revenue

     Revenue for fiscal year 2000 increased 22.8% to $654.2 million from
$532.7 million in fiscal year 1999. This growth is the result of increased
demand for communications products and overall improved market conditions.
Wireless sales growth of 181% was driven by increased market acceptance of our
PRISM(R) products.

     Geographically, 49.2%, 22.0% and 28.8% of product sales were derived in
North America, Europe and Asia/Pacific, respectively, during fiscal year 2000,
compared to 53.5%, 24.6% and 21.9%, respectively, in fiscal year 1999. This
change in mix is the result of increased demand from Asian-based customers and
from other customers moving manufacturing facilities to Asia.

  Gross Margin

     Cost of goods sold consists primarily of purchased materials, labor and
overhead (including depreciation) associated with product manufacturing, plus
royalty, warranty and sustaining engineering expenses pertaining to products
sold. Gross margin on product sales increased 43.2% to $262.0 million in fiscal
year 2000 from $182.9 million in fiscal year 1999. As a percentage of sales,
gross margin was 40.0% in fiscal year 2000 as compared to 34.3% in fiscal year
1999. This increase was primarily due to increased capacity utilization in all
three fabrication facilities, improved product costs from yield enhancements and
manufacturing cost improvement projects. Additionally, wireless products, which
generally carry higher margins, increased as a

                                       22
percentage of our total sales. Headcount reductions and a decrease in
depreciation expense resulting from a revaluation of our property and equipment
due to purchase accounting also contributed to the margin improvement.

  Research and Development ("R&D")

     R&D expenses consist primarily of salaries and selected costs of employees
engaged in product/process research, design and development activities, as well
as related subcontracting activities, prototype development, cost of design
tools and technology license agreement expenses. R&D expenses increased 16.4% to
$78.0 million in fiscal year 2000 from $67.0 million in fiscal year 1999. The
increase was the result of our continued investment in PRISM(R) chip sets and in
power management integrated circuits, focusing in the categories of
communications and computing products. As a percentage of sales, R&D expenses
declined slightly to 11.9% in fiscal year 2000 from 12.6% in fiscal year 1999.

  In-Process R&D Charge

     In connection with the acquisition of the semiconductor business of Harris,
we allocated $20.2 million of the purchase price to in-process R&D projects.
These projects were in various stages of completion ranging from 35-90%
complete. The present value of $29.0 million of in-process R&D was primarily
determined by discounting 10 year after tax cash flow projections of the
individual projects using a discount rate of 20%. This value was then reduced by
negative goodwill resulting from the acquisition.

     At the date of acquisition, the development of these projects had not yet
reached technological feasibility and the in-process R&D had no alternative
future uses. Accordingly, these costs were expensed as a one-time charge to
earnings in the combined fiscal year ended June 30, 2000.

     There is risk associated with the completion of the projects and there can
be no assurance that any will meet with either technological or commercial
success. Discussion of certain of the acquired projects can be found in the
Products and Technology portion of the Business section located elsewhere in
this prospectus.

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

     SG&A costs, which include marketing, selling, general and administrative
expenses, increased 17.1% to $109.3 million in fiscal year 2000 from
$93.3 million in fiscal year 1999. The increase was due to additional selling
costs resulting from higher sales in fiscal year 2000 and additional marketing
costs associated with our new company branding initiative. Operating expenses
include charges allocated by Harris to us for legal, financial and other
administrative expenses of $1.2 million for the six weeks ended August 13, 1999,
and $9.3 million for the twelve months ended July 2, 1999. As a percentage of
sales, SG&A costs decreased to 16.7% in fiscal year 2000 from 17.5% in fiscal
year 1999.

  Intangible Assets

     Certain intangible assets were recorded on the opening balance sheet of
Intersil as part of purchase accounting. We also recorded goodwill in June 2000
as a result of the acquisition of No Wires Needed B.V. These assets are being
amortized over their useful lives ranging from five to eleven years.

  Loss on Sale of Malaysian Operation

     On June 30, 2000, we completed the sale of our Kuala Lumpur, Malaysia-based
semiconductor assembly and test operations to ChipPAC, Inc. As consideration for
the sale we received approximately $52.5 million in cash and $15.8 million in
ChipPAC preferred convertible stock and we recognized a non-recurring, non-cash
charge of $24.8 million for loss on sale.

  Interest Expense

     In connection with the acquisition of the semiconductor business, we
entered into new credit facilities. See "--Liquidity and Capital Resources."
Interest expense related to this debt for Intersil Holding during the fiscal
year 2000 was $41.9 million, excluding interest income of $3.8 million.

                                       23
Extraordinary Item

     On February 25, 2000, we issued 22,000,000 shares of our Class A Common
Stock in a registered underwritten initial public offering. From the proceeds of
the offering, we repaid approximately $419.0 million of debt incurred through
the acquisition of the semiconductor business, which included certain prepayment
penalties and accrued interest. In connection with the early extinguishment of
debt, we recorded extraordinary charges (net of tax effect) of $25.5 million.
The extraordinary charges consisted of the write-off of deferred financing fees
and prepayment penalties.

  Tax Expense

     The tax benefit for the combined twelve months ended June 30, 2000 is not
comparable to the twelve months ended July 2, 1999, due to the differences in
our tax structure as compared to that of the semiconductor business of Harris.

  Backlog

     We had backlog at June 30, 2000 of $259.5 million compared to
$174.0 million at July 2, 1999. The increase was due to increased demand for our
integrated communications products and improved market conditions.

FISCAL YEAR 1999 COMPARED WITH FISCAL YEAR 1998

  Revenue

     Revenue for fiscal year 1999 decreased 7.6% to $532.7 million from $576.8
million in fiscal year 1998. This decrease was the result of continued soft
market conditions and resulting adverse effects on semiconductor demand. This
trend continued through the second quarter of fiscal 1999. We believe that the
principal causes for the decline were initially high inventory levels of our
products at our distributors, which decreased 17% from fiscal year 1998 to
fiscal year 1999, as well as high levels of inventory at customers. This was
followed by an overall drop in global semiconductor demand of 8.5% in calendar
year 1998. Particularly hard hit were our Discrete Power products where prices
of power metal oxide semiconductor field effect transistors, or MOSFETs,
declined by nearly 15%. Additionally, distributors and major original equipment
manufacturers reduced the amount of pipeline inventory in the channel, taking
advantage of the shorter lead-times and lower prices. During the third fiscal
quarter of 1999, we began to experience an increase in new orders, which
resulted in a 9.1% increase in sales in the third quarter versus the preceding
quarter. The positive trend continued into the fourth quarter with an increase
in sales of 11.3% from the third quarter.

     Geographically, 53.5%, 24.6% and 21.9% of product sales were derived in
North America, Europe and Asia/Pacific, respectively, during fiscal year 1999,
compared to 53.8%, 28.0% and 18.2% in fiscal year 1998.   Gross Margin

     Gross margin on product sales declined 11.9% to $182.9 million in fiscal
year 1999 from $207.5 million in fiscal year 1998. As a percent of sales, gross
margin was 34.3% in fiscal year 1999 and 36.0% in fiscal year 1998. This
decrease was substantially due to price pressure worldwide for our Discrete
Power products and a $13.2 million increase in our depreciation expense
resulting from the additional capital expenditures that went into our 8-inch
wafer fab in Mountaintop, Pennsylvania. Our gross margin decline was partially
offset by a series of cost reduction initiatives which resulted in lower
operating costs and improved pricing and terms with our suppliers of raw
materials.

  R&D

     R&D expenses decreased 10.8% to $67.0 million in fiscal year 1999 from
$75.1 million in fiscal year 1998. During fiscal year 1999, we focused our
resources on targeted applications and reduced programs that did not support our
emphasis. Major investment continued on the PRISM(R) chip set which addresses
the wireless local area network

                                       24
market. R&D for products designed for the power management market was
principally focused on computing and communications which led our growth of new
product revenue during fiscal year 1999.

  SG&A

     SG&A costs decreased 13.8% to $93.3 million in fiscal year 1999 from $108.2
million in fiscal year 1998. The decrease in SG&A was primarily due to increased
efficiencies resulting from a reorganization of the internal sales force and
external sales representative firms and reduction of administrative expenses
including headcount reductions. Operating expenses include allocated charges by
Harris to us for legal, financial and other administrative expenses of
$9.3 million for fiscal year 1999 and $10.0 million for fiscal year 1998. As a
percentage of sales, SG&A costs decreased to 17.5% in fiscal year 1999 from
18.8% in fiscal year 1998.

  Tax Expenses

     The tax benefit of $6.0 million in fiscal year 1999 was primarily driven by
changes in the Malaysian tax system, resulting in fiscal year 1999 income not
being subject to tax.

  Backlog

     We had backlog at July 2, 1999 of $174.0 million compared to backlog of
about $188.5 million at July 3, 1998. The decrease in backlog was primarily due
to shorter industry lead-times.

LIQUIDITY AND CAPITAL RESOURCES

     On February 25, 2000, we issued 22,000,000 shares of Class A Common Stock
at a price of $25.00 per share. We received net proceeds from this offering,
after deducting underwriting discounts and commissions and other fees, of
approximately $513.1 million, of which $435.2 million was subsequently used to
repay debt incurred as a result of our acquisition of the semiconductor business
of Harris.

     In connection with the acquisition of the semiconductor business, we
entered into new credit facilities, which provided for a Revolving Credit
Facility in an aggregate amount up to $70.0 million. We may request, subject to
the agreement of our lenders, that the amount of the Revolving Credit Facilities
be increased to as much as $150 million. The Revolving Credit Facility will
mature in 2005 unless terminated earlier and was undrawn as of June 30, 2000.

     Our principal capital requirements are to fund working capital needs, to
meet required debt payments and to complete planned maintenance and expansion.
We anticipate that our operating cash flow and our cash on hand, together with
available borrowings under the Revolving Credit Facility, will be sufficient to
meet our working capital, capital expenditure and interest requirements on our
debt obligations for the foreseeable future. As of June 30, 2000, our total debt
and shareholders' equity was $116.6 million and $679.0 million, respectively.

     Because our business was operated as a subsidiary of Harris during fiscal
year 1998 to August 13, 1999, we do not believe our prior years' cash flows are
indicative of our business on a stand-alone basis. Net cash generated by
operating activities for the fiscal year ended June 30, 2000 was
$111.1 million. Net cash provided by investing activities for the fiscal year
ended June 30, 2000 was $13.7 million. Net cash used to repay debt for the
twelve months ended June 30, 2000 was $435.2 million. Our cash and cash
equivalents balance at June 30, 2000 was $211.9 million.

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

                                       25
Receivables and Inventories

     Trade accounts receivable less the allowance for collection losses totaled
$111.7 million at June 30, 2000 compared to $100.7 million at July 2, 1999. This
increase was due to higher product shipments from increased demand. Inventories
declined 17.8% from $153.8 million at July 2, 1999 to $126.5 million at
June 30, 2000. The inventory decrease was a result of the sale of our Malaysian
operation and a management initiative to reduce our inventory through portfolio
management and process improvements.

     Distributor reserves have fluctuated from year to year based on the level
of inventory at distributors. The reserve increased 13.8% from $6.5 million at
July 2, 1999 to $7.4 million at June 30, 2000 resulting from increasing
inventory levels at distributors in response to higher demand and overall market
improvement.

  Capital Expenditures

     Capital expenditures for the fiscal year ended June 30, 2000 were
$40.7 million compared to $38.6 million in fiscal year 1999. We do not
anticipate substantial capital expenditures in the foreseeable future.

RECENT ACCOUNTING PRONOUNCEMENTS

     In June 1999, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. (SFAS) 137, "Accounting for Derivative
Instruments and Hedging Activities--Deferral of the Effective Date of SFAS 133."
SFAS 137 amends Statement of Financial Accounting Standards No. 133, "Accounting
for Derivative Instruments and Hedging Activities," to defer its effective date
to all fiscal quarters of all fiscal years beginning after June 15, 2000.
SFAS 133 establishes accounting and reporting standards for derivative
instruments including standalone instruments, as forward currency exchange
contracts and interest rate swaps or embedded derivatives and requires that
these instruments be marked-to-market on an ongoing basis. These market value
adjustments are to be included either in the income statement or shareholders'
equity, depending on the nature of the transaction. We are required to adopt
SFAS 133 in the first quarter of our fiscal year 2001. We believe that SFAS 133
will not have a material adverse effect on our financial position or results of
operations.

     In December 1999, the Securities and Exchange Commission issued SAB
No. 101, "Revenue Recognition in Financial Statements," which provides guidance
on the recognition, presentation, and disclosure of revenue in financial
statements filed with the SEC. SAB No. 101 outlines the basic criteria that must
be met to recognize revenue and provides guidance for disclosure related to
revenue recognition policies. We believe that SAB No. 101 will not have a
material effect on our financial position or results of operations.

     In April 2000, the Financial Accounting Standards Board issued FASB
Interpretation No. 44, "Accounting for Certain Transactions Involving Stock
Compensation, an Interpretation of APB Opinion No. 25." Among other issues, this
interpretation clarifies the definition of employees for purposes of applying
Opinion No. 25, the criteria for determining whether a plan qualifies as a
non-compensatory plan, the accounting consequence of various modifications to
the terms of a previously fixed stock option or award and the accounting for an
exchange of stock compensation awards in a business combination. This
interpretation is effective July 1, 2000, but certain conclusions in the
interpretations cover specific events that occur after either December 15, 1998
or January 12, 2000. To the extent that this interpretation covers events
occurring during the period after December 15, 1998, or January 12, 2000, but
before the effective date of July 1, 2000, the effect of applying this
interpretation is recognized on a prospective basis from July 1, 2000. We are
currently reviewing our stock grants to determine the impact, if any, that may
arise from implementation of this interpretation, although we do not expect the
impact, if any, to be material to our financial statements.

                                       26
MARKET RISK MANAGEMENT

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

     In August 1999, we began to use foreign exchange contracts to hedge
anticipated foreign cash flow commitments of up to six months. Hedges on
anticipated foreign cash flow commitments do not qualify for deferral and,
therefore, gains and losses on changes in the fair market value of the foreign
exchange contracts are recognized in income.

     Prior to August 1999, we used foreign exchange contracts and options to
hedge both balance sheet and off-balance sheet foreign currency commitments.
Specifically, these foreign exchange contracts offset foreign currency
denominated inventory and purchase commitments from suppliers, accounts
receivable from, and future committed sales to, customers and intercompany
loans. Foreign currency financial instruments were used to reduce the risks that
arise from doing business in international markets.

     At June 30, 2000, we had open foreign exchange contracts with a notional
amount of $30.9 million, all of which were to hedge anticipated foreign cash
flow commitments. At July 2, 1999, we had open foreign exchange contracts with a
notional amount of $22.0 million, all of which were to hedge off-balance-sheet
commitments. Additionally, during fiscal year 2000, we purchased and sold
$87.4 million of foreign exchange forward and option contracts, compared to
$120.7 million for the prior year. See Note O "Financial Instruments" in the
Notes to Consolidated Financial Statements for further information with respect
to commitments to buy or sell foreign currencies. Our hedging activities provide
only limited protection against currency exchange risks. Factors that could
impact the effectiveness of our hedging programs include accuracy of sales
estimates, volatility of currency markets and the cost and availability of
hedging instruments. A 10% adverse change in currency exchange rates for our
foreign currency derivatives held at June 30, 2000, would have an impact of
approximately $3.8 million on the fair value of these instruments. This
qualification of exposure to the market risk associated with foreign exchange
financial instruments does not take into account the offsetting impact of
changes in the fair value of our foreign denominated assets, liabilities and
firm commitments.

     As of June 30, 2000, we also had fixed rate debt of approximately
$116.6 million consisting primarily of the 13.25% Senior Subordinated Notes due
2009. For fixed rate debt, changes in interest rates generally affect the fair
market value, but not earnings or cash flows.

                                       27
INDUSTRY OVERVIEW

     Semiconductors, which consist of integrated circuits and discrete
semiconductors, are the critical components used to create an increasing variety
of electronic products and systems. Integrated circuits operate at low power
levels and perform multiple functions to process and convey information in
electronic signal form. Integrated circuit capability is largely defined by
circuit density, which increases as its components are miniaturized. In contrast
to integrated circuits, discrete semiconductors perform a single function and
often have multiple uses in many different end-user applications.

     Worldwide Semiconductor Trade Statistics, or WSTS, forecasts strong growth
of about 17.9% for the semiconductor industry through 2003. We sell our
semiconductors into high-growth segments of the market including the
communications analog & mixed-signal market, which is forecast by the
Semiconductor Industry Association, or SIA, to grow 34.5% in calendar year 2000
from calendar year 1999, segments of the power management market, which is
forecast by SIA to grow at 70.0% in calendar year 2000 from calendar year 1999,
and the wireless local area network integrated circuit market, which is forecast
by Cahners In-Stat Group to grow 133.1% in calendar year 2000 from calendar year
1999.

SEMICONDUCTOR CLASSIFICATIONS

     The following table sets forth the worldwide semiconductor total available
market, or TAM, for each of five product functions of the semiconductor industry
according to WSTS. Our products fit within the Analog and Discrete Power
classifications listed in the table.

                          WORLDWIDE SEMICONDUCTOR TAM
YEAR ENDED DECEMBER 31,
                             -----------------------------------------------------------------------------------
                             1990    1991    1992    1993     1994     1995     1996     1997     1998     1999    CAGR
                             -----   -----   -----   -----   ------   ------   ------   ------   ------   ------   ----
                                                            (DOLLARS IN BILLIONS)
Analog.....................  $ 7.8   $ 8.3   $ 8.7   $10.7   $ 13.6   $ 16.6   $ 17.0   $ 19.8   $ 19.1   $ 22.1   12.3%
Discrete Power.............    4.3     4.4     4.5     5.2      6.3      8.2      7.8      8.1      7.4      8.2    7.4
Microcomponents............    9.2    11.4    13.9    19.1     23.8     33.4     39.8     47.8     47.3     51.7   21.1
Memory.....................   11.8    12.2    14.8    21.3     32.5     53.5     36.0     29.3     23.0     32.3   11.8
Other......................   17.5    18.2    17.9    21.1     25.7     32.7     31.3     32.2     28.8     35.1    8.0
                             -----   -----   -----   -----   ------   ------   ------   ------   ------   ------
Total......................  $50.6   $54.5   $59.8   $77.4   $101.9   $144.4   $131.9   $137.2   $125.6   $149.4   12.8
                             =====   =====   =====   =====   ======   ======   ======   ======   ======   ======
Analog integrated circuits are used to shape or condition electrical
signals, to amplify electrical signal strengths, to convert electrical signals
to and from digital "one or zero" levels, to regulate voltage levels and to
provide interfaces between other products within an electrical system. Power
semiconductors can be either discrete power devices or analog integrated
circuits. Discrete devices perform a single function, such as switching
electricity on and off. Analog integrated circuits perform multiple functions
such as controlling and regulating currents. Microcomponents include
microprocessors and microcontrollers that process data according to instructions
embedded within the semiconductors themselves. These are considered the "brains"
of the electronic system and are at the center of the system architecture.
Memory are devices that store data and instructions. The "other" category
includes all electronic devices whose functions do not include one of the four
previously mentioned product functions.

ANALOG

     Analog signals are not discrete binary numerical values, but rather
continuously variable electrical signals that represent continuous data
variables or wave signals, such as sound waves. The analog market is split into
two major segments: standard linear and mixed-signal. The standard linear market
is composed of building block products such as amplifiers, voltage regulators,
data conversion, interface circuits and comparators. These products are used in
all end systems, from computers and telecommunications, to industrial,
automotive and consumer applications. The mixed-signal market consists of more
complex analog products, which also contain some digital circuitry for timing,
information control and data flow. Mixed-signal products are often developed for
specific applications, such as video encoding, hard disk drive control, data
transmission, motor control and power management.

                                       28
DISCRETE POWER

     Discrete power semiconductors, such as a transistor or diode (a device that
allows current to flow in only one direction), typically contain one active
element. These devices perform a single function such as efficiently switching
electricity on and off. Examples of discrete power semiconductors include power
metal oxide semiconductor field effect transistors, or MOSFETs, and insulated
gate bipolar transistors, or IGBTs. MOSFETs are semiconductors that convert,
switch or otherwise shape or condition electricity. IGBTs typically serve the
switch function in power conversion applications that require higher current and
voltage than power MOSFETs can handle efficiently. IGBTs combine the ease of
voltage-driven power MOSFET technology with the conduction efficiency of bipolar
transistor technology.

INDUSTRY TRENDS

     As the performance of semiconductor devices has increased and size and cost
have decreased, demand for semiconductors has expanded beyond their original
primary applications in computer systems to applications in telecommunications
systems, automotive products, consumer products and industrial automation and
control systems. In addition, system users and designers have driven the demand
for systems with increased functionality, higher levels of performance, greater
reliability and shorter design cycle times, all in smaller packages at lower
costs. These demands have resulted in increased semiconductor dollar content of
electronic products. The demand for electronic systems has also expanded
geographically with the emergence of new markets, particularly in the
Asia/Pacific region. We believe that future demand for semiconductors will be
driven by the growing trend towards use of the Internet and portable
electronics, including consumer electronics, computers and cellular telephones,
and the resulting need for semiconductors that can manage connectivity and power
for longer periods of use and that require less space.

     Today, nearly every form of communication is being revolutionized by the
growing use of digital communications to move all types of data, voice and video
around the world. Different technologies, protocols and media have evolved which
are uniquely suited to particular applications in this rapidly evolving
environment. Advances in broadband communications are accelerating the reach of
cost effective, fast data highways to both homes and offices. Communications
semiconductors will be used extensively in broadband communication
networks/facilities, portable communications devices, and in servers and
infrastructure supporting the Internet. Each of these technologies requires
specific transport and access hardware devices, including handsets and base
stations for wireless telephony, switches and routers for telecommunications and
data networking, set-top boxes for cable and satellite communications, and
digital cable and digital subscriber line, or xDSL, modems for Internet access.
The advent of the Internet as a communications medium has dramatically increased
business and consumer demand for high-speed access to multimedia and
entertainment content.

     As business and consumers increasingly rely on the Internet and intranets,
many existing networks are under significant stress. A bandwidth constraint has
emerged, particularly at the "last mile" of network infrastructures, challenging
users and industry participants in a number of communications segments. In
response to growing network demands, telecommunications, data communications and
cable network operators are making significant investments to alleviate
congestion and support emerging high bandwidth, integrated data, voice and video
services. Specific technologies addressing bandwidth capacity constraints
include cable modems and xDSL, including asymmetric digital subscriber line, or
ADSL, for residential applications, high speed digital subscriber line, or HDSL,
symmetric digital subscriber line, or SDSL, and T1/E1 for high speed network
access in commercial applications, and asynchronous transfer mode, or ATM, and
synchronous optical network, or SONET, for network backbone transmission. The
importance of the Internet as a communications medium and the increased ability
to deliver access to content available through the Internet will increase the
demand for home and small business networking solutions, provided these
networking solutions are cost-effective.

      Wireless telephony technologies are moving towards the third generation,
or 3G, of standards such as Wideband CDMA which will support more users than
current standards, provide faster data transmission and mobile Internet access,
and increase the ability to execute new wireless applications. Second
generation, or 2G, is the current digital standard supporting IS-95 CDMA and GSM
and is used widely throughout the

                                       29
world. Given the significant investment in infrastructure required to move from
2G to 3G, some carriers have begun to provide an intermediate technology, known
as 2.5G, such as Edge and IS-95+, which enhances speed and capacity, but does
not provide all the capabilities of 3G. This infrastructure buildout to 2.5G and
ultimately to 3G will require the use of advanced integrated circuits that are
compatible with the new digital standards.

     In addition, these developments in communications infrastructure depend on
enhanced performance capabilities of advanced electronic systems. As electronic
systems continue to increase in performance and sophistication, they demand more
complex power management solutions. The latest generation of personal computers
rely on advances in power conversion to operate at ever-lower voltages in order
to reduce power consumption, increase efficiency and, in notebook personal
computers, prolong battery life. Further, advanced electronic systems outside of
communications applications also have greater power management requirements. All
of these systems, including efficient power supplies for communications and
computing networks and engine and chassis management in automobiles, require
advanced power management semiconductors for more complex digital signal
processors and microcontrollers and for efficient power inverters.

     The growth in Internet infrastructure, portable battery-powered computing
and communication devices and continually faster microprocessors are driving the
development of, and demand for, successively more efficient power management
integrated circuits and discrete power semiconductors.

                                       30
BUSINESS

GENERAL

     We are a systems oriented designer and manufacturer of analog and digital
integrated circuits and discrete semiconductors for the communications and power
management end-user markets. The majority of our revenue is derived from sales
of our analog and mixed-signal products. We use our proprietary technologies and
design capabilities to provide systems solutions for rapidly growing wireless
applications. We own over 1,250 patents and have substantial expertise in the
design and manufacturing of components that perform many of the essential
functions relating to the supply, distribution and regulation of electric power
in electronic products. Our core competencies include the design of analog,
mixed-signal, digital signal processing, radio frequency and discrete power
semiconductor products. Our products include components performing complex
communications functions, such as our PRISM(R) chip sets for wireless data
communications, digital radios and high speed converters in cellular base
stations and power management integrated circuits and discrete semiconductors
used in Internet servers and computers.

OUR BUSINESS STRATEGY

     We provide systems level solutions for the growing integrated
communications semiconductor market. Integrated communications semiconductors
enable the convergence of voice, data and video communications. Within
integrated communications, we are focused on several key markets including high
data rate wireless connectivity, power management and communications integrated
circuits for wireless and wired communications infrastructure. We use our
expertise in digital and analog semiconductors and radio and software design in
order to deliver chip sets, components, software and licensable application
designs for communications equipment customers. For fiscal year 2000, we
allocated about 92% of our research and development investment to the
development of products for the integrated communications market.

     Our business strategy emphasizes the following key elements:

     o Focus on High Growth, Integrated Communications Markets.  In light of the
       rapid expansion of communication applications and the increased
       requirement for power management in electronic systems, we focus our
       investments in these areas. We believe these markets have attractive
       growth characteristics and enable us to draw on our core competencies.
       Accordingly, we are pursuing opportunities in communications, wireless
       and power management.

     o Maintain Technology Leadership.  We focus our research and development
       investments on integrated communications. We have 220 engineers working
       on innovative wireless and power management architectures. We also have
       significant experience in analog and mixed-signal process technology and
       high volume manufacturing. In conjunction with these efforts, we will
       continue to expand our strong intellectual property position by seeking
       to increase our existing portfolio of over 1,250 patents.

     o Provide Systems Level Solutions to Our Customers.  We design and develop
       our semiconductors with a systems level approach that we believe enhances
       the value of our products as they are designed into and incorporated in
       our customers' electronic systems. This approach yields early integration
       of our products into our customers' products, provides opportunities for
       current design wins, and ultimately increases revenue as our solutions
       are incorporated within a targeted end application.

     o Focus on Partnering with Industry Leaders.  We partner with industry
       leaders in each of our target end-user markets to take our strong
       engineering and design capabilities to commercial levels. Our customer
       base of industry leaders illustrates the acceptance of our products to
       date, and we continue to partner with these customers and others to
       develop and market our next generation products. Our applications and
       design engineers support our customers' end product development.

     o Maintain High Quality Customer Service.  Quality customer service is
       critical to our customer retention and sales growth. Through our customer
       relations initiatives, we believe we distinguish ourselves from our
       competitors. Additionally, our sales force and authorized representatives
       and distributors provide customer information programs and support our
       comprehensive customer service efforts.

                                       31
PRODUCTS AND TECHNOLOGY

     Our products are organized into three principal product groups: Analog &
Mixed-Signal, Discrete Power and Wireless.
ANALOG &                   DISCRETE
                                             MIXED-SIGNAL                  POWER                  WIRELESS
                                      --------------------------  ------------------------  ---------------------
FISCAL YEAR 2000 REVENUES...........  $396.8 million              $205.9 million            $51.5 million

PERCENTAGE OF REVENUES..............  60.7%                       31.4%                     7.9%

KEY CUSTOMERS.......................  Cisco                       Asustek                   Cisco
                                      Compaq                      Bosch                     Nokia
                                      Dell                        Compaq                    Siemens
                                      Intel                       Emerson                   Sony
                                      Siemens                                               3Com
ANALOG & MIXED-SIGNAL

     Our Analog & Mixed-Signal portfolio represented 60.7% of our fiscal year
2000 revenue. We deliver leading-edge analog, mixed-signal and digital signal
processing semiconductors and groups of semiconductors that are designed to work
together, also known as chip set solutions, for today's fastest-growing
communications markets. Our design focus targets such opportunities as wired
networks, subscriber line interface circuits, or SLICs, which interface analog
and digital signals for telecom systems, and high-speed digital radios for
cellular basestations. The two analog product lines include the following:

     Signal Processing Products.  We have a portfolio of linear, mixed-signal
and digital signal processing integrated circuits optimized for high-speed
communications applications. Communications analog and mixed-signal integrated
circuits are primarily targeted at wired and wireless voice and data
communications infrastructure applications. We have developed a complete
portfolio of digital radio signal processing products and a line of 8-, 12- and
14-bit high speed data acquisition converter integrated circuits for cellular
basestations, wireless data links, wireless local loop and broadband wireless
access, which we refer to as the wireless infrastructure market. These products,
designated CommLink(TM), enable our customers to increase the amount of data
that can be transmitted, enabling the addition of high speed data transmission
to cellular communications networks. These integrated circuits enable faster
wireless data links between remote basestations and also enable more efficient
cable "headends"--the ground station for the satellite links and broadband
wireless access--which is sometimes called Wireless Cable or LMDS. Our products
support cellular standards including 2G Digital such as IS-95 CDMA and GSM, 2.5G
such as Edge and IS-95+, and 3G such as Wideband CDMA. We utilize both systems
level engineering and integrated circuit expertise to offer superior products
for wireless communications systems. This combination of expertise enabled us to
introduce the industry's first digital signal processing-based single chip, the
HSP50016, which increased the efficiency of signal chain implementation through
component reductions. We continue that leadership with the HSP50216 Quad
programmable down converter for use in 2.5G cellular basestation designs.

     New generations of high performance digital signal processing
communications integrated circuits require ever increasing performance from the
analog-to-digital and digital-to-analog converters that convert between digital
signals and analog radio frequency signals for wireless applications. We
currently market a family of 6- to 14-bit, CMOS analog-to-digital and
digital-to-analog converters in multiple speed ranges and functional
combinations in order to complement our digital radio wireless infrastructure
solutions.

     With more than 15 years of experience in their design and development, we
continue to expand our portfolio of SLICs. SLICs, which are used in many
telephone applications, serve two primary functions. First, they interface
analog voice signals with digital processors. Second, they serve the simple, yet
essential, function of ringing a telephone to signal an incoming call. Recently,
we introduced an advanced ringing SLIC, which combined both functions into a
single SLIC. Thus, the ringing SLIC acts as both an interface into the telephone
and also rings the telephone. Our newest ringing SLIC product, a voice over
internet protocol, or VoIP, product, enables the use of analog phones in the
emerging Internet telephony market. Our SLIC portfolio of advanced telecom
linecard solutions are ideal for today's universal telecom exchange

                                       32
systems, including Plain Old Telephone Service, or POTS, Private Branch
Exchanges, Central Office, Loop Carrier, Fiber in the Loop and Wireless Local
Loop.

     Included in our legacy base product portfolio are operational amplifiers,
which are referred to as op amps, interface integrated circuits, industrial and
video integrated circuits and digital products which serve both defense and
commercial systems, with microprocessor, memory and data communications
products. These products typically have long life cycles and are designed into
our customers' products. These include the industry standard BiCMOS high speed
op amp and the low power instrumentation converter. This portfolio is sold to a
broad range of customers in industrial, medical, computer, avionics and test and
measurement instrumentation markets, primarily through distribution partners.
These products typically have long life cycles and are designed into our
customers' products thereby supporting long-term sales. Our end-user markets
include wireless communications, video and image processing, high-speed
satellite communications, test/measurement equipment and medical
instrumentation.

     We supply our communications products to Cisco, Dell, IBM, Lucent, Siemens
and other customers.

     Power Management Integrated Circuits.  We develop power system
architectures and provide a portfolio of computer products, file server/storage
system products, networking and VoIP products. Our power management products for
computing applications operate in a voltage range of 1 to 30 volts and are
designed into desktop personal computers, file servers and workstations. We have
also developed new power management circuits for 24x7 server networks supporting
e-commerce on the Internet.

     Our highly successful HIP6000 family of pulse width modulator controller
integrated circuits are used in about 30% of all personal computers that use
Pentium, Pentium II and Pentium III class processors. We are currently working
with motherboard manufacturers to have our pulse width modular controller
integrated circuits designed into motherboards utilizing the recently introduced
Pentium 4 processor. We expect to begin shipping products for Pentium 4
motherboards as Pentium 4 processors begin to ship in greater volumes in the
near term. Based on our current design wins, we believe that we also will have a
substantial share of the volume of pulse width modulator controller integrated
circuits used in motherboards utilizing Athlon processors.

     We have introduced an advanced architecture which delivers multiphase power
to higher speed microprocessors. This is a requirement for Intel and AMD
microprocessors above 800 MHz. This new platform of products consists of three
controllers (HIP6301, HIP6302 and HIP6303) and three gate drivers (HIP6601,
HIP6602 and HIP6603). We also offer a complete advanced configuration power
interface solution for instant on and sleep mode capability used to save energy
in personal computers.

     We provide complete power solutions for the file server and redundant array
of independent disks, or RAID, market. Internet growth, especially e-commerce,
is driving the need for high reliability/availability in these applications. Our
family of hot plug products allows repair and maintenance of a file server and
RAID without a complete shutdown of the file server.

     We are currently expanding our space-qualified portfolio by offering our
Starpower(TM) family of radiation hardened power management products for
commercial satellite applications. We are developing what we believe will be an
industry-leading radiation hardened DC/DC Converter power module line to provide
highly reliable power management in communications satellites. Our radiation
hardened integrated circuit product portfolio includes logic, memories, signal
processing components, microprocessors and custom devices, providing system
designers with a full complement of products for radiation hardened systems used
in commercial space and defense applications.

     Our power management integrated circuits are also used in industrial
control and automotive engine management systems.

     We supply our power management products to Asustek, Compaq, Dell, IBM,
Intel and other customers.

                                       33
DISCRETE POWER

     Our Discrete Power portfolio represented 31.4% of our revenue for fiscal
year 2000. Discrete Power products, coupled with our power management integrated
circuits, provide unique power management solutions for the integrated
communications market. Our MOSFETs have been designed in conjunction with our
multiphase power integrated circuits for faster, next generation computers. We
also manufacture efficient power MOSFETs used in servers supporting the
Internet. We are investing in new, efficient trench power devices for cellular
phones and portable information appliances.

     In 1980, we invented IGBTs, or insulated gate bipolar transistors, and hold
some of the fundamental patents that cover their production. We introduced our
600V SMPS, or switch mode power supply Series IGBT family of high-speed, high
efficiency IGBTs specifically tailored for operation in today's switched mode
power supplies. Our portfolio also includes radiation hardened N- and P-channel
metal oxide semiconductor field effect transistors, or MOSFETs, for
high-reliability applications such as communications satellites.

     In addition, our IGBTs, MOSFETs and rectifiers are used in automotive and
industrial applications. These include motor management, automotive ignition,
welding, instrumentation and other industrial applications. Like our base analog
and mixed-signal products, our base power MOSFETs are designed into our
customers' products with life cycles spanning several years.

     We supply our Discrete Power products to Asustek, Bosch, Compaq, Emerson
and Siemens and other customers who use our products for personal computer
motherboard power, diesel fuel injection, body and chassis controls and
industrial power supplies.

     WIRELESS

     Our Wireless portfolio represented 7.9% of our revenue for fiscal year
2000. We are the leading developer of semiconductor solutions for the emerging
wireless local area networking market. Our PRISM(R) family of chip sets
addresses the growing demand for wireless networking for use in both the home
and business providing cost effective, wireless access to high data rate
broadband communications networks. We believe we are the only supplier of an
integrated wireless networking product solution, including reference designs,
software and all integrated circuits necessary for wireless data communications
at data rates of 11 megabits-per-second.

     The PRISM II chip set is composed of five highly integrated semiconductors.
They are the 2.4GHz power amplifier, RF/IF up and down converter, IF/BV
quadrature modulator/demodulator, baseband processor and the medium access
controller. These integrated circuits represent design and manufacturing
competence in radio frequency, or RF, mixed-signal and digital technologies. The
2.4GHz power amplifier, RF/IF up and down converter, and the quadrature
modular/demodulator are designed and manufactured using a high performance RF
silicon germanium process technology. The baseband processor and medium access
controller are designed and manufactured using submicron complementary metal
oxide semiconductor, or CMOS, process technologies.

     Because we design all of the components of our wireless chip set, including
reference designs and software, we believe we provide our customers with the
best available performance and value. Providing our customers with a turnkey
wireless data radio solution enables them to have the fastest time to market for
their systems which we believe is a critical competitive advantage in this
emerging market. More than 40 companies, including Cisco, Compaq, Nokia, Samsung
and Sony, have adopted use of the PRISM(R) chip set in their products. Our PRISM
II chip set is our second-generation chip set capable of delivering high-speed
wireless networking at data rates of 11 megabits-per-second. The PRISM II chip
set incorporates advanced integrated circuit design with silicon germanium
process technology which makes the PRISM II chip set five times faster while
reducing power consumption by 50% compared to the original PRISM(R) chip set.
Since the introduction of the PRISM II chip set, we have been developing
relationships with original equipment manufacturers, including Cisco, Compaq,
Nokia, Nortel, Siemens, Sony, Symbol and 3Com, for use of the PRISM II chip set
in a variety of wireless local area network applications for home and business.

     As of May 29, 2000, we acquired privately held No Wires Needed B.V., or
NWN, for 3.35 million shares of our Class A Common Stock. Based in Bilthoven,
The Netherlands, NWN provides high performance wireless-to-broadband access
point reference designs. NWN utilizes the PRISM(R) chip set together with its
own high data rate digital controller integrated circuits allowing end users to
wirelessly connect multiple computers and hand-held or Internet appliances to a
wired broadband network. NWN also provides wireless encryption software which
enhances the security of a wireless local area network.

                                       34
Additionally, NWN has designed a high data rate digital controller integrated
circuit, which is a component we believe will enhance the performance of future
generations of our PRISM(R) chip set. The NWN digital integrated circuit, which
we refer to as a medium access controller, or MAC, is compliant with the
IEEE802.11b standard and can support data rates of up to 54 megabits-per second,
which is vital for multi-channel voice and digital video in homes and offices.
The acquisition of NWN added 52 new employees.

CUSTOMERS AND APPLICATIONS

     We seek to capitalize on our core competencies by focusing on the
integrated communications market. Within the integrated communications market,
our products include communication integrated circuits, power management
semiconductors and PRISM(R) wireless local area network chip sets.
END MARKETS                       APPLICATIONS                    KEY CUSTOMERS
                     ------------------------   --------------------------------------    -------------------
Communications       Wireless local area        Wireless local area networks providing    Cisco, Compaq,
                     networks,                  network wireless access to broadband      Dell, IBM, Lucent,
                     communications,            (cable, ethernet, xDSL, ISDN)             Nokia, Nortel,
                     telecommunications         networks, video, wired and wireless       Samsung, Siemens,
                                                telephony, home gateways, networking      Sony, Symbol, 3Com

Power Management     Networking and computing   File servers, PC motherboards,            Asustek, Compaq,
                                                printers, workstations                    Dell, IBM, Intel
Outside of our targeted end markets, our remaining category is industrial
products. Applications in this category include automotive applications such as
fuel injection and ignition circuits, industrial applications including power
supplies and defense applications such as smart munitions and tactical and
strategic missiles. We sell to, among others, DaimlerChrysler, Siemens, Boeing,
Lockheed Martin and Emerson.

SALES, MARKETING AND DISTRIBUTION

     In fiscal years 2000 and 1999, we derived about 60% and 66%, respectively,
of our sales from original equipment manufacturer, or OEM, customers through our
global sales organizations and 40% and 34%, respectively, of our sales through
distributors. We operate sales organizations in the Americas, Europe and the
Asia/Pacific region. Our sales organizations are supported by logistics
organizations. Product orders flow to our manufacturing facilities or to one of
our foundries where the product is made. Products are then shipped to the
customer either directly or indirectly via our warehouses in the United States,
Europe and Asia.

     We have dedicated direct sales organizations operating in the Americas,
Europe and Asia/Pacific regions that serve our major OEM customers. We have
strategically located our sales offices near these major OEM customers. We also
have a large network of distributors and manufacturers' representatives to
distribute our products around the world. To serve our customer base, we
maintain a small, highly focused, direct sales force selling products for each
of our targeted product areas, combined with an extensive network of
distributors and manufacturers' representatives. Our sales force is segmented by
end-user markets, thereby ensuring each salesperson has an end-user market
expertise and focus. We also maintain a dedicated marketing organization, which
supports each product area on a regional basis.

     Typically, distributors handle a wide variety of products, including
products that compete with our products, and fill orders for many customers.
Some of our sales to distributors are made under agreements allowing for market
price fluctuations and/or the right of return on some unsold merchandise.
Virtually all distribution agreements contain an industry standard stock
rotation provision allowing for minimum levels of inventory returns. In our
experience, these inventory returns can usually be resold. Manufacturers'
representatives generally do not offer products that compete directly with our
products, but may carry complementary items manufactured by others.
Manufacturers' representatives do not maintain a product inventory; instead,
their customers place large quantity orders directly with us and are referred to
distributors for smaller orders.

                                       35
RESEARCH AND DEVELOPMENT

     We believe that the continued introduction of new products in our target
markets is essential to our growth. We believe that we must continue to
innovate, enhance and expand our products and services to maintain our
leadership position, and we intend to achieve this through in-house research and
development efforts and selective acquisitions. As of June 30, 2000, we had 571
employees engaged in research and development efforts. Our research and
development efforts are focused on new product development and improvements in
process technology in our growth areas of communications and power management.
For fiscal year 2000, we allocated about 92% of our research and development
investment towards development of products for the integrated communications
market.

     Our expenditures for research and development in fiscal years 1998, 1999
and 2000 were $75.1 million, $67.0 million and $78.0 million, respectively. Each
of our product areas maintains independent research and development
organizations. We work closely with our major customers in many research and
development situations to increase the likelihood that our products will be
designed directly into the customers' products and achieve rapid and lasting
market acceptance.

MANUFACTURING

     We fabricate wafers at three locations in the United States--Mountaintop,
Pennsylvania, Palm Bay, Florida, and Findlay, Ohio. We also use a number of
outside wafer fabrication foundries for the manufacture of device types where we
do not have the necessary technologies resident in house. We also utilize
advanced manufacturing processes of outside foundries for certain components of
our PRISM(R) products.

     We recently sold our principal assembly and test facility, located in Kuala
Lumpur, Malaysia, to ChipPAC and entered into a multi-year supply agreement with
ChipPAC under which the Malaysian facility became our preferred provider of
semiconductor assembly and test services. We also have limited assembly and test
capability in Palm Bay, Florida. We use a number of assembly and test
subcontractors for device types and packages that cannot be assembled and tested
at ChipPAC's facility in Kuala Lumpur.

     Our wafer fabs are among the most productive and efficient in the industry.
We believe we can continue to maintain competitive cost, further increase
productivity and enhance our process efficiency by investing in people and
assets, where necessary.

     We utilize an extensive set of manufacturing processes to fabricate our
products, including technologies such as: ULTRAFET(R), IGBT, BiCMOS, Power
BiCMOS, High Frequency Bipolar, CMOS and Rad Hard Processes. The table below
sets forth some information regarding our manufacturing facilities, products,
wafer diameter and annual wafer capacity:

                             FABRICATION FACILITIES
ANNUAL CAPACITY
      LOCATION                         PRODUCTS/FUNCTIONS                    WAFER DIAMETER     (6" EQUIVALENT WAFERS)
---------------------  --------------------------------------------------   ----------------    ---------------------------
Mountaintop,           MOSFETs, IGBTs, rectifiers                                 6", 8"                  420,000
 Pennsylvania

Findlay, Ohio          Standard linear/interface integrated circuits,                 5"                  120,000
                       power integrated circuits

Palm Bay, Florida      Power integrated circuits, telecom SLICs, rad hard         4", 6"                  175,000
                       integrated circuits
36
Our manufacturing processes use many raw materials, including silicon
wafers and various chemicals and gases. We obtain our raw materials and supplies
from a large number of sources on a just-in-time basis. Although supplies for
the raw materials used by us are currently adequate, shortages could occur in
various essential materials due to interruption of supply or increased demand in
the industry.

BACKLOG

     Our sales are made pursuant to purchase orders that are generally booked
from one to six months in advance of delivery. Backlog is influenced by several
factors including market demand, pricing and customer order patterns in reaction
to product lead times. Although quantities actually purchased by customers may
vary between booking and delivery to the extent customer needs or industry
conditions change, our backlog has historically been a reliable indicator of our
future revenues. Our backlog was about $188.5 million at July 3, 1998, $174.0
million at July 2, 1999 and $259.5 million at June 30, 2000. We expect to ship
the backlog at June 30, 2000 within twelve months of that date.

SEASONALITY

     A lower percentage of our products is sold to the computer end-user or into
the computer market than is sold by other semiconductor manufacturers. Sales in
the computer market fluctuate more than in other semiconductor markets. As a
result, we experience less seasonal fluctuation than the semiconductor industry
as a whole. Historically, our first quarter has been the weakest due to model
year changeovers in the automotive industry and summer holiday seasons,
primarily in Europe. Our increasing focus on integrated communications products
has resulted in a higher percentage of our sales coming from the communications
markets in the second half of our fiscal year. Sales made into the
communications market generally experience less seasonality than sales of our
historical mix of products.

COMPETITION

     We compete in different markets to various degrees on the basis of price,
technical performance, product features, product system compatibility,
customized design, availability, quality and sales and technical support. Our
ability to compete successfully depends on elements both within and outside of
our control, including successful and timely development of new products and
manufacturing processes, product performance and quality, manufacturing yields,
product availability, intellectual property protection obtained by us and our
competitors, customer service, pricing, industry trends and general economic
trends.

     The following chart sets forth our principal competitors by business unit:
BUSINESS UNIT               PRINCIPAL COMPETITORS
--------------------------  ----------------------------------------------------------------------------
Analog & Mixed-Signal       Analog Devices, Linear Technology, Semtech, Texas Instruments

Discrete Power              International Rectifier, STMicroelectronics, Vishay

Wireless                    Lucent, Philips, Texas Instruments
37
TRADEMARKS AND PATENTS

     We own rights to a number of trademarks and patents that are important to
our business. Among others, we consider Intersil, PRISM(R), ULTRAFET(R) and
CommLink to be trademarks that are material to our operations.

     Our corporate policy is to protect proprietary products by obtaining
patents for these products when practicable. We currently possess about 1,250
patents.

EMPLOYEES

     Our worldwide workforce consisted of 2,930 employees (full- and part-time)
as of June 30, 2000, of whom 730 were represented by collective bargaining
arrangements. Of our employees, 1,715 were engaged in manufacturing, 571 were
engaged in engineering, 394 were engaged in marketing and sales, 145 were
engaged in administration and 105 were engaged in operating our management
information systems. Of our employees, 1,786 were employed in the Analog &
Mixed-Signal area; 882 were employed in the Discrete Power area; and 262 were
employed in the Wireless area. We believe that our relations with our employees
are good.

PROPERTIES

     In the United States, we lease our corporate headquarters in Irvine,
California. Additional manufacturing, warehouse and office facilities are housed
in about 846,000 square feet, 445,000 square feet and 270,000 square feet of
space in properties owned by us in Palm Bay, Florida, Mountaintop, Pennsylvania
and Findlay, Ohio, respectively.

     Our primary engineering activity takes place in Palm Bay, Florida and at
our other manufacturing facilities. In addition, we have engineering activities
taking place in our corporate headquarters and in leased facilities in Durham,
North Carolina (Research Triangle Park), Branchburg, New Jersey,
San Antonio, Texas, Seattle, Washington and Bilthoven, The Netherlands.

     We maintain regional sales offices in Orange County, California, Palm Bay,
Florida; Burlington, Massachusetts; Dallas, Texas; San Jose, California; Munich,
Germany; Milan, Italy; Camberly, United Kingdom; and Taipei, Taiwan and other
sales offices around the world. All our offices are leased generally under short
term leases, except our offices in Palm Bay, Florida.

     We believe that our facilities around the world, whether owned or leased,
are well-maintained. Our manufacturing facilities contain sufficient production
capacity to meet our needs for the foreseeable future.

ENVIRONMENTAL MATTERS

     Our operations are subject to environmental laws in the countries in which
we operate that regulate, among other things, air, ground and water emissions at
our manufacturing facilities; the management and disposal of hazardous
substances; and the investigation and remediation of environmental
contamination. As with other companies engaged in like businesses, the nature of
our operations exposes us to the risk of environmental liabilities or claims. We
believe, however, that our operations are in substantial compliance with
applicable environmental requirements. Our costs to comply with environmental
regulations were about $6.3 million, $7.4 million and $4.8 million in each of
fiscal years 1998, 1999 and 2000, respectively.

     Our facilities in Findlay, Ohio have ongoing remediation projects to
respond to releases of hazardous substances that occurred prior to the
acquisition of Harris' semiconductor business. Our facilities in Mountaintop,
Pennsylvania have groundwater and subsurface soil contamination from past
operations, some of which occurred prior to Harris' acquisition of those
facilities, for which remediation has been conducted, and additional remediation
may be required. In addition, Harris' facilities in Palm Bay, Florida, a portion
of which includes our business, are listed on the National Priorities List for
clean-up under the Comprehensive Environmental Response, Compensation, and
Liability Act ("Superfund"). Remediation activities are ongoing in Palm Bay in
accordance with consent decrees entered into by Harris with the United States
Environmental Protection Agency. Harris has agreed to indemnify us for the cost
of these projects at all of our facilities,

                                       38
including at Findlay, Ohio, Mountaintop, Pennsylvania and Palm Bay, Florida and
our former facility at Kuala Lumpur, Malaysia to the extent these costs exceed
financial reserve amounts at the time of our acquisition of the semiconductor
business of Harris. Based on the historical costs of these projects and because
the remediation projects are in advanced stages, we do not believe that the
future cleanup costs will be material, even without the indemnity.

     In connection with the closure of a waste storage pad at our former Kuala
Lumpur facility in Malaysia, a June 2000 environmental investigation identified
evidence of potential releases to the groundwater of hazardous substances that
were previously stored on the pad. Based on the composition of the groundwater
impacts, it appears that the hazardous substances were those used by Harris or
its predecessors, and not us. Harris has agreed to indemnify us for addressing
environmental conditions created prior to our ownership, and accordingly we put
Harris on notice of the potential environmental claim. We sold the business
which operates out of the Kuala Lumpur, Malaysia facility to ChipPAC in June
2000 (See Business--Manufacturing) and we gave ChipPAC a similar indemnity.
ChipPAC provided us with a claim for indemnification by letter dated August 1,
2000. We do not have adequate information to determine the extent of the impacts
to groundwater, but we do not believe future cleanup costs, if needed, will be
material even without the Harris indemnity.

     Future laws or regulations and changes in existing environmental laws or
regulations may subject our operations to different, additional or more
stringent standards. While historically the cost of compliance with
environmental laws has not had a material adverse effect on our business,
financial condition or results of operations, we cannot predict with certainty
our future costs of compliance because of changing standards and requirements.
We cannot assure you that material costs will not be incurred in connection with
the future compliance with environmental laws or with future cleanup costs
related to currently unknown contamination.

LEGAL PROCEEDINGS

     From time to time we are involved in legal proceedings arising in the
ordinary course of business. We are presently co-defendants with Harris in a
suit brought by Ericsson alleging patent infringement, which is pending in the
Sherman Division of the United States District Court for the Eastern District of
Texas. Ericsson alleges infringement of four of its patents relating to
telephone subscriber line interface circuits. The suit was initially directed
against Harris; we were joined as defendants in this action on September 1,
1999. Ericsson seeks an injunction (requiring the co-defendants to stop making,
using or selling telephone subscriber line interface circuits which utilize
Ericsson's patents) plus damages, including lost profits and/or a reasonable
royalty, costs of suit, treble damages, prejudgment interest and attorneys'
fees. However, to the extent our liability for damages from this litigation, if
any, arises out of the conduct of the semiconductor business by Harris prior to
closing, this liability will be covered by Harris' agreement in connection with
the acquisition of the semiconductor business to provide us with certain
indemnities.

     In addition, Harris is a defendant in an action brought by Geisting &
Associates seeking to recover commissions and receivables allegedly lost as a
result of the termination of Geisting as a sales representative for our PRISM
chip set. The action is pending in the United States District Court for the
Middle District of Florida-Orlando. While Intersil has not been named as a
defendant, we could be liable for any judgment entered against Harris on the
pending claims, and we are conducting the defense of the action. Geisting seeks
damages, including lost profits, and attorneys' fees.

     We believe that there is no litigation pending that could have,
individually or in the aggregate, a material adverse effect on our business,
financial condition or results of operations.

                                       39
MANAGEMENT

DIRECTORS AND EXECUTIVE OFFICERS

     The following table sets forth certain information regarding the persons
who are members of our Board of Directors, key employees or executive officers.
With the exception of Messrs. Conn, Peeters and Pokelwaldt, who joined as
directors on April 19, 2000, each of our directors has served as director since
our formation on June 2, 1999. Our directors will continue to hold office until
the next annual meeting of shareholders or until a successor has been elected
and qualified. With one exception, each of our officers has served as an officer
since our formation, and each of our officers will hold office until the first
meeting of directors after its next annual meeting of shareholders or until a
successor has been elected and qualified.
NAME                                         AGE                                TITLE
------------------------------------------   ---   ---------------------------------------------------------------
Gregory L. Williams.......................   47    Chief Executive Officer, Director

Daniel J. Heneghan........................   44    Vice President, Chief Financial Officer and Assistant Secretary

Larry W. Sims.............................   43    Vice President, Marketing and Sales

Lawrence J. Ciaccia.......................   41    Vice President, General Manager, PRISM(R) Wireless

W. Russell Morcom.........................   54    Vice President, General Manager, Discrete Power

Stephen M. Moran..........................   43    Vice President, General Counsel and Secretary

Julie B. Forbes...........................   43    Vice President, Human Resources

Robert W. Conn............................   58    Director

Gary E. Gist..............................   53    Director

Jan Peeters...............................   49    Director

Robert N. Pokelwaldt......................   64    Director

James A. Urry.............................   45    Director
Gregory L. Williams, Chief Executive Officer, Director.  Mr. Williams is
our Chief Executive Officer and one of our directors. From October 1998 to
August 1999, Mr. Williams was President of the semiconductor business at Harris.
From January 1998 to October 1998, Mr. Williams was Vice President and General
Manager of the Power Products Division at Harris. From 1984 to 1998,
Mr. Williams also served as Vice President and Assistant General Manager of the
Semiconductor Components Group, Vice President and General Manager of the Power
Products Division, and Vice President and Director of Automotive World Marketing
at Motorola Semiconductor, and from 1977 to 1984, Mr. Williams served with
General Electric Company.

     Daniel J. Heneghan, Vice President, Chief Financial Officer and Assistant
Secretary.  Mr. Heneghan is our Vice President, Chief Financial Officer and
Assistant Secretary. From 1996 to August 1999, Mr. Heneghan was Vice President
and Controller of the semiconductor business at Harris. From 1994 to 1996,
Mr. Heneghan was Vice President of Digital Products of the semiconductor
business at Harris. Mr. Heneghan also served at various times as Division
Controller of the semiconductor business at Harris, Director of Planning at
Harris, Director of Finance at Harris and Senior Financial Analyst with Royal
Crown Cola.

     Larry W. Sims, Vice President, Marketing and Sales.  Mr. Sims is our Vice
President, Marketing and Sales. From August 1998 to August 1999, Mr. Sims was
Vice President, Sales of the semiconductor business at Harris. From 1979 to
1998, Mr. Sims served in various sales management positions at Motorola
Semiconductor.

     Lawrence J. Ciaccia, Vice President, General Manager, PRISM(R) Wireless.
Mr. Ciaccia is our Vice President and General Manager, PRISM(R) Wireless
Products Business Unit. From February 1998 to December 1999, Mr. Ciaccia was
Vice President and Director of Engineering for the PRISM(R) Wireless Products
business at Harris. From 1997 to 1998 Mr. Ciaccia was Director of Strategic and
Product Marketing for the Multimedia Products business at Harris. Mr. Ciaccia
also served at various times from 1993 to 1997 as Director of Engineering for
several different semiconductor businesses at Harris.

     W. Russell Morcom, Vice President, General Manager, Discrete
Power.  Mr. Morcom is our Vice President and General Manager, Discrete Power.
From 1997 to August 1999, Mr. Morcom was Vice

                                       40
President and General Manager, Operations and Quality of the semiconductor
business at Harris. From 1991 to 1997, Mr. Morcom was Vice President and General
Manager, Semiconductor Products Division of the semiconductor business of
Harris.

     Julie B. Forbes, Vice President, Human Resources.  Ms. Forbes joined our
company as Vice President, Human Resources in August 1999. Prior to joining us,
Ms. Forbes was the Vice President and Director of Human Resources for the
Satellite Communications Group of Motorola from 1998 to 1999. From 1992 until
1998, Ms. Forbes served in various other Human Resources positions in the
Semiconductor Products Sector of Motorola.

     Stephen M. Moran, Vice President, General Counsel and Secretary.  Mr. Moran
joined our company as Vice President, General Counsel, and Secretary in January
of 2000. Prior to joining us, Mr. Moran served with Toshiba America, Inc. from
September 1996 until January 2000 and served as the Vice President and General
Counsel for Toshiba America Electronic Components, Inc. (Toshiba America's
Semiconductor Company) from January 1998 to January 2000. From March 1992 until
September 1996, Mr. Moran was the General Counsel of ITT Cannon, Inc., an ITT
Industries corporation.

     Robert W. Conn, Director.  Dr. Conn is one of our directors. Dr. Conn has
been the Dean of the Jacobs School of Engineering, University of California, San
Diego, and the Walter J. Zable Endowed Chair in Engineering since 1994. Prior to
joining University of California, San Diego, Dr. Conn served as Professor of
Engineering and Applied Sciences and founding Director of the Institute of
Plasma and Fusion Research at the University of California, Los Angeles. Dr.
Conn has been editor of the journal Fusion Engineering and Design, since 1986.
Dr. Conn recently served as a member of the President's Committee of Advisors on
Science and Technology Panel on Energy R&D Policy for the 21st Century, which
service ended in 1998.

     Gary E. Gist, Director.  Mr. Gist is one of our directors. Mr. Gist has
served as the President and Chief Executive Officer of Palomar Technological
Companies since 1995, a corporation made up of a diverse group of companies that
focus on designing and manufacturing electronic products including the following
companies: HID Corporation, AML Wireless Systems, Inc., Palomar Display
Products, Inc., Palomar Products, Inc. and Palomar Technologies, Inc. Prior to
1995, he was Division Manager of the Technology Products Division of Hughes
Industrial Electronics Company.

     Jan Peeters, Director.  Mr. Peeters is one of our directors. Mr. Peeters is
the founder, Chairman, President, Chief Executive Officer and a major
shareholder of Olameter Inc., a communications and data management service
provider which he formed in 1998. Mr. Peeters was a founder, Vice-Chairman,
President and Chief Executive Officer of Fonorola Inc. where he held the
position of President and Chief Executive Officer since 1990 and the position of
Vice-Chairman since 1994, until that company was sold to Call-Net Enterprises in
June 1998. Mr. Peeters serves on the Board of Directors of Call-Net Enterprises
and Cogeco, Inc.

     Robert N. Pokelwaldt, Director.  Mr. Pokelwaldt is one of our directors.
Mr. Pokelwaldt retired as the Chairman and Chief Executive Officer of YORK
International Corporation, an independent supplier of heating, ventilating, air
conditioning, and refrigeration products in the U.S. and internationally in
November 1999. He became President and Chief Executive Officer of YORK in 1991,
and Chairman of YORK in January 1993. Mr. Pokelwaldt joined YORK as President of
Applied Systems Worldwide, a YORK Division, in 1988, and two years later was
appointed President and Chief Operating Officer of YORK International. Mr.
Pokelwaldt serves on the Board of Directors of Mohawk Industries, Susquehanna
Pfaltzgraff, Inc. and Carpenter Technology.

     James A. Urry, Director.  Mr. Urry is one of our directors. Mr. Urry has
been with Citibank, N.A. since 1981 serving as a Vice President since 1986. He
has been a Vice President of Citicorp Venture Capital Ltd., which is an
affiliate of ours, since 1989. He is also a Director of Airxcel, Inc., Hancor
Holding Corporation, IKS Corporation, Palomar Technological Companies and York
International Corporation.

     Our Board of Directors currently consists of six directors, determined as
follows: our chief executive officer, one individual designated by Sterling, up
to two independent directors designated by Sterling (to the extent permitted by
applicable law as determined in Sterling's sole discretion) and, in the event
the Board includes two independent directors designated by Sterling, one
additional individual designated by Sterling.

                                       41
The holders of a majority of the outstanding shares of Class A Common Stock
(including any shares of Class A Common Stock held by Sterling) have the right
to veto the election of any independent directors designated by Sterling. Under
our Shareholders' Agreement, each of our shareholders prior to the initial
public offering (owning in the aggregate 18,554,703 shares, or approximately
41%, of the outstanding Class A Common Stock, our only class of voting stock,
and 49,746,482 shares, or 100%, of Class B Common Stock which are convertible
into shares of Class A Common Stock on a one-to-one basis) agrees to take all
action necessary (including voting his, her or its shares, calling special
meetings and executing and delivering written consents) to ensure our Board of
Directors will be composed at all times as described in this paragraph.

DIRECTOR COMPENSATION AND ARRANGEMENTS

     Those directors who are employed by us or by Citicorp Venture Capital Ltd.
do not receive compensation for their services as directors. All other directors
receive cash in the amount of $10,000 per year and $1,500 and $1,000,
respectively, per board and committee meeting attended and non-cash compensation
of a one-time appointment grant of options to purchase 7,500 shares of our
Class A Common Stock and an annual grant of options to purchase 5,000 shares of
our Class A Common Stock. All directors will be reimbursed for travel and other
expenses incurred in attending meetings of the Board of Directors or its
committees.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION; AUDIT COMMITTEE

     James A. Urry and Gary E. Gist are the members of our Compensation
Committee. Jan Peeters, Gary E. Gist, and Robert N. Pokelwaldt are the members
of our Audit Committee.

                                       42
EXECUTIVE COMPENSATION

     The following table sets forth certain information concerning the
compensation received by our five most highly compensated officers for services
rendered in fiscal years 1999 and 2000.

                           SUMMARY COMPENSATION TABLE
LONG-TERM COMPENSATION
                                                                                 ---------------------------
                                                                                    AWARDS
                                              ANNUAL COMPENSATION                -------------      PAYOUTS
                                   ------------------------------------------      SECURITIES     ----------
       NAME AND          FISCAL                               OTHER ANNUAL         UNDERLYING        LTIP         ALL OTHER
  PRINCIPAL POSITION      YEAR      SALARY     BONUS(1)    COMPENSATION(2)(3)      OPTIONS(4)       PAYOUTS     COMPENSATION(5)
----------------------   ------    --------    --------    ------------------    -------------    ----------    ---------------
Gregory L. Williams...    2000     $399,615    $ 49,559         $430,052            140,000         $    0          $29,312
 Chief Executive          1999      318,615      20,531            6,925                  0              0           12,207
 Officer

Larry W. Sims             2000      239,231      41,698          421,239             63,334              0            6,666
  Vice President,         1999      185,769     117,953           47,174                  0              0            1,889
  Marketing and Sales

George L. Gidzinski...    2000      190,769      22,173                0             63,334         19,620           10,899
  Vice President and      1999      133,269      46,683            3,264                  0         28,350           15,128
  General Manager,
  Analog and
  Mixed-Signal

W. Russell Morcom.....    2000      186,923      51,360                0             63,334         49,050           16,099
  Vice President and      1999      170,000     113,623           10,798                  0         70,875           57,114
  General Manager,
  Discrete Power

Daniel J. Heneghan....    2000      179,712      44,287                0             63,334         17,249           10,405
  Vice President,         1999      121,980      44,121            1,920                  0         24,924           23,774
  Chief Financial
  Officer and
  Assistant Secretary
------------------
(1) This category includes Annual Incentive Plan bonus for all officers and a
    sales incentive compensation bonus for Mr. Sims. It also includes a
    disruption bonus for Mr. Heneghan in the amount of $25,000 in fiscal year
    2000 and a disruption and signing bonus for Mr. Sims in the amount of
    $65,000 in fiscal 1999.

(2) Except for Mr. Williams and Mr. Sims, none of the executive officers named
    in the Summary Compensation Table received personal benefits in excess of
    $50,000 or 10% of annual salary and bonus for fiscal year 2000.
    Mr. Williams' and Mr. Sims' personal benefits for fiscal year 2000 included
    relocation expenses and applicable taxes associated with their relocation to
    the corporate office in Irvine, California.

(3) Except for Mr. Sims, none of the executive officers named in the Summary
    Compensation Table received personal benefits in excess of the lesser of
    $50,000 or 10% of annual salary and bonus for fiscal year 1999. Mr. Sims'
    personal benefits for fiscal year 1999 included relocation expenses and
    applicable taxes associated with his relocation to Melbourne, Florida. The
    other amounts reported represent dividend equivalent payments on outstanding
    performance shares granted under Harris' Stock Incentive Plan for which the
    performance period had not expired.

(4) All stock options were granted under the Intersil Holding Corporation 1999
    Equity Compensation Plan. The stock option grants terminate ten years from
    the date of grant and vest over a five year period--20% upon each of the
    first five anniversary dates of the grant.

(5) Amounts reported reflect contributions and allocations to defined
    contribution retirement plans and the value of insurance premiums for term
    life insurance and disability insurance.

                                       43
The following table provides information concerning stock options granted
to the executive officers named in the Summary Compensation Table during fiscal
year 2000.
POTENTIAL REALIZABLE
                                                   OPTIONS GRANTED IN LAST FISCAL YEAR                          VALUE AT
                                       ------------------------------------------------------------        ASSUMED ANNUAL RATES
                                                         PERCENTAGE OF                                            OF STOCK
                                                          ALL OPTIONS                                       PRICE APPRECIATION
                                       NUMBER OF          GRANTED TO                                           FOR OPTION
                                       SECURITIES       ALL EMPLOYEES                                            TERM (4)
                                       UNDERLYING         IN FISCAL         EXERCISE      EXPIRATION    ------------------------
                NAME                   OPTIONS (1)        YEAR (2)           PRICE         DATE (3)         5%           10%
------------------------------------   -----------    -----------------    ----------    ----------    ----------    ----------
Gregory L. Williams.................     140,000             4.4%            $25.00       2/24/2010    $2,201,131    $5,578,099
Larry W. Sims.......................      63,334             2.0              25.00       2/24/2010       995,760     2,523,452
George L. Gidzinski.................      63,334             2.0              25.00       2/24/2010       995,760     2,523,452
W. Russell Morcom...................      63,334             2.0              25.00       2/24/2010       995,760     2,523,452
Daniel J. Heneghan..................      63,334             2.0              25.00       2/24/2010       995,760     2,523,452
------------------
(1) These options vest in twenty-percent increments on the first five
    anniversaries of the grant date of February 24, 2000.
(2) A total of 3,177,184 options were granted to Intersil employees under the
    Intersil Stock Option Plan in fiscal year 2000.
(3) The options will expire ten years after the grant date of February 24, 2000.
(4) Represents the potential realizable value of the underlying shares of
    Intersil common stock at the expiration date based on an assumed annual
    appreciation rate of 5% and 10%, set by the Securities and Exchange
    Commission. The amounts shown are not intended to forecast future
    appreciation in the price of our Class A Common Stock.

     The following table sets forth information regarding the number and value
of options held by the executive officers named in the Summary Compensation
Table at the end of fiscal year 2000.

                    OPTION VALUES AT END OF LAST FISCAL YEAR
NUMBER OF SECURITIES                NET VALUE OF
                                                                UNDERLYING UNEXERCISED         UNEXERCISED IN-THE-MONEY
                                                                 OPTIONS AT YEAR-END            OPTIONS AT YEAR-END(1)
                                                             ----------------------------    ----------------------------
                                                             EXERCISABLE    UNEXERCISABLE    EXERCISABLE    UNEXERCISABLE
                                                             -----------    -------------    -----------    -------------
Gregory L. Williams.......................................         --          140,000             --        $ 4,068,400
Larry W. Sims.............................................         --           63,334             --          1,840,486
George L. Gidzinski.......................................         --           63,334             --          1,840,486
W. Russell Morcom.........................................         --           63,334             --          1,840,486
Daniel J. Heneghan........................................         --           63,334             --          1,840,486
------------------
(1) Reflects net pre-tax amounts determined by subtracting the exercise price
    from $54.06 per share, the fair market value of common stock at the end of
    fiscal year 2000.

EMPLOYMENT AGREEMENTS

     We and Intersil entered into an employment agreement with Mr. Williams for
him to serve as our Chief Executive Officer and a member of our Board of
Directors. His employment agreement provides for an annual base salary of
$425,000, subject to increases and annual performance bonuses at the discretion
of the Board of Directors. The agreement also provides for Mr. Williams to
receive our standard benefits. The term of the agreement is 60 months from
August 13, 1999, subject to automatic renewal for successive one year terms,
unless either we give or Mr. Williams gives prior notice of non-renewal.
Mr. Williams is subject to a noncompetition covenant during the term of his
agreement and for a period of one year following termination or expiration of
the agreement.

                                       44
RETIREMENT AND SAVINGS PROGRAM

     We provide retirement benefits to substantially all employees primarily
through a retirement plan having profit-sharing and savings elements.
Contributions by us to the retirement plan are based on profits and employees'
savings with no other funding requirements. We are able to make additional
contributions to the fund at our discretion. We also have non-contributory
defined benefit pension plans which are fully funded.

     Retirement benefits also include an unfunded limited healthcare plan for
U.S.-based retirees and employees on long-term disability. We accrue the
estimated cost of these medical benefits, which are not material, during an
employee's active service life.

1999 EQUITY COMPENSATION PLAN

     We adopted the 1999 Equity Compensation Plan, effective August 13, 1999,
which we refer to as the Plan. Under the Plan, we may grant awards covering up
to 7,500,000 shares of Class A Common Stock to key employees, directors and
consultants of the company and our subsidiaries. Options to acquire 2,954,184
shares of Class A Common Stock are the only awards which have been granted under
the Plan as of June 30, 2000. The Plan authorizes us to grant either (1) options
intended to constitute incentive stock options under the Internal Revenue Code
of 1986, as amended, (2) non-qualified stock options, (3) shares of restricted
stock, (4) stock appreciation rights or (5) phantom share awards. Under the
Plan, a committee of the Board of Directors will determine the exercise price of
each option granted, provided that the minimum exercise price for an incentive
stock option will be the fair market value of the underlying stock on the date
the option is granted. The maximum term of any option will be ten years from the
date of grant. Options granted will be exercisable at the determination of the
committee of the Board of Directors. Within any calendar year, an employee may
not receive options to purchase more than 666,667 shares of Class A Common
Stock.

     A grant of restricted stock represents the right to become the owner of
that stock upon the lapse of restrictions, which will usually require the
performance of substantial additional services by the recipient of the grant. If
the restrictions are not satisfied, the restricted stock is forfeited. If the
restrictions are satisfied, the individual in question becomes the owner of
those shares. In the interim, the individual is entitled to any dividends that
may be paid on the restricted shares and is allowed to vote them. The individual
cannot, however, sell, assign or otherwise transfer the subject shares.

     A stock appreciation right entitles the recipient to a payment, in cash or
in shares of Class A Common Stock of an amount equal to the excess of the fair
market value of Class A Common Stock on the date the stock appreciation right is
exercised over the "exercise price" of the stock appreciation right, which will
usually be the fair market value of the Class A Common Stock on the date the
stock appreciation right is granted.

     A phantom stock award entitles the recipient to a payment in cash or in
shares of Class A Common Stock of an amount equal to the value of the underlying
Class A Common Stock as of the date of settlement specified in the award or
appreciation in the value of the underlying Class A Common Stock over the period
from the grant of the phantom share award to the date of settlement specified in
the award.

     The terms and conditions of grants of restricted stock, stock appreciation
rights and phantom stock awards will be governed by the Plan and by the terms of
the agreement making the grant or award, as determined by the committee of the
Board of Directors.

     Any Class A Common Stock awarded as restricted stock, awarded upon exercise
of an option or a stock appreciation right or awarded in settlement of a phantom
stock award will count against the 7,500,000 share overall limit under the Plan.

EMPLOYEE STOCK PURCHASE PLAN

     In connection with our initial public offering, we adopted the Intersil
Holding Corporation Employee Stock Purchase Plan, which we refer to as the
Employee Stock Purchase Plan. Pursuant to the Employee Stock Purchase Plan, our
employees and employees of related participating employers such as Choice-
Microsystems, Inc. have an opportunity to purchase up to 1,333,334 shares of our
Class A Common Stock at

                                       45
a discount. All such employees who render more than 20 hours of service per week
for more than five months per calendar year, other than those who own 5% or more
of our outstanding securities, are eligible to participate in the Employee Stock
Purchase Plan. The Employee Stock Purchase Plan will expire 10 years from its
effective date. The Employee Stock Purchase Plan is intended to comply with the
provisions of Section 423 of the Internal Revenue Code of 1986.

     Employees purchase shares pursuant to the Employee Stock Purchase Plan by
electing to have a percentage of their base compensation withheld from their
paychecks for the duration of a six month purchase period. We hold such
compensation in notional accounts for the benefit of the participating
employees. At the end of each purchase period, the money that has accumulated in
each employee's notional account will be used to buy shares of our Class A
Common Stock at a price equal to no less than 85% of the lesser of the fair
market value of the stock on the first day of the purchase period and the fair
market value of the stock on the last day of the purchase period. Within any one
calendar year, an employee may not purchase more than $25,000 worth of our Class
A Common Stock under the Employee Stock Purchase Plan, and no more than 16,667
shares may be purchased by an employee on any purchase date.

                 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     Citicorp Mezzanine Partners, L.P. contributed $30.0 million in cash to us
in exchange for the 13.5% Subordinated PIK Note due 2010 and warrants to
purchase 3,703,707 shares of our Class A Common Stock. The 13.5% Subordinated
PIK Note due 2010 was repaid in full with the proceeds of our initial public
offering and, as a result of early repayment, the number of shares subject to
such warrants was reduced to 2,222,224 shares. We contributed the $30.0 million
from Citicorp Mezzanine Partners, L.P. to Intersil as a capital contribution.
The general partner of Citicorp Mezzanine Partners, L.P. is an affiliate of
Citicorp Venture Capital Ltd. Citicorp Venture Capital Ltd. owns an interest in
Sterling, one of our principal shareholders.

     Sterling, Harris and certain members of our senior management entered into
a Shareholders' Agreement containing certain agreements among the shareholders
regarding our capital stock and corporate governance. We exercised our option
under the Shareholders' Agreement to repurchase from Sterling Holding Company,
LLC a total of 1,833,333 shares of Class A Common Stock for an aggregate
purchase price of $137,500 to reissue to our employees. See "Description of
Capital Stock--Shareholders' Agreement."

     We purchased from Harris selected portions of the semiconductor business.
Harris entered into with us various agreements, including the Intellectual
Property Agreement, the Patent Assignment and Services Agreement, the License
Assignment Agreement, the Secondary Trademark Assignment and License Agreement,
the Harris Trademark License Agreement and the Royalty Agreement.

     o The Intellectual Property Agreement provides for the assignment by Harris
       to us of its entire ownership, right, title and interest in some
       intangible property rights owned by Harris and specific to the
       semiconductor business.

     o The Patent Assignment and Services Agreement provides for the assignment
       by Harris to us, subject to pre-existing license rights, of about 1,300
       patent rights. Harris has retained the rights to some patents for up to
       three years before assigning their entire right, title and interest
       therein to us (provided that the patents are not in litigation at the
       time, and no royalties are owed on licenses to the patents). During the
       interim preceding the assignment of these retained patents, Harris has
       granted us a worldwide, royalty-free, non-exclusive license to these
       patents, without the right to sublicense.

     o The License Assignment Agreement provides for the assignment by Harris to
       us of certain license agreements that may be assigned without the consent
       of third party licensors and licensees and also provides that Harris will
       provide us with the economic benefit of certain other material license
       agreements that may not be assigned without the consent of third party
       licensors and licensees.

     o The Secondary Trademark Assignment and License Agreement provides for the
       assignment by Harris to us of some trademarks related to products of the
       semiconductor business and provides that we grant back to Harris
       worldwide, non-exclusive, royalty-free licenses recognizing transitional
       use of some visible trademarks assigned by Harris to us.

                                       46
o The Harris Trademark License Agreement provides for the grant by Harris
       to us of non-exclusive, royalty-free licenses recognizing transitional
       use of some visible trademarks and product-embedded trademarks, which
       embedded trademarks will not be eliminated until the relevant product is
       discontinued.

     o The Royalty Agreement provides for our payment to Harris of 2% of the
       revenue generated by the sales of the PRISM(R)chip sales until
       August 13, 2004.

     In June 2000, we sold our assembly and test facilities in Malaysia along
with related intellectual property to ChipPAC in exchange for $52.5 million in
cash and preferred stock of ChipPAC that has an aggregate liquidation preference
of $17.5 million. We also assigned to ChipPAC patents, copyrights and technical
information used exclusively in or associated exclusively with our assembly and
test facilities in Malaysia and granted ChipPAC a worldwide, nonexclusive,
royalty-free license under other of our patents, copyrights and technical
information that is also used in or related to the operation of the assembly and
test facilities in Malaysia. Any intellectual property rights in the bonding
diagrams, test programs, mask works and test boards uniquely related to our
products for which ChipPAC will provide packaging and test services under the
supply agreement are licensed to ChipPAC only for use in providing those
services. We also entered into a long term joint services agreement with ChipPAC
in connection with the sale under which each party is required to assist the
other in a smooth transition of each party's operations following the sale.

     Under our supply agreement with ChipPAC, we have agreed to continue to use
the Malaysian facility to provide 100% (until June 30, 2003), 90% (from July 1,
2003 to June 30, 2004) and 80% (from July 1, 2004 to June 30, 2005) of our
semiconductor package configuration assembly and test requirements for all
products assembled and tested at the Malaysian facility on the date of the
supply agreement and any new or additional products we may develop after that
date. In addition, ChipPAC will ensure that we are allocated 100% of the
utilized capacity that was in place on the date of the supply agreement.

     One of the principal shareholders of ChipPAC is an affiliate of Sterling,
our principal shareholder.

     The terms of the agreements listed above were the result of arms-length
negotiations and in our opinion are no less favorable to us than those that
could be obtained from non-affiliated parties.

                                       47
PRINCIPAL AND SELLING SHAREHOLDERS

     The following table sets forth information regarding the beneficial
ownership of each holder of 5% or more of the outstanding shares of our Class A
Common Stock (the only voting class of stock) and Class B Common Stock, each
director and each executive officer named in the Summary Compensation Table, and
all directors and officers as a group, as of June 30, 2000. The table does not
include shares of our Class A Common Stock issuable upon conversion of the
warrants issued in connection with (i) the 13.5% Subordinated Holding PIK Note
due 2010 and (ii) the 13.25% Senior Subordinated Notes due 2009.

     The number of shares deemed outstanding after this offering includes the
shares of Class A Common Stock that we are offering for sale in this offering
but assumes no exercise by the underwriters of their over-allotment option.
Unless otherwise indicated, the address of each person owning more than 5% of
our outstanding shares is c/o Intersil Holding Corporation, 7585 Irvine Center
Drive, Suite 100, Irvine, California 92618.
CLASS A COMMON STOCK(1)
                                                  -------------------------------------------------------------------------------
                                                      SHARES OWNED         SHARES                    SHARES OWNED
                                                   PRIOR TO OFFERING      OFFERED(2)                AFTER OFFERING(3)
                                                  --------------------    ---------   -------------------------------------------
NAME OF BENEFICIAL OWNER                            NUMBER     PERCENT     NUMBER         NUMBER                PERCENT
------------------------------------------------- ----------   -------    ---------   --------------------   --------------------
Sterling Holding Company, LLC(6)(7) ............. 10,738,026    23.98%    6,218,535         4,519,491                 9.46%

Harris Corporation(8) ...........................    892,806     2.00%           --           892,806                 1.87%
  1025 W. NASA Boulevard
  Melbourne, Florida 32919

Gregory L. Williams(9) ..........................  2,090,056     4.67%      299,967         1,790,089                 3.75%

W. Russell Morcom(10) ...........................    573,570     1.28%       85,350           488,220                 1.02%

Larry W. Sims(11) ...............................    541,750     1.21%       57,913           483,837                 1.01%

George L. Gidzinski(12) .........................    461,098     1.03%           --           461,098                    *

Daniel J. Heneghan(13) ..........................    392,685        *        58,902           333,783                    *

Karl McCalley ...................................    285,006        *        53,514           231,492                    *

Ray D. Odom(14) .................................    357,074        *        53,106           303,968                    *

Julie B. Forbes(15) .............................    277,486        *        40,714           236,772                    *

Lawrence J. Ciaccia(16) .........................    355,238        *        50,000           305,238                    *

Stephen M. Moran.................................     33,334        *            --            33,334                    *

James A. Urry(17) ...............................     32,024        *            --            32,024                    *

Gary E. Gist(18) ................................      4,708        *            --             4,708                    *

Robert W. Conn...................................         --       --            --                --                   --

Jan Peeters......................................      3,034        *            --             3,034                    *

Robert N. Pokelwaldt.............................         --       --            --                --                   --

All directors and executive officers as a
group (15 persons) ..............................  5,407,063    12.08%      699,466         4,707,597                  9.85

The Gregory L. Williams and Linda
  H. Williams Trust dated 1/28/00 FBO
  A Family Member. ..............................     66,667        *        13,333            53,334                    *

The Gregory L. Williams and Linda
  H. Williams Trust dated 1/28/00 FBO
  A Family Member. ..............................     66,667        *        13,333            53,334                    *

The Gregory L. Williams and Linda
  H. Williams Trust dated 1/28/00 FBO
  Certain Family Members. .......................     26,667        *         5,333            21,334                    *

W. Russell Morcom Irrevocable Trust
  dated 12/23/99 FBO A Family Member ............     66,667        *        10,000            56,667                    *

W. Russell Morcom Irrevocable Trust
  dated 12/23/99 FBO A Family Member ............     66,667        *        10,000            56,667                    *

LS Parents Trust No. 00-1 .......................     13,334        *        13,334                --                   --

ES Parents Trust No. 00-1 .......................     13,334        *        13,334                --                   --

Phillip McCalley ................................     21,272        *         2,000            19,272                    *

Irrevocable Trust U/T/D 12/29/99 for the benefit
of a family member of Mr. Odom ..................     13,334        *           666            12,668                    *

Irrevocable Trust U/T/D 12/29/99 for the benefit
of a family member of Mr. Odom ..................     13,334        *           666            12,668                    *
CLASS B COMMON STOCK(4)
                                                   -------------------------------------------   PERCENT OF ALL COMMON STOCK
NAME OF BENEFICIAL OWNER                               NUMBER                PERCENT             OWNED AFTER OFFERING(3)(5)
-------------------------------------------------  --------------------   --------------------   ---------------------------
Sterling Holding Company, LLC(6)(7) .............       45,214,898                90.89%              51.00%

Harris Corporation(8) ...........................        4,531,584                 9.11%               5.56%
  1025 W. NASA Boulevard
  Melbourne, Florida 32919

Gregory L. Williams(9) ..........................               --                   --                1.84%

W. Russell Morcom(10) ...........................               --                   --                   *

Larry W. Sims(11) ...............................               --                   --                   *

George L. Gidzinski(12) .........................               --                   --                   *

Daniel J. Heneghan(13) ..........................               --                   --                   *

Karl McCalley ...................................               --                   --                   *

Ray D. Odom(14) .................................               --                   --                   *

Julie B. Forbes(15) .............................               --                   --                   *

Lawrence J. Ciaccia(16) .........................               --                   --                   *

Stephen M. Moran.................................               --                   --                   *

James A. Urry(17) ...............................               --                   --                   *

Gary E. Gist(18) ................................               --                   --                   *

Robert W. Conn...................................               --                   --                  --

Jan Peeters......................................               --                   --                   *

Robert N. Pokelwaldt.............................               --                   --                  --

All directors and executive officers
as a group (15 persons) .........................               --                   --                4.83%

The Gregory L. Williams and Linda
  H. Williams Trust dated 1/28/00 FBO
  A Family Member. ..............................               --                   --                   *

The Gregory L. Williams and Linda
  H. Williams Trust dated 1/28/00 FBO
  A Family Member. ..............................               --                   --                   *

The Gregory L. Williams and Linda
  H. Williams Trust dated 1/28/00 FBO
  Certain Family Members. .......................               --                   --                   *

W. Russell Morcom Irrevocable Trust
  dated 12/23/99 FBO A Family Member ............               --                   --                   *

W. Russell Morcom Irrevocable Trust
  dated 12/23/99 FBO A Family Member ............               --                   --                   *

LS Parents Trust No. 00-1 .......................               --                   --                  --

ES Parents Trust No. 00-1 .......................               --                   --                  --

Phillip McCalley ................................               --                   --                   *

Irrevocable Trust U/T/D 12/29/99 for the benefit
of a family member of Mr. Odom...................               --                   --                   *

Irrevocable Trust U/T/D 12/29/99 for the benefit
of a family member of Mr. Odom ..................               --                   --                   *
48
------------------
 *   Less than 1%.

 (1) Does not include shares of Class A Common Stock issuable upon conversion of
     Class B Common Stock. A holder of Class B Common Stock may convert any or
     all of his shares into an equal number of shares of Class A Common Stock,
     provided that such conversion would be permitted only to the extent that
     the holder of shares to be converted would be permitted under applicable
     law to hold the total number of shares of Class A Common Stock which would
     be held after giving effect to the conversion.

 (2) Does not include shares of Class B Common Stock issuable upon conversion of
     Class A Common Stock. A holder of Class A Common Stock may convert any or
     all of his shares into an equal number of shares of Class B Common Stock.

 (3) Percentages are derived using (i) the number of shares of Class A Common
     Stock and common stock outstanding as of June 30, 2000 and (ii) the
     3,000,000 shares we expect to issue in connection with this offering.

 (4) All shares to be sold in this offering will be shares of Class A Common
     Stock.

 (5) Represents the percentage of the total number of shares of Class A Common
     Stock and Class B Common Stock combined.

 (6) An affiliate of Credit Suisse First Boston Corporation owns an interest in
     Sterling and could have the right to acquire up to 1,070,177 shares of
     Class A Common Stock.

 (7) Citicorp Venture Capital Ltd. owns an interest in Sterling and could have
     the right to acquire up to 42,055,184 shares of Class A or Class B Common
     Stock. Citicorp Mezzanine Partners, L.P., the general partner of which is
     an affiliate of Citicorp Venture Capital, contributed $30.0 million in cash
     to our company in exchange for the 13.5% Subordinated Holding PIK Note due
     2010 and warrants to purchase 3,703,707 shares of our Class A Common Stock.
     We contributed the $30.0 million to Intersil as a capital contribution.
     Upon repayment of the 13.5% Subordinated PIK Note due 2010, the warrants
     became exercisable for 2,222,224 shares of our Class A Common Stock.

 (8) The shares reported by Harris are owned by Manatee Investment Corporation,
     a wholly owned subsidary of Harris. Harris may be deemed to beneficially
     own these shares.

 (9) Includes 2,053,116 shares owned by Gregory L. Williams and Linda H.
     Williams. Does not include 66,667 shares owned by the Gregory L. Williams
     and Linda H. Williams Trust dated 1/28/00 FBO a family member, 66,667
     shares held by the Gregory L. Williams and Linda H. Williams Trust dated
     1/28/00 FBO a family member and 26,667 shares owned by the Gregory L.
     Williams and Linda H. Williams Trust dated 1/28/00 FBO certain family
     members for which Mr. Williams disclaims beneficial ownership. Includes
     21,798 shares owned by DLJSC, as Trustee for Gregory L. Williams IRA
     Account. Includes currently exercisable options to purchase 15,142 shares
     of our Class A Common Stock.

(10) Includes 569,027 shares owned by W. Russell Morcom Revocable Trust. Does
     not include 66,667 owned by W. Russell Morcom Irrevocable Trust FBO a
     family member dated 12/23/99 and 66,667 shares owned by W. Russell Morcom
     Irrevocable Trust FBO a family member dated 12/23/99 for which Mr. Morcom
     disclaims beneficial ownership. Includes currently exercisable options to
     purchase 4,543 shares of our Class A Common Stock.

(11) Includes 437,207 shares owned by Larry W. Sims and Elizabeth Sims, 100,000
     shares owned by Lesgrat No. 00-1, a trust holding shares on behalf of its
     beneficial owners. Does not include 13,334 shares owned by Larry and
     Elizabeth Sims, LS Parents Trust No. 00-1 for which Mr. Sims disclaims
     beneficial ownership and 13,334 shares owned by ES Parents Trust No. 00-1
     for which Mr. Sims disclaims beneficial ownership. Includes currently
     exercisable options to purchase 4,543 shares of our Class A Common Stock.

(12) Includes currently exercisable options to purchase 4,543 shares of our
     Class A Common Stock.

(13) Includes 389,656 shares owned by Daniel J. Heneghan and Barbara Heneghan.
     Includes currently exercisable options to purchase 3,029 shares of our
     Class A Common Stock.

(14) Does not include 13,334 shares owned by an Irrevocable Trust U/T/D 12/29/99
     for the benefit of a family member and 13,334 shares owned by an
     Irrevocable Trust U/T/D 12/29/99 for the benefit of a family member for
     which Mr. Odom disclaims beneficial ownership. Includes currently
     exercisable options to purchase 3,029 shares of our Class A Common Stock.

(15) Includes 126,259 shares owned by Julie B. Forbes Trust D/T/D 3/23/00,
     126,258 shares owned by the Peter K. Forbes Trust D/T/D 3/23/00, 9,456
     shares owned by the Peter K. Forbes and Julie B. Forbes Trust dated 1/20/00
     FBO a family member and 9,456 shares owned by Peter K. Forbes and Julie B.
     Forbes Trust dated 1/20/00 FBO a family member. Includes currently
     exercisable options to purchase 6,057 shares of our Class A Common Stock.

(16) Includes 288,570 shares owned by Lawrence J. Ciaccia and Marcia R. Ciaccia
     and 66,668 shares owned by the Lawrence J. Ciaccia and Marcia R. Ciaccia
     Trust dated 1/20/00.

(17) James A. Urry, who is one of our directors, is affiliated with Sterling in
     the capacities described under "Management--Directors and Executive
     Officers" and footnote (6) above. All shares reported for Mr. Urry are held
     by Sterling, but do not include all shares held by Sterling, which Mr. Urry
     may be deemed to beneficially own as a result of his affiliation with
     Sterling. Mr. Urry disclaims beneficial ownership of all shares held by
     Sterling, except for those shares reported for Mr. Urry, which Mr. Urry has
     the right to acquire in exchange for an ownership interest in Sterling.

(18) Gary E. Gist owns an interest in Sterling and could have the right to
     exchange that interest for up to 38,186 shares of our common stock.

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

     Sterling, our principal shareholder, also owns 7.1% of Class A Common Stock
and 100% of Class B Common Stock of Fairchild Semiconductor International, Inc.,
one of our competitors. Fairchild Semiconductor Corporation is a wholly owned
subsidiary of Fairchild Semiconductor International, Inc.

                                       49
DESCRIPTION OF CAPITAL STOCK

     Our capital stock consists of 600,000,000 authorized shares of common
stock, par value $.01 per share, divided into two classes consisting of (a)
300,000,000 shares of Class A Common Stock, of which 44,801,748 shares are
outstanding and (b) 300,000,000 shares of Class B Common Stock, of which
49,746,482 shares are outstanding. Our capital stock also consists of 100,000
authorized shares of preferred stock, par value $.01 per share, none of which is
issued or outstanding.

     The following description of the terms and provisions of our capital stock
is not complete, and you should read our Bylaws and Restated Certificate of
Incorporation, which have been filed as exhibits to the Registration Statement
of which this prospectus is a part.

CLASS A COMMON STOCK

     The holders of Class A Common Stock are entitled to one vote for each share
held of record on all matters submitted to a vote of the shareholders other than
elections of directors. Our Restated Certificate of Incorporation provides for
cumulative voting for directors. With cumulative voting, at each election for
directors, each holder of Class A Common Stock is entitled to as many votes as
would equal the number of shares he or she holds multiplied by the number of
directors to be elected. The holder may cast all of his or her votes for a
single candidate or may distribute them among any number of candidates. Under
cumulative voting, a minority holder has a greater possibility of influencing
the election of directors because, for example, the minority holder can increase
the number of votes such holder may cast for an individual director. The holders
of Class A Common Stock will be entitled to such dividends as may be declared at
the discretion of our Board of Directors out of funds legally available for that
purpose. The holders of Class A Common Stock will be entitled to share ratably
with holders of Class B Common Stock in the net assets of our company upon
liquidation after payment or provision for all liabilities. A holder of Class A
Common Stock may convert any or all of his shares into an equal number of shares
of Class B Common Stock. We have never paid and we do not anticipate declaring
or paying any cash dividends on shares of our Class A Common Stock in the
foreseeable future. As of June 30, 2000, there were 163 holders of record of our
Class A Common Stock.

CLASS B COMMON STOCK

     Except as required by law, the holders of Class B Common Stock have no
voting rights. The holders of Class B Common Stock will be entitled to such
dividends as may be declared at the discretion of our Board of Directors out of
funds legally available for that purpose. The holders of Class B Common Stock
will be entitled to share ratably with holders of Class A Common Stock in the
net assets of our company upon liquidation after payment or provision for all
liabilities. A holder of Class B Common Stock may convert any or all of his
shares into an equal number of shares of Class A Common Stock, provided that
such conversion would be permitted only to the extent that the holder of such
shares to be converted certifies to us in writing that the holder would be
permitted under applicable law to hold the total number of shares of Class A
Common Stock which would be held after giving effect to the conversion. We have
never paid and we do not anticipate declaring or paying any cash dividends on
shares of our Class B Common Stock in the foreseeable future. As of June 30,
2000, there were 2 holders of record of our Class B Common Stock.

PREFERRED STOCK

     Under our Restated Certificate of Incorporation, our Board of Directors has
the authority to issue up to 100,000 shares of preferred stock, but only in
connection with the adoption of a shareholder rights plan. A shareholder rights
plan may only be adopted by our Board of Directors with the approval of holders
of a majority of outstanding shares of Class A Common Stock or with the
unanimous consent of our Board of Directors, unless Sterling and its affiliates
hold less than 15% of our outstanding common stock, in which case approval by a
majority of our Board of Directors is required. See "--Other Provisions of Our
Restated Certificate of Incorporation." If our Board of Directors has such
requisite authority, it will be authorized to issue preferred stock in
connection with a shareholder rights plan in one or more series, and to fix the
voting powers, designations, preferences, and relative, participating, optional
or other special rights and

                                       50
qualifications, limitations and restrictions of each series, including dividend
rights, conversion rights, voting rights, terms of redemption, liquidation
preferences, and the number of shares constituting any series. The ability of
our Board of Directors to issue preferred stock could have the effect of making
it more difficult for a third party to acquire, or discouraging a third party
from acquiring, a majority of our outstanding Class A Common Stock. Our Board of
Directors' ability to establish the preferences and rights of the shares of any
series of preferred stock may also afford holders of any preferred stock
preferences, powers and rights (including voting rights) senior to the rights of
holders of our Class A Common Stock. We have no present plans to issue any
shares of preferred stock.

OTHER PROVISIONS OF OUR RESTATED CERTIFICATE OF INCORPORATION

     Our Restated Certificate of Incorporation contains provisions affecting the
rights of our shareholders and the powers of our Board of Directors, including
the following:

     o We are not subject to the provisions of Section 203 of the General
       Corporation Law of Delaware regulating takeovers. Section 203 generally
       makes it more difficult for a third party to take control of a company by
       prohibiting a third party owning more than 15% of the company's stock
       from entering into transactions with the company unless the board of
       directors or shareholders unaffiliated with the third party approve
       either the third party or the transaction at issue, before the third
       party becomes a 15% owner or the third party acquires at least 85% of the
       company's stock.

     o A shareholder rights plan can be adopted only with the consent of holders
       of a majority of outstanding Class A Common Stock or with the unanimous
       consent of our Board of Directors, except that if Sterling's and its
       affiliates' ownership is less than 15% of our outstanding common stock,
       then a shareholder rights plan can be adopted with the consent of a
       majority of our Board of Directors. A shareholder rights plan generally
       makes it more difficult for a hostile bidder to take control of a company
       by providing existing shareholders with special rights which would make
       it uneconomical for the third party to acquire additional interests. If
       our Board of Directors is authorized to and decides to implement a
       shareholder rights plan, the plan adopted by the Board may deter
       acquisitions which you might deem to be in your best interests.

     o Our Board of Directors must have no fewer than three and no more than
       seven members and may not be divided into classes. The term of each
       member of the Board of Directors expires at each annual shareholders'
       meeting. Having a minimum number of Directors ensures that cumulative
       voting will operate to protect the interests of minority shareholders,
       since with a smaller Board it would take a greater percentage of votes to
       elect one director. Similarly, by prohibiting a classified Board, our
       Restated Certificate of Incorporation ensures that shareholders may
       replace the entire Board at each annual election.

     o Shareholders may act by written consent, without a meeting and without
       notice or a vote. This provision enables shareholders to act on matters
       subject to a shareholder vote without waiting until the next annual or
       special meeting of shareholders.

     o Each of the provisions of our Restated Certificate of Incorporation
       described above, and the provision described above under "Preferred
       Stock" that limits the Board of Directors' ability to issue preferred
       stock other than in connection with a shareholder rights plan, may be
       amended only with the approval of holders of 75% of our outstanding Class
       A Common Stock. Amending other provisions requires approval by holders of
       a majority of our outstanding Class A Common Stock. The provision
       requiring a supermajority vote also cannot be amended without the consent
       of holders of 75% of the Class A Common Stock. If a third party--that is,
       a person or entity other than our principal shareholders or members of
       our management--acquires more than 40% of the Class A Common Stock, then
       the holders of a majority of the Class A Common Stock could amend the
       foregoing provisions. If, after any transfer by Sterling or its
       affiliates, Sterling and its affiliates together own less than 15% of our
       outstanding common stock, then holders of a majority of the Class A
       Common Stock can amend the supermajority provisions. The effect of each
       supermajority provision is that holders of 25% or more of our Class A
       Common Stock could block amendments to our Restated Certificate of
       Incorporation affecting the provisions described above.

                                       51
WARRANTS RELATING TO THE ISSUANCE OF THE UNITS

     We originally issued and sold warrants, referred to as the Warrants, to
Credit Suisse First Boston Corporation, J.P. Morgan Securities, Inc. and Salomon
Smith Barney Inc. pursuant to a private placement by Intersil Holding and
Intersil of 200,000 units, each unit consisting of $1,000 principal amount of
13.25% Senior Subordinated Notes due 2009 and one Warrant to purchase 18.5185
shares of Class A Common Stock at an exercise price (the "Exercise Price") of
$0.0015. The Exercise Price and the number of shares of Common Stock issuable
upon exercise of a Warrant may be subject to adjustment. The Warrants initially
entitle the holders to acquire, in the aggregate 3,703,707 shares of Class A
Common Stock.

     The Warrants may be exercised at any time after August 13, 2000; provided,
however, that the holder of Warrants will be able to exercise the Warrants only
if a shelf registration statement relating to the Class A Common Stock
underlying the Warrants is effective or the exercise of those Warrants is exempt
from the registration requirements of the Securities Act of 1933, or the
Securities Act, and such securities are qualified for sale or exempt from
qualification under the applicable securities laws of the states or other
jurisdictions in which such holders reside. We have filed a shelf registration
statement to cover the Warrants for resale and the issuance of the Class A
Common Stock upon exercise of the Warrants, and the Securities and Exchange
Commission has declared it effective. Unless earlier exercised, the Warrants
will expire on August 15, 2009 (the "Expiration Date"). We will give notice of
expiration not less than 90 nor more than 120 days prior to the Expiration Date
to the registered holders of the then outstanding Warrants. If we fail to give
the expiration notice, the Warrants will nevertheless expire and become void on
the Expiration Date.

WARRANTS RELATING TO THE 13.5% SUBORDINATED HOLDING PIK NOTE

     In connection with our issuance of the 13.5% Subordinated Holding PIK Note,
we issued to Citicorp Mezzanine Partners, L.P. warrants to purchase Class A
Common Stock. These warrants now entitle the holders to purchase up to
2,222,224 shares of our Class A Common Stock upon exercise of the warrants
beginning on August 13, 2001 and ending on August 15, 2009 at an exercise price
of $0.0015 per share, subject to anti-dilution adjustments.

SHAREHOLDERS' AGREEMENT

     Prior to our initial public offering, the then-existing shareholders of our
company entered into a Securities Purchase and Holders Agreement, which we refer
to as the Shareholders' Agreement, containing agreements among the shareholders
with respect to our capital stock and corporate governance.

     The Shareholders' Agreement contains provisions which restrict Citicorp
Venture Capital Ltd., or CVC, and its permitted transferees from effecting a
transfer of 50% or more of the shares of common stock owned by them without
offering the other parties to the Shareholders' Agreement an equal opportunity
to participate in the transaction or transactions. In addition, CVC and its
affiliates have the right to have observers present at meetings of our Board of
Directors if they are not represented on our Board of Directors as long as they
own at least 5% of the common stock then outstanding. The Shareholders'
Agreement continues to subject some of our executive officers' common stock to a
risk of repurchase by the Company.

REGISTRATION RIGHTS AGREEMENT

     In connection with their entry into the Shareholders' Agreement, the
then-existing shareholders of our company also entered into a Registration
Rights Agreement (the "Registration Rights Agreement"). According to the
Registration Rights Agreement, upon the written request of CVC and subject to
our option to defer action for 180 days, we will prepare and file a registration
statement with the Securities and Exchange Commission concerning the
distribution of all or part of the shares held by CVC and use our best efforts
to cause such registration statement to become effective. If at any time we file
a registration statement for our common stock because of a request by CVC or
otherwise, we will use our best efforts to allow the other parties to the
Registration Rights Agreement to have their shares of our common stock (or a
portion of their shares under circumstances set forth in the Registration Rights
Agreement) included in the registered offering. We are not bound by this
requirement if we file a registration statement on Form S-8, Form S-4 or any
similar form in connection with an exchange offer or an offering solely to our
employees or existing

                                       52
shareholders, or a registration statement registering a unit offering consisting
of a public offering of our debt and equity securities in which (i) not more
than twenty percent of the gross proceeds received from the sale of those
securities is attributed to the equity securities and (ii) after the public
offering, we do not have a class of equity securities required to be registered
under the Securities Exchange Act of 1934. Most registration expenses of the
selling shareholders will be paid by us. We will not pay expenses relating to
underwriting commissions, brokerage fees and transfer taxes applicable to the
shares sold by the shareholders or in certain cases the fees and expenses of any
accountants or other representatives retained by a selling shareholder.

TRANSFER AGENT AND REGISTRANT

     The Transfer Agent and Registrar for the Class A Common Stock is Equiserve
Trust Company.

                                       53
DESCRIPTION OF CERTAIN INDEBTEDNESS

     The following is a summary of certain indebtedness of Intersil and of
Intersil Holding. To the extent such summary contains descriptions of documents
relating to the notes, the senior credit facilities and other loan documents,
such descriptions do not purport to be complete and are qualified in their
entirety by reference to such documents, which are available upon request to us.

NOTES

     On August 13, 1999, Intersil and Intersil Holding issued 200,000 units,
each unit consisting of $1,000 principal amount of the Notes of Intersil and one
warrant to purchase 18.518535 shares of Class A Common Stock, in connection with
the unit offering for gross proceeds of approximately $200.0 million. The Notes
were issued under an indenture dated as of August 13, 1999 (the "Indenture")
between Intersil and United States Trust Company of New York, as Trustee. The
warrants were issued under the Warrant Agreement between us and United States
Trust Company of New York, as warrant agent. The net proceeds of the unit
offering, together with the net proceeds of certain other funds, were used to
pay the cash consideration for the acquisition of the semiconductor business
from Harris and pay related fees and expenses. Under the terms of the Notes, we
were permitted, but were not required, to redeem up to $70.0 million principal
amount of the Notes with the net cash proceeds of our initial public offering at
a price of 113.25% of the principal amount of the Notes, plus accrued and unpaid
interest on the Notes. The amount repaid with the proceeds of our initial public
offering included $70.0 million of the principal amount of the Notes plus a
prepayment premium and accrued and unpaid interest thereon.

     The Notes were initially in the principal amount of $200.0 million and
mature on August 15, 2009. Interest on the Notes accrues at 13.25% per annum and
is payable semiannually in arrears on February 15 and August 15, commencing
February 15, 2000. Subject to certain covenants set forth in the Indenture,
Intersil may issue more Notes under the Indenture in an unlimited principal
amount. Any additional Notes that are actually issued will be treated as issued
and outstanding Notes (and as the same class as the initial Notes) for most
purposes. The Notes are unsecured senior subordinated obligations of Intersil,
are subordinated in right of payment to all existing and future Senior
Indebtedness (as defined in the Indenture) of Intersil, and are senior in right
of payment to all future Subordinated Indebtedness (as defined in the Indenture)
of Intersil. The Notes are guaranteed by Intersil Holding and each Subsidiary
Guarantor (as defined in the Indenture). The Guaranties are senior subordinated
obligations of Intersil Holding and the relevant Subsidiary Guarantor.

     On or after August 15, 2004, the Notes may be redeemed at the option of
Intersil, in whole or in part, at the following redemption prices (expressed as
percentages of principal amount at maturity), plus accrued and unpaid interest,
if redeemed during the 12 months beginning August 15 of the years
indicated below:
YEAR                                                                                 PERCENTAGE
----------------------------------------------------------------------------------   ----------
2004..............................................................................     106.625%
2005..............................................................................     104.969
2006..............................................................................     103.313
2007..............................................................................     101.656
2008 and thereafter...............................................................     100.000
Upon a Change of Control (as defined in the Indenture), each holder of
Notes may require Intersil to repurchase all or any portion of the holder's
Notes at a purchase price equal to 101% of the principal amount plus accrued and
unpaid interest to the date of purchase.

     The Indenture contains certain covenants that, among other things, limit
(i) the incurrence of additional debt by Intersil and certain of its
subsidiaries, (ii) the payment of dividends on capital stock of Intersil and the
purchase, redemption or retirement of capital stock or subordinated
indebtedness, (iii) investments, (iv) certain transactions with affiliates, (v)
sales of assets, including capital stock of subsidiaries, and (vi) certain
consolidations, mergers and transfers of assets. The Indenture also prohibits
certain restrictions on distributions from certain subsidiaries. All of these
limitations and prohibitions, however, are subject to a number of important
qualifications.

                                       54
SENIOR CREDIT FACILITIES

     General.  Intersil entered into senior credit facilities with a syndicate
of certain financial institutions, as lenders, Credit Suisse First Boston, New
York branch, as the Administrative Agent, Salomon Smith Barney Inc., as
Syndication Agent, and Morgan Guaranty Trust Company of New York, as
Documentation Agent. The description below is only a summary of the principal
terms of the senior credit facilities and related loan documents.

     Intersil has available up to $70.0 million of aggregate borrowing capacity,
consisting of a secured $70.0 million revolving line of credit (the "Revolving
Credit Facility"). Intersil may request, subject to lender approval, that the
amount of the Revolving Credit Facility be increased to an amount not to exceed
$150.0 million.

     Guaranties; Security.  Intersil's obligations under the senior credit
facilities are unconditionally guaranteed, jointly and severally, by Intersil
Holding and each of Intersil's existing and subsequently acquired or organized
domestic subsidiaries. Intersil's obligations and those of the guarantors under
the senior credit facilities are secured by a pledge of all of Intersil's
capital stock and by substantially all of the assets of Intersil Holding,
Intersil and each of Intersil's existing and subsequently acquired or organized
domestic (and, to the extent no adverse tax consequences will result, foreign)
subsidiaries. No foreign subsidiary is required to guarantee the senior credit
facilities and less than two-thirds of the capital stock of certain foreign
subsidiaries is required to be pledged to secure the senior credit facilities.

     Amortization; Interest; Fees; Maturity.  The Revolving Credit Facility is
available until 2005 unless terminated earlier under the terms of the senior
credit facilities.

     Borrowings under the senior credit facilities bear interest at a rate equal
to, at Intersil's option, either (i) the base rate (which is based on the prime
rate most recently announced by the Administrative Agent or the Federal Funds
rate plus one-half of 1%) or (ii) the applicable London interbank offered rate,
in each case plus the applicable margin. In addition, the senior credit
facilities are subject to a commitment fee of 0.50% per annum of the undrawn
portion of the Revolving Credit Facility, and letter of credit fees regarding
each letter of credit outstanding under the senior credit facilities equal to
(i) the applicable margin over the Adjusted LIBOR Rate (as defined in the Credit
Agreement) in effect for loans under the Revolving Credit Facility and
(ii) 0.25% per annum on the face amount of all outstanding letters of credit.

     Prepayments.  Voluntary prepayments may be made in whole or in part without
premium or penalty.

     Covenants and Events of Default.  The senior credit facilities contain,
among other things, covenants restricting Intersil's ability and its
subsidiaries' ability to dispose of assets, merge, pay dividends, repurchase or
redeem capital stock and indebtedness (including the notes), incur indebtedness
or guaranties, create liens, enter into agreements with negative pledge clauses,
make certain investments or acquisitions, enter into sale and leaseback
transactions, enter into transactions with affiliates, change Intersil's
business or make fundamental changes, and otherwise restrict corporate actions.
The senior credit facilities also contain a number of financial maintenance
covenants.

     The senior credit facilities also include events of default usual for these
types of credit facilities and transactions, including but not limited to
nonpayment of principal or interest, violation of covenants, incorrectness of
representations and warranties, cross defaults and cross acceleration,
bankruptcy, material judgments, ERISA, actual or asserted invalidity of the
guaranties or the security documents and certain changes of control of Intersil.
The occurrence of any event of default could result in the acceleration of
Intersil's and the guarantors' obligations under the senior credit facilities,
which could materially and adversely affect holders of Class A Common Stock.

                                       55
SHARES ELIGIBLE FOR FUTURE SALE

     Upon consummation of this offering, 50,237,649 shares of Class A Common
Stock will be outstanding (excluding 7,500,000 shares issuable upon exercise of
employee stock options, of which 3,177,184 were issued and outstanding at August
24, 2000) and 49,746,482 shares of Class B Common Stock will be outstanding.
Class A and Class B shares are convertible into the other on a one-for-one
basis. 43,096,424 shares of Class A Common Stock, which includes the 10,000,000
shares sold in this offering (assuming the underwriters do not exercise their
over-allotment option), the 23,000,000 shares sold in our initial public
offering, the 2,423,608 shares issued in connection with the exercise of
warrants, the 4,322,816 shares issued in connection with the exercise of options
and the 3,350,000 shares issued to certain shareholders of NWN will be freely
tradable without further registration under the Securities Act, unless held by
an "affiliate" of our company as that term is defined in Rule 144. All of the
remaining 7,141,225 shares of Class A Common Stock and the 49,746,482 shares of
Class B Common Stock, are "restricted securities," as such term is defined under
Rule 144 promulgated under the Securities Act of 1933. These shares are
restricted securities because they were issued in private transactions not
involving a public offering and may not be sold in the absence of registration
other than in accordance with Rule 144 or another exemption from registration
under the Securities Act and will be available for resale under Rule 144, as
described below. In addition, we can currently issue up to 665,000 shares of our
Class A Common Stock in connection with future acquisitions, all of which will
be freely tradable upon issuance.

LOCK-UP AGREEMENTS

     Our directors, executive officers and various shareholders, including the
selling shareholders, have entered into lock-up agreements which generally
provide that these holders will not offer, sell, contract to sell, grant any
option to purchase or otherwise dispose of our common stock or any securities
exercisable for or convertible into our common stock owned by them for a period
of 90 days after consummation of the offering without the prior written consent
of the representatives of the underwriters. In addition, shareholders who
received our common stock in the acquisition of NWN have entered into lock-up
agreements which restrict the disposition of 131,844 shares of common stock and
79,106 shares of common stock prior to August 23, 2001 and August 23, 2002,
respectively. A total of 296,540 shares of common stock received in the
acquisition are held by us in escrow until May 29, 2001. The lock-up agreements
executed by our employees and directors also cover any shares they may acquire
upon the exercise of options. Shares subject to lock-up agreements may not be
sold until these agreements expire or are waived by Credit Suisse First Boston
Corporation.

RULE 144

     In general, under Rule 144 as currently in effect, if a minimum of one year
has elapsed since the later of the date of acquisition of the restricted
securities from the issuer or from an affilate of the issuer, a person (or
persons whose shares of Class A Common Stock are aggregated), including persons
who may be deemed our affiliates, would be entitled to sell within any
three-month period a number of shares of Class A Common Stock that does not
exceed the greater of:

     o one percent of the then-outstanding shares of Class A Common Stock, which
       will equal approximately 502,376 shares immediately after this
       offering; or

     o the average weekly trading volume during the four calendar weeks
       preceding the date on which notice of the sale is filed with the
       Securities and Exchange Commission.

     Sales under Rule 144 are also subject to restrictions as to the manner of
sale, notice requirements and the availability of current public information
about our company. In addition, under Rule 144(k), if a period of at least two
years has elapsed since the later of the date restricted securities were
acquired from our company or the date they were acquired from an affiliate of
our company, a shareholder who is not an affiliate of our company at the time of
sale and who has not been an affiliate of our company for at least three months
prior to the sale would be entitled to sell shares of Class A Common Stock in
the public market

                                       56
immediately without compliance with the foregoing requirements under Rule 144,
unless otherwise restricted. Rule 144 does not require the same person to have
held the securities for the applicable periods.

     The remaining 56,887,707 shares of Class A Common Stock (including shares
of Class A Common Stock issued upon conversion of the 49,746,482 outstanding
shares of Class B Common Stock) will be "restricted securities" and will be
available for sale in the open market after the expiration of the 90-day lock-up
period described above, subject to the volume and other limitations under
Rule 144.

REGISTRATION RIGHTS

     Beginning August 14, 2000, some of our shareholders have the right to cause
us to register the sale of their shares under the Securities Act and our other
current shareholders may have the right to have their shares covered by the
registration statement. See "Description of Capital Stock--Registration Rights
Agreement."

EMPLOYEE PLANS

     We filed a registration statement under the Securities Act to register
8,833,334 shares to be issued pursuant to our employee benefit plans. As a
result, any shares issued pursuant to the exercise of options or rights under
the 1999 Equity Compensation Plan or the Intersil Holding Corporation Employee
Stock Purchase Plan will also be freely tradable in the public market. However,
shares held by affiliates will still be subject to the volume limitation, manner
of sale, notice and public information requirements of Rule 144.

     As of August 24, 2000, we had granted options to purchase 3,177,184 shares
of common stock (of which 235,311 had been exercised), and we had reserved
4,322,816 shares of common stock for possible future issuance pursuant to the
exercise of stock options issued under the 1999 Equity Compensation Plan.

     We have also reserved 1,333,334 shares of common stock for possible future
issuance under our Employee Stock Purchase Plan. See "Risk Factors--Risks
Relating to Future Sales," "Management--1999 Equity Compensation Plan" and
"Management--Employee Stock Purchase Plan."

                                       57
UNITED STATES TAX CONSEQUENCES TO NON-UNITED STATES HOLDERS

     The following is a general discussion of the material United States federal
income and estate tax consequences of the ownership and disposition of the Class
A Common Stock applicable to Non-United States Holders of such Class A Common
Stock. A "Non-United States Holder" is any holder that for United States federal
income tax purposes is not a United States person. For purposes of this
discussion, the term "United States person" means: (i) a citizen or resident of
the United States; (ii) a corporation or other entity taxable as a corporation
created or organized in the United States or under the laws of the United States
or of any political subdivision thereof; (iii) an estate the income of which is
included in gross income for United States federal income tax purposes
regardless of its source; or (iv) a trust if its administration is subject to
the primary supervision of a United States court and one or more United States
persons have the authority to control all substantial decisions of the trust. If
a partnership holds our Class A Common Stock, the tax treatment of a partner
generally will depend upon the status of the partner and upon the activities of
the partnership. Partners of partnerships holding our Class A Common Stock
should consult their tax advisors.

     This discussion does not address all aspects of United States federal
income and estate taxation that may be relevant in light of such Non-United
States Holder's particular facts and circumstances (such as being a U.S.
expatriate) and does not address any tax consequences arising under the laws of
any state, local or non-United States taxing jurisdiction. Furthermore, the
following discussion is based on current provisions of the Internal Revenue Code
of 1986, as amended (the "Code") and administrative and judicial interpretations
thereof, all as in effect on the date hereof, and all of which are subject to
change, possibly with retroactive effect.

     We have not and will not seek a ruling from the Internal Revenue Service
with respect to the United States federal income and estate tax consequences
described below, and as a result, there can be no assurance that the IRS will
not disagree with or challenge any of the conclusions set forth in this
discussion.

     Investors are urged to consult their own tax advisors with respect to the
tax consequences of the ownership and disposition of our common stock, including
the application and effect of the laws of any state, local, foreign or other
taxing jurisdiction.

DIVIDENDS

     We have never paid, and do not have any current plans to pay cash dividends
on our Class A Common Stock. Cash dividends would constitute dividends for
United States tax purposes to the extent paid from our current and accumulated
earnings and profits, as determined under United States federal income tax
principles. To the extent those dividends exceeded our current and accumulated
earnings and profits, the dividends will constitute a return of capital and
would first reduce a Holder's basis, but not below zero, and then would be
treated as gain from the sale of stock. Should we ever pay a cash dividend, any
dividend paid to a Non-United States Holder of Class A Common Stock generally
would be subject to United States withholding tax at the then-effective U.S.
withholding tax rate (currently 30% of the gross amount of the dividend) or such
lower rate as may be specified by an applicable tax treaty. Dividends received
by a Non-United States Holder that are effectively connected with a United
States trade or business conducted by such Non-United States Holder or, if a tax
treaty applies, attributable to a United States permanent establishment of such
Non-United States Holder, would be exempt from such withholding tax, provided
such Non-United States Holder complies with applicable certification and
disclosure requirements. However, any such effectively connected or attributable
dividends, net of deductions and credits, would be taxed at the same graduated
rates that apply to United States persons (all or a portion of those dividends,
in the case of a corporate Non-United States Holder, may be subject to the
branch profits tax at the rate of 30% (or a lower treaty rate, if applicable)).

     Dividends may be subject to backup withholding at the rate of 31% unless
the Non-United States Holder certifies to required information in accordance
with United States Treasury Regulations applicable to withholding and
information reporting. Currently, backup withholding does not apply to dividends
paid to a Non-United States Holder at an address outside the United States.
However, under final regulations regarding withholding and information
reporting, which will generally be effective for payments made after December
31, 2000, payment of dividends to a Non-United States Holder at an address
outside the United States may be subject to backup withholding unless such
Non-United States Holder satisfies applicable certification

                                       58
requirements. Backup withholding, if applied, is not an additional tax. Rather,
the tax liability of the person subject to backup withholding will be reduced by
the amount of tax withheld. If withholding results in an overpayment of taxes, a
refund may be obtained, provided that the required information is furnished to
the IRS.

     Generally, we must report annually to the IRS the amount of dividends paid,
the name and address of the recipient, and the amount, if any, of tax withheld.
A similar report is sent to the holder. Pursuant to tax treaties or other
agreements, the IRS may make such reports available to tax authorities in the
recipient's country of residence.

GAIN ON DISPOSITION OF COMMON STOCK

     A Non-United States Holder generally will not be subject to United States
federal income tax on any gain realized upon the sale or other disposition of
its common stock unless: (i) the gain is effectively connected with a United
States trade or business of the Non-United States Holder (all or a portion of
which gain, in the case of a corporate Non-United States Holder, may be subject
to the branch profits tax at the rate of 30% (or lower treaty rate, if
applicable)), (ii) the Non-United States Holder is an individual who holds the
common stock as a capital asset (within the meaning of Section 1221 of the Code)
and who is present in the United States for a period or periods aggregating 183
days or more during the taxable year in which the sale or disposition occurs and
other conditions are met, or (iii) we are or have been a "United States real
property holding corporation" for United States federal income tax purposes at
any time within the shorter of the five-year period preceding the disposition or
the Non-United States Holder's holding period of its common stock. We have
determined that we are not, and do not believe that we are likely to become, a
"United States real property holding corporation" for United States federal
income tax purposes. However, no assurance can be provided that we will not
become a United States real property holding corporation. If we were to become a
United States real property holding corporation, gains realized by a Non-United
States Holder that did not directly or indirectly own more than 5% of our common
stock at any time during the shorter of the five-year period preceding the
disposition or the Holder's holding period generally would not be subject to
United States federal income tax as a result of the status of our company as a
United States real property holding corporation, provided that our common stock
was regularly traded on an established securities market.

     The payment of the proceeds of a sale of common stock to or through the
United States office of a broker is currently subject to both information
reporting and backup withholding at the rate of 31% unless the Non-United States
Holder certifies its non-United States status under penalties of perjury or
otherwise establishes an exemption. Generally, the payment of proceeds of a
disposition by a Non-United States Holder of common stock outside the United
States to or through a foreign office of a broker will not be subject to backup
withholding. However, such payments will be subject to information reporting if
the broker is a United States person or has certain other connections to the
United States unless the Non-United States Holder establishes an exemption in
accordance with United States Treasury Regulations regarding withholding and
information reporting, as applicable.

     The final regulations regarding withholding and information reporting as to
payments made after December 31, 2000 unify current certification procedures and
forms and clarify reliance standards. Except as noted above with respect to
foreign brokers that are partnerships, the final regulations generally do not
significantly alter the substantive withholding and information reporting
requirements but do alter the procedures for claiming the benefits of an income
tax treaty and change the certification procedures relating to the receipt by
intermediaries of payments on behalf of the beneficial owner of shares of common
stock. Non-United States Holders should consult their own tax advisors regarding
the effect, if any, of the final regulations on their particular situations.

ESTATE TAX

     Common stock owned or treated as owned at the time of death by an
individual who is not a citizen or resident of the United States for federal
estate tax purposes will be included in such individual's estate for United
States federal estate tax purposes, unless an applicable estate tax treaty
applies other rules, and as a result may be subject to United States federal
estate tax.

                                       59
UNDERWRITING

     Under the terms and subject to the conditions contained in an underwriting
agreement dated               , 2000, we and the selling shareholders have
agreed to sell to the underwriters named below, for whom Credit Suisse First
Boston Corporation is acting as representative, the following respective numbers
of shares of common stock:
NUMBER
UNDERWRITER                                                     OF SHARES
-------------------------------------------------------------   ---------
Credit Suisse First Boston Corporation.......................

                                                               ----------
     Total...................................................  10,000,000
                                                               ==========
The underwriting agreement provides that the underwriters are obligated to
purchase all the shares of common stock in the offering if any are purchased,
other than those shares covered by the over-allotment option described below.
The underwriting agreement also provides that if an underwriter defaults the
purchase commitments of non-defaulting underwriters may be increased or the
offering of common stock may be terminated.

     We and Sterling have granted to the underwriters a 30-day option to
purchase on a pro rata basis up to 500,000 additional shares from us and
1,000,000 additional outstanding shares from Sterling at the public
offering price less the underwriting discounts and commissions. The option may
be exercised only to cover any over-allotments of common stock.

     The underwriters propose to offer the shares of common stock initially at
the public offering price on the cover page of this prospectus and to selling
group members at that price less a concession of $        per share. The
underwriters and selling group members may allow a discount of $        per
share on sales to other broker/dealers. After the public offering, the
public offering price and concession and discount to broker/dealers may be
changed by the representatives.

     The following table summarizes the compensation and estimated expenses we
and the selling shareholders will pay.
PER SHARE                        TOTAL
                                                      --------------------------     --------------------------
                                                        WITHOUT         WITH           WITHOUT         WITH
                                                         OVER-          OVER-           OVER-          OVER-
                                                       ALLOTMENT      ALLOTMENT       ALLOTMENT      ALLOTMENT
                                                      -----------    -----------     -----------    -----------
Underwriting Discounts and Commissions paid by
  us...............................................   $              $               $              $
Expenses payable by us.............................   $              $               $              $
Underwriting Discounts and Commissions paid by
  selling shareholders.............................   $              $               $              $
Expenses payable by the selling shareholders.......   $              $               $              $
We have agreed that we will not offer, sell, contract to sell, pledge or
otherwise dispose of, directly or indirectly, or file with the Securities and
Exchange Commission a registration statement under the Securities Act relating
to, any shares of our common stock or securities convertible into or
exchangeable or exercisable for any shares of our common stock, or publicly
disclose the intention to make any such offer, sale, pledge, disposition or
filing, without the prior written consent of Credit Suisse First Boston
Corporation for a period of 90 days after the date of this prospectus, except
issuances pursuant to the conversion or exchange of convertible or exchangeable
securities or the exercise of warrants or options, in each case outstanding on
the date hereof, grants of employee stock options pursuant to the terms of a
plan in effect on the date hereof, issuances pursuant to the exercise of such
options, the filing of registration statements on Form S-8 and amendments
thereto in connection with those stock options or our employee stock purchase
plans in existence on the date hereof and the issuance of shares or options in
acquisitions in which the acquiror of such shares agrees to the foregoing
restrictions.

     Our officers, directors and various shareholders, including the selling
shareholders, have agreed that they will not offer, sell, contract to sell,
pledge or otherwise dispose of, directly or indirectly, any shares of our common
stock or securities convertible into or exchangeable or exercisable for any
shares of our common stock, enter into a transaction which would have the same
effect, or enter into any swap, hedge or other

                                       60
arrangement that transfers, in whole or in part, any of the economic
consequences of ownership of our common stock, whether any such aforementioned
transaction is to be settled by delivery of our common stock or such other
securities, in cash or otherwise, or publicly disclose the intention to make any
such offer, sale, pledge or disposition, or to enter into any such transaction,
swap, hedge or other arrangement, without, in each case, the prior written
consent of Credit Suisse First Boston Corporation for a period of 90 days after
the date of this prospectus.

     We and, to a limited extent, the selling shareholders have agreed to
indemnify the underwriters against liabilities under the Securities Act, or
contribute to payments which the underwriters may be required to make in that
respect.

     Our Class A Common Stock is traded on The Nasdaq Stock Market's National
Market, under the symbol "ISIL."

     Credit Suisse First Boston, New York branch, an affiliate of Credit Suisse
First Boston Corporation, is a lender and the Administrative Agent under our
senior credit facilities. An affiliate of Credit Suisse First Boston Corporation
owns an interest in Sterling Holding Company LLC, our principal shareholder, and
could have the right to exchange that interest for up to 1,070,177 shares of our
common stock as of June 30, 2000. No underwriter has the right, directly or
indirectly, to designate any member of our board of directors.

     In connection with the offering, the underwriters may engage in stabilizing
transactions, over-allotment transactions, syndicate covering transactions,
penalty bids and passive market making in accordance with Regulation M under the
Exchange Act.

     o Stabilizing transactions permit bids to purchase the underlying security
       so long as the stabilizing bids do not exceed a specified maximum.

     o Over-allotment involves sales by the underwriters of shares in excess of
       the number of shares the underwriters are obligated to purchase, which
       creates a syndicate short position. The short position may be either a
       covered short position or a naked short position. In a covered short
       position, the number of shares over-allotted by the underwriters is not
       greater than the number of shares that they may purchase in the
       over-allotment option. In a naked short position, the number of shares
       involved is greater than the number of shares in the over-allotment
       option. The underwriters may close out any short position by either
       exercising their over-allotment option and/or purchasing shares in the
       open market.

     o Syndicate covering transactions involve purchases of the common stock in
       the open market after the distribution has been completed in order to
       cover syndicate short positions. In determining the source of shares to
       close out the short position, the underwriters will consider, among other
       things, the price of shares available for purchase in the open market as
       compared to the price at which they may purchase shares through the
       over-allotment option. If the underwriters sell more shares than could be
       covered by the over-allotment option--a naked short position--that
       position can only be closed out by buying shares in the open market. A
       naked short position is more likely to be created if the underwriters are
       concerned that there may be downward pressure on the price of the shares
       in the open market after pricing that could adversely affect investors
       who purchase in the offering.

     o Penalty bids permit the representatives to reclaim a selling concession
       from a syndicate member when the common stock originally sold by the
       syndicate member is purchased in a stabilizing or syndicate covering
       transaction to cover syndicate short positions.

     o In passive market making, market makers in the common stock who are
       underwriters or prospective underwriters may, subject to limitations,
       make bids for or purchases of the common stock until the time, if any, at
       which a stabilizing bid is made.

These stabilizing transactions, syndicate covering transactions and penalty bids
may have the effect of raising or maintaining the market price of the common
stock or preventing or retarding a decline in the market price of the common
stock. As a result, the price of the common stock may be higher than the price
that might otherwise exist in the open market. These transactions may be
effected on The Nasdaq National Market or otherwise and, if commenced, may be
discontinued at any time.

                                       61
NOTICE TO CANADIAN RESIDENTS

RESALE RESTRICTIONS

     The distribution of the common stock in Canada is being made only on a
private placement basis exempt from the requirement that we and the selling
shareholders prepare and file a prospectus with the securities regulatory
authorities in each province where trades of common stock are made. Any resale
of the common stock in Canada must be made under applicable securities laws,
which will vary depending on the relevant jurisdiction, and which may require
resales to be made under available statutory exemptions or under a discretionary
exemption granted by the applicable Canadian securities regulatory authority.
Purchasers are advised to seek legal advice prior to any resale of the common
stock.

REPRESENTATIONS OF PURCHASERS

     By purchasing common stock in Canada and accepting a purchase confirmation
a purchaser is representing to us, the selling shareholders and the dealer from
whom the purchase confirmation is received that:

     o the purchaser is entitled under applicable provincial securities laws to
       purchase the common stock without the benefit of a prospectus qualified
       under those securities laws,

     o where required by law, that the purchaser is purchasing as principal and
       not as agent, and

     o the purchaser has reviewed the text above under Resale Restrictions.

RIGHTS OF ACTION (ONTARIO PURCHASERS)

     The securities being offered are those of a foreign issuer and Ontario
purchasers will not receive the contractual right of action prescribed by
Ontario securities law. As a result, Ontario purchasers must rely on other
remedies that may be available, including common law rights of action for
damages or rescission or rights of action under the civil liability provisions
of the U.S. federal securities laws.

ENFORCEMENT OF LEGAL RIGHTS

     All of the issuer's directors and officers as well as the experts named
herein and the selling shareholders may be located outside of Canada and, as a
result, it may not be possible for Canadian purchasers to effect service of
process within Canada upon the issuer or such persons. All or a substantial
portion of the assets of the issuer and such persons may be located outside of
Canada and, as a result, it may not be possible to satisfy a judgment against
the issuer or such persons in Canada or to enforce a judgment obtained in
Canadian courts against such issuer or persons outside of Canada.

NOTICE TO BRITISH COLUMBIA RESIDENTS

     A purchaser of common stock to whom the Securities Act (British Columbia)
applies is advised that the purchaser is required to file with the British
Columbia Securities Commission a report within ten days of the sale of any
common stock acquired by the purchaser pursuant to this offering. The report
must be in the form attached to British Columbia Securities Commission Blanket
Order BOR #95/17, a copy of which may be obtained from us. Only one such report
must be filed for common stock acquired on the same date and under the same
prospectus exemption.

TAXATION AND ELIGIBILITY FOR INVESTMENT

     Canadian purchasers of common stock should consult their own legal and tax
advisors with respect to the tax consequences of an investment in the common
stock in their particular circumstances and about the eligibility of the common
stock for investment by the purchaser under relevant Canadian legislation.

                                       62
LEGAL MATTERS

     The validity of the Class A Common Stock will be passed upon for us by
Dechert, Philadelphia, Pennsylvania. Dechert beneficially owns 80,300 shares of
our Class A Common Stock. Members of Dechert who provided legal advice in
connection with this offering beneficially own 2,500 shares of our Class A
Common Stock. The underwriters have been represented by Cravath, Swaine & Moore,
New York, New York.

                                    EXPERTS

     Ernst & Young LLP, independent auditors, have audited the Intersil Holding
Corporation (Successor) consolidated financial statements at June 30, 2000, and
for the 46 weeks then ended and the consolidated financial statements of the
Harris Semiconductor Business (Predecessor) at June 2, 1999, and for each of the
two years in the period ended July 2, 1999 and the six weeks in the period ended
August 13, 1999, as set forth in their report. We have included our financial
statements in the prospectus and elsewhere in the registration statement in
reliance on Ernst & Young LLP's report, given on their authority as experts in
accounting and auditing.

                      WHERE YOU CAN FIND MORE INFORMATION

     We file annual, quarterly and special reports and other information with
the Securities and Exchange Commission. You may read and copy any reports or
other information filed by us at the Securities and Exchange Commission's public
reference room at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549 and at the SEC's regional offices located at Northwestern
Atrium Center, 500 West Madison Street, Suite 1400, Chicago, IL 60661 and Seven
World Trade Center, 13th Floor, New York, NY 10048. Copies of this material can
be obtained from the Public Reference Section of the SEC upon payment of fees
prescribed by the SEC. You may call the Securities and Exchange Commission at
1-800-SEC-0330 for further information contained in the public reference room.
Our filings with the Securities and Exchange Commission will also be available
to the public from commercial document retrieval services and at the Securities
and Exchange Commission's Web site at "http://www.sec.gov."

     We have filed with the SEC a registration statement on Form S-1 under the
Securities Act, covering the shares of Class A Common Stock to be offered
pursuant to this prospectus. This prospectus, which is a part of the
registration statement, does not contain all of the information included in the
registration statement. Any statement made in this prospectus concerning the
contents of any contract, agreement or other document is not necessarily
complete. For further information regarding our company and the Class A Common
Stock offered by this prospectus, please reference the registration statement,
including its exhibits. If we have filed any contract, agreement or other
document as an exhibit to the registration statement, you should read the
exhibit for a more complete understanding of the documents or matter involved.

     Copies of the registration statement, including all related exhibits and
schedules, may be inspected without charge at the public reference facilities
maintained by the SEC, or obtained at prescribed rates from the Public Reference
Section of the SEC at the address set forth above. In addition, you may request
a copy of any of these filings, at no cost, by writing or telephoning us at the
following address or phone number: Intersil Holding Corporation, 7585 Irvine
Center Drive, Suite 100, Irvine, California 92618; the telephone number at that
address is (949) 341-7062.

                                       63
INDEX TO FINANCIAL STATEMENTS
                          INTERSIL HOLDING CORPORATION
PAGE
                                                                                                              ----
Independent Certified Public Accountants' Report...........................................................    F-2

Consolidated Statements of Operations and Comprehensive Income.............................................    F-3

Consolidated Balance Sheets................................................................................    F-4

Consolidated Statements of Cash Flows......................................................................    F-5

Consolidated Statement of Shareholders' Equity.............................................................    F-6

Notes to Consolidated Financial Statements.................................................................    F-7
F-1
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS' REPORT

The Board of Directors
Intersil Holding Corporation

We have audited the accompanying consolidated balance sheet of Harris
Semiconductor Business (Semiconductor Business) (Predecessor), which was wholly
owned by Harris Corporation, as of July 2, 1999 and the related statement of
operations, comprehensive income and cash flows for each of the two fiscal years
in the period ended July 2, 1999 and the six weeks ended August 13, 1999,
respectively. We have also audited the accompanying consolidated balance sheet
of Intersil Holding Corporation (Successor) as of June 30, 2000 and the related
statements of operations, comprehensive income, shareholders' equity, and cash
flows for the 46 weeks ended June 30, 2000. Our audits also included the
financial statement schedule listed at Item 16. These financial statements and
financial statement schedule are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements and
financial statement schedule based on our audits.

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

The accompanying Predecessor consolidated financial statements were prepared on
the basis of presentation as described in Note A. The results of operations are
not necessarily indicative of the results of operations that would be recorded
by Semiconductor Business on a stand-alone basis.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of Intersil Holding
Corporation as the Successor and Predecessor companies at June 30, 2000 and
July 2, 1999 and the consolidated results of their operations and their cash
flows for each of the two years in the period ended July 2, 1999 and for the six
weeks and 46 weeks ended August 13, 1999 and June 30, 2000, respectively, on the
basis described in Note A, in conformity with accounting principles generally
accepted in the United States. Also, in our opinion, the related financial
statement schedule, when considered in relation to the basic financial
statements taken as a whole, present fairly in all material respects the
information set forth therein.

Jacksonville, Florida                                          Ernst & Young LLP
July 21, 2000

                                      F-2
INTERSIL HOLDING CORPORATION

                     CONSOLIDATED STATEMENTS OF OPERATIONS
PREDECESSOR               PREDECESSOR        SUCCESSOR
                                                                  ----------------------------    ---------------    --------------
                                                                       FISCAL YEAR ENDED          SIX WEEKS ENDED    46 WEEKS ENDED
                                                                  ----------------------------    ---------------    --------------
                                                                  JULY 3, 1998    JULY 2, 1999    AUGUST 13, 1999    JUNE 30, 2000
                                                                  ------------    ------------    ---------------    --------------
                                                                     (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
REVENUE
  Product sales................................................     $576,836        $532,718         $  57,336          $596,849

COSTS AND EXPENSES
  Cost of product sales........................................      369,332         349,776            39,681           352,513
  Research and development.....................................       75,125          67,079             8,499            69,456
  Selling, general and administrative..........................       98,184          83,998            10,908            97,227
  Harris corporate expense allocation..........................        9,962           9,303             1,164                --
  Intangible amortization......................................        2,292           2,414               326            10,686
  In-process research and development..........................           --              --                --            20,239
  Other........................................................           --              --                --             1,178
                                                                    --------        --------         ---------          --------
Operating income (loss)........................................       21,941          20,148            (3,242)           45,550
  Loss on sale of Malaysian operation..........................           --              --                --            24,825
  Interest expense.............................................           43             129                --            41,924
  Interest income..............................................         (957)         (1,360)             (111)           (3,720)
                                                                    --------        --------         ---------          --------
  Income (loss) before income taxes and
     extraordinary item........................................       22,855          21,379            (3,131)          (17,479)
  Income taxes (benefit).......................................        9,944          (6,027)             (102)             (289)
                                                                    --------        --------         ---------          --------
  Net income (loss) before extraordinary item..................       12,911          27,406            (3,029)          (17,190)
  Extraordinary item--loss on extinguishment of debt, net of
     tax effect................................................           --              --                --           (25,518)
                                                                    --------        --------         ---------          --------
NET INCOME (LOSS)..............................................       12,911          27,406            (3,029)          (42,708)
Preferred dividends............................................           --              --                --             5,391
                                                                    --------        --------         ---------          --------
Net income (loss) to common shareholders.......................     $ 12,911        $ 27,406         $  (3,029)         $(48,099)
                                                                    ========        ========         =========          ========
BASIC AND DILUTED LOSS PER SHARE:
  Loss before extraordinary item...............................                                                         $  (0.30)
  Extraordinary item...........................................                                                         $  (0.33)
                                                                                                                        --------
  Net loss.....................................................                                                         $  (0.63)
                                                                                                                        ========
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING (IN MILLIONS):
  Basic and diluted............................................                                                             76.7
                                                                                                                        ========
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
PREDECESSOR               PREDECESSOR        SUCCESSOR
                                                                  ----------------------------    ---------------    --------------
                                                                       FISCAL YEAR ENDED          SIX WEEKS ENDED    46 WEEKS ENDED
                                                                  ----------------------------    ---------------    --------------
                                                                  JULY 3, 1998    JULY 2, 1999    AUGUST 13, 1999    JUNE 30, 2000
                                                                  ------------    ------------    ---------------    --------------
                                                                                  (IN THOUSANDS)
Net income (loss)..............................................     $ 12,911        $ 27,406          $(3,029)          $(42,708)
Other comprehensive income (loss):
  Currency translation adjustments.............................       (1,851)           (574)           2,475              1,636
                                                                    --------        --------          -------           --------
Comprehensive income (loss)....................................     $ 11,060        $ 26,832          $  (554)          $(41,072)
                                                                    ========        ========          =======           ========
See Notes to Consolidated Financial Statements.

                                      F-3
INTERSIL HOLDING CORPORATION

                          CONSOLIDATED BALANCE SHEETS
PREDECESSOR       SUCCESSOR
                                                                                                     ------------    -------------
                                                                                                     JULY 2, 1999    JUNE 30, 2000
                                                                                                     ------------    -------------
                                                                                                            (IN THOUSANDS)
ASSETS
Current Assets
  Cash and cash equivalents.......................................................................     $     --        $ 211,940
  Trade receivables, less allowances for collection loss ($582 as of July 2, 1999 and $1,341 as of
    June 30, 2000)................................................................................      100,674          111,695
  Inventories.....................................................................................      153,822          126,481
  Prepaid expenses................................................................................        3,725           10,645
  Income tax receivable...........................................................................        1,527            1,254
  Deferred income taxes...........................................................................        3,476           25,768
                                                                                                       --------        ---------
       Total Current Assets.......................................................................      263,224          487,783
Other Assets
  Property, plant and equipment, less allowance for depreciation ($582,616 as of July 2, 1999 and
    $36,699 as of June 30, 2000)..................................................................      410,530          225,484
  Intangibles, less accumulated amortization ($19,929 as of July 2, 1999 and $10,686
    as of June 30, 2000)..........................................................................       45,368          190,150
  Other...........................................................................................       42,057           30,521
                                                                                                       --------        ---------
       Total Other Assets.........................................................................      497,955          446,155
                                                                                                       --------        ---------
Total Assets......................................................................................     $761,179        $ 933,938
                                                                                                       ========        =========
LIABILITIES AND SHAREHOLDERS' EQUITY/BUSINESS EQUITY
Current Liabilities
  Trade payables..................................................................................     $ 31,068        $  36,991
  Retirement plan accruals........................................................................       13,640            6,228
  Accrued compensation............................................................................       19,283           32,398
  Accrued interest and sundry taxes...............................................................        3,193           10,512
  Other accrued items.............................................................................       16,418           22,734
  Distributor reserves............................................................................        6,542            7,366
  Unearned service income.........................................................................          567              129
  Long-term debt--current portion.................................................................          360              404
                                                                                                       --------        ---------
       Total Current Liabilities..................................................................       91,071          116,762
Other Liabilities
  Deferred income taxes...........................................................................        7,022           21,992
  Long-term debt..................................................................................        4,207          116,188
Shareholders' Equity/Business Equity
  Preferred Stock, $1,000 par value, 100,000 shares authorized, no shares issued or outstanding at
    June 30, 2000.................................................................................           --               --
  Class A Common Stock, $.01 par value, voting; 300,000,000 shares authorized, 44,773,152 shares
    issued and outstanding at June 30, 2000.......................................................           --              448
  Class B Common Stock, $.01 par value, non-voting; 300,000,000 shares authorized, 49,746,482
    shares issued and outstanding at June 30, 2000................................................           --              497
  Additional paid-in capital......................................................................           --          719,123
  Business equity.................................................................................      661,388               --
  Retained deficit................................................................................           --          (42,708)
  Accumulated other comprehensive (loss) income...................................................       (2,509)           1,636
                                                                                                       --------        ---------
       Total Shareholders' Equity/Business Equity.................................................      658,879          678,996
                                                                                                       --------        ---------
       Total Liabilities and Shareholders' Equity/Business Equity.................................     $761,179        $ 933,938
                                                                                                       ========        =========
See Notes to Consolidated Financial Statements.

                                      F-4
INTERSIL HOLDING CORPORATION

                     CONSOLIDATED STATEMENTS OF CASH FLOWS
PREDECESSOR               PREDECESSOR
                                                                  ----------------------------    ---------------
                                                                                                    SIX WEEKS
                                                                       FISCAL YEAR ENDED               ENDED
                                                                  ----------------------------    ---------------
                                                                  JULY 3, 1998    JULY 2, 1999    AUGUST 13, 1999
                                                                  ------------    ------------    ---------------
                                                                                  (IN THOUSANDS)
OPERATING ACTIVITIES:
  Net income (loss)............................................     $ 12,911        $ 27,406         $  (3,029)
Adjustments to reconcile net income (loss) to net cash provided
  by operating activities
    Depreciation...............................................       65,036          78,217             8,747
    Amortization...............................................        2,295           2,414               326
    Provisions for inventory obsolescence......................        7,317           3,894             1,919
    Write-off of in-process research and development...........           --              --                --
    Write-off of unearned compensation.........................           --              --                --
    Loss on sale of Malaysian operation........................           --              --                --
    Non-current deferred income taxes..........................         (461)          1,896            (4,756)
  Changes in assets and liabilities:
    Trade receivables..........................................        1,270          10,001            14,532
    Inventories................................................      (17,176)         22,516            (3,568)
    Prepaid expenses...........................................          506             933               674
    Trade payables and accrued liabilities.....................      (14,399)        (13,950)          (18,705)
    Unearned service income....................................          (32)            319                --
    Income taxes...............................................       (3,866)         (4,486)            4,430
    Other......................................................       (5,070)        (17,911)            2,812
                                                                    --------        --------         ---------
      Net cash provided by operating activities................       48,331         111,249             3,382
INVESTING ACTIVITIES:
Proceeds from sale of Malaysian operation......................           --              --                --
Cash paid for acquired business................................           --          (1,335)               --
Property, plant and equipment..................................      (90,184)        (38,563)           (1,887)
                                                                    --------        --------         ---------
      Net cash provided by (used in) investing activities......      (90,184)        (39,898)           (1,887)
FINANCING ACTIVITIES:
  Proceeds from offering.......................................           --              --                --
  Proceeds from exercise of stock options......................           --              --                --
  Proceeds from borrowings.....................................        2,750             800                --
  Payments of borrowings.......................................          (83)           (302)              (32)
  Net cash transfer and billings from (to) parent..............       41,844         (67,030)           (1,198)
                                                                    --------        --------         ---------
      Net cash provided by (used in) financing activities......       44,511         (66,532)           (1,230)
  Effect of exchange rates on cash and cash equivalents........       (2,658)         (4,819)            1,177
                                                                    --------        --------         ---------
      Net increase in cash and cash equivalents................           --              --             1,442
      Cash and cash equivalents at the beginning of the
         period................................................           --              --                --
                                                                    --------        --------         ---------
      Cash and cash equivalents at the end of the period.......     $     --        $     --         $   1,442
                                                                    ========        ========         =========
SUPPLEMENTAL DISCLOSURES--NON-CASH ACTIVITIES:
  Exchange of preferred stock for common stock...................................................................
  Common Stock issued in acquisition of No Wires Needed B.V......................................................
  Additional paid-in capital from tax benefit on
    exercise of non-qualified stock options......................................................................
SUCCESSOR
                                                                 -----------------
                                                                   46 WEEKS ENDED
                                                                 -----------------
                                                                  JUNE 30, 2000
                                                                 -----------------
OPERATING ACTIVITIES:
  Net income (loss)............................................      $ (42,708)
Adjustments to reconcile net income (loss) to net cash provided
  by operating activities
    Depreciation...............................................         50,602
    Amortization...............................................         10,686
    Provisions for inventory obsolescence......................         23,906
    Write-off of in-process research and development...........         20,239
    Write-off of unearned compensation.........................            878
    Loss on sale of Malaysian operation........................         24,825
    Non-current deferred income taxes..........................         (4,680)
  Changes in assets and liabilities:
    Trade receivables..........................................        (24,991)
    Inventories................................................         (5,668)
    Prepaid expenses...........................................         (7,737)
    Trade payables and accrued liabilities.....................         43,036
    Unearned service income....................................           (437)
    Income taxes...............................................          2,290
    Other......................................................         20,898
                                                                     ---------
      Net cash provided by operating activities................        111,139
INVESTING ACTIVITIES:
Proceeds from sale of Malaysian operation......................         52,500
Cash paid for acquired business................................             --
Property, plant and equipment..................................        (38,813)
                                                                     ---------
      Net cash provided by (used in) investing activities......         13,687
FINANCING ACTIVITIES:
  Proceeds from offering.......................................        513,114
  Proceeds from exercise of stock options......................          1,985
  Proceeds from borrowings.....................................             --
  Payments of borrowings.......................................       (435,204)
  Net cash transfer and billings from (to) parent..............             --
                                                                     ---------
      Net cash provided by (used in) financing activities......         79,895
  Effect of exchange rates on cash and cash equivalents........           (158)
                                                                     ---------
      Net increase in cash and cash equivalents................        204,563
      Cash and cash equivalents at the beginning of the
         period................................................          7,377
                                                                     ---------
      Cash and cash equivalents at the end of the period.......      $ 211,940
                                                                     =========
SUPPLEMENTAL DISCLOSURES--NON-CASH ACTIVITIES:
  Exchange of preferred stock for common stock.................      $  89,400
                                                                     =========
  Common Stock issued in acquisition of No Wires Needed B.V....      $ 111,348
                                                                     =========
  Additional paid-in capital from tax benefit on
    exercise of non-qualified stock options....................      $   2,132
                                                                     =========
See Notes to Consolidated Financial Statements.

                                      F-5
INTERSIL HOLDING CORPORATION

                 CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
ACCUMULATED
                                                            COMMON STOCK       ADDITIONAL                    OTHER
                                                         ------------------     PAID-IN      RETAINED    COMPREHENSIVE
                                                         CLASS A    CLASS B     CAPITAL      DEFICIT        INCOME          TOTAL
                                                         -------    -------    ----------    --------    -------------    --------
                                                                                      (IN THOUSANDS)
Initial capitalization at August 14, 1999.............    $ 158      $ 509      $  5,935     $     --       $    --       $  6,602
Net (loss)............................................       --         --            --      (42,708)           --        (42,708)
Shares issued in initial public offering..............      220         --       512,894           --            --        513,114
Shares issued under Stock Option Plan.................        2         --         4,115           --            --          4,117
Shares sold to certain executives and foreign
  employees...........................................       --         --           878           --          (878)            --
Write-off of unearned compensation....................       --         --            --           --           878            878
Shares issued for acquisition of No Wires Needed
  B.V.................................................       30         --       111,318           --            --        111,348
Exchange of preferred stock...........................       26         --        89,374           --            --         89,400
Exchange of common stock..............................       12        (12)           --           --            --             --
Preferred dividends...................................       --         --        (5,391)          --            --         (5,391)
Foreign currency translation..........................       --         --            --           --         1,636          1,636
                                                          -----      -----      --------     --------       -------       --------
Balance at June 30, 2000..............................    $ 448      $ 497      $719,123     $(42,708)      $ 1,636       $678,996
                                                          =====      =====      ========     ========       =======       ========
See Notes to Consolidated Financial Statements.

                                      F-6
INTERSIL HOLDING CORPORATION

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

  YEARS ENDED JULY 3, 1998 AND JULY 2, 1999, SIX WEEKS ENDED AUGUST 13, 1999,
                        AND 46 WEEKS ENDED JUNE 30, 2000

NOTE A--ORGANIZATION AND BASIS OF PRESENTATION

ORGANIZATION

     Intersil Holding Corporation (Intersil Holding or Successor) was formed on
August 13, 1999 through a series of transactions in which Intersil Holding and
its wholly-owned subsidiary, Intersil Corporation (Intersil), acquired the
semiconductor business (semiconductor business or Predecessor) of Harris
Corporation (Harris) (the acquisition). Intersil Holding currently has no
operations but holds common stock related to its investment in Intersil.
Intersil and its wholly-owned domestic and foreign subsidiaries include the
operations of the Predecessor.

BASIS OF PRESENTATION

     The accompanying Successor consolidated financial statements subsequent to
August 13, 1999 include the accounts of Intersil Holding and Intersil
(collectively, the Company). All material intercompany transactions have been
eliminated in consolidation. The consolidated balance sheet as of July 2, 1999
and the consolidated statements of operations, comprehensive income and cash
flows for the fiscal years ended July 3, 1998 and July 2, 1999 and the six weeks
ended August 13, 1999 include the accounts of the semiconductor business, the
Predecessor company.

     Accordingly, the consolidated financial statements include the power,
communications, space and defense product lines of Harris' Semiconductor
Business that were purchased in the transaction. The transaction did not include
Harris' semiconductor suppression business or photomask operations or certain
patents in the memory field that were retained by Harris. The semiconductor
business, which was wholly-owned by Harris, designs, manufactures and sells
discrete semiconductors and standard and custom integrated circuits to the
semiconductor markets. The semiconductor business' manufacturing facilities
perform manufacturing operations related to other Harris Semiconductor Product
Lines. The semiconductor business was not a separate legal entity and the assets
and liabilities associated with the semiconductor business were components of a
larger business.

     The Predecessor's consolidated statements of operations include all
revenues and costs attributable to the semiconductor business. For cost of
sales, material costs are directly attributable to a product line and are
charged accordingly. Indirect costs are assigned using activity based costing.
Operating expenses (engineering, marketing, and administration & general) have
been allocated to the product lines based on sales or labor, as appropriate.
Harris corporate expense allocations were based on a percentage of the
semiconductor business' net sales. Interest expense was provided on direct
borrowings of the semiconductor business. Interest expense of Harris has not
been allocated to the Semiconductor Business.

     All of the allocations and estimates in the Predecessor's combined
statements of operations are based on assumptions that management believes are
reasonable under the circumstances. However, these allocations and estimates are
not necessarily indicative of the costs that would have resulted if the
Semiconductor Business had been operated on a stand alone basis.

     The semiconductor business sells products to other affiliated operations of
Harris. Sales to these operations are not material.

ACQUISITION OF HARRIS' SEMICONDUCTOR BUSINESS

     The total purchase price of the semiconductor business acquisition was
$614.3 million, which included transaction costs of approximately $7.8 million
and deferred financing costs of $12.2 million (Note H). The consideration paid
by Intersil Holding was $504.3 million in cash of which $420.0 million was
financed

                                      F-7
INTERSIL HOLDING CORPORATION

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

  YEARS ENDED JULY 3, 1998 AND JULY 2, 1999, SIX WEEKS ENDED AUGUST 13, 1999,
                        AND 46 WEEKS ENDED JUNE 30, 2000

NOTE A--ORGANIZATION AND BASIS OF PRESENTATION--(CONTINUED)

through borrowings from the senior credit facilities, the 13.25% Senior
Subordinated Notes and 13.5% Subordinated Holding "Pay-In-Kind" (PIK) Note and
the issuance of a $90.0 million PIK Note note to Harris.

     The acquisition was accounted for using the purchase method of accounting
and, accordingly, the operating results of the Semiconductor Business have been
included in Intersil's consolidated financial statements since the date of
acquisition. The total purchase price was allocated to the assets and
liabilities of the Semiconductor Business based upon their approximate fair
values. The fair values of the net assets acquired exceeded the purchase price
resulting in negative goodwill. This negative goodwill was allocated to the
identified intangibles and property and equipment based on their relative fair
values as follows (in millions).
Purchase price:

  Cash paid to Harris...........................       $ 504.3
  13.5% Subordinated PIK Note...................          90.0
  Transaction costs and fees....................          20.0
                                                       -------
Total purchase price............................       $ 614.3
                                                       =======
ALLOCATION OF
                                                   FAIR VALUE OF      EXCESS FAIR       ADJUSTED
                                                   ACQUIRED ASSETS      VALUE          FAIR VALUE
                                                   ---------------    -------------    -------------
Net current assets..............................       $ 160.6           $    --          $ 160.6
Other...........................................          17.2                --             17.2
Property and equipment..........................         481.0            (153.2)           327.8
Developed Technology............................          80.0             (23.9)            56.1
Customer base...................................          33.0             (10.0)            23.0
In-process research and development.............          29.0              (8.8)            20.2
Assembled workforce.............................          13.5              (4.1)             9.4
                                                       -------           -------          -------
                                                       $ 814.3           $(200.0)         $ 614.3
                                                       =======           =======          =======
Excess fair value of net assets acquired over
  purchase price................................       $ 200.0
                                                       =======
The appraisal of the acquired semiconductor business included $20.2 million
of purchased in-process research and development, which was related to various
products under development. This valuation represents the 10 year after-tax cash
flow of this in-process technology using a discount rate of 20%. The acquired
technology had not yet reached technological feasibility and had no future
alternative uses. Accordingly, it was written off at the time of the
acquisition. The remaining identified intangibles (developed technology,
customer base and assembled workforce) are being amortized over 5 to 11 years.

     In connection with the acquisition of the semiconductor business, Intersil
formulated a restructuring plan that included the termination of the employment
of 372 employees of the semiconductor business. At

                                      F-8
INTERSIL HOLDING CORPORATION

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

  YEARS ENDED JULY 3, 1998 AND JULY 2, 1999, SIX WEEKS ENDED AUGUST 13, 1999,
                        AND 46 WEEKS ENDED JUNE 30, 2000

NOTE A--ORGANIZATION AND BASIS OF PRESENTATION--(CONTINUED)

August 13, 1999, Intersil recorded $11.0 million in severance benefits and this
is included in the allocation of the acquisition cost. The severance includes
the following:
NO. OF
                              LOCATION                                  EMPLOYEES     AMOUNTS
---------------------------------------------------------------------   ---------    -------------
                                                                                     (IN MILLIONS)
Europe...............................................................       17           $ 5.6
Malaysia.............................................................      262             1.9
North America........................................................       93             3.5
                                                                           ---           -----
                                                                           372           $11.0
                                                                           ===           =====
For the 46 weeks ended June 30, 2000, approximately $10.1 million of these
restructuring costs had been paid out. As of June 30, 2000, the restructuring
liability was $0.9 million. Intersil Holding will complete the restructing plan
by the end of August 2000.

NOTE B--SIGNIFICANT ACCOUNTING POLICIES

     FISCAL YEAR--The 1998 fiscal year includes the 53 weeks ended July 3, 1998;
fiscal year 1999 includes the 52 weeks ended July 2, 1999; and fiscal year 2000
includes the six weeks ended August 13, 1999 and the 46 weeks ended June 30,
2000.

     CASH AND CASH EQUIVALENTS--Intersil Holding considers all highly liquid
investments with a maturity of three months or less when purchased to be cash
equivalents.

     INVENTORIES--Inventories are carried at the lower of standard cost, which
approximates actual cost, determined by the First-In-First-Out (FIFO) method, or
market.

     PROPERTY, PLANT AND EQUIPMENT--Machinery and equipment are carried on the
basis of cost. The estimated useful lives of buildings range between 5 and
50 years. The estimated useful lives of machinery and equipment range between 3
and 10 years. Depreciation is computed by the straight-line method using the
estimated useful life of the asset.

     REVENUE RECOGNITION--Revenue is recognized from sales to all customers,
including distributors, when a product is shipped. Sales to distributors are
made under agreements which provide the distributors rights of return and price
protection on unsold merchandise they hold. Accordingly, sales are reduced for
estimated returns from distributors and estimated future price reductions of
unsold merchandise held by distributors. Product sales to two distributors for
the fiscal years ended July 3, 1998 and July 2, 1999, and the six weeks ended
August 13, 1999 and 46 weeks ended June 30, 2000 amounted to 19.0%, 16.6%, 29.3%
and 15.7%, respectively, of total product sales.

     RESEARCH AND DEVELOPMENT--Research and development costs, consisting of the
cost of designing, developing, and testing new or significantly enhanced
products, are expensed as incurred.

     RETIREMENT BENEFITS--Intersil Holding provides retirement benefits to
substantially all employees primarily through a retirement plan having
profit-sharing and savings elements. Contributions by Intersil Holding to the
retirement plan are based on profits and employees' savings with no other
funding requirements. Intersil Holding may make additional contributions to the
fund at its discretion.

                                      F-9
INTERSIL HOLDING CORPORATION

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

  YEARS ENDED JULY 3, 1998 AND JULY 2, 1999, SIX WEEKS ENDED AUGUST 13, 1999,
                        AND 46 WEEKS ENDED JUNE 30, 2000

NOTE B--SIGNIFICANT ACCOUNTING POLICIES--(CONTINUED)

     The savings element of the retirement plan is a defined contribution plan,
which is qualified under Internal Revenue Service Code Section 401(k). All
employees of the Company may elect to participate in the 401(k) retirement plan
(the "401(k) plan"). Under the 401(k) plan, participating employees may defer a
portion of their pretax earnings up to certain limits prescribed by the Internal
Revenue Service. The Company provides matching contributions under the
provisions of the plan. Employees fully vest in the Company's matching
contributions upon the completion of 7 years of service.

     Retirement benefits also include an unfunded limited healthcare plan for
U.S.-based retirees and employees on long-term disability. Intersil Holding
accrues the estimated cost of these medical benefits, which are not material,
during an employee's active service life.

     Retirement plans expense was $15.6 million in 1998, $14.8 million in 1999,
$1.4 million for the six weeks ended August 13, 1999 and $10.4 million for the
46 weeks ended June 30, 2000.

     INCOME TAXES--For the Predecessor financial statements, the semiconductor
business was included with its parent, Harris, in a consolidated federal income
tax return. Harris required each of its businesses to provide for taxes on
financial statement pre-tax income or loss at applicable statutory tax rates.
United States local amounts receivable or payable for current and prior years'
income taxes were treated as intercompany transactions and were recorded in the
Semiconductor Business equity. Intersil Holding follows the liability method of
accounting for income taxes. International current income taxes payable and
deferred income taxes resulting from temporary differences between the financial
statements and the tax basis of assets and liabilities of Intersil Holding's
international subsidiaries are separately classified on the balance sheet.

     ASSET IMPAIRMENT--Intersil Holding accounts for long-lived asset impairment
under Statement of Financial Accounting Standards No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of."
The Company recognizes impairment losses on long-lived assets used in operations
when indicators of impairment are present and the undiscounted cash flows
estimated to be generated by those assets are less than the assets' carrying
amounts. The impairment loss is measured by comparing the fair value of the
asset to its carrying amount. Fair value is estimated based on discounted future
cash flows. Long-lived assets to be disposed of are recorded at the lower of
their carrying amount or estimated fair value less cost to sell.

     INTANGIBLES--Intangibles resulting from acquisitions are being amortized by
the straight-line method over five to 11 years. Recoverability of intangibles is
assessed using estimated undiscounted cash flows of related operations.
Intangibles that are not expected to be recovered through future undiscounted
cash flows are charged to expense when identified. Amounts charged to expense
are amounts in excess of the fair value of the intangible asset. Fair value is
determined by calculating the present value of estimated expected future cash
flows using a discount rate commensurate with the risks involved.

     FUTURES AND FORWARD CONTRACTS--When Intersil Holding sells products outside
the United States or enters into purchase commitments, the transactions are
frequently denominated in currencies other than U.S. dollars. To minimize the
impact on revenue and cost from currency fluctuations, Intersil Holding enters
into currency exchange agreements that qualify for hedge accounting treatment.
It is Intersil Holding's policy not to speculate in foreign currencies. Currency
exchange agreements are designated as, and are effective as, hedges of foreign
currency commitments. In addition, these agreements are consistent with the
designated currency of the underlying transaction and mature on or before the
underlying transaction. Gains and losses on currency exchange agreements that
qualify as hedges are deferred and recognized as an adjustment of the carrying
amount of the hedged asset, liability or commitment. Gains and losses on
currency exchange

                                      F-10
INTERSIL HOLDING CORPORATION

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

  YEARS ENDED JULY 3, 1998 AND JULY 2, 1999, SIX WEEKS ENDED AUGUST 13, 1999,
                        AND 46 WEEKS ENDED JUNE 30, 2000

NOTE B--SIGNIFICANT ACCOUNTING POLICIES--(CONTINUED)

agreements that do not qualify as hedges are recognized in operations based on
changes in the fair market value of the currency exchange agreement.

     FOREIGN CURRENCY TRANSLATION--The functional currency for the Malaysian
subsidiary was the U.S. dollar, and for other international subsidiaries it is
the local currency. Assets and liabilities are translated at current rates of
exchange, and income and expense items are translated at the weighted average
exchange rate for the year. The resulting translation adjustments are recorded
as a separate component of shareholders' equity (Business Equity in the
Predecessor's financial statements). Cumulative translation gains (losses) were
$(0.6) million and $1.6 million at July 2, 1999 and June 30, 2000, respectively.

     LOSS PER SHARE--Loss per share is computed and presented in accordance with
SFAS No. 128, "Earnings per Share" and the Securities and Exchange Commission
Staff Accounting Bulletin No. 98. Net loss per common share is presented for the
46 weeks ended June 30, 2000 only because it is not meaningful for earlier
periods since the Company did not have common stock outstanding for any of the
earlier periods.

     USE OF ESTIMATES--These statements have been prepared in conformity with
accounting principles generally accepted in the United States and require
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from those
estimates.

     RECLASSIFICATIONS--Certain prior year amounts have been reclassified to
conform with current year classifications.

NOTE C--ACCOUNTING PRONOUNCEMENTS

     In June 1999, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards No. (SFAS) 137, "Accounting for
Derivative Instruments and Hedging Activities--Deferral of the Effective Date of
FASB Statement No. 133." SFAS 137 amends SFAS 133, "Accounting for Derivative
Instruments and Hedging Activities," to defer its effective date to all fiscal
quarters of all fiscal years beginning after June 15, 2000. SFAS 133 establishes
accounting and reporting standards for derivative instruments including
standalone instruments, such as forward currency exchange contracts and interest
rate swaps or embedded derivatives and requires that these instruments be
marked-to-market on an ongoing basis. These market value adjustments are to be
included either in the income statement or shareholders' equity, depending on
the nature of the transaction. The Company is required to adopt SFAS 133 in the
first quarter of its fiscal year 2001. We believe that SFAS 133 will not have a
material adverse effect on the Company's financial position or results of
operations.

     In December 1999, the Securities and Exchange Commission issued SAB
No. 101. "Revenue Recognition in Financial Statements," which provides guidance
on the recognition, presentation, and disclosures of revenue in financial
statements filed with the SEC. SAB No. 101 outlines the basic criteria that must
be met to recognize revenue and provides guidance for disclosures related to
revenue recognition policies. We believe that SAB No. 101 will not have a
material adverse effect on the Company's financial position or results of
operations.

                                      F-11
INTERSIL HOLDING CORPORATION

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

  YEARS ENDED JULY 3, 1998 AND JULY 2, 1999, SIX WEEKS ENDED AUGUST 13, 1999,
                        AND 46 WEEKS ENDED JUNE 30, 2000

NOTE C--ACCOUNTING PRONOUNCEMENTS--(CONTINUED)

     In April 2000, the Financial Accounting Standards Board issued FASB
Interpretation No. 44, "Accounting for Certain Transactions Involving Stock
Compensation, an Interpretation of APB Opinion No. 25." Among other issues, that
interpretation clarifies the definition of employees for purposes of applying
Opinion No. 25, the criteria for determining whether a plan qualifies as a
non-compensatory plan, the accounting consequence of various modifications to
the terms of a previously fixed stock option or award and the accounting for an
exchange of stock compensation awards in a business combination. This
interpretation is effective July 1, 2000, but certain conclusions in the
interpretation cover specific events that occur after either December 15, 1998
or January 12, 2000. To the extent that this interpretation covers events
occurring during the period after December 15, 1998, or January 12, 2000, but
before the effective date of July 1, 2000, the effect of applying this
interpretation is recognized on a prospective basis from July 1, 2000. We are
currently reviewing stock grants to determine the impact, if any, that may arise
from implementation of this interpretation, although we do not expect the
impact, if any, to be material to our financial statements.

NOTE D--INVENTORIES

     Inventories are summarized below (in thousands):
(PREDECESSOR)     (SUCCESSOR)
                                                                              -------------    -------------
                                                                                JULY 2,         JUNE 30,
                                                                                 1999             2000
                                                                              -------------    -------------
Finished products..........................................................     $  58,041        $  45,064
Work in process............................................................       102,457           96,278
Raw materials and supplies.................................................        11,441            7,072
                                                                                ---------        ---------
                                                                                  171,939          148,414
Less inventory reserves....................................................        18,117           21,933
                                                                                ---------        ---------
                                                                                $ 153,822        $ 126,481
                                                                                =========        =========
At July 2, 1999 and June 30, 2000 Intersil Holding was committed to
purchase $22.5 million and $24.9 million, respectively of inventory from
suppliers. Management believes the cost of this inventory approximates current
market value.

                                      F-12
INTERSIL HOLDING CORPORATION

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

    YEARS ENDED JULY 3, 1998, JULY 2, 1999, SIX WEEKS ENDED AUGUST 13, 1999,
                      AND THE 46 WEEKS ENDED JUNE 30, 2000

NOTE E--PROPERTY, PLANT AND EQUIPMENT

     Property, plant and equipment are summarized below (in thousands):
(PREDECESSOR)     (SUCCESSOR)
                                                                                  -------------    -------------
                                                                                    JULY 2,         JUNE 30,
                                                                                     1999             2000
                                                                                  -------------    -------------
Land...........................................................................     $   3,966        $   3,860
Buildings......................................................................       266,364           78,940
Machinery and equipment........................................................       722,816          179,383
                                                                                    ---------        ---------
                                                                                      993,146          262,183
Less allowances for depreciation...............................................       582,616           36,699
                                                                                    ---------        ---------
                                                                                    $ 410,530        $ 225,484
                                                                                    =========        =========
NOTE F--INTANGIBLES

     Intangibles are summarized below (in thousands):
(PREDECESSOR)     (SUCCESSOR)
                                                                                    -------------    -------------
                                                                    PERIOD OF        JULY 2,          JUNE 30,
                                                                   AMORTIZATION        1999             2000
                                                                   -------------    -------------    -------------
Developed technology............................................       11 years        $    --         $  56,925
Customer base...................................................        7 years             --            23,482
Assembled workforce.............................................        5 years             --             9,606
Goodwill........................................................      5-7 years         65,297           110,823
                                                                                       -------         ---------
                                                                                        65,297           200,836
Less accumulated amortization...................................                        19,929            10,686
                                                                                       -------         ---------
                                                                                       $45,368         $ 190,150
                                                                                       =======         =========
F-13
INTERSIL HOLDING CORPORATION

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

    YEARS ENDED JULY 3, 1998, JULY 2, 1999, SIX WEEKS ENDED AUGUST 13, 1999,
                      AND THE 46 WEEKS ENDED JUNE 30, 2000

NOTE G--LOSS PER SHARE

     The following table sets forth the computation of basic and diluted loss
per share (in thousands, except per share amounts):
(SUCCESSOR)
                                                                              -----------------
                                                                                JUNE 30, 2000
                                                                              -----------------
Numerator:
  Net loss available to common shareholders (numerator for basic and
     diluted earnings per share)...........................................       $ (48,099)
                                                                                  =========
Denominator:
  Denominator for basic earnings per share-weighted average common
     shares................................................................          76,745
  Effect of dilutive securities:
     Stock options.........................................................              --
     Warrants..............................................................              --
                                                                                  ---------
  Denominator for diluted earnings per share-adjusted weighted average
     shares................................................................          76,745
                                                                                  =========
Basic and diluted loss per share...........................................       $   (0.63)
                                                                                  =========
The effect of dilutive securities is not included in the computation for
the 46 weeks ended June 30, 2000 because to do so would be antidilutive.

NOTE H--LONG-TERM DEBT

LONG-TERM DEBT

     Long-term debt consists of the following (in thousands):
(PREDECESSOR)     (SUCCESSOR)
                                                                             -------------    --------------
                                                                             JULY 2, 1999     JUNE 30, 2000
                                                                             -------------    --------------
13.25% Senior Subordinated Notes..........................................      $    --          $112,384
Other.....................................................................        4,567             4,208
                                                                                -------          --------
                                                                                  4,567           116,592
Less current portion......................................................          360               404
                                                                                -------          --------
                                                                                $ 4,207          $116,188
                                                                                =======          ========
F-14
INTERSIL HOLDING CORPORATION

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

    YEARS ENDED JULY 3, 1998, JULY 2, 1999, SIX WEEKS ENDED AUGUST 13, 1999,
                      AND THE 46 WEEKS ENDED JUNE 30, 2000

NOTE H--LONG-TERM DEBT--(CONTINUED)

     Scheduled future principal payments under Intersil Holding's and Intersil's
indebtedness are as follows (in thousands):
2001....................................................................   $    404
2002....................................................................        416
2003....................................................................        429
2004....................................................................        388
2005....................................................................        373
Thereafter..............................................................    114,582
                                                                           --------
                                                                           $116,592
                                                                           ========
13.25% Senior Subordinated Notes and Warrants

     On August 13, 1999, in connection with the acquisition of the Semiconductor
Business, Intersil completed an offering of 200,000 units consisting of $200
million of its 13.25% Senior Subordinated Notes due 2009 and warrants to
purchase 3,703,707 shares of Class A Common Stock of Intersil Holding. Each unit
consisted of $1,000 principal amount of 13.25% Senior Subordinated Notes of
Intersil and one warrant to purchase 18.5185 shares of Class A Common Stock of
Intersil Holding. The total gross proceeds from the sale of the 13.25% Senior
Subordinated Notes were $194.0 million, net of $6.0 million of deferred
financing fees. The $6.0 million deferred financing fees were treated as
additional interest related to the 13.25% Senior Subordinated Notes and
amortized over the life of the 13.25% Senior Subordinated Notes on an effective
yield method.

     The 13.25% Senior Subordinated Notes are unsecured and are fully and
unconditionally guaranteed by Intersil Holding and all of Intersil's current and
future domestic subsidiaries. The 13.25% Senior Subordinated Notes are not
guaranteed by Intersil's foreign subsidiaries. The 13.25% Senior Subordinated
Notes require semi-annual interest payments beginning on February 15, 2000
through maturity on August 15, 2009. The 13.25% Senior Subordinated Notes may be
redeemed at the option of Intersil Holding after August 15, 2004 upon the
payment of certain redemption premiums, although up to 35% of the 13.25% Senior
Subordinated Notes can be redeemed prior to August 15, 2002 with the proceeds of
certain equity offerings and upon the payment of certain redemption premiums.
The 13.25% Senior Subordinated Notes contain various restrictive covenants,
including limitations on the incurrence of additional indebtedness, restrictions
and limitations on payment of dividends, making investments, engaging in
transactions with affiliates, consolidating, merging or transfering assets and
restrictions and limitations on the sales of certain assets, among others. The
13.25% Senior Subordinated Notes also require the maintenance of certain ratios.

     Each warrant entitles the holder to purchase 18.5185 shares of Intersil
Holding Class A Common Stock at a price of $.001 per share. The warrants are
exercisable beginning on the first anniversary of their issue date (August 13,
1999) and expire on August 15, 2009. Warrant holders have no voting rights. The
warrants were preliminarily valued at $0.3 million and will be treated as
additional interest related to the 13.25% Senior Subordinated Notes and
amortized over the life of the 13.25% Senior Subordinated Notes on an effective
yield method.

  Extinguishment of Debt

     On August 13, 1999, in connection with the acquisition of the semiconductor
business, Intersil entered into senior credit facilities with a syndicate of
financial institutions. The senior credit facilities include a $205.0 million
funded term loan facility (the "Tranche B Senior Term Facility") and a revolving
line of

                                      F-15
INTERSIL HOLDING CORPORATION

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

    YEARS ENDED JULY 3, 1998, JULY 2, 1999, SIX WEEKS ENDED AUGUST 13, 1999,
                      AND THE 46 WEEKS ENDED JUNE 30, 2000

NOTE H--LONG-TERM DEBT--(CONTINUED)

credit (the "Revolving Credit Facility"). The Revolving Credit Facility provides
for up to $70.0 million of which no amounts were outstanding as of June 30,
2000.

     The Revolving Credit Facility bears interest ranging from LIBOR + 2.00% to
LIBOR + 3.25%, depending on the results of applicable ratios. The Revolving
Credit Facility matures in 2005.

     The senior credit facilities are unconditionally guaranteed, jointly and
severally, by Intersil Holding, Intersil and existing and subsequently acquired
or organized domestic subsidiaries. The Company's obligations and those of the
guarantors under the Senior Credit Facilities are secured by a pledge of all of
Intersil's capital stock and by substantially all of the assets of Intersil
Holding, Intersil and each of Intersil's existing and subsequently acquired or
organized domestic (and, to the extent no adverse consequences will result,
foreign) subsidiaries. The senior credit facilities contain various restrictive
covenants, including, incurrence of indebtedness, payment of dividends, making
certain investments and acquisitions, disposing of assets, among others. The
senior credit facilities also require the maintenance of certain ratios.

     Also on August 13, 1999, in connection with the acquisition of the
semiconductor business, Intersil Holding issued to Harris a $90.0 million 11.13%
Seller Holding PIK Note and issued to Citicorp Mezzanine Partners, L.P. a
$30.0 million 13.5% Subordinated Holding PIK Note.

     On February 25, 2000, the Company issued 22,000,000 shares of common stock
at a price of $25.00 per share. From the proceeds of the initial public
offering, the Company paid off approximately $419.0 million of debt incurred
through the acquisition of the semiconductor business, including all amounts
then outstanding under the Tranche B Senior Term Facility, the 11.13% Seller
Holding PIK Note and the 13.5% Subordinated PIK Note. In connection with the
early extinguishment of debt, the Company recorded extraordinary charges (net of
tax) of $25.5 million.

     Other

     The other debt consists of five loans made by agencies of the Commonwealth
of Pennsylvania with maturity dates ranging from 2003 to 2017 and are secured by
Intersil's manufacturing facility in Mountaintop, Pennsylvania, which has a net
carrying value of $4.6 million at July 2, 1999 and $4.2 million at June 30,
2000, respectively. The weighted average interest rate for this debt was 3.0% at
July 2, 1999 and June 30, 2000.

NOTE I--PREFERRED STOCK

     Intersil Holding has 100,000 shares of preferred stock authorized, stated
value of $1,000 per share. The rights of holders of preferred stock will be
stipulated at the time of issuance as determined pursuant to the adoption of a
shareholder rights plan. On August 13, 1999, Intersil Holding sold 83,434 shares
of its 12% Series A Cumulative Compounding Preferred Stock to certain buyers,
including Sterling Holding Company, LLC, Harris and certain members of
management. The $83.4 million received from the sale was used as a cash equity
contribution from Intersil Holding to Intersil for the acquisition of the
semiconductor business.

     On August 13, 1999, Intersil Holding granted to certain members of
management options to purchase 766.67 shares of Series A Preferred Stock at an
option price of $250 per share, and a sign-on bonus in the aggregate amount of
$575,025, representing the difference between the stated par value and the
option price. The preferred stock options vest immediately. Intersil Holding
recorded compensation expense for the $575,025 as of the grant date.

                                      F-16
INTERSIL HOLDING CORPORATION

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

    YEARS ENDED JULY 3, 1998, JULY 2, 1999, SIX WEEKS ENDED AUGUST 13, 1999,
                      AND THE 46 WEEKS ENDED JUNE 30, 2000

NOTE I--PREFERRED STOCK--(CONTINUED)

     Concurrent with the initial public offering, Intersil Holding exchanged all
outstanding shares of its 12% Series A Cumulative Compounding Preferred Stock
plus accrued and unpaid dividends for approximately 2.6 million shares of its
Class A Common Stock. Also, the outstanding options to purchase 766.67 shares of
Series A Preferred Stock were exchanged for options to purchase 40,881 shares of
Class A Common Stock.

NOTE J--LEASE COMMITMENTS

     Total rental expense amounted to $6.3 million in fiscal year 1998,
$6.3 million in fiscal year 1999, $0.6 million for the six weeks ended
August 13, 1999 and $5.0 million for the six weeks ended June 30, 2000. Future
minimum rental commitments under noncancelable operating leases, primarily used
for land and office buildings amounted to approximately $11.8 million at
June 30, 2000. These commitments for the years following 2000 (which exclude the
estimated rental expense for annually renewable contracts) are: 2001--
$2.4 million, 2002--$1.6 million, 2003--$1.0 million, 2004--$0.6 million,
2005--$0.5 million and $5.7 million thereafter.

NOTE K--BUSINESS EQUITY

     Changes in the business equity of the Predecessor's financial statements
are summarized as follows (in thousands):
FISCAL YEAR ENDED        SIX WEEKS ENDED
                                                                            ---------------------------   ---------------
                                                                            JULY 3, 1998   JULY 2, 1999   AUGUST 13, 1999
                                                                            ------------   ------------   ---------------
Balance at beginning of period............................................    $646,173       $699,077        $ 658,879
Net income (loss).........................................................      12,911         27,406           (3,029)
Foreign currency translation adjustments..................................      (1,851)          (574)           2,475
Net cash transfers and billings from (to) Harris Corporation..............      41,844        (67,030)          (1,198)
Purchase price elimination................................................          --             --         (657,127)
                                                                              --------       --------        ---------
Balance at end of period..................................................    $699,077       $658,879        $      --
                                                                              ========       ========        =========
NOTE L--COMMON STOCK

     On February 25, 2000, Intersil Holding completed the filing of a
registration statement with the Securities and Exchange Commission for a public
offering of shares of its Class A Common Stock. Intersil Holding issued
22,000,000 shares of its Class A Common Stock at a price of $25.00 per share.
The net proceeds of this offering, after deducting underwriting discounts and
commissions, were approximately $513.1 million. In connection with the public
offering, Intersil Holding effected a 1-for-1.5 reverse stock split of its Class
A and Class B Common Stock as of February 23, 2000. All references to common
shares in the accompanying financial statements reflect Intersil Holding's
reverse stock split, retroactively applied to all periods presented.

                                      F-17
INTERSIL HOLDING CORPORATION

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
    YEARS ENDED JULY 3, 1998, JULY 2, 1999, SIX WEEKS ENDED AUGUST 13, 1999,

                      AND THE 46 WEEKS ENDED JUNE 30, 2000

NOTE L--COMMON STOCK--(CONTINUED)

     Intersil Holding is authorized to issue 600.0 million shares of Intersil
Holding common stock, par value $0.01 per share, divided into two classes
consisting of 300.0 million shares of Intersil Holding Class A Common Stock and
300.0 million shares of Intersil Holding Class B Common Stock. Holders of
Class A Common Stock are entitled to one vote for each share held and holders of
Class B Common Stock have no voting rights. A holder of either class of Intersil
Holding common stock may convert any or all shares into an equal number of
shares of the other class of Intersil Holding common stock.

     On August 13, 1999, Intersil Holding sold 15.76 million shares of Class A
Common Stock and 50.91 million shares of Class B Common Stock for approximately
$5.0 million. The $5.0 million proceeds, along with the $83.4 million proceeds
from the sale of Series A Preferred Stock were used as a cash equity
contribution from Intersil Holding to Intersil for the acquisition of the
semiconductor business.

     On August 13, 1999, in connection with the issuance of the 13.5%
Subordinated Holding PIK Note, Intersil Holding issued to Citicorp Mezzanine
Partners, L.P. warrants to purchase 3,703,707 shares of its Class A Common Stock
at an exercise price of $.001 per share, subject to certain anti-dilution
adjustments. These warrants may be exercised at any time after August 13, 2001
and expire on August 15, 2009. As Intersil Holding has prepaid in full the 13.5%
Subordinated Holding PIK Note within 24 months after issuance, the warrants have
become exercisable for 2,222,224 shares of Intersil Holding Class A Common
Stock. The warrants were valued at $0.3 million and were treated as additional
interest related to the 13.5% Subordinated Holding PIK Note.

     On May 29, 2000, Intersil Holding acquired 100% of the outstanding capital
stock of Bilthoven, The Netherlands-based No Wires Needed B.V. ("NWN").
Consideration for the acquisition of NWN was 3.35 million shares of Intersil
Holding Class A Common Stock valued at $111.3 million at the date of closing.
(Note Q)

     During the 46 weeks ended June 30, 2000, Intersil Holding recorded $0.9
million of unearned compensation for the excess of the fair value of the Class A
Common Stock over the grant price for stock sold to certain executives by the
majority shareholder of Intersil Holding. Upon the Company's initial public
offering, the stock sold became fully vested and the unearned compensation was
written off.

     Intersil Holding had an option to purchase 1,161,905 shares from a majority
shareholder at $0.075 per share pursuant to an agreement executed at the initial
capitalization. Intersil Holding repurchased the 1,161,905 shares in January
2000.

     In the third quarter of fiscal year 2000, approximately 1.2 million shares
of Class B Common Stock were exchanged for an equivalent number of Class A
Common Stock. The exchanged Class B Common Stock is included in the authorized
and unissued shares.

                                      F-18
INTERSIL HOLDING CORPORATION

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

    YEARS ENDED JULY 3, 1998, JULY 2, 1999, SIX WEEKS ENDED AUGUST 13, 1999,
                      AND THE 46 WEEKS ENDED JUNE 30, 2000

NOTE M--INCOME TAXES

     The provisions for income taxes are summarized below (pro forma for
predecessor financial statements) (in thousands):
SUCCESSOR (46 WEEKS ENDED JUNE 30, 2000)
Current taxes:
          Federal..................................................................    $   --
          State....................................................................        --
          Foreign..................................................................     4,391
                                                                                       ------
                                                                                        4,391
Deferred taxes:
          Federal..................................................................    (4,198)
          State....................................................................      (482)
          Foreign..................................................................        --
                                                                                       ------
                                                                                       (4,680)
                                                                                       ------

Income tax benefit.................................................................    $ (289)
                                                                                       ======
SIX WEEKS
                                                                                                              ENDED
                                                                                 FISCAL YEAR ENDED        --------------
                                                                             ---------------------------    AUGUST 13,
PREDECESSOR                                                                  JULY 3, 1998   JULY 2, 1999      1999
-----------                                                                  ------------   ------------  --------------
United States (benefit)...................................................     $4,221        $ (6,626)       $   (399)
International.............................................................      4,910           1,605             352
State and local (benefit).................................................        813          (1,006)            (55)
                                                                               ------        --------        --------
                                                                               $9,944        $ (6,027)       $   (102)
                                                                               ======        ========        ========
The benefit related to tax deductions for the Company's stock option plans
is recorded as an increase to additional paid in capital when realized. For the
46 weeks ended June 30, 2000, the Company realized tax benefits of approximately
$2.1 million related to its stock option plans.

     In the year 2000, the Malaysian taxing authority converted its income tax
system to a self-assessment system. The new self-assessment system requires
Malaysian corporate taxpayers to begin making estimated tax payments in year
2000 based on year 2000 estimated taxable income. Previously, Malaysian
corporate taxpayers submitted tax payments following the year of assessment. In
fiscal year 1999, the Semiconductor Business made Malaysian taxing payments
based on fiscal year 1998's taxable income. As a result of the change in the
Malaysian taxing system, the semiconductor business was not required to make tax
payments on its fiscal year 1999 Malaysian taxable income, and therefore has not
provided a tax provision for Malaysian taxes for the fiscal year ended July 2,
1999, which would have amounted to approximately $15.1 million. The Malaysian
tax holiday is effective for Intersil's fiscal year ended July 2, 1999 only, and
does not impact the six weeks ended August 13, 1999 or the 46 weeks ended
June 30, 2000.

                                      F-19
INTERSIL HOLDING CORPORATION

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

    YEARS ENDED JULY 3, 1998, JULY 2, 1999, SIX WEEKS ENDED AUGUST 13, 1999,
                      AND THE 46 WEEKS ENDED JUNE 30, 2000

NOTE M--INCOME TAXES--(CONTINUED)

     The components of deferred income tax assets (liabilities) are as follows
(in thousands):
(PREDECESSOR)            (SUCCESSOR)
                                                                      ---------------------   ----------------------
                                                                          JULY 2, 1999            JUNE 30, 2000
                                                                      ---------------------   ----------------------
                                                                      CURRENT   NON-CURRENT   CURRENT    NON-CURRENT
                                                                      -------   -----------   --------   -----------
Receivables.........................................................  $   --      $    --     $    239    $      --
Inventory...........................................................      --           --        8,664           --
Fixed Assets........................................................      --           --           --      (21,590)
Intangibles.........................................................      --           --           --      (14,363)
Accrued Expenses....................................................      --           --       18,582           --
NOL Carryforward....................................................      --           --           --       13,961
Depreciation........................................................      --       (7,022)          --           --
All other--net......................................................   3,476           --       (1,717)          --
                                                                      -------     -------     --------    ---------
                                                                      $3,476      $(7,022)    $ 25,768    $ (21,992)
                                                                      =======     =======     ========    =========
A reconciliation of the statutory United States income tax rate to the
Company's effective income tax rate follows:
(PREDECESSOR)           (PREDECESSOR)      (SUCCESSOR)
                                                          ---------------------------   ---------------   ---------------
                                                               FISCAL YEAR ENDED        SIX WEEKS ENDED   46 WEEKS ENDED
                                                          ---------------------------   ---------------   ---------------
                                                          JULY 3, 1998   JULY 2, 1999   AUGUST 13, 1999   JUNE 30, 2000
                                                          ------------   ------------   ---------------   ---------------
Statutory U.S. income tax rate..........................       35.0%          35.0%           35.0%             35.0%
State taxes.............................................        2.3           (3.1)            1.1               1.1
International income....................................        5.2          (61.9)          (29.7)              7.6
Research credits........................................       (2.9)          (2.7)            2.2               0.8
In-process research and development.....................         --             --              --             (16.5)
Subpart F...............................................         --             --              --              (7.6)
Goodwill amortization...................................        3.5            4.0            (4.9)             (1.2)
Effect of sale of Malaysian operations..................         --             --              --             (18.0)
Other items.............................................         .4            0.5            (0.5)             (0.5)
                                                             ------         ------           -----             -----
Effective income tax rate...............................       43.5%         (28.2)%           3.2%              0.7%
                                                             ======         ======           =====             =====
United States income taxes have not been provided on undistributed earnings
of international subsidiaries because of Intersil Holding's intention to
reinvest these earnings. The determination of unrecognized deferred U.S. tax
liability for the undistributed earnings of international subsidiaries is not
practicable.

     Pretax income (loss) of international subsidiaries was $10.2 million in
fiscal year 1998, $41.9 million in fiscal year 1999, $(1.6) million for the six
weeks ended August 13, 1999 and $21.6 million for the 46 weeks ended June 30,
2000.

     Income taxes paid were $14.8 million in fiscal year 1998, $3.4 million in
fiscal year 1999, $0.2 million for the six weeks ended August 13, 1999 and
$0.6 million for the 46 weeks ended June 30, 2000.

     The Company has a tax year-end of December 31 for federal and state income
tax purposes and has estimated that as of December 31, 1999, it had a cumulative
federal and state operating loss carryforward of $17.0 million. The federal net
operating loss carryforwards will expire in 2020. The state net operating loss
carryforwards will expire in varying amounts beginning in 2005. Calculated as of
June 30, 2000, the

                                      F-20
INTERSIL HOLDING CORPORATION

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

    YEARS ENDED JULY 3, 1998, JULY 2, 1999, SIX WEEKS ENDED AUGUST 13, 1999,
                      AND THE 46 WEEKS ENDED JUNE 30, 2000

NOTE M--INCOME TAXES--(CONTINUED)

Company recorded a deferred tax asset associated with federal and state net
operating loss carryforwards of $14.0 million.

     The federal and state net operating loss and tax credit carryforwards could
be subject to limitation if, within any three year period prior to the
expiration of the applicable carryforward period, there is a greater than 50%
change in ownership of the Company.

     No valuation allowance has been provided in connection with the net
deferred tax asset as the Company expects to be able to utilize its deferred tax
assets against future taxable income. Based on the Company's projected taxable
income and estimates of future profitability, management has concluded that
operating income will more likely than not be sufficient to give rise to income
tax expense to cover all deferred tax assets.

NOTE N--GEOGRAPHIC INFORMATION

     Intersil Holding operates exclusively in the semiconductor industry.
Substantially all revenues result from the sale of semiconductor products. All
intercompany revenues and balances have been eliminated.

     A summary of the operations by geographic area is summarized below (in
thousands):
(PREDECESSOR)           (PREDECESSOR)      (SUCCESSOR)
                                                            ---------------------------   ---------------   ---------------
                                                                 FISCAL YEAR ENDED        SIX WEEKS ENDED   46 WEEKS ENDED
                                                            ---------------------------   ---------------   ---------------
                                                            JULY 3, 1998   JULY 2, 1999   AUGUST 13, 1999   JUNE 30, 2000
                                                            ------------   ------------   ---------------   ---------------
United States operations
  Net sales...............................................    $563,180       $519,555        $  54,664         $ 574,867
  Long-lived assets.......................................     386,333        371,448          366,386           333,668
International
  Net sales...............................................      13,656         13,163            2,672            21,982
  Long-lived assets.......................................     122,397        121,330          118,277           112,487
Export sales included in U.S. operations were, $258.4 million in fiscal
year 1998, $254.8 million in fiscal year 1999, $30.4 million for the six weeks
ended August 13, 1999 and $340.3 million for the 46 weeks ended June 30, 2000.

NOTE O--FINANCIAL INSTRUMENTS

     The carrying values of accounts receivable, accounts payable and short-term
debt approximates fair value due to the short-term maturities of these assets
and liabilities. The fair value of long-term debt is based on quoted market
prices or pricing models using prevailing financial market information at the
date of measurement.

     Letters of credit are issued by Intersil during the ordinary course of
business through major financial institutions as required by certain vendor
contracts. As of June 30, 2000, Intersil had outstanding letters of credit
totaling $2.7 million.

     Intersil Holding markets its products for sale to customers, including
distributors, primarily in the United States, Europe and Asia/Pacific. Credit is
extended based on an evaluation of the customer's financial condition and
collateral is generally not required. Intersil Holding maintains an allowance
for losses based upon the expected collectibility of all accounts receivable.
Intersil Holding believes it is adequately reserved with regard to receivables
from its domestic and international customers.

                                      F-21
INTERSIL HOLDING CORPORATION

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

    YEARS ENDED JULY 3, 1998, JULY 2, 1999, SIX WEEKS ENDED AUGUST 13, 1999,
                      AND THE 46 WEEKS ENDED JUNE 30, 2000

NOTE O--FINANCIAL INSTRUMENTS--(CONTINUED)

     In August 1999, Intersil Holding began to use foreign exchange contracts to
hedge anticipated foreign cash flow commitments up to six months. Hedges on
anticipated foreign cash flow commitments do not qualify for deferral and
therefore, gains and losses on changes in the fair market value of the foreign
exchange contracts are recognized in income. Total net gains on foreign exchange
contracts for the 46 weeks ended June 30, 2000 were $3.2 million. At June 30,
2000, open foreign exchange contracts were $30.9 million, all of which were to
hedge anticipated foreign cash flow commitments. For the year ended June 30,
2000, Intersil Holding purchased and sold $87.4 million of foreign exchange
forward contracts.

     Prior to August 1999, Intersil Holding used foreign exchange contracts and
options to hedge intercompany accounts and off-balance-sheet foreign currency
commitments. Specifically, these foreign exchange contracts offset foreign
currency denominated inventory and purchase commitments from suppliers, accounts
receivable from and future committed sales to customers and firm committed
operating expenses. Foreign currency financial instruments were used to reduce
the risks that arise from doing business in international markets. Such
contracts generally had a term of one year or less. At July 2, 1999, open
foreign exchange contracts were $22.0 million, all of which were to hedge
off-balance-sheet commitments. Additionally, for the year ended July 2, 1999,
the Semiconductor Business purchased and sold $120.7 million of foreign exchange
forward contracts.

     Deferred gains and losses are included on a net basis in the Consolidated
Balance Sheets as other assets and are recorded in operations as part of the
underlying transaction when recognized. At July 2, 1999, Intersil Holding had
deferred foreign exchange contract losses on future commitments of approximately
$28.6 million.

     Total open foreign exchange contracts and options at July 2, 1999 and
June 30, 2000, are described in the table below:

JULY 2, 1999

COMMITMENTS TO BUY FOREIGN CURRENCIES
CONTRACT AMOUNT
                                                                ---------------------------    DEFERRED    MATURITIES
CURRENCY                                                        FOREIGN CURRENCY     U.S.       GAINS      (IN MONTHS)
-------------------------------------------------------------   ----------------    -------    --------    -----------
                                                                                        (IN THOUSANDS)
Malaysian Ringgit............................................          80,589       $19,000     $2,208         1-2
COMMITMENTS TO SELL FOREIGN CURRENCIES
CONTRACT AMOUNT
                                                                ---------------------------    DEFERRED    MATURITIES
CURRENCY                                                        FOREIGN CURRENCY     U.S.       GAINS      (IN MONTHS)
-------------------------------------------------------------   ----------------    -------    --------    -----------
                                                                                        (IN THOUSANDS)
French Franc.................................................          10,900       $ 1,857     $  138         1-2
British Pound................................................             691         1,094          2           1
F-22
INTERSIL HOLDING CORPORATION

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

    YEARS ENDED JULY 3, 1998, JULY 2, 1999, SIX WEEKS ENDED AUGUST 13, 1999,
                      AND THE 46 WEEKS ENDED JUNE 30, 2000

NOTE O--FINANCIAL INSTRUMENTS--(CONTINUED)

JUNE 30, 2000

OPTIONS TO SELL FOREIGN CURRENCIES
CONTRACT AMOUNT
                                                                           ---------------------------    MATURITIES
CURRENCY                                                                   FOREIGN CURRENCY     U.S.      (IN MONTHS)
------------------------------------------------------------------------   ----------------    -------    -----------
                                                                                           (IN THOUSANDS)
Euro....................................................................           3,000       $ 2,883        5-6
COMMITMENTS TO SELL FOREIGN CURRENCIES
CONTRACT AMOUNT
                                                                           ---------------------------    MATURITIES
CURRENCY                                                                   FOREIGN CURRENCY     U.S.      (IN MONTHS)
------------------------------------------------------------------------   ----------------    -------    -----------
                                                                                            (IN THOUSANDS)
Euro....................................................................          16,500       $15,697        1-6
British Pound...........................................................           2,300         3,572        1-6
Japanese Yen............................................................       1,190,000        11,655        1-7
NOTE P--EMPLOYEE BENEFIT PLANS

  Equity Compensation Plan

     On November 5, 1999, Intersil Holding adopted the 1999 Equity Compensation
Plan (the "Plan"), which became effective on August 13, 1999, for salaried
officers and key employees. The Plan authorizes the grant of options for up to
7.5 million shares of Intersil Holding Class A Common Stock and can include
(i) options intended to constitute incentive stock options under the Internal
Revenue Code, (ii) non-qualified stock options, (iii) restricted stock,
(iv) stock appreciation rights, and (v) phantom share awards. The exercise price
of each option granted under the Plan shall be determined by a committee of the
Board of Directors (the "Board"). The maximum term of any option shall be ten
years from the date of grant for incentive stock options and ten years and one
day from the date of grant for non-qualified stock options. Options granted
under the Plan are exercisable at the determination of the Board, currently
vesting ratably over approximately 5 years. Employees receiving options under
the Plan may not receive in any one year period options to purchase more than
666,667 shares of common stock. During the 46 weeks ended June 30, 2000,
Intersil Holding granted 1,596,793 options to acquire Intersil Holding Class A
Common Stock at a price of $2.25 per share, 1,239,291 options at a price of
$25.00 per share, and 118,100 options at an average price of $45.65 per share.
The Company accounts for its Equity Compensation Plan in accordance with
Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to
Employees." As such, compensation expense is recorded on the date of grant only
if the current market price of the underlying stock exceeds the exercise price.
During the 46 weeks ended June 30, 2000, the Company recorded no deferred
compensation. Had compensation cost for the Company's stock option plan been
determined consistent with SFAS Statement No. 123, the Company would have
reported a net loss of $43.7 million for the 46 weeks ended June 30, 2000.

     The Company estimates the fair value of each option as of the date of grant
using a Black-Scholes pricing model with the following weighted average
assumptions.

                                      F-23
INTERSIL HOLDING CORPORATION

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

    YEARS ENDED JULY 3, 1998, JULY 2, 1999, SIX WEEKS ENDED AUGUST 13, 1999,
                      AND THE 46 WEEKS ENDED JUNE 30, 2000

NOTE P--EMPLOYEE BENEFIT PLANS--(CONTINUED)
JUNE 30, 2000
                                                                                  -------------
Expected volatility............................................................         0.5
Dividend yield.................................................................          --
Risk-free interest rate........................................................        6.25%
Expected life, in years........................................................           7
A summary of the status of the Company's stock option plan as of June 30,
2000, and changes during the 46 weeks then ended are presented in the
table below.
JUNE 30, 2000
                                                                       --------------------------
                                                                                         WEIGHTED
                                                                                         AVERAGE
                                                                                         EXERCISE
                                                                         SHARES           PRICE
                                                                       --------------    --------
                                                                       (IN THOUSANDS)
Outstanding at beginning of period..................................           --         $   --
Granted.............................................................        3,177          15.41
Exercised...........................................................         (194)         10.21
Canceled............................................................          (28)         15.20
                                                                           ------         ------
Outstanding at end of period........................................        2,955         $15.76
                                                                           ======         ======
Exercisable at end of period........................................          191         $ 2.25
                                                                           ======         ======
Weighted average fair value of options granted......................                      $ 5.07
                                                                                          ======
Information with respect to stock options outstanding and stock options
exercisable at June 30, 2000, is as follows:
OPTIONS OUTSTANDING
                                                      ---------------------------------------      OPTIONS EXERCISABLE
                                                                     WEIGHTED-                   ------------------------
                                                                     AVERAGE
                                                                     REMAINING      WEIGHTED-                   WEIGHTED-
                                                                     CONTRACTUAL    AVERAGE                     AVERAGE
                                                                                    EXERCISE                    EXERCISE
                                                       NUMBER          LIFE          PRICE       NUMBER          PRICE
                  EXERCISE PRICE                      OUTSTANDING                                EXERCISABLE
---------------------------------------------------   -----------    -----------    ---------    -----------    ---------
                                                          (IN                                        (IN
                                                      THOUSANDS)                                 THOUSANDS)
$2.25..............................................      1,458           9.19        $  2.25         191          $2.25
$25.00.............................................      1,156           9.65        $ 25.00          --             --
$28.50-$42.13......................................        208           9.89        $ 36.62          --             --
$42.94-$58.50......................................        133           9.89        $ 47.40          --             --
Employee Stock Purchase Plan

       In February 2000, Intersil Holding adopted the Employee Stock Purchase
  Plan ("the ESPP") whereby eligible employees can purchase shares of Intersil
  Holding's common stock. Intersil has received 1,333,334 shares of common stock
  for issuance under the Plan. The ESPP permits employees to purchase common
  stock through payroll deductions, which may not exceed 10% of an employee's
  compensation, at a price not less than 85% of the market value of the stock on
  specified dates. In no event, may any participant purchase more than $25,000
  worth of shares in any calendar year and no more than 16,667 shares may be

                                      F-24
INTERSIL HOLDING CORPORATION

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

    YEARS ENDED JULY 3, 1998, JULY 2, 1999, SIX WEEKS ENDED AUGUST 13, 1999,
                      AND THE 46 WEEKS ENDED JUNE 30, 2000

NOTE P--EMPLOYEE BENEFIT PLANS--(CONTINUED)

  purchased by an employee on any purchase date. Unless sooner terminated by the
  Board, the ESPP shall terminate upon the earliest of (1) February 28, 2010,
  (2) the date on which all shares available for issuance under the ESPP shall
  have been sold pursuant to purchase rights exercised under the ESPP, or
  (3) the date on which all purchase rights are exercised in connection with a
  Corporate Transaction (as defined in the ESPP). As of June 30, 2000, no shares
  have been issued under the ESPP.

NOTE Q--ACQUISITION OF NO WIRES NEEDED B.V.

     On May 29, 2000, Intersil Holding acquired 100% of the outstanding capital
stock of Bilthoven, The Netherlands-based No Wires Needed B.V. ("NWN").
Consideration for the acquisition of NWN was 3.35 million shares of Intersil
Holding Class A Common Stock valued at $111.3 million at the date of closing.
The NWN acquisition has been accounted for by the purchase method of accounting
and, accordingly, the results of operations of NWN have been included in the
accompanying consolidated financial statements since the acquisition date. The
preliminary purchase price exceeded the fair value of the net tangible assets
acquired by approximately $109.0 million. NWN had completed all in-process
research and development programs prior to its acquisition. Therefore, none of
the preliminary purchase price in excess of the fair value of the net tangible
assets was allocated to purchase in-process research and development. The
preliminary purchase price in excess of fair value of net tangible assets was
allocated to goodwill, which will be amortized on a straight-line basis over
seven years.

     The following unaudited pro forma consolidated results of operations are
presented as if the NWN acquisition occurred on August 14, 1999 (in millions,
except per share data):
46 Weeks Ended
                                                                                June 30, 2000
                                                                                --------------
Product sales................................................................       $603.2
Net loss before extraordinary item...........................................        (31.7)
Net loss.....................................................................        (57.3)
Net loss to common shareholders..............................................        (62.7)
Net loss per basic and diluted share:........................................        (0.79)
The pro forma results of operations include adjustments to give affect to
additional depreciation and amortization related to the increased value of
acquired assets and identifiable intangibles. The unaudited pro forma
information is not necessarily indicative of the results of operations that
would have occurred had the acquisition actually been made at the beginning of
the period presented or the future results of the combined operations.

NOTE R-- SALE OF INTERSIL'S KUALA LUMPUR, MALAYSIA-BASED SEMICONDUCTOR ASSEMBLY
        AND TEST OPERATIONS

     On June 30, 2000, Intersil Holding completed the sale of its Kuala Lumpur,
Malaysia-based semiconductor assembly and test operations to ChipPAC, Inc.
("ChipPAC") which, under a multi-year supply agreement, will supply integrated
circuit (IC) assembly and test services to Intersil Holding. Under the terms of
the transaction, ChipPAC acquired all of Intersil's Kuala Lumpur assets,
including a 524,000 square foot semiconductor assembly and test facility,
wireless and analog/mixed-signal capabilities, product distribution center as
well as the operation's management team and approximately 2,900 employees. As
consideration for the sale, Intersil received approximately $52.5 million in
cash and $15.8 million in

                                      F-25
INTERSIL HOLDING CORPORATION

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

    YEARS ENDED JULY 3, 1998, JULY 2, 1999, SIX WEEKS ENDED AUGUST 13, 1999,
                      AND THE 46 WEEKS ENDED JUNE 30, 2000

NOTE R-- SALE OF INTERSIL'S KUALA LUMPUR, MALAYSIA-BASED SEMICONDUCTOR ASSEMBLY
        AND TEST OPERATIONS--(CONTINUED)

ChipPAC preferred convertible stock. Intersil Holding recognized a non-recurring
charge of $24.8 million for the loss on sale in connection with the transaction.

NOTE S-- FINANCIAL INFORMATION FOR GUARANTOR AND NON-GUARANTOR SUBSIDIARIES

     Intersil Holding is a holding company for Intersil. All of the operations
are conducted through Intersil and its wholly-owned domestic and foreign
subsidiaries. On August 13, 1999, in connection with the acquisition, Intersil
issued the Notes and entered into the Senior Credit Facilities (Note H), which
are fully and unconditionally guaranteed on a joint and several basis by
Intersil Holding (Parent), Intersil and all of Intersil's wholly-owned current
and future domestic subsidiaries (the "Guarantor Subsidiaries"). Intersil's
wholly-owned foreign subsidiaries are not guarantors (the "Non-Guarantor
Subsidiaries"). In management's opinion, separate financial statements of the
Guarantor Subsidiaries and the Non-Guarantor Subsidiaries are not material
to investors.

     The condensed consolidated financial information presented below includes
the Predecessor consolidated balance sheet as of July 2, 1999 and the
Predecessor consolidated statements of operations and cash flows for the fiscal
years ended July 3, 1998, and July 2, 1999, and the six weeks ended August 13,
1999 for the Predecessor Guarantor and Non-Guarantor Subsidiaries. The condensed
consolidated balance sheet as of June 30, 2000 and the condensed consolidated
statements of income operations and cash flows for the 46 weeks ended
June 30, 2000 reflect the Parent, Guarantor Subsidiaries and Non-Guarantor
Subsidiaries.

                                      F-26
INTERSIL HOLDING CORPORATION

          SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

                            YEAR ENDED JULY 3, 1998
PREDECESSOR
                                                            ------------------------------------------------------------
                                                                              FOREIGN
                                                            GUARANTOR       NON-GUARANTOR    ELIMINATING
                                                            SUBSIDIARIES    SUBSIDIARIES      ENTRIES       CONSOLIDATED
                                                            ------------    -------------    -----------    ------------
                                                                                  (IN THOUSANDS)
REVENUE
  Product sales..........................................     $609,136        $ 418,721       $(451,021)      $576,836

COSTS AND EXPENSES
  Cost of product sales..................................      402,892          388,729        (422,289)       369,332
  Research and development...............................       74,466              659              --         75,125
  Selling, general and administrative....................       79,547           18,637              --         98,184
  Harris corporate expense allocations...................       10,941             (979)             --          9,962
  Goodwill amortization..................................        2,292               --              --          2,292
                                                              --------        ---------       ---------       --------
Operating income (loss)..................................       38,998           11,675         (28,732)        21,941
  Interest net...........................................       40,793           (5,325)        (36,382)          (914)
                                                              --------        ---------       ---------       --------
  Income (loss) before income taxes......................       (1,795)          17,000           7,650         22,855
  Income taxes (benefit).................................         (887)          (1,418)         12,249          9,944
                                                              --------        ---------       ---------       --------
  NET INCOME (LOSS)......................................     $   (908)       $  18,418       $  (4,599)      $ 12,911
                                                              ========        =========       =========       ========
YEAR ENDED JULY 2, 1999
PREDECESSOR
                                                            ------------------------------------------------------------
                                                                              FOREIGN
                                                            GUARANTOR       NON-GUARANTOR    ELIMINATING
                                                            SUBSIDIARIES    SUBSIDIARIES      ENTRIES       CONSOLIDATED
                                                            ------------    -------------    -----------    ------------
                                                                                   (IN THOUSANDS)
REVENUE
  Product sales..........................................     $524,142        $ 480,981       $(472,405)      $532,718

COSTS AND EXPENSES
  Cost of product sales..................................      379,282          337,287        (366,793)       349,776
  Research and development...............................       67,316             (237)             --         67,079
  Selling, general and administrative....................       65,866           18,132              --         83,998
  Harris corporate expense allocations...................       10,115             (812)             --          9,303
  Goodwill amortization..................................        2,414               --              --          2,414
                                                              --------        ---------       ---------       --------
Operating income (loss)..................................         (851)         126,611        (105,612)        20,148
  Interest, net..........................................       33,894           (4,975)        (30,150)        (1,231)
                                                              --------        ---------       ---------       --------
  Income (loss) before income taxes......................      (34,745)         131,586         (75,462)        21,379
  Income taxes (benefit).................................      (39,176)          10,313          22,836         (6,027)
                                                              --------        ---------       ---------       --------
  NET INCOME (LOSS)......................................     $  4,431        $ 121,273       $ (98,298)      $ 27,406
                                                              ========        =========       =========       ========
F-27
INTERSIL HOLDING CORPORATION

          SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

                        SIX WEEKS ENDED AUGUST 13, 1999
PREDECESSOR
                                                            ------------------------------------------------------------
                                                                              FOREIGN
                                                            GUARANTOR       NON-GUARANTOR    ELIMINATING
                                                            SUBSIDIARIES    SUBSIDIARIES      ENTRIES       CONSOLIDATED
                                                            ------------    -------------    -----------    ------------
                                                                                  (IN THOUSANDS)
REVENUE
  Product sales..........................................     $ 39,470        $ 129,546       $(111,680)      $ 57,336
COSTS AND EXPENSES
  Cost of product sales..................................       37,484          139,292        (137,095)        39,681
  Research and development...............................        8,511              (12)             --          8,499
  Selling, general and administrative....................        8,986            1,778             144         10,908
  Harris corporate expense allocations...................        1,393              (85)           (144)         1,164
  Intangible amortization................................          326               --              --            326
                                                              --------        ---------       ---------       --------
Operating income (loss)..................................      (17,230)         (11,427)         25,415         (3,242)
  Interest, net..........................................         (161)              50              --           (111)
                                                              --------        ---------       ---------       --------
  Income (loss) before income taxes......................      (17,069)         (11,477)         25,415         (3,131)
  Income taxes (benefit).................................       (4,943)             (15)          4,856           (102)
                                                              --------        ---------       ---------       --------
  NET INCOME (LOSS)......................................     $(12,126)       $ (11,462)      $  20,559       $ (3,029)
                                                              ========        =========       =========       ========
46 WEEKS ENDED JUNE 30, 2000
SUCCESSOR
                                                ------------------------------------------------------------------------
                                                                              FOREIGN
                                                            GUARANTOR       NON-GUARANTOR    ELIMINATING
                                                 PARENT     SUBSIDIARIES    SUBSIDIARIES      ENTRIES       CONSOLIDATED
                                                --------    ------------    -------------    -----------    ------------
                                                                             (IN THOUSANDS)
REVENUE
  Product sales..............................   $     --      $568,091        $ 527,695       $(498,937)      $596,849
COSTS AND EXPENSES
  Cost of product sales......................         --       362,807          499,438        (509,732)       352,513
  Research and development...................         --        69,341              115              --         69,456
  Selling, general and administrative........        123        75,609           21,495              --         97,227
  Harris corporate expense allocation........         --            --               --              --             --
  Intangible amortization....................         --         9,124            1,562              --         10,686
  In-process research and development........         --        20,239               --              --         20,239
  Other......................................        300           878               --              --          1,178
                                                --------      --------        ---------       ---------       --------
Operating income (loss)......................       (423)       30,093            5,085          10,795         45,550
  Loss on sale of Malaysian operation........         --        24,825               --              --         24,825
  Interest, net..............................      7,855        30,404              (91)             36         38,204
  Equity in subsidiary (loss)................    (19,960)           --               --          19,960             --
                                                --------      --------        ---------       ---------       --------
  Income (loss) before income taxes and
    extraordinary item.......................     11,682       (25,136)           5,176          (9,201)       (17,479)
  Income taxes (benefit).....................         --           193             (482)             --           (289)
                                                --------      --------        ---------       ---------       --------
  Income (loss) before extraordinary item....     11,682       (25,329)           5,658          (9,201)       (17,190)
  Extraordinary item--loss on extinguishment
    of debt, net of tax effect...............       (568)      (24,950)              --              --        (25,518)
                                                --------      --------        ---------       ---------       --------
  Net income (loss)..........................     11,114       (50,279)           5,658          (9,201)       (42,708)
  Preferred dividends........................      5,391         5,391               --          (5,391)         5,391
                                                --------      --------        ---------       ---------       --------
  NET INCOME (LOSS) TO COMMON SHAREHOLDERS...   $  5,723      $(55,670)       $   5,658       $  (3,810)      $(48,099)
                                                ========      ========        =========       =========       ========
F-28
INTERSIL HOLDING CORPORATION

               SUPPLEMENTAL CONDENSED CONSOLIDATING BALANCE SHEET

                                  JULY 2, 1999
PREDECESSOR
                                                            ------------------------------------------------------------
                                                                              FOREIGN
                                                            GUARANTOR       NON-GUARANTOR    ELIMINATING
                                                            SUBSIDIARIES    SUBSIDIARIES      ENTRIES       CONSOLIDATED
                                                            ------------    -------------    -----------    ------------
                                                                                   (IN THOUSANDS)
ASSETS
  Trade receivables, net.................................     $ 97,043        $   3,631       $      --       $100,674
  Intercompany balances..................................     (139,993)          19,554         120,439             --
  Inventories............................................       86,986           86,049         (19,213)       153,822
  Other current assets...................................        7,782              946              --          8,728
  Property, plant and equipment, net.....................      291,645          118,885              --        410,530
  Intangibles, net.......................................       45,368               --              --         45,368
  Investment in subsidiaries.............................       10,907           72,195         (83,102)            --
  Other non-current assets...............................       39,721            2,336              --         42,057
                                                              --------        ---------       ---------       --------
    Total Assets.........................................     $439,459        $ 303,596       $  18,124       $761,179
                                                              ========        =========       =========       ========
LIABILITIES AND BUSINESS EQUITY
  Trade payables.........................................     $ 21,503        $   9,565       $      --       $ 31,068
  Compensation and benefits..............................       26,120            6,803              --         32,923
  Other current liabilities..............................       42,778           (8,254)         (7,444)        27,080
  Other non-current liabilities..........................       11,229               --              --         11,229
  Business Equity........................................      337,829          295,482          25,568        658,879
                                                              --------        ---------       ---------       --------
    Total Liabilities and Business Equity................     $439,459        $ 303,596       $  18,124       $761,179
                                                              ========        =========       =========       ========
JUNE 30, 2000
SUCCESSOR
                                             ------------------------------------------------------------------------
                                                                           FOREIGN
                                                          GUARANTOR      NON-GUARANTOR    ELIMINATING
                                              PARENT     SUBSIDIARIES    SUBSIDIARIES       ENTRIES      CONSOLIDATED
                                             --------    ------------    -------------    -----------    ------------
                                                                          (IN THOUSANDS)
ASSETS
  Cash and cash equivalents...............   $     --     $  200,237       $  11,703      $        --      $211,940
  Trade receivables, net..................         --        104,769           6,926               --       111,695
  Intercompany balances...................         --         (3,009)          3,009               --            --
  Inventories.............................         --        126,313             168               --       126,481
  Other current assets....................         --         37,295             372               --        37,667
  Property, plant and equipment, net......         --        223,852           1,632               --       225,484
  Intangibles, net........................         --         80,888         109,262               --       190,150
  Investment in subsidiaries..............    719,768        323,526           1,370       (1,044,664)           --
  Other non-current assets................         --         28,927           1,594                         30,521
                                             --------     ----------       ---------      -----------      --------
    Total Assets..........................   $719,768     $1,122,798       $ 136,036      $(1,044,664)     $933,938
                                             ========     ==========       =========      ===========      ========
LIABILITIES AND SHAREHOLDERS' EQUITY
  Trade payables..........................   $     --     $   32,953       $   4,038      $        --      $ 36,991
  Compensation and benefits...............         --         35,254           3,372               --        38,626
  Other current liabilities...............         --         35,823           5,322               --        41,145
  Long-term debt..........................         --        116,188              --               --       116,188
  Other non-current liabilities...........         --         21,992              --               --        21,992
  Common stock............................        945             --              --               --           945
  Additional paid-in capital..............    718,823            300              --               --       719,123
  Retained deficit........................         --        880,288         121,668       (1,044,664)      (42,708)
  Accumulated other comprehensive income..         --             --           1,636               --         1,636
                                             --------     ----------       ---------      -----------      --------
    Total Liabilities and Shareholders'
      Equity..............................   $719,768     $1,122,798       $ 136,036      $(1,044,664)     $933,938
                                             ========     ==========       =========      ===========      ========
F-29
INTERSIL HOLDING CORPORATION

          SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

                            YEAR ENDED JULY 3, 1998
PREDECESSOR
                                                            ------------------------------------------------------------
                                                                             FOREIGN
                                                            GUARANTOR       NON-GUARANTOR    ELIMINATING
                                                            SUBSIDIARIES    SUBSIDIARIES      ENTRIES       CONSOLIDATED
                                                            ------------    -------------    -----------    ------------
                                                                                   (IN THOUSANDS)
OPERATING ACTIVITIES:
  Net income (loss)......................................     $   (908)        $18,418        $  (4,599)      $ 12,911
Adjustments to reconcile net income (loss) to net cash
  provided by (used in) operating activities
  Depreciation and amortization..........................       51,295          16,036               --         67,331
  Provision for inventory obsolescence...................        7,317              --               --          7,317
  Changes in working capital.............................     (162,132)         12,669          110,235        (39,228)
                                                              --------         -------        ---------       --------
    Net cash provided by (used in) operating
      activities.........................................     (104,428)         47,123          105,636         48,331

INVESTING ACTIVITIES:
Property, plant and equipment............................      (49,762)        (40,422)              --        (90,184)
                                                              --------         -------        ---------       --------
    Net cash used in investing activities................      (49,762)        (40,422)              --        (90,184)

FINANCING ACTIVITIES:
  Proceeds from borrowings...............................        2,750              --               --          2,750
  Payments of borrowings.................................          (83)             --               --            (83)
  Net cash transfer and billings from (to) parent........      151,523          (4,043)        (105,636)        41,844
                                                              --------         -------        ---------       --------
    Net cash provided by (used in) financing
      activities.........................................      154,190          (4,043)        (105,636)        44,511
Effect of exchange rates on cash.........................           --          (2,658)              --         (2,658)
                                                              --------         -------        ---------       --------
Net increase in cash.....................................           --              --               --             --
Cash at the beginning of the period......................           --              --               --             --
                                                              --------         -------        ---------       --------
Cash at the end of the period............................     $     --         $    --        $      --       $     --
                                                              ========         =======        =========       ========
YEAR ENDED JULY 2, 1999
PREDECESSOR
                                                            ------------------------------------------------------------
                                                                              FOREIGN
                                                             GUARANTOR      NON-GUARANTOR    ELIMINATING
                                                            SUBSIDIARIES    SUBSIDIARIES      ENTRIES       CONSOLIDATED
                                                            ------------    -------------    -----------    ------------
                                                                                   (IN THOUSANDS)
OPERATING ACTIVITIES:
  Net income (loss)......................................    $    4,431       $ 121,273       $ (98,298)      $ 27,406
Adjustments to reconcile net income (loss) to net cash
  provided by (used in) operating activities
  Depreciation and amortization..........................        59,615          21,016              --         80,631
  Provision for inventory obsolescense...................         3,894              --              --          3,894
  Changes in working capital.............................       144,087          19,084        (163,853)          (682)
                                                             ----------       ---------       ---------       --------
    Net cash provided by (used in) operating
      activities.........................................       212,027         161,373        (262,151)       111,249

INVESTING ACTIVITIES:
Cash paid for acquired business..........................        (1,335)             --              --         (1,335)
Property, plant and equipment............................       (21,648)        (16,915)             --        (38,563)
                                                             ----------       ---------       ---------       --------
    Net cash used in investing activities................       (22,983)        (16,915)             --        (39,898)

FINANCING ACTIVITIES:
  Proceeds from borrowings...............................           800              --              --            800
  Payments of borrowings.................................          (302)             --              --           (302)
  Net cash transfer and billings from (to) parent........      (189,542)       (139,639)        262,151        (67,030)
                                                             ----------       ---------       ---------       --------
    Net cash provided by (used in) financing
      activities.........................................      (189,044)       (139,639)        262,151        (66,532)
Effect of exchange rates on cash.........................            --          (4,819)             --         (4,819)
                                                             ----------       ---------       ---------       --------
Net increase in cash.....................................            --              --              --             --
Cash at the beginning of the period......................            --              --              --             --
                                                             ----------       ---------       ---------       --------
Cash at the end of the period............................    $       --       $      --       $      --       $     --
                                                             ==========       =========       =========       ========
F-30
INTERSIL HOLDING CORPORATION

          SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

                        SIX WEEKS ENDED AUGUST 13, 1999
PREDECESSOR
                                                            ------------------------------------------------------------
                                                                              FOREIGN
                                                             GUARANTOR      NON-GUARANTOR    ELIMINATING
                                                            SUBSIDIARIES    SUBSIDIARIES      ENTRIES       CONSOLIDATED
                                                            ------------    -------------    -----------    ------------
                                                                                  (IN THOUSANDS)
OPERATING ACTIVITIES:
  Net income (loss)......................................    $  (11,462)      $ (12,126)      $  20,559       $ (3,029)
Adjustments to reconcile net income (loss) to net cash
  provided by (used in) operating activities
  Depreciation and amortization..........................         2,380           6,693              --          9,073
  Provision for inventory obsolescense...................         1,919              --              --          1,919
  Non-current deferred income taxes......................            --           4,815          (9,571)        (4,756)
  Changes in working capital.............................       208,945         128,451        (337,221)           175
                                                             ----------       ---------       ---------       --------
    Net cash provided by (used in) operating
       activities........................................       201,782         127,833        (326,233)         3,382
INVESTING ACTIVITIES:
Property, plant and equipment............................        (1,020)           (867)             --         (1,887)
                                                             ----------       ---------       ---------       --------
    Net cash used in investing activities................        (1,020)           (867)             --         (1,887)
FINANCING ACTIVITIES:
  Payments of borrowings.................................            --           4,535          (4,567)           (32)
  Net cash transfer and billings from (to) parent........      (200,497)       (131,501)        330,800         (1,198)
                                                             ----------       ---------       ---------       --------
    Net cash provided by (used in) financing
       activities........................................      (200,497)       (126,966)        326,233         (1,230)
Effect of exchange rates on cash.........................         1,177              --              --          1,177
                                                             ----------       ---------       ---------       --------
Net increase in cash.....................................         1,442              --              --          1,442
Cash at the beginning of the period......................            --              --              --             --
                                                             ----------       ---------       ---------       --------
Cash at the end of the period............................    $    1,442       $      --       $      --       $  1,442
                                                             ==========       =========       =========       ========
46 WEEKS ENDED JUNE 30, 2000
SUCCESSOR
                                                 -------------------------------------------------------------------------
                                                                                FOREIGN
                                                               GUARANTOR      NON-GUARANTOR    ELIMINATING
                                                  PARENT      SUBSIDIARIES    SUBSIDIARIES      ENTRIES       CONSOLIDATED
                                                 ---------    ------------    -------------    -----------    ------------
                                                                              (IN THOUSANDS)
OPERATING ACTIVITIES:
  Net income (loss)...........................   $  11,114     $  (50,279)      $   5,658        $(9,201)      $  (42,708)
Adjustments to reconcile net income (loss) to
  net cash provided by (used in) operating
  activities
  Depreciation and amortization...............          --         52,500           8,788             --           61,288
  Provision for inventory obsolescense........          --         23,906              --             --           23,906
  Write-off of in-process research and
    development...............................          --         20,239              --             --           20,239
  Write-off of unearned compensation..........         878             --              --             --              878
  Loss on sale of Malaysian operations........          --             --          24,825             --           24,825
  Non-current deferred income taxes...........          --         (4,680)             --             --           (4,680)
  Changes in working capital..................    (527,091)       622,854         (77,573)         9,201           27,391
                                                 ---------     ----------       ---------        -------       ----------
    Net cash provided by (used in) operating
      activities..............................    (515,099)       664,540         (38,302)            --          111,139
INVESTING ACTIVITIES:
Sale of Malaysian operation...................          --             --          52,500             --           52,500
Property, plant and equipment.................          --        (35,031)         (3,782)            --          (38,813)
                                                 ---------     ----------       ---------        -------       ----------
    Net cash provided by (used in) investing
      activities..............................          --        (35,031)         48,718             --           13,687
FINANCING ACTIVITIES:
Proceeds from offering........................     513,114             --              --             --          513,114
Proceeds from exercise of stock options.......       1,985             --              --             --            1,985
Payments of borrowings........................          --       (435,204)             --             --         (435,204)
                                                 ---------     ----------       ---------        -------       ----------
  Net cash provided by (used in) financing
    activities................................     515,099       (435,204)             --             --           79,895
Effect of exchange rates on cash and cash
  equivalents.................................          --             --            (158)            --             (158)
                                                 ---------     ----------       ---------        -------       ----------
Net increase in cash and cash equivalents.....          --        194,305          10,258             --          204,563
Cash at the beginning of the period...........          --          5,932           1,445             --            7,377
                                                 ---------     ----------       ---------        -------       ----------
Cash and cash equivalents at the end of the
  period .....................................   $      --     $  200,237       $  11,703        $    --       $  211,940
                                                 =========     ==========       =========        =======       ==========
F-31
NOTE T--QUARTERLY FINANCIAL DATA (UNAUDITED)
QUARTERS ENDED
                                                                    ---------------------------------------------------
                                                                    OCTOBER 1,    DECEMBER 31,    MARCH 31,    JUNE 30,
                                                                      1999          1999            2000        2000
                                                                    ----------    ------------    ---------    --------
                                                                                       (IN MILLIONS)
Net sales........................................................     $134.0         $158.1        $ 170.9      $191.2
Gross margin.....................................................       48.3           61.7           69.4        82.6
Income (loss) before extraordinary item..........................      (23.1)          (1.7)           2.8         1.8
Extraordinary item...............................................         --             --          (25.5)         --
                                                                      ------         ------        -------      ------
Net income (loss)................................................     $(23.1)        $ (1.7)       $ (22.7)     $  1.8
                                                                      ======         ======        =======      ======
Net income (loss) to common shareholders.........................     $(24.5)        $ (4.2)       $ (24.2)     $  1.8
Per Share (Basic):
  Income (loss) before extraordinary item........................     $(0.37)        $(0.06)       $  0.02      $ 0.02
  Extraordinary item.............................................         --             --          (0.34)         --
                                                                      ------         ------        -------      ------
  Net income (loss)..............................................     $(0.37)        $(0.06)       $ (0.32)     $ 0.02
                                                                      ======         ======        =======      ======
Per Share (Diluted):
  Income (loss) before extraordinary item........................     $(0.37)        $(0.06)       $  0.02      $ 0.02
  Extraordinary item.............................................         --             --          (0.34)         --
                                                                      ------         ------        -------      ------
  Net income (loss)..............................................     $(0.37)        $(0.06)       $ (0.32)     $ 0.02
                                                                      ======         ======        =======      ======
F-32
[INTERSIL LOGO]
PART II

                     INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 13.  OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

     The following expenses (other than the SEC filing fee, the NASD filing fee
and the Nasdaq National Market listing fee) are estimated:
SEC Registration Fee................................................................................   $  162,232
NASD Filing Fee.....................................................................................       30,500
Nasdaq National Market Listing Fee..................................................................       35,000
Accounting Fees.....................................................................................       *
Printing and Engraving Expenses.....................................................................       *
Legal Fees and Expenses (other than blue sky).......................................................       *
Blue Sky Fees and Expenses..........................................................................       *
Transfer Agent and Registrar Fees...................................................................       *
Miscellaneous Fees and Expenses.....................................................................       *
                                                                                                       ----------
  Total.............................................................................................   $   *
                                                                                                       ==========
------------------
* To be completed by amendment.

ITEM 14.  INDEMNIFICATION OF DIRECTORS AND OFFICERS

     As permitted by the Delaware General Corporation Law, the Restated
Certificate of Incorporation of the Issuer provides that directors of the Issuer
shall not be personally liable to the Issuer or its shareholders for monetary
damages for breach of fiduciary duty as a director, except for liability (i) for
any breach of the director's duty of loyalty to the Issuer or its shareholders,
(ii) for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law, (iii) under Section 174 of the
Delaware General Corporation Law, relating to prohibited dividends or
distributions or the repurchase or redemption of stock, or (iv) for any
transaction from which the director derives an improper personal benefit. In
addition, the By-laws of the Issuer provide for indemnification of the Issuer's
officers and directors to the fullest extent permitted under Delaware law.
Section 145 of the Delaware General Corporation Law provides that a corporation
may indemnify any persons, including officers and directors, who were or are, or
are threatened to be made, parties to any threatened, pending or completed legal
action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of such corporation), by
reason of the fact that such person was an officer, director, employee or agent
of such corporation or is or was serving at the request of such corporation as
an officer, director, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise. The indemnity may include expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by such person in connection with such action,
suit or proceeding, provided such person acted in good faith and in a manner he
reasonably believed to be in or not opposed to the corporation's best interests
and, for criminal proceedings, had no reasonable cause to believe that his
conduct was unlawful. A Delaware corporation may indemnify officers and
directors in an action by or in the right of the corporation under the same
conditions, except that no indemnification is permitted without judicial
approval if the officer or director is adjudged to be liable to the corporation.
Where an officer or director is successful on the merits or otherwise in the
defense of any action referred to above, the corporation must indemnify him
against the expenses that such officer or director actually and reasonably
incurred. Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers or persons controlling an
Issuer pursuant to the foregoing provisions, the Issuer has been informed that
in the opinion of the Commission such indemnification is against public policy
as expressed in the Securities Act and is therefore unenforceable.

     The directors and officers of the Issuer are insured against certain
liabilities under the Issuer's directors' and officers' liability insurance.

                                      II-1
The Underwriting Agreement filed as Exhibit 1.01 to this Registration
Statement provides for indemnification by the underwriters of the Issuer and its
officers and directors for some liabilities that arise under the Securities Act
or otherwise.

     The foregoing summary of the Delaware General Corporation Law and of the
Certificate of Incorporation and By-laws of the Issuer is qualified in its
entirety by reference to the relevant provisions of the Delaware General
Corporation Law and of the Issuer's Certificate of Incorporation and By-laws,
which are filed as exhibits to this Registration Statement.

ITEM 15.  RECENT SALES OF UNREGISTERED SECURITIES

     On August 13, 1999, pursuant to an Amended and Restated Master Transaction
Agreement, Intersil and Intersil Holding acquired selected portions of the
semiconductor business of Harris (the "Acquisition"). In connection with the
Acquisition, (i) Intersil Holding issued an 11.13% subordinated promissory note
to Harris in the principal amount of $90.0 million; (ii) Harris paid about $9.0
million in cash to Intersil Holding to purchase shares of 12% Series A
Cumulative Compounding Preferred Stock ("Intersil Holding Preferred Stock") and
shares of common stock ("Intersil Holding Common Stock"); (iii) Intersil Holding
sold to Sterling Holding Company, LLC shares of Intersil Holding Preferred Stock
and Intersil Holding Common Stock and to senior management and other key
employees and certain other investors shares of Intersil Holding Common Stock
for a total of about $81.0 million in cash, (iv) Citicorp Mezzanine Partners,
L.P. contributed $30.0 million in cash to Intersil Holding in exchange for a
13.5% subordinated promissory note and warrants to purchase about 3,703,707
shares of Class A Common Stock of Intersil Holding. In addition, Intersil
Holding granted to senior managers a sign-on bonus in the aggregate amount of
about $574,000, in the form of options to purchase Intersil Holding Preferred
Stock. Intersil Holding has determined that the issuance of the subordinated
notes, the Intersil Holding Preferred Stock, the Intersil Holding Common Stock,
the warrants, the options to purchase Intersil Holding Preferred Stock were
exempt from registration under Section 4(2) of the Securities Act of 1933, as
amended.

     Also in connection with the Acquisition, Intersil offered Senior
Subordinated Notes due 2009, the old notes, to "qualified institutional buyers"
(as defined in Rule 144A under the Securities Act). That offering was
consummated on August 13, 1999 with the sale of 200,000 units, each unit
consisting of one 13 1/4% Senior Subordinated Note due 2009 of Intersil with a
principal amount of $1,000 and one warrant to purchase 18,5185 shares of
Intersil Holding's Class A Common Stock. An exchange offer registration
statement filed by Intersil became effective on January 12, 2000 with respect to
the exchange of the old notes for registered notes having substantially
identical terms, the new notes. A registration statement was filed by Intersil
Holding on November 20, 1999 to register the warrants and the shares of Common
Stock issuable upon exercise of the warrants.

     Pursuant to the 1999 Equity Compensation Plan, Intersil Holdings granted
certain salaried officers and key employees options to acquire 1,549,333 shares
of Intersil Holding Class A Common Stock, effective as of August 14, 1999. The
options vest 20% per year over five years, and 20% became immediately vested
upon the initial public offering. Intersil Holding has determined that the
issuance of the options to purchase Intersil Holding Common Stock were exempt
from registration under Section 4(2) of the Securities Act of 1933, as amended.

ITEM 16.  EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

     (a) Exhibits:

     Incorporated by reference to the Exhibit Index following page II-4 hereto.

     (b) Financial Statement Schedules:

     Schedule I Condensed Financial Information of Registrant

     The information required by Schedule I is included in the notes to the
Consolidated Financial Statements.

                                      II-2
SCHEDULE II
                       VALUATION AND QUALIFYING ACCOUNTS
                                (IN THOUSANDS $)
ADDITIONS
                                                                          CHARGED      ADDITIONS                 BALANCE
                                                            BALANCE AT    TO COSTS     CHARGED      DEDUCTION       AT
                                                            BEGINNING       AND        TO OTHER       FROM       END OF
                                                            OF PERIOD     EXPENSES     ACCOUNTS     RESERVES      PERIOD
                                                            ----------    ---------    ---------    ---------    ---------
Valuation and qualifying accounts deducted from the
  assets to which they apply:

ALLOWANCE FOR UNCOLLECTIBLE ACCOUNTS
  2000...................................................    $    582      $   423       $ 395       $    59      $ 1,341
  1999...................................................    $    571      $   487       $  --       $   476      $   582
  1998...................................................    $  1,336      $   324       $  --       $ 1,089      $   571

INVENTORY RESERVE
  2000...................................................    $ 18,117      $38,074       $ 573       $34,831      $21,933
  1999...................................................    $ 24,482      $ 8,373       $ 257       $14,995      $18,117
  1998...................................................    $ 31,736      $ 9,846       $ 120       $17,220      $24,482

DISTRIBUTOR RESERVES
  2000...................................................    $  6,542      $37,408       $  --       $36,584      $ 7,366
  1999...................................................    $  6,189      $52,965       $  --       $52,612      $ 6,542
  1998...................................................    $ 11,278      $66,062       $  --       $71,151      $ 6,189
All other schedules for which provision is made in the applicable
accounting regulation of the Securities and Exchange Commission are not required
under the related instructions or are inapplicable and therefore have been
omitted.

ITEM 17.  UNDERTAKINGS

     Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.

     The undersigned registrant hereby undertakes that:

          (1) for the purpose of determining any liability under the Securities
     Act of 1933, the information omitted from the form of prospectus filed as
     part of this registration statement in reliance upon Rule 430A and
     contained in the form of prospectus filed by the registrant pursuant to
     Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to
     be a part of this registration statement as of the time it was declared
     effective; and

          (2) for the purpose of determining any liability under the Securities
     Act of 1933, each post-effective amendment that contains a form of
     prospectus shall be deemed to be a new registration statement relating to
     the securities offered therein, and the offering of such securities at that
     time shall be deemed to be the initial bona fide offering thereof.

                                      II-3
SIGNATURES

     Pursuant to the requirements of the Securities Act of 1933, as amended, the
below-named Registrant has duly caused this Registration Statement to be signed
on its behalf by the undersigned, thereunto duly authorized, in the City of
Irvine, State of California, on the 25th day of August, 2000.

                                          INTERSIL HOLDING CORPORATION

                                          By: GREGORY L. WILLIAMS
                                            ------------------------------------
                                              Gregory L. Williams
                                              Chief Executive Officer and
                                              Director

                               POWER OF ATTORNEY

     KNOWN TO ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Gregory L. Williams, Daniel J. Heneghan
and Stephen M. Moran, each his attorney-in-fact, with full power of substitution
and resubstitution, for him in any and all capacities, to sign any or all
amendments or post-effective amendments to this Registration Statement or any
Registration Statement for the same offering that is effective upon filing
pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and to
file the same with exhibits thereto and other documents in connection therewith
or in connection with the registration of common stock under the Securities
Exchange Act of 1934, as amended, with the Securities and Exchange Commission,
granting unto such attorney-in-fact and agent full power and authority to do and
perform each and every act and thing requisite and necessary in connection with
such matters and hereby ratifying and confirming all that each attorney-in-fact,
or his agent or substitute, may do or cause to be done by virtue hereof.

     Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed below by the following persons in
the capacities at the above-named Registrant on August 25, 2000.
SIGNATURE                                               TITLE
------------------------------------------------------    ---------------------------------------------
GREGORY L. WILLIAMS                                       Chief Executive Officer and Director
------------------------------------------------------    (principal executive officer)
Gregory L. Williams

DANIEL J. HENEGHAN                                        Vice President, Chief Financial Officer
------------------------------------------------------    and Assistant Secretary (principal financial
Daniel J. Heneghan                                        and accounting officer)

ROBERT W. CONN                                            Director
------------------------------------------------------
Robert W. Conn

GARY E. GIST                                              Director
------------------------------------------------------
Gary E. Gist

JAN PEETERS                                               Director
------------------------------------------------------
Jan Peeters

ROBERT N. POKELWALDT                                      Director
------------------------------------------------------
Robert N. Pokelwaldt

JAMES A. URRY                                             Director
------------------------------------------------------
James A. Urry
EXHIBIT INDEX
EXHIBIT
   NO.                                                    DESCRIPTION
----------  -------------------------------------------------------------------------------------------------------
1.01     Form of Underwriting Agreement.*
   2.01     Amended and Restated Master Transaction Agreement dated as of June 2, 1999, by and among Intersil
            Holding Corporation ("Holding"), Intersil Corporation ("Intersil") and Harris Corporation ("Harris")
            (incorporated by reference to Exhibit 2.01 to the Registration Statement on Form S-1 previously filed
            by Intersil Holding Corporation on November 10, 1999 (Registration No. 333-90857) ("Registration
            Statement on Form S-1")).
   2.02     Agreement Concerning Deferred Closings dated as of August 13, 1999, by and among Harris and Intersil
            (incorporated by reference to Exhibit 2.02 to the Registration Statement on Form S-1).
   2.03     Transition Services Agreement dated as of August 13, 1999, by and among Intersil and Harris
            (incorporated by reference to Exhibit 2.03 to the Registration Statement on Form S-1).
   2.04     Share Sale Agreement dated August 13, 1999, between Harris Airport Systems (Malaysia) Sdn. Bhd., Harris
            Solid State (Malaysia) Sdn. Bhd. and Sapphire Worldwide Investments, Inc. (incorporated by reference to
            Exhibit 2.04 to the Registration Statement on Form S-1).
   2.05     Agreement for the Sale and Purchase of the Business and Assets of Harris Semiconductor Limited dated as
            of August 13, 1999, between Harris Semiconductor Limited and Intersil Limited (incorporated by
            reference to Exhibit 2.05 to the Registration Statement on Form S-1).
   2.06     Asset Purchase Agreement dated as of August 20, 1999, between Harris Semiconductor Design & Sales Pte.
            Ltd. and Intersil Pte. Ltd. (incorporated by reference to Exhibit 2.06 to the Registration Statement on
            Form S-1).
   2.07     Purchase Agreement of Corporate Quotas of a Limited Liability Company, dated as of August 13, 1999,
            between Harris Semiconductor BV, Harris Semiconductor Limited and Intersil (incorporated by reference
            to Exhibit 2.07 to the Registration Statement on Form S-1).
   2.08     Assignment of Shares, dated as of August 13, 1999, between Intersil and Harris for the transfer by
            Harris of all of its shares of Harris Semiconducteurs, Sarl to Intersil (incorporated by reference to
            Exhibit 2.08 to the Registration Statement on Form S-1).
   2.09     Share Transfer Agreement, dated as of August 1, 1999, between Harris and Intersil for the transfer of
            stock of Harris Semiconductor Y.H. (incorporated by reference to Exhibit 2.09 to the Registration
            Statement on Form S-1).
   2.10     Equity Purchase Agreement, dated as of August 13, 1999, between Harris Advanced Technology (Malaysia)
            Sdn. Bhd. and Harris Airport Systems (M) Sdn. Bhd. (incorporated by reference to Exhibit 2.10 to the
            Registration Statement on Form S-1).
   2.11     Agreement Re: China Subsidiaries, dated as of August 13, 1999, between Harris and Intersil
            (incorporated by reference to Exhibit 2.11 to the Registration Statement on Form S-1).
   2.12     Agreement Re: Anshan Joint Venture, dated as of August 13, 1999, between Harris Advanced Technology
            (Malaysia) Sdn. Bhd. and Harris Airport Systems (M) Sdn. Bhd. (incorporated by reference to Exhibit
            2.12 to the Registration Statement on Form S-1).
   2.13     Agreement Re: Guangzhou Joint Venture, dated as of August 13, 1999, between Harris Advanced Technology
            (Malaysia) Sdn. Bhd. and Harris Airport Systems (M) Sdn. Bhd. (incorporated by reference to Exhibit
            2.13 to the Registration Statement on Form S-1).
   2.14     Agreement Re: Suzhou Harris, dated as of August 13, 1999, between Harris Advanced Technology (Malaysia)
            Sdn. Bhd. and Harris Airport Systems (M) Sdn. Bhd. (incorporated by reference to Exhibit 2.14 to the
            Registration Statement on Form S-1).
   2.15     Intellectual Property Agreement, dated as of August 13, 1999, among Harris, Harris Semiconductor
            Patents, Inc. and Holding (incorporated by reference to Exhibit 2.15 to the Registration Statement on
            Form S-1).
EXHIBIT
   NO.                                                    DESCRIPTION
----------  -------------------------------------------------------------------------------------------------------
2.16     Patent Assignment and Services Agreement, dated as of August 13, 1999, among Harris, Harris
            Semiconductor Patents, Inc. and Holding (incorporated by reference to Exhibit 2.16 to the Registration
            Statement on Form S-1).
   2.17     License Assignment Agreement, dated as of August 13, 1999, among Harris, Harris Semiconductor Patents,
            Inc. and Holding (incorporated by reference to Exhibit 2.17 to the Registration Statement on Form S-1).
   2.18     Harris Trademark License Agreement, dated as of August 13, 1999, among Harris, HAL Technologies, Inc.
            and Holding (incorporated by reference to Exhibit 2.18 to the Registration Statement on Form S-1).
   2.19     Secondary Trademark Assignment and License Agreement, dated as of August 13, 1999, between Harris and
            Holding (incorporated by reference to Exhibit 2.19 to the Registration Statement on Form S-1).
   2.20     PRISM(R) Intellectual Property Assignment, dated August 13, 1999, between Holding and Intersil
            (incorporated by reference to Exhibit 2.20 to the Post-Effective Amendment No. 1 to the Registration
            Statement on Form S-1).
   2.21     Tax Sharing Agreement, dated as of August 13, 1999, among Holding, Intersil and Choice Microsystems,
            Inc. (incorporated by reference to Exhibit 2.21 to the Registration Statement on Form S-1).
   2.22     Royalty Agreement, dated as of August 13, 1999, among Harris and Intersil (incorporated by reference to
            Exhibit 2.22 to the Registration Statement on Form S-1).
   2.23     Option Agreement, dated as of August 13, 1999, among Intersil and Intersil PRISM, LLC. (incorporated by
            reference to Exhibit 2.23 to the Registration Statement on Form S-1).
   2.24     Stock Purchase Agreement among ChipPAC Limited, ChipPAC, Inc., Sapphire Worldwide Investments, Inc. and
            Intersil Corporation dated as of June 30, 2000 (incorporated by reference to Exhibit 2.1 to the Current
            Report on Form 8-K previously filed by ChipPAC, Inc. on July 14, 2000 (Commission File No.
            333-91641)).
   2.25     Share Purchase Agreement dated April 27, 2000 by and among Holding, Intersil B.V., No Wires Needed
            B.V., Gilde It Fund B.V., Parnib B.V., 3Com Corporation, Kennet I L.P., Hans B. Van Der Hoek and the
            shareholders named therein (incorporated by reference to Exhibit 2.25 to the Report on Form 10-K
            previously filed by Intersil Holding Corporation on August 17, 2000).
   2.26     Amendment No. 1 to the Share Purchase Agreement dated April 27, 2000 by and among Holding, Intersil
            B.V., No Wires Needed B.V., Gilde It Fund B.V., Parnib B.V., 3Com Corporation, Kennet I L.P., Hans B.
            Van Der Hoek and the shareholders named therein (incorporated by reference to Exhibit 2.26 to the
            Report on Form 10-K previously filed by Intersil Holding Corporation on August 17, 2000).
   3.01     Restated Certificate of Incorporation of Holding (incorporated by reference to Exhibit 3.01 to the
            Post-Effective Amendment No. 1 to the Registration Statement on Form S-1).
   3.02     Bylaws of Holding (incorporated by reference to Exhibit 3.02 to the Registration Statement on Form
            S-1).
   4.01     Specimen Certificate of Holding's Class A Common Stock (incorporated by reference to Exhibit 4.01 to
            Amendment No. 2 to the Registration Statement on Form S-1 (Registration Number 333-95199)).
   4.02     Amended and Restated Registration Rights Agreement, dated as of January 21, 2000, by and among Holding,
            Sterling Holding Company, L.L.C., Manatee Investment Corporation, Citicorp Mezzanine Partners, L.P. and
            the management investors named therein (incorporated by reference to Exhibit 4.02 to the Registration
            Statement on Form 8-A previously filed by Intersil Holding Corporation on February 18, 2000).
   5.01     Opinion of Dechert.*
EXHIBIT
   NO.                                                    DESCRIPTION
----------  -------------------------------------------------------------------------------------------------------
10.01     Warrant Agreement, dated as of August 13, 1999, between Holding and United States Trust Company of New
            York (incorporated by reference to Exhibit 4.01 to the Registration Statement on Form S-1).
  10.02     Purchase Agreement, dated as of August 6, 1999, between Intersil, Holding, Harris Semiconductor, LLC,
            Harris Semiconductor (Ohio), LLC, Harris Semiconductor (Pennsylvania), LLC, Choice Microsystems, Inc.,
            Credit Suisse First Boston Corporation, J. P. Morgan Securities Inc. and Salomon Smith Barney Inc.
            (incorporated by reference to Exhibit 4.02 to the Registration Statement on Form S-1).
  10.03     Registration Rights Agreement, dated as of August 6, 1999, between Intersil, Holding, Harris
            Semiconductor, LLC, Harris Semiconductor (Ohio), LLC, Harris Semiconductor (Pennsylvania), LLC, Choice
            Microsystems, Inc., Credit Suisse First Boston Corporation, J. P. Morgan Securities Inc. and Salomon
            Smith Barney Inc. (incorporated by reference to Exhibit 4.03 to the Registration Statement on Form
            S-1).
  10.04     Indenture, dated as of August 13, 1999, among Intersil, Holding, Harris Semiconductor, LLC, Harris
            Semiconductor (Ohio), LLC, Harris Semiconductor (Pennsylvania), LLC, Choice Microsystems, Inc. and
            United States Trust Company of New York for 13 1/4% Senior Subordinated Notes due 2009 (incorporated by
            reference to Exhibit 10.01 to the Registration Statement on Form S-1).
  10.05     Form of 13 1/4% Senior Subordinated Notes due 2009 (included in Exhibit 10.01).
  10.06     Credit Agreement, dated as of August 13, 1999, among Intersil, the Lender Parties thereto, Credit
            Suisse First Boston, as the Administrative Agent, Salomon Smith Barney, as Syndication Agent, and
            Morgan Guaranty Trust Company of New York, as Documentation Agent (incorporated by reference to Exhibit
            10.03 to the Registration Statement on Form S-1).
  10.07     Amendment No. 1 and Waiver, dated as of January 28, 2000, to the Credit Agreement, dated as of August
            13, 1999, among Intersil, Holding, Credit Suisse First Boston, as the Administrative Agent, Salomon
            Smith Barney, Syndication Agent, and Morgan Guaranty Trust Company of New York, as Documentation Agent
            (incorporated by reference to Exhibit 10.07 to the Amendment No. 2 to the Registration Statement on
            Form S-1).
  10.08     Subordinated Credit Agreement, dated as of August 13, 1999, among Holding and Citicorp Mezzanine
            Partners, L.P. for 13 1/2% Subordinated Pay-In-Kind Note due 2010 (incorporated by reference to Exhibit
            10.04 to the Registration Statement on Form S-1).
  10.09     Form of 13 1/2% Subordinated Pay-In-Kind Note due 2010 (included in Exhibit 10.04).
  10.10     Indenture, dated as of August 13, 1999, among Holding and United States Trust Company of New York for
            11.13% Subordinated Pay-In-Kind Notes due 2010 (incorporated by reference to Exhibit 10.06 to the
            Registration Statement on Form S-1).
  10.11     Form of 11.13% Subordinated Pay-In-Kind Note due 2010 (included in Exhibit 10.06).
  10.12     Securities Purchase and Holders Agreement, dated as of August 13, 1999, among Holding, Sterling Holding
            Company, LLC, Manatee Investment Corporation, Intersil Prism LLC, Citicorp Mezzanine Partners, L.P.,
            William N. Stout and the management investors named therein (incorporated by reference to Exhibit 10.09
            to the Registration Statement on Form S-1).
  10.13     Option Award Agreement, dated as of August 13, 1999 (incorporated by reference to Exhibit 10.10 to the
            Registration Statement on Form S-1).
  10.14     Employment Agreement, dated as of August 9, between Intersil and Gregory L. Williams (incorporated by
            reference to Exhibit 10.11 to the Registration Statement on Form S-1).
  10.15     Agreement between Harris and Local Union No. 1907 International Brotherhood of Electrical Workers,
            AFL-CIO (Findlay, OH Facility), effective as of July 1, 1996 (incorporated by reference to Exhibit
            10.12 to the Registration Statement on Form S-1).
EXHIBIT
   NO.                                                    DESCRIPTION
----------  -------------------------------------------------------------------------------------------------------
10.16     Agreement between Harris and Local Union 177 International Union of Electronic, Electrical, Salaried,
            Machine and Furniture Workers, AFL-CIO (Mountaintop, PA Facility), effective December 1, 1998
            (incorporated by reference to Exhibit 10.13 to the Registration Statement on Form S-1).
  10.17     Machinery and Equipment Loan Agreement, dated September 9, 1996, between Commonwealth of Pennsylvania,
            Department of Community and Economic Development and Harris (incorporated by reference to Exhibit 10.14
            to the Registration Statement on Form S-1).
  10.18     Machinery and Equipment Loan Agreement, dated as of November 3, 1998, between Commonwealth of
            Pennsylvania, Department of Community and Economic Development and Harris (incorporated by reference to
            Exhibit 10.15 to the Registration Statement on Form S-1).
  10.19     Master Agreement, dated as of December 2, 1997, between Harris Semiconductor and Optum Software
            (incorporated by reference to Exhibit 10.16 to the Registration Statement on Form S-1).
  10.20     Purchase Agreement, dated as of March 14, 1997, between Harris Semiconductor and Praxair, Inc.
            (incorporated by reference to Exhibit 10.17 to the Registration Statement on Form S-1).
  10.21     Asset Purchase Agreement, dated as of July 2, 1999, by and among Align-Rite International, Inc.,
            Align-Rite, Inc. and Harris (incorporated by reference to Exhibit 10.18 to the Registration Statement
            on Form S-1).
  10.22     Bill of Sale and Assignment, dated as of July 2, 1999, by Harris in favor of Align-Rite International,
            Inc. and Align-Rite, Inc. (incorporated by reference to Exhibit 10.19 to the Registration Statement on
            Form S-1).
  10.23     Lease Agreement, dated as of July 2, 1999, by and among Harris Corporation Semiconductor Business Unit
            and Align-Rite, Inc. (incorporated by reference to Exhibit 10.20 to the Registration Statement on Form
            S-1).
  10.24     Photomask Supply and Strategic Alliance Agreement, dated as of July 2, 1999, by and among Harris,
            Align-Rite International, Inc. and Align-Rite, Inc. (incorporated by reference to Exhibit 10.21 to the
            Registration Statement on Form S-1).
  10.25     Site Services Agreement, dated as of July 2, 1999, by and among Harris Corporation Semiconductor
            Business Unit and Align-Rite, Inc. (incorporated by reference to Exhibit 10.22 to the Registration
            Statement on Form S-1).
  10.26     Software License Agreement, dated as of July 31, 1984, between Harris and Consilium Associates, Inc.
            (incorporated by reference to Exhibit 10.23 to the Registration Statement on Form S-1).
  10.27     Addendum Software License and Maintenance Agreement, dated as of October 27, 1995, between Harris and
            Consilium, Inc. (incorporated by reference to Exhibit 10.24 to the Registration Statement on Form S-1).
  10.28     Specialty Gas Supply Agreement, dated as of October 15, 1996, between Air Products and Chemicals, Inc.
            and Harris (incorporated by reference to Exhibit 10.25 to the Registration Statement on Form S-1).
  10.29     Silicon Wafer Purchase Agreement, dated as of January 1, 1997, between Mitsubishi Silicon America
            Corporation and Harris (incorporated by reference to Exhibit 10.26 to the Registration Statement on
            Form S-1).
  10.30     Nitrogen Supply Agreement, dated as of September 22, 1992, between Harris Corporation Semiconductor
            Sector and Liquid Air Corporation Merchant Gases Division (incorporated by reference to Exhibit 10.27
            to the Registration Statement on Form S-1).
  10.31     Nitrogen Supply System Agreement, Amendment Number 1, dated as of September 15, 1996, between Air
            Liquide America Corporation and Harris Corporation Semiconductor Sector (incorporated by reference to
            Exhibit 10.28 to the Registration Statement on Form S-1).
EXHIBIT
   NO.                                                    DESCRIPTION
----------  -------------------------------------------------------------------------------------------------------
10.32     Site Subscription Agreement, dated as of July 1, 1993, between Harris Semiconductor Sector of Harris
            and Cadence Design Systems, Inc. (incorporated by reference to Exhibit 10.29 to the Registration
            Statement on Form S-1).
  10.33     Site Subscription Addendum, dated December 19, 1997, between Harris Semiconductor Sector of Harris and
            Cadence Design Systems, Inc. (incorporated by reference to Exhibit 10.30 to the Registration Statement
            on Form S-1).
  10.34     HMCD--HSS Memorandum of Agreement, dated March 26, 1999, between Harris Microwave Communication
            Division and Harris Semiconductor Sector (incorporated by reference to Exhibit 10.31 to the
            Registration Statement on Form S-1).
  10.35     Investment Agency Appointment and Participation Authorization, dated September 3, 1999, between
            Intersil, Intersil Corporation Master Trust and T. Rowe Price Trust Company (incorporated by reference
            to Exhibit 10.32 to the Registration Statement on Form S-1).
  10.36     Investment Agency Appointment and Participation Authority, dated September 3, 1999, between Intersil
            Corporation Master Trust and T. Rowe Price Trust Company (incorporated by reference to Exhibit 10.33 to
            the Registration Statement on Form S-1).
  10.37     Investment Advisory Agreement (Equity Growth Fund), dated September 3, 1999, between T. Rowe Price
            Associates, Inc. and Intersil Corporation Retirement Committee (incorporated by reference to Exhibit
            10.34 to the Registration Statement on Form S-1).
  10.38     Investment Advisory Agreement (Equity Income Fund), dated September 3, 1999, between T. Rowe Price
            Associates, Inc. and Intersil Corporation Retirement Committee (incorporated by reference to Exhibit
            10.35 to the Registration Statement on Form S-1).
  10.39     Intersil Corporation Retirement Plan (Non-Union), dated September 3, 1999 (incorporated by reference to
            Exhibit 10.36 to the Registration Statement on Form S-1).
  10.40     Intersil Corporation Retirement Plan (Union), dated September 3, 1999 (incorporated by reference to
            Exhibit 10.37 to the Registration Statement on Form S-1).
  10.41     Commercial Supply Agreement, dated December 3, 1998, by and between Texas Instruments Incorporated and
            Harris (incorporated by reference to Exhibit 10.38 to the Registration Statement on Form S-1).
  10.42     Military Supply Agreement, dated December 3, 1998, by and between Texas Instruments Incorporated and
            Harris (incorporated by reference to Exhibit 10.39 to the Registration Statement on Form S-1).
  10.43     Intellectual Property Agreement, dated December 3, 1998, by and between Texas Instruments Incorporated,
            Harris, Harris Advanced Technology (Malaysia) Sdn. Bhd. and Harris Southwest Properties, Inc.
            (incorporated by reference to Exhibit 10.40 to the Registration Statement on Form S-1).
  10.44     Asset Transfer Agreement, dated December 3, 1998, by and between Texas Instruments Incorporated and
            Harris Advanced Technology (Malaysia) Sdn. Bhd. (incorporated by reference to Exhibit 10.41 to the
            Registration Statement on Form S-1).
  10.45     Military Asset Purchase Agreement, dated October 23, 1998, by and between Texas Instruments
            Incorporated, Harris, Harris Advanced Technology (Malaysia) Sdn. Bhd. and Harris Southwest Properties,
            Inc. (incorporated by reference to Exhibit 10.42 to the Registration Statement on Form S-1).
  10.46     Commercial Asset Purchase Agreement, dated October 23, 1998, by and between Texas Instruments
            Incorporated, Harris, Harris Advanced Technology (Malaysia) Sdn. Bhd. and Harris Southwest Properties,
            Inc. (incorporated by reference to Exhibit 10.43 to the Registration Statement on Form S-1).
  10.47     Certificate of Leasehold Property for Land Office No. 7668 by Harris Advanced Technology (M) Sdn. Bhd.
            (incorporated by reference to Exhibit 10.44 to the Registration Statement on Form S-1).
EXHIBIT
   NO.                                                    DESCRIPTION
----------  -------------------------------------------------------------------------------------------------------
10.48     State Lease for Lot No. 7716 by Harris Advanced Technology (Malaysia) Sdn. Bhd. (incorporated by
            reference to Exhibit 10.45 to the Registration Statement on Form S-1).
  10.49     Certificate of Leasehold Property for Land Office No. 7666 by Harris Advanced Technology (M) Sdn. Bhd.
            (incorporated by reference to Exhibit 10.46 to the Registration Statement on Form S-1).
  10.50     Amendment No. 1, dated as of December 13, 1999, to the Securities Purchase and Holders Agreement by and
            among Holding, Sterling Holding Company, LLC, Manatee Investment Corporation, Citicorp Mezzanine
            Partners, L.P. and the management investors named therein.
  10.51     Amendment No. 2, dated as of May 31, 2000, to the Securities Purchase and Holders Agreement, by and
            among Holding, Sterling Holding Company, LLC, Manatee Investment Corporation, Citicorp Mezzanine
            Partners, L.P. and the management investors named therein.
  10.52     Supply Agreement entered into as of June 30, 2000 by and between ChipPAC Limited and lntersil
            Corporation (incorporated by reference to Exhibit 10.33 to the Registration Statement on Form S-1
            previously filed by ChipPAC, Inc. on July 14, 2000 (Registration No. 333-39428)).
  10.53     Intellectual Property Agreement entered into as of June 30, 2000 between Intersil Corporation and
            ChipPAC Limited (incorporated by reference to Exhibit 10.32 to the Registration Statement on Form S-1
            previously filed by ChipPAC, Inc. on July 14, 2000 (Registration No. 333-39428)).
  10.54     Intersil Holding Corporation 1999 Equity Compensation Plan, effective as of August 13, 1999
            (incorporated by reference to Exhibit 10.54 to the Report on Form 10-K previously filed by Intersil
            Holding Corporation on August 17, 2000).
  10.55     The Intersil Holding Corporation Employee Stock Purchase Plan, effective as of February 25, 2000
            (incorporated by reference to Exhibit 10.55 to the Report on Form 10-K previously filed by Intersil
            Holding Corporation on August 17, 2000).
  21.01     Subsidiaries of Holding (incorporated by reference to Exhibit 21.01 to the Report on Form 10-K
            previously filed by Intersil Holding Corporation on August 17, 2000).
  23.01     Consent of Dechert (included in Exhibit 5.01).*
  23.02     Consent of Ernst & Young LLP.**
  24.01     Power of Attorney (included on Signature Page).**
  27.01     Financial Data Schedule.**
------------------
 * To be filed.
** Filed herewith.