Semtech Updates Outlook for First Quarter and Year.

Business Editors

NEWBURY PARK, Calif.--(BUSINESS WIRE)--April 18, 2001

Semtech Corp. (Nasdaq:SMTC) today announced that it expects net sales for the first quarter of fiscal year 2002 will be approximately $60 million, up 5 percent as compared to the same period last year, and down approximately 14 percent sequentially.

At this revenue level, the company expects to earn approximately $0.18 per diluted share for the quarter.

The revised forecast is the result of weak demand from the communications infrastructure and automated test equipment (ATE) markets. During the first quarter, the company has received a limited amount of turns orders from the communications market, and has had to cancel backlog for many communications customers.

Additionally, a significant amount of backlog for the automated test equipment market has been rescheduled in the past few weeks to reflect customers' revised forecasts. Demand from the computer market has been stable. Despite the slowdown in the communications end-market, Semtech's advanced communications products have grown ahead of plans so far in the first quarter.

Jack Poe, chairman and chief executive officer, commented: "The weakness in the marketplace has been well documented in recent months and will impact our revenue through the second quarter. However, our strong design win momentum in the portable equipment, communications and computer markets are forecasted to generate sequential improvements in the company's revenue in both the third and fourth quarters of this year.

"We are reducing the company's fixed costs through the planned sale of the Santa Clara wafer fab and other steps which move us further towards a variable manufacturing cost structure. This should create leverage for gross margin improvement, especially as sales volumes increase later this year. Finally, discretionary spending has been cut in certain areas, while investment in research and development continues as planned," Poe added.

Buyback Update

Semtech has purchased $13 million of its common stock and registered convertible debentures under the $50 million buyback program announced in January 2001. The company expects to complete the current program over the next few months.

Current Quarter Outlook

-- Net sales for the first quarter ending April 29, 2001 are forecasted to be
down approximately 14 percent from the prior quarter.

-- Gross margin for the first quarter is forecasted to be down slightly as
compared to the fourth quarter of fiscal year 2001.

-- Operating expenses will be down approximately $600,000 as compared to prior
quarter. Interest and other income is now expected to be approximately $2.1
million due to lower interest rates. Share count is forecasted at 76.6 million.


-- Semtech anticipates incurring one-time costs of approximately $800,000 in
the first quarter in connection with the previously announced reduction in
force at its Santa Clara wafer fab and the planned consolidation of the
company's New York location into the Newbury Park facility.

Remainder of Fiscal Year Outlook

-- Net sales for the second quarter of fiscal year 2002 are

forecast to be down 5 to 10 percent, sequentially. Net sales

for the third and fourth quarters are forecasted to grow

sequentially in mid-single digit rates, based on current

market conditions.

-- Earnings per diluted share for full year, based on these

revenue assumptions, are currently forecasted in a range of

$0.66 to $0.70 per share.

The company plans to release results for the first quarter of fiscal year 2002 on May 22, 2001, after the close of market.

About Semtech

Semtech Corp.is a leading supplier of power management, transient protection, system management, high-performance and advanced communications semiconductor products for portable and high-speed communications applications.

Safe Harbor Provision

Statements contained in this release that are not historical facts are forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements, including projections and forecasts for revenue and gross margin, involve risks and uncertainties that could cause actual results to differ materially from those projected. These risks and uncertainties include worldwide economic conditions, the timing and duration of semiconductor market upturns or downturns, demand for personal computers, cellular phones and automated test equipment, demand for semiconductor devices in general, competitors' actions, relations with large strategic customers and suppliers, manufacturing costs and yields, demand for the company's products in particular, and risks associated with the businesses of major customers. Other factors that may cause actual results to differ from the forward-looking statements contained in this news release and that may affect the company's prospects in general are described in the company's filings with the Securities and Exchange Commission. The company undertakes no obligation to update or revise forward-looking statements to reflect subsequent events or changed assumptions or circumstances.