EL SEGUNDO, CA, October 15, 1998 -- International Rectifier Corporation (IRF/NYSE) today reported net income of $34 thousand ($0.00 per share) on revenue of $127.5 million in the quarter ended September, compared to net income of $6.1 million ($0.12 per share) on revenue of $133.1 million in the prior-year quarter. Royalties contributed $4.4 million to revenue, compared to $4.5 million in the year-ago quarter. September-quarter gross margin was 28.4 percent, compared to 33.8 percent for the year-ago quarter. The year-to-year decline reflected lower prices.

"Despite continued challenging business conditions, IR remained in the black in our first fiscal quarter," noted chief executive officer Derek Lidow. "We see signs that an industry bottom is forming, and price declines began to moderate in the September quarter. In the coming quarters, revenue and earnings growth should improve, reflecting continued strength in the PC market, the resumption of normal shipments to General Motors, higher sales of recently-introduced products, and seasonal improvements. We believe our sustained market share gains and aggressive cost reductions position IR to continue outperforming our industry as conditions improve in our served markets."

IR's September-quarter unit shipments increased 21 percent year-to-year and 3 percent sequentially, and the most recent industry figures show that IR continued to gain market share in the first two months of the quarter.

During the quarter, IR reduced its worldwide work force by 5 percent, or more than 200 employees. Selling and administrative expense declined by 5 percent year-to-year. From June to September, the Company cut its inventories by approximately $2 million, and receivables dropped by over $8 million.

Research & development expense was 15 percent higher than in the year-earlier quarter. September-quarter design wins built on IR's success in setting proprietary power architectures. Four major PC manufacturers selected IR's new power MOSFETs for their most demanding portable PC designs, and a Japanese computer-maker designed IR's new MOSFET/Control IC chipset into the power supply for its most advanced models. Three major suppliers of industrial and appliance motor controls started using the Company's new high-voltage ICs and IGBTs.

During the quarter, the Board of Appeals of the Patent and Trademark Office confirmed an International Rectifier power MOSFET patent that covers fundamental and widely-used elements of design and structure. This patent is central to more than 20 licensing agreements under the Company's power MOSFET patents, and the confirmation strengthens IR's proprietary technology position.

Unaudited Consolidated Statement of Income
Consolidated Balance Sheet

International Rectifier is a major worldwide supplier of power semiconductors, which convert electrical energy to operate power supplies, motor drives, and lighting ballasts. Its patented HEXFETR power MOSFETs and IGBTs make IR the world leader in field effect transistors. The Company's technological advances improve the performance and energy efficiency of electronic and electrical equipment in automotive, consumer, computer/peripheral, industrial, lighting, telecom, and government/space applications.

The foregoing material contains some forward-looking statements. We caution that such statements are subject to a number of uncertainties, and actual results may differ materially. Factors that could affect the Company's actual results include regulatory and judicial decisions affecting intellectual property and licensing agreements, the rate of customer inventory adjustments, push-out of delivery dates, product returns, changes in customers' order patterns, the Company's mix of product shipments, market and sector conditions that affect our customers, pricing pressures, acceptance of competitors' products, the success of cost reduction measures, introduction and acceptance of new products, impact on the Company's business due to internal systems or systems of suppliers and other third parties adversely affected by year 2000 problems, general economic conditions in the Company's markets around the world, and other uncertainties disclosed in the Company's filings with the Securities and Exchange Commission.