of innovative ICs for power management, reported

today its financial results for the first quarter ended March 31,

2001.

Net sales for the first quarter, were $8.8 million, a 5% increase

over the comparable quarter of the prior year. The company grew sales

revenue despite the industry inventory correction and general economic

conditions.

Net income for the first quarter, was $646,000, compared to

$1,245,000 for the comparable quarter of the prior year. Due to the

focus given to proprietary products business, margin expectations were

exceeded and profitability was maintained while aggressively expanding

the investment in R&D.

Earnings per share for the first quarter, fully diluted, were 2

cents per share, compared to 4 cents per share for the comparable

quarter of the prior year.

"The first quarter 2001 was one of investment for O2Micro", said

Sterling Du, Chairman and CEO. "We invested in the establishment of a

design center in Shanghai and warehouse distribution center in Hong

Kong. O2Micro continued to strengthen its position through increases

in intellectual property, introduction of new high-performance

products, and increased market penetration".

O2Micro announced that its best estimate for second quarter is for

an increase in net sales of 5% to 8% over Q1.

Conference Call: O2Micro will hold its first quarter conference

call today at 2:00 p.m. PDT; 5:00 p.m. EDT. You may participate by

dialing 877/692-2587 or 973/633-6740. A replay of the call will be

available by phone until May 9th by dialing 877/519-4471 or

973/341-3080, PIN No. 2534369. A live simulcast will also be available

at www.streetevents.com and an online replay will be available for one

week on the company website at www.o2micro.com.

About O2Micro

Founded in March 1995, O2Micro designs, develops and markets

innovative power management and security components for mobile

communication, computer, Internet appliance, and LCD products.

Products include AudioDJ(TM), SmartCardBus(R) for secure on line

e-commerce, LCD Backlight Inverters and Battery Management IC's.

O2Micro maintains an extensive portfolio of intellectual property

with 268 patent claims granted, and over 303 more pending. The company

maintains offices worldwide. Additional company and product

information can be found on the company website at www.o2micro.com.

Statements made in this release that are not historical, including

statements regarding O2Micro's or management's intentions, hopes,

beliefs, expectations, representations, projections, plans or

predictions of the future, are forward-looking statements within the

meaning of the Private Securities Litigation Reform Act of 1955. Such

statements involve risks and uncertainties that may cause actual

results to differ materially from those set forth in these statements.

Factors that could cause actual results to differ materially include

risks and uncertainties such as reduced demand for products of

electronic equipment manufacturers which include O2Micro's products

due to adverse economic conditions in general or specifically

affecting O2Micro's markets, technical difficulties and delays in the

development process, and errors in the products. You are also referred

to the documents filed by O2Micro with the SEC from time to time,

including but not limited to the Form F-1 in connection with the

company's initial public offering in August 2000, which identify

important risk factors that could cause actual results to differ from

those contained in the forward-looking statements.

O2Micro International Limited

Consolidated Statements of Income

(Thousands, except per share data)

Three Months Ended Years Ended

March 31 Dec. 31

2001 2000 2000 1999

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

NET SALES $ 8,790 $ 8,348 $ 40,356 $ 23,728

COST OF SALES 3,273 2,927 15,687 9,797

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

GROSS PROFIT 5,517 5,421 24,669 13,931

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

OPERATING EXPENSES

Research and

development 2,867 2,063 9,682 5,521

Selling, general

and administrative 2,437 2,147 8,714 6,973

Stock-based

compensation 53 156 458 773

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

Total Operating

Expenses 5,357 4,366 18,854 13,267

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

INCOME FROM

OPERATIONS 160 1,055 5,815 664

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

NON-OPERATING

INCOME

Interest - net 517 40 887 157

Other - net (3) 35 169 30

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

Total Non-Operating

Income - Net 514 75 1,056 187

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

INCOME BEFORE

INCOME TAX 674 1,130 6,871 851

INCOME TAX EXPENSE (28) 115 (227) (13)

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

NET INCOME $ 646 $ 1,245 $ 6,644 $ 838

OTHER COMPENSATION

INCOME

Translation

adjustments

on subsidiaries (10) (138) (185) (12)

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

COMPREHENSIVE

INCOME 636 1,107 6,459 826

========== ========== ========== ==========

EARNINGS PER SHARE

Basic $ 0.02 $ 0.13 $ 0.34 $ 0.09

========== ========== ========== ==========

Diluted $ 0.02 $ 0.04 $ 0.21 $ 0.03

========== ========== ========== ==========

NUMBER OF THOUSAND

SHARES USED IN

EARNINGS PER

SHARE CALCULATION

Basic 32,906 9,920 19,415 9,734

========== ========== ========== ==========

Diluted 34,372 30,014 32,256 29,721

========== ========== ========== ==========

O2Micro International Limited

Consolidated Balance Sheets

(Thousands)

March 31, December 31,

2,001 2,000 2000 1999

ASSETS

CURRENT ASSETS

Cash and cash equivalents $ 34,949 $ 2,761 $ 37,448 $ 5,946

Restricted cash 1,199 324 1,199 317

Accounts receivable - net 7,584 3,584 5,420 1,693

Inventories 4,607 3,997 5,472 3,118

Deferred income tax

- current 0 0 132 --

Prepaid expenses and

other current assets 934 300 1,016 160

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

Total Current Assets 49,273 10,966 50,687 11,234

Long-term Investment 500 0 500 --

FIXED ASSETS - NET 2,346 1,750 2,102 1,290

OTHER ASSETS

Receivables from

360 Degree Web Ltd. 750 750 750 --

Deferred income tax

- noncurrent 133 133 133 --

Other assets 455 259 435 267

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

Total Other Assets 1,338 1,142 1,318 267

TOTAL ASSETS $ 53,457 $ 13,858 $ 54,607 $ 12,791

========== ========== ========== ==========

LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES

Notes and accounts

payable $ 1,867 $ 2,383 $ 3,767 $ 2,752

Income tax payable 268 162 449 12

Current portion of

obligations under

capital lease 29 50 41 5

Accrued expenses and

other current

liabilities 2,422 1,622 2,358 1,669

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

Total Current Liabilities 4,586 4,217 6,615 4,438

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

OBLIGATIONS UNDER CAPITAL

LEASE - NET OF

CURRENT PORTION 9 24 13 2

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

GUARANTEE DEPOSITS 51 51 51 51

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

Total Liabilities 4,646 4,292 6,679 4,491

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

SHAREHOLDERS' EQUITY

Ordinary shares at $0.001

par value per share.

Authorized - 32,000,000

and 95,000,000 shares at

December 31, 1999 and 2000,

respectively. Issued -

9,912,050 and 32,784,238

shares at December 31,

1999 and 2000,

respectively. 33 10 33 10

Series A, B, C, D, E, F, G

and H preference shares

at $0.001 par value

per share. Authorized

- 18,193,889 shares

(liquidation preference

of $100, $300, $100, $500,

$500, $4,018, $6,968 and

$6,484, respectively)

Issued - 18,527,380 shares. 0 19 -- 19

Additional paid in capital 55,240 22,378 55,071 22,375

Warrants outstanding

- 311,299 and 300,000

shares at December 31,

1999 and 2000, respectively. 51 61 51 61

Deferred compensation (171) (572) (249) (728)

Accumulated other

comprehensive income (233) (176) (223) (38)

Accumulated deficit (6,109) (12,154) (6,755) (13,399)

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

Total Shareholders' Equity 48,811 9,566 47,928 8,300

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

TOTAL LIABILITIES AND

SHAREHOLDERS' EQUITY $53,457 $13,858 $54,607 $12,791

======== ======== ======== ========

CONTACT: O2Micro

Gil Goodrich, 408/987-5920 ext. 8013

gil.goodrich@o2micro.com