CREDIT AGREEMENT

                                (LINE OF CREDIT)

                        (LETTER OF CREDIT SUB-FACILITY)

                        (FOREIGN EXCHANGE SUB-FACILITY)



   This Agreement (the "Agreement") is made and entered into as of June 30,

2003, by and between BANK OF THE WEST (the "Bank") and MICREL, INCORPORATED

(the "Borrower"), on the terms and conditions that follow:



                                    SECTION

                                       1

                                  DEFINITIONS



1.1 Certain Defined Terms:  Unless elsewhere defined in this Agreement, the

following terms shall have the following meanings (such meanings to be

generally applicable to the singular and plural forms of the terms

defined):



    1.1.1 "Advance":  shall mean an advance to the Borrower under the credit

facility (ies) described in Section 2.



    1.1.2 "Business Day": shall mean a day, other than a Saturday or Sunday,

on which commercial banks are open for business in California.



    1.1.3 "Cash Flow":  shall mean the sum of net income after tax and

exclusive of extraordinary gains or losses, acquisition expenses,

capital gains or losses from sale of assets outside the ordinary

course of the Borrower's business and investment income or losses

earned outside the ordinary course of the Borrower's business plus

depreciation and amortization expense minus dividends and

distributions.



    1.1.4 "Close-Out Date":  shall mean the Business Day on which the Bank

closes out and liquidates an FX Transaction.



    1.1.5  "Closing Value": has the meaning given to it in Section 7.5(i)

hereof.



    1.1.6 "Closing Gain" and "Closing Loss" :shall mean the amount determined

in accordance with Section 7.5(ii) hereof.



    1.1.7 "Credit Percentage": shall mean 15%.



    1.1.8 "Debt":  shall mean all liabilities of the Borrower less

Subordinated Debt, if any.



    1.1.9 "Effective Tangible Net Worth":  shall mean the Borrower's stated

net worth plus Subordinated Debt but less all intangible assets of

the Borrower (i.e., goodwill, trademarks, patents, copyrights,

organization expense, and similar intangible items including, but

not limited to, investments in and all amounts due from affiliates,

officers or employees).



                                      -1-

{PAGE}



    1.1.10 "ERISA":  shall mean the Employee Retirement Income Security Act of

1974, as amended from time to time, including (unless the context

otherwise requires) any rules or regulations promulgated

thereunder.



    1.1.11 "Event of Default":  shall have the meaning set forth in Section 6.



    1.1.12 "Expiration Date":  shall mean June 30, 2005, or the date of

termination of the Bank's commitment to lend under this Agreement

pursuant to Section 7, whichever shall occur first.



    1.1.13 "Foreign Currency":  shall mean any legally traded currency other

than US dollars and which may be transferred by paperless wire

transfer or cash and in which the Bank regularly trades.



    1.1.14  "Foreign Exchange Facility":  shall mean the credit facility

described as such in Section 2.



    1.1.15 "FX Risk Liability":  shall mean the product of (a) the Credit

Percentage, times (b) the aggregate of the Notional Values of all

FX Transactions outstanding, net of any Offsetting Transactions.



    1.1.16 "FX Limit":  shall mean $2,000,000.00.



    1.1.17 "FX Transaction":  shall mean any transaction between the Bank and

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