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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

FORM 10-Q
TABLE OF CONTENTS

Commission file number 1-7201

AVX CORPORATION
(Exact name of registrant as specified in its charter)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes X

No ___

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.

Class		Outstanding at November 8, 2002
Common Stock, par value $0.01 per share		174,091,918

AVX CORPORATION

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AVX CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except per share data)

See accompanying notes to consolidated financial statements.

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See accompanying notes to consolidated financial statements.

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See accompanying notes to consolidated financial statements.

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AVX CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(dollars in thousands, except share data)

1. Basis of Presentation:

The consolidated financial statements of AVX Corporation and subsidiaries ("AVX" or "the Company") include all accounts of the Company and its subsidiaries. All significant intercompany transactions and accounts have been eliminated. The accompanying financial statements have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC") for interim financial reporting. These consolidated financial statements are unaudited, and in the opinion of management, include all adjustments, consisting of normal recurring adjustments and accruals, necessary for the fair presentation of the consolidated balance sheet, operating results and cash flows for the periods presented. Operating results for the three and six months ended September 30, 2002 are not necessarily indicative of the results that may be expected for the fiscal year ended March 31, 2003 due to cyclical and other factors. Certain information and f ootnote disclosures normally included in financial statements prepared in accordance with accounting principals generally accepted in the United States have been omitted in accordance with the rules and regulations of the SEC. These consolidated financial statements should be read in conjunction with the audited consolidated financial statements and accompanying notes included in the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 2002. Certain prior period amounts have been reclassified to conform to the current period presentation.

New Accounting Standards:

On April 1, 2002, the Company adopted Financial Accounting Standards Board Statements of Financial Accounting Standards No. 141 "Business Combinations" ("SFAS 141") and No. 142 "Goodwill and Other Intangible Assets" ("SFAS 142"). Under SFAS 142, goodwill and intangible assets deemed to have indefinite lives are no longer amortized, but are subject to periodic impairment reviews. Accordingly, the Company ceased amortizing goodwill effective April 1, 2002. The following table adjusts certain second quarter fiscal 2002 information as if the non-amortization provisions of SFAS 142 had been required at that time:

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During the quarter ended September 30, 2002, the Company reviewed goodwill for impairment as required by SFAS 142 and determined there was no impairment of assets. Accordingly, the Company was not required to write down existing goodwill as of September 30, 2002. Aside from goodwill, the Company does not have a significant amount of intangible assets. The adoption of SFAS 141 did not have a material impact on the Company.

On April 1, 2002, the Company adopted Statement of Financial Accounting Standards No. 144 "Accounting for the Impairment or Disposal of Long-Lived Assets" ("SFAS 144"), which addresses financial accounting and reporting for the impairment or disposal of long-lived assets. The adoption of SFAS 144 did not have a material impact on the Company.

2. Trade Accounts Receivable:

Trade accounts receivable consisted of:

3. Inventories:

Inventories consisted of:

4. Restructuring and Special Charges:

The Company recorded $60,141 of restructuring and special charges during the previous fiscal year ended March 31, 2002. The restructuring costs included $11,146, of which $1,140 was included in the quarter ended September 30, 2001, for employee separations covering 6,100 production, technical, administrative and support employees in all geographic regions. As of September 30, 2002, $5,593 of severance costs have been paid. The remaining accrual of $5,553 includes $920 of long-term payments to be paid under an early retirement program, while the balance is expected to be paid within the next twelve months.

Included in the $60,141 of restructuring and special charges was a write-down to net realizable value of $22,410 for a portion of the Company's palladium inventory due to a sudden and significant decrease in product demand. In accordance with generally accepted accounting principles, the Company has continued to adjust this palladium inventory to net realizable value as market prices declined. As a result of increased demand for components using palladium, the Company will be using this excess palladium inventory in production. Therefore, the Company will no longer record the effects of market price reductions on palladium. The palladium inventory will be used in production at its current raw material cost.

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5. Environmental Matters and Contingencies:

The Company has been named as a potentially responsible party in state and federal administrative proceedings seeking contribution for costs associated with the correction and remediation of environmental conditions at various waste disposal sites. Once it becomes probable that the Company will incur costs in connection with remediation of a site and such costs can be reasonably estimated, the Company establishes reserves or adjusts its reserve for its projected share of these costs. Management believes that it has adequate reserves with respect to these matters. Actual costs may vary from these estimated reserves, but such costs are not expected to have a material adverse effect on the Company's financial condition or results of operations.

6. Comprehensive Income (Loss):

Comprehensive income (loss) represents total non-shareholder changes in equity during a period except those resulting from investments by and distributions to shareholders. The specific components include net income and deferred gains and losses resulting from foreign currency translation and qualified foreign currency cash flow hedges.

Comprehensive income (loss) for the three and six months ended September 30, 2001 and 2002, includes the following components:

The accumulated balance of comprehensive income (loss), as of September 30, 2001 and 2002 is as follows:

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7. Earnings Per Share:

Basic earnings per share are computed by dividing net earnings by the weighted average number of shares of common stock outstanding for the period. Diluted earnings per share are computed by dividing net earnings by the sum of (a) the weighted average number of shares of common stock outstanding during the period and (b) the dilutive effect of potential common stock equivalents during the period. Stock options are the only common stock equivalents currently used by the Company and are computed using the treasury stock method.

The table below represents the basic and diluted weighted average number of shares of common stock and potential common stock equivalents outstanding for the three and six months ended September 30, 2001 and 2002:

Common stock equivalents, not included in the computation of diluted earnings per share because the option's exercise price was greater than the average market price of the common shares, were 313,067 and 1,663,377 for the three months ended September 30, 2001 and 2002, respectively, and 344,482 and 756,241 for the six months ended September 30, 2001 and 2002, respectively. Common stock equivalents, not included in the computation of diluted earnings per share because the effect would have been antidilutive, were 1,158,886 for the three months ended September 30, 2001.

8. Segment and Geographic Information:

The Company has three reportable operating segments: Passive Components, Connectors and Research and Development. The Company is organized, exclusive of research and development, on the basis of products being separated into six units. Five of the units which manufacture or distribute ceramic, tantalum, film and power capacitors, ferrites and other passive devices have been aggregated into the segment "Passive Components".

The Company evaluates performance of its segments based upon sales and operating profit. There are no intersegment revenues. The tables below present information about reported segments for the three and six months ended September 30, 2001 and 2002:

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The following geographic data is based upon net sales generated by operations located within that geographic area for the three and six months ended September 30, 2001 and 2002:

9. Subsequent Event:

On October 15, 2002, the Company declared a $0.0375 dividend per share of common stock with respect to the quarter ended September 30, 2002, payable on November 15, 2002.

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This Quarterly Report on Form 10-Q may contain "forward-looking" information within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact, including statements regarding industry prospects and future results of operations or financial position, made in the Quarterly Report on Form 10-Q are forward looking. The forward-looking information may include, among other information, statements concerning the Company's outlook for fiscal year 2003, overall volume and pricing trends, cost reduction strategies and their anticipated results, expectations for research and development, and capital expenditures. There may also be other statements of expectations, beliefs, future plans and strategies, anticipated events or trends, and similar expressions concerning matters that are not historical facts. Forward-looking statements reflect management's expectations and are inherently uncertain. The forward-looking information and st atements in this report are subject to risks and uncertainties, including those discussed in the Company's Annual Report on Form 10-K for fiscal year ended March 31, 2002, that could cause actual results to differ materially from those expressed in or implied by the information or statements.

"Management's Discussion and Analysis of Results of Operations and Financial Condition" is based upon the Company's consolidated financial statements and notes thereto, which have been prepared in accordance with generally accepted accounting principles in the United States. The preparation of these financial statements requires management to make estimates and judgments that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reported periods. On an ongoing basis, management evaluates its estimates and judgments, including those related to revenue recognition, bad debts, inventories, property and equipment, goodwill, restructuring costs, income taxes and contingencies. Management bases its estimates and judgments on historical experience and on various other factors that are believed to be reasonable under the circumsta nces, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. There can be no assurance that actual results will not differ from those estimates.

The Company has identified the accounting policies that are critical to our business operations and understanding the Company's results of operations. Those policies can be found in Note 1 "Summary of Significant Accounting Policies" of the Company's Notes to the Consolidated Financial Statements and Item 7 "Critical Accounting Policies" in Management's Discussion and Analysis of Results of Operations and Financial Condition contained in the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 2002. Accordingly, this Quarterly Report on Form 10-Q should be read in conjunction with the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 2002.

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Net sales in the three months ended September 30, 2002 decreased 3.3% to $295.4 million from $305.5 million in the three months ended September 30, 2001. Passive component sales declined 2.6% to $270.6 million from $277.9 million, while connector sales declined 9.8% to $24.9 million from $27.6 million for the three month periods ended September 30, 2002 and 2001, respectively. The decline in sales was primarily a result of lower selling prices for certain commodity related products and the continuing trend toward smaller part sizes, which traditionally have lower average selling prices. The decrease in revenue for both segments was also attributable to the continued soft demand across all markets, particularly the telecommunications and information technology hardware industries. Geographically, compared to the same period last year, sales as a percentage of total sales increased 7% in the Americas, offset by declines of 4% in Asia and 3% in Europe.

Gross profit (loss) in the three months ended September 30, 2002 was $22.6 million compared to ($4.9) million in the three months ended September 30, 2001. Gross profit for the three months ended September 30, 2001 was negatively impacted by special charges totaling $32.5 million. These charges related to inventory write-downs for precious metals, other raw materials and finished goods. Excluding the special charges incurred during the three months ended September 30, 2001, gross profit for the three months ended September 30, 2002 decreased $5.0 million compared to the same period last year. Gross profit as a percentage of net sales decreased to 7.6% from 9.0% for the three month period ended September 30, 2002 compared to the three month period ended September 30, 2001, excluding the special charges incurred during the three month period ended September 30, 2001. Despite a reduction in operating expenses, reduced sales, lower selling prices and increased raw material costs negativel y impacted gross profit in dollar terms and as a percentage of sales.

Selling, general and administrative expenses in the three months ended September 30, 2002 were $23.9 million compared with $28.9 million in the three months ended September 30, 2001. Selling, general and administrative expenses for the three months ended September 30, 2001 included a $3.0 million charge for customer receivables determined to be uncollectable. Excluding this charge, selling, general and administrative expenses for the three months ended September 30, 2001 were 8.5% of net sales compared to 8.1% for the three months ended September 30, 2002. The decrease in selling, general and administrative expenses in terms of dollars and as a percentage of sales was the result of the cost savings measures initiated last year combined with decreased selling expenses resulting from lower sales.

As a result of the above factors, the Company reported a loss from operations of ($1.3) million in the three months ended September 30, 2002 compared to a loss from operations of ($46.9) million in the three months ended September 30, 2001. The loss from operations for the three month period ended September 30, 2001 included restructuring costs of $13.1 million for facility consolidations and employee severance in addition to the $35.5 million of special charges discussed above.

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The effective tax rate for the three months ended September 30, 2002 increased to 65.2% from a tax benefit of 31.7% for the three months ended September 30, 2001. The increase in the effective tax rate was primarily due to the nonrecognition of tax benefits related to certain French net operating losses.

Net income in the three months ended September 30, 2002 was $1.0 million compared to net loss of ($28.1) million in the three months ended September 30, 2001. The increase in net income was a result of the factors set forth above partially offset by lower interest income on invested cash due to lower interest rates.

Net sales in the six months ended September 30, 2002 decreased 12.0% to $590.3 million from $670.6 million in the six months ended September 30, 2001. Passive component sales declined 12.1% to $541.8 million from $616.2 million, while connector sales declined 10.9% to $48.5 million from $54.4 million for the six month period ended September 30, 2002 compared to the six month period ended September 30, 2001. The decline in sales was primarily a result of lower selling prices for certain commodity related products and the continuing trend toward smaller part sizes, which traditionally have lower average selling prices. The decrease in revenue for both segments was also attributable to the continued soft demand across all markets, particularly the telecommunications and information technology hardware industries. Geographically, compared to the same period last year, sales as a percentage of total sales increased 3% in the Americas and 2% in Asia, offset by a decrease of 5% in Europe. < /P>

Gross profit in the six months ended September 30, 2002 decreased to $43.8 million from $66.2 million in the six months ended September 30, 2001. Gross profit for the six months ended September 30, 2001 was negatively impacted by special charges totaling $32.5 million. These charges related to inventory write-downs for precious metals, other raw materials and finished goods. Excluding the special charges incurred during the six months ended September 30, 2001, gross profit for the six months ended September 30, 2002 decreased $54.9 million compared to the same period last year. Gross profit as a percentage of net sales decreased to 7.4% for the six months ended September 30, 2002 compared to 14.7% for the six months ended September 30, 2001 excluding the special charges incurred during the six months ended September 30, 2001. Despite a reduction in operating expenses, reduced sales, lower selling prices and increased raw material costs negatively impacted gross profit in dollar terms and as a percentage of sales.

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Selling, general and administrative expenses in the six months ended September 30, 2002 were $46.9 million compared with $57.8 million in the six months ended September 30, 2001. Selling, general and administrative expenses for the six months ended September 30, 2001 included a $3.0 million special charge for customer receivables determined to be uncollectable. Excluding this charge, selling, general and administrative expenses for the six months ended September 30, 2001 was 8.2% of net sales compared to 7.9% for the six months ended September 30, 2002. The decline in selling, general and administrative expenses, in terms of dollars and as a percentage of sales, was due to the reduction in headcount and operating expenses, as well as lower sales commissions to independent manufacturers' representatives.

As a result of the above factors, the Company reported a loss from operations of ($3.1) million in the six months ended September 30, 2002 compared to a loss from operations of ($8.4) million in the six months ended September 30, 2001. The loss from operations for the six month period ended September 30, 2001 includes restructuring costs of $16.8 million for facility consolidations and employee severance in addition to the $35.5 million of special charges discussed above.

The effective tax rate for the six months ended September 30, 2002 increased to 53.5% from 48.0% for the six months ended September 30, 2001. The increase in the effective tax rate was primarily due to the nonrecognition of the tax benefits related to certain French net operating losses, partially offset by a $0.5 million one-time state tax refund, net of federal tax, resulting from a multiple year high technology investment tax credit received during the first quarter of the current fiscal year.

Net income in the six months ended September 30, 2002 was $2.3 million compared to net income of $1.3 million in the six months ended September 30, 2001. The increase in net income was a result of the factors set forth above, partially offset by lower interest income on invested cash due to lower interest rates.

The continued uncertainty in the global economy and end market demand makes it difficult to predict near-term events. As of September 30, 2002, we expect the uncertainty in the global economy to lead to continued soft demand through at least the next quarter. We also expect a continued, but more modest, decline in average selling prices for certain commodity related products resulting from the imbalance of the industry's supply capacity and end market demand. Reduced selling prices may continue to depress operating margins.

In reaction to the slow down in near-term demand, the Company has significantly reduced its labor force and operating costs. The Company continues to evaluate its cost structure and manufacturing capabilities in conjunction with current demand and future expectations. The Company will continue to take strategic actions in response to changes in current or future economic conditions.

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Despite the current uncertainties, we are optimistic that opportunities for long-term growth and improved profitability exist due to the following: (a) an increase in worldwide demand for electronic components, (b) cost reductions and improvements in our production processes and (c) opportunities for growth in our advanced product line due to advances in component design.

The majority of the Company's commodity related ceramic capacitors are currently manufactured using nickel. The Company continues to use palladium metal in the manufacture of certain components. Due to a sudden and significant decrease in product demand and the Company's ongoing conversion to nickel, the Company wrote down a portion of its palladium inventory in September 2001 to net realizable value. In accordance with generally accepted accounting principles, the Company has continued to adjust this palladium inventory to net realizable value as market prices declined. As a result of increased demand for components using palladium, the Company will be using this excess palladium inventory in production. Therefore, the Company will no longer record the effects of market price reductions on palladium. The palladium inventory will be used in production at its current raw material cost.

The Company's liquidity needs arise primarily from working capital requirements, dividend payments, capital expenditures and acquisitions. Historically, the Company has satisfied its liquidity requirements through internally generated funds. As of September 30, 2002, the Company had a current ratio of 5.4 to 1, $717.3 million of cash, cash equivalents and long-term cash investments, $1,505.8 million of stockholders' equity and an insignificant amount of long-term debt.

Net cash from operating activities was $67.7 million in the six months ended September 30, 2002 compared to $225.3 million in the six months ended September 30, 2001. The decrease in cash flow was a result of changes in net working capital, reduced depreciation and non-cash costs associated with the restructuring and special charges incurred during the six month period ended September 30, 2001 added back to net income for cash flow purposes.

Purchases of property and equipment were $16.5 million in the six-month period ended September 30, 2002 and $51.4 million in the six-month period ended September 30, 2001. Expenditures for both periods were primarily for expanding production capabilities and process improvements of the passive component and connector product lines in North America, Europe and Asia.

Although the majority of the Company's funding is internally generated, certain European subsidiaries of the Company have from time to time borrowed local currencies under various bank agreements.

Based on the financial condition of the Company as of September 30, 2002, the Company believes that cash on hand and expected to be generated from operating activities will be sufficient to satisfy the Company's anticipated financing needs for working capital, capital expenditures, research, development and engineering expenses, and any dividend payments to be made in the next year. Additionally, the Company does not anticipate any significant changes in its ability to generate or meet its liquidity needs in the long-term.

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Additional information concerning the Company's material commitments and contingencies can be found in Notes 12 and 16 of the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 2002.

The Company's market risk exposure at September 30, 2002 is consistent with the types of market risk and amount of exposures, including foreign currency and materials risks, presented in the Annual Report on Form 10-K for the year ended March 31, 2002.

Within 90 days prior to the date of this report, we carried out an evaluation of the effectiveness and design of the Company's disclosure controls and procedures pursuant to Exchange Act Rules 13a-14 and 15d-14. Based on this evaluation, the Company's principal executive officer and principal financial officer concluded that the Company's disclosure controls and procedures are effective in timely alerting them to material information required to be included in the Company's periodic reports filed with the SEC.

In addition, the Company reviewed its internal controls, and there have been no significant changes in the Company's internal controls or in other factors that could significantly affect those controls subsequent to the date of their last evaluation. There were no significant deficiencies or weaknesses, therefore there were no corrective actions taken.

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The Company filed a complaint on July 29, 2002, against Cabot Corporation in the U.S. District Court for the Commonwealth of Massachusetts with respect to its existing supply agreement with Cabot for tantalum powder, ore and wire. The complaint filed by the Company claims unfair and deceptive trade practices by Cabot, breach of contract and other related matters. The Company uses tantalum materials in the manufacture of tantalum capacitors. The Company seeks, pursuant to the action, injunctive relief, actual and treble damages in amounts to be determined at trial and attorneys' fees.

See the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2002, for information concerning the Company's July 23, 2002 annual meeting of shareholders and actions taken at that meeting.

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Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

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