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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549





FORM 10-Q







|x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ---------------------------------------------------------------------------------------

For the quarterly period ended September 30, 2009

OR



| ̈ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ----------------------------------------------------------------------------------------

For the transition period
from            to

Commission file number 000-50857





Volterra
Semiconductor Corporation

(Exact name of registrant as specified in its charter)







|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|Delaware                                                       |  | 94-3251865                          
|(State or other jurisdiction of incorporation or organization) |  | (I.R.S. Employer Identification No.)

47467 Fremont Blvd.

Fremont, CA 94538

(Address of principal executive
offices)

Registrants telephone number, including area code: (510) 743-1200





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 by check mark whether the registrant has submitted electronically and posted on its Web site, if any, every Interactive Data File
required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes   ̈    No   ̈

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of large accelerated filer, accelerated
filer and smaller reporting company in Rule 12b-2 of the Exchange Act.



|                        |  |                                                  |  |                           |  |  
|----------------------- |  | ------------------------------------------------ |  | ------------------------- |  | -
|Large accelerated filer |  |  ̈                                                |  | Accelerated filer         |  | x
|                        |  |                                                  | 
|Non-accelerated filer   |  |  ̈  (Do not check if a smaller reporting company) |  | Smaller reporting company |  |  ̈

Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act).    Yes   ̈    No  x

As of October 26, 2009, the registrant had 25,223,371 shares of common stock outstanding.









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Cautionary Note Regarding Forward-Looking Statements

This quarterly report on Form 10-Q contains forward-looking statements that involve many risks and uncertainties. These statements relate to
future events and our future performance and are based on current expectations, estimates, forecasts and projections about the industries in which we operate and the beliefs and assumptions of our management. In some cases, you can identify
forward-looking statements by terms such as would, could, may, will, should, expect, intend, plan, anticipate, believe,
estimate, predict, potential, targets, seek, or continue, the negative of these terms or other variations of such terms. In addition, any statements that refer to projections of
our future financial performance, our anticipated growth and trends in our business and other characterizations of future events or circumstances are forward-looking statements. These statements are only predictions based upon assumptions made that
are believed to be reasonable at the time, and are subject to risk and uncertainties. Therefore, actual events or results may differ materially and adversely from those expressed in any forward-looking statement. In evaluating these statements, you
should specifically consider the risks described under Risk Factors in Item 1A of Part II and elsewhere in this Form 10-Q. These factors may cause our actual results to differ materially from any forward-looking statements.
Except as required by law, we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.



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Volterra Semiconductor Corporation and Subsidiaries



|                                                                                                                 |  |     
|---------------------------------------------------------------------------------------------------------------- |  | ----
|                                                                                                                 |  | Page
|PART I. FINANCIAL INFORMATION                                                                                    |  | 4   
|                                                                                                                 | 
|Item 1. Financial Statements                                                                                     |  | 4   
|Condensed Consolidated Balance Sheets as of September 30, 2009 and December 31,
2008                             |  | 4   
|Condensed Consolidated Statements of Operations for the three and nine months ended September 
30, 2009 and 2008 |  | 5   
|Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2009 and
2008            |  | 6   
|Notes to the Condensed Consolidated Financial Statements                                                         |  | 7   
|Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations                    |  | 15  
|Item 3. Quantitative and Qualitative Disclosures About Market Risk                                               |  | 21  
|Item 4. Controls and Procedures                                                                                  |  | 22  
|                                                                                                                 | 
|PART II. OTHER INFORMATION                                                                                       |  | 22  
|                                                                                                                 | 
|Item 1. Legal Proceedings                                                                                        |  | 22  
|Item 1A. Risk Factors                                                                                            |  | 22  
|Item 6. Exhibits                                                                                                 |  | 37  
|SIGNATURES                                                                                                       |  | 39  
|                                                                                                                 | 
|EXHIBIT 31.1                                                                                                     |  |     
|EXHIBIT 31.2                                                                                                     |  |     
|EXHIBIT 32.1                                                                                                     |  |     
|EXHIBIT 32.2                                                                                                     |  |     



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PART I. FINANCIAL INFORMATION



|Item 1. | Financial Statements
|------- | --------------------

VOLTERRA SEMICONDUCTOR CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In thousands, except per share amounts)

(unaudited)



|                                                                                                                         |  |                   |         |   |                  |   |         |  
|------------------------------------------------------------------------------------------------------------------------ |  | ----------------- | ------- | - | ---------------- | - | ------- | -
|                                                                                                                         |  | September 30,2009 |         |   | December 31,2008 |  
|Assets                                                                                                                   |  |                   |         |   |                  |   |         |  
|Current assets:                                                                                                          |  |                   |         |   |                  |   |         |  
|Cash and cash equivalents                                                                                                |  | $                 | 61,592  |   |                  | $ | 46,893  |  
|Short-term investments                                                                                                   |  |                   | 10,545  |   |                  |   | 10,461  |  
|Accounts receivable, net of allowances of $2,101 and $2,660, respectively                                                |  |                   | 14,153  |   |                  |   | 12,073  |  
|Inventory                                                                                                                |  |                   | 8,485   |   |                  |   | 13,668  |  
|Prepaid expenses and other current assets                                                                                |  |                   | 1,949   |   |                  |   | 2,507   |  
|                                                                                                                         |  |                   |         |   |                  |   |         |  
|Total current assets                                                                                                     |  |                   | 96,724  |   |                  |   | 85,602  |  
|Property and equipment, net                                                                                              |  |                   | 4,899   |   |                  |   | 5,285   |  
|Other assets                                                                                                             |  |                   | 113     |   |                  |   | 405     |  
|                                                                                                                         |  |                   |         |   |                  |   |         |  
|Total assets                                                                                                             |  | $                 | 101,736 |   |                  | $ | 91,292  |  
|                                                                                                                         |  |                   |         |   |                  |   |         |  
|                                                                                                                         |  |                  
|Liabilities and Stockholders Equity                                                                                     |  |                   |         |   |                  |   |         |  
|Current liabilities:                                                                                                     |  |                   |         |   |                  |   |         |  
|Accounts payable                                                                                                         |  | $                 | 6,663   |   |                  | $ | 5,834   |  
|Accrued liabilities                                                                                                      |  |                   | 10,078  |   |                  |   | 8,073   |  
|                                                                                                                         |  |                   |         |   |                  |   |         |  
|Total current liabilities                                                                                                |  |                   | 16,741  |   |                  |   | 13,907  |  
|Lease incentive                                                                                                          |  |                   | 506     |   |                  |   | 688     |  
|Other long-term liabilities                                                                                              |  |                   | 990     |   |                  |   | 784     |  
|                                                                                                                         |  |                   |         |   |                  |   |         |  
|Total liabilities                                                                                                        |  |                   | 18,237  |   |                  |   | 15,379  |  
|Commitments                                                                                                              |  |                   |         |   |                  |   |         |  
|Stockholders equity:                                                                                                    |  |                   |         |   |                  |   |         |  
|Preferred stock, $0.001 par value; 5,000 shares authorized; none issued and outstanding                                  |  |                   |        |   |                  |   |        |  
|Common stock, $0.001 par value; 200,000 shares authorized; 23,250 and 23,104 shares issued and outstanding,
respectively |  |                   | 25      |   |                  |   | 24      |  
|Additional paid-in capital                                                                                               |  |                   | 111,310 |   |                  |   | 102,612 |  
|Accumulated deficit                                                                                                      |  |                   | (12,836 | ) |                  |   | (16,818 | )
|Treasury stock at cost, 1,921 and 1,272 shares, respectively                                                             |  |                   | (15,000 | ) |                  |   | (9,905  | )
|                                                                                                                         |  |                   |         |   |                  |   |         |  
|Total stockholders equity                                                                                               |  |                   | 83,499  |   |                  |   | 75,913  |  
|                                                                                                                         |  |                   |         |   |                  |   |         |  
|Total liabilities and stockholders equity                                                                               |  | $                 | 101,736 |   |                  | $ | 91,292  |  
|                                                                                                                         |  |                   |         |   |                  |   |         |  

The accompanying notes are an integral part of these condensed consolidated financial
statements.



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VOLTERRA SEMICONDUCTOR CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts)

(Unaudited)



|                                     |  |                                 |        |   |                                |   |        |      |  |   |        |   |  |   |        |  
|------------------------------------ |  | ------------------------------- | ------ | - | ------------------------------ | - | ------ | ---- |  | - | ------ | - |  | - | ------ | -
|                                     |  | Three Months EndedSeptember 30, |        |   | Nine Months EndedSeptember 30, |  
|                                     |  | 2009                            |        |   | 2008                           |   |        | 2009 |  |   | 2008   |  
|Net revenue                          |  | $                               | 29,687 |   |                                | $ | 30,576 |      |  | $ | 70,751 |   |  | $ | 82,290 |  
|Cost of revenue                      |  |                                 | 12,097 |   |                                |   | 12,906 |      |  |   | 29,616 |   |  |   | 35,600 |  
|                                     |  |                                 |        |   |                                |   |        |      |  |   |        |   |  |   |        |  
|Gross margin                         |  |                                 | 17,590 |   |                                |   | 17,670 |      |  |   | 41,135 |   |  |   | 46,690 |  
|                                     |  |                                 |        |   |                                |   |        |      |  |   |        |   |  |   |        |  
|                                     |  |                                 |        |  
|Operating expenses:                  |  |                                 |        |   |                                |   |        |      |  |   |        |   |  |   |        |  
|Research and development             |  |                                 | 6,816  |   |                                |   | 7,144  |      |  |   | 19,113 |   |  |   | 19,784 |  
|Selling, general and administrative  |  |                                 | 7,090  |   |                                |   | 5,076  |      |  |   | 17,697 |   |  |   | 13,997 |  
|                                     |  |                                 |        |   |                                |   |        |      |  |   |        |   |  |   |        |  
|Total operating expenses             |  |                                 | 13,906 |   |                                |   | 12,220 |      |  |   | 36,810 |   |  |   | 33,781 |  
|                                     |  |                                 |        |   |                                |   |        |      |  |   |        |   |  |   |        |  
|Income from operations               |  |                                 | 3,684  |   |                                |   | 5,450  |      |  |   | 4,325  |   |  |   | 12,909 |  
|Interest and other income            |  |                                 | 19     |   |                                |   | 235    |      |  |   | 122    |   |  |   | 961    |  
|Interest and other expense           |  |                                 | (46    | ) |                                |   | (53    | )    |  |   | (91    | ) |  |   | (171   | )
|                                     |  |                                 |        |   |                                |   |        |      |  |   |        |   |  |   |        |  
|Income before income taxes           |  |                                 | 3,657  |   |                                |   | 5,632  |      |  |   | 4,356  |   |  |   | 13,699 |  
|Income tax expense                   |  |                                 | 230    |   |                                |   | 241    |      |  |   | 374    |   |  |   | 535    |  
|                                     |  |                                 |        |   |                                |   |        |      |  |   |        |   |  |   |        |  
|Net income                           |  |                                 | 3,427  |   |                                |   | 5,391  |      |  |   | 3,982  |   |  |   | 13,164 |  
|                                     |  |                                 |        |   |                                |   |        |      |  |   |        |   |  |   |        |  
|                                     |  |                                 |        |  
|Net income per share:                |  |                                 |        |   |                                |   |        |      |  |   |        |   |  |   |        |  
|Basic                                |  | $                               | 0.15   |   |                                | $ | 0.23   |      |  | $ | 0.17   |   |  | $ | 0.55   |  
|                                     |  |                                 |        |  
|Diluted                              |  | $                               | 0.14   |   |                                | $ | 0.21   |      |  | $ | 0.16   |   |  | $ | 0.52   |  
|                                     |  |                                 |        |  
|Weighted average shares outstanding: |  |                                 |        |   |                                |   |        |      |  |   |        |   |  |   |        |  
|Basic                                |  |                                 | 22,973 |   |                                |   | 23,914 |      |  |   | 22,868 |   |  |   | 23,827 |  
|                                     |  |                                 |        |   |                                |   |        |      |  |   |        |   |  |   |        |  
|Diluted                              |  |                                 | 24,770 |   |                                |   | 25,637 |      |  |   | 24,185 |   |  |   | 25,411 |  
|                                     |  |                                 |        |   |                                |   |        |      |  |   |        |   |  |   |        |  

The accompanying notes are an integral part of these condensed consolidated financial
statements.



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VOLTERRA SEMICONDUCTOR CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)



|                                                                              |  |                                |         |   |      |   |        |  
|----------------------------------------------------------------------------- |  | ------------------------------ | ------- | - | ---- | - | ------ | -
|                                                                              |  | Nine Months EndedSeptember 30, |        
|                                                                              |  | 2009                           |         |   | 2008 |  
|Cash flows from operating activities:                                         |  |                                |         |   |      |   |        |  
|Net income                                                                    |  | $                              | 3,982   |   |      | $ | 13,164 |  
|Adjustments to reconcile net income to net cash used by operating activities: |  |                                |         |   |      |   |        |  
|Stock-based compensation                                                      |  |                                | 3,911   |   |      |   | 3,037  |  
|Depreciation and amortization                                                 |  |                                | 1,346   |   |      |   | 1,819  |  
|Accretion of discount in short-term investments                               |  |                                | (41     | ) |      |   |       |  
|Loss on disposal of fixed assets                                              |  |                                |        |   |      |   | 8      |  
|(Allowance) release for doubtful accounts, net                                |  |                                | (190    | ) |      |   | 211    |  
|Changes in operating assets and liabilities:                                  |  |                                |         |   |      |   |        |  
|Accounts receivable, net                                                      |  |                                | (1,890  | ) |      |   | (434   | )
|Inventory                                                                     |  |                                | 5,198   |   |      |   | (4,894 | )
|Prepaid expenses, other current, and other long-term assets                   |  |                                | 850     |   |      |   | (16    | )
|Accounts payable                                                              |  |                                | 677     |   |      |   | 443    |  
|Accrued liabilities                                                           |  |                                | 2,196   |   |      |   | 4,379  |  
|                                                                              |  |                                |         |   |      |   |        |  
|Net cash provided by operating activities                                     |  |                                | 16,039  |   |      |   | 17,717 |  
|                                                                              |  |                                |         |   |      |   |        |  
|Cash flows from investing activities:                                         |  |                                |         |   |      |   |        |  
|Purchases of property and equipment                                           |  |                                | (975    | ) |      |   | (2,084 | )
|Purchases of short-term investments                                           |  |                                | (15,043 | ) |      |   | (6,940 | )
|Proceeds from maturity of short-term investments                              |  |                                | 15,000  |   |      |   | 985    |  
|                                                                              |  |                                |         |   |      |   |        |  
|Net cash used in investing activities                                         |  |                                | (1,018  | ) |      |   | (8,039 | )
|                                                                              |  |                                |         |   |      |   |        |  
|Cash flows from financing activities:                                         |  |                                |         |   |      |   |        |  
|Proceeds from issuance of common stock, net                                   |  |                                | 4,773   |   |      |   | 3,356  |  
|Purchase of treasury stock                                                    |  |                                | (5,095  | ) |      |   | (2,441 | )
|                                                                              |  |                                |         |   |      |   |        |  
|Net cash (used in) provided by financing activities                           |  |                                | (322    | ) |      |   | 915    |  
|                                                                              |  |                                |         |   |      |   |        |  
|Net increase in cash and cash equivalents                                     |  |                                | 14,699  |   |      |   | 10,593 |  
|Cash and cash equivalents, beginning of period                                |  |                                | 46,893  |   |      |   | 47,414 |  
|                                                                              |  |                                |         |   |      |   |        |  
|Cash and cash equivalents, end of period                                      |  | $                              | 61,592  |   |      | $ | 58,007 |  
|                                                                              |  |                                |         |   |      |   |        |  
|Supplemental disclosure of cash flows:                                        |  |                                |         |   |      |   |        |  
|Income tax payment, net                                                       |  | $                              | 258     |   |      | $ | 160    |  

The accompanying notes are an integral part of these condensed consolidated financial
statements.



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VOLTERRA SEMICONDUCTOR CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except per share data)

(Unaudited)

1. Description of Business and Significant Accounting Policies

Volterra Semiconductor Corporation (the Company or Volterra) was incorporated in Delaware in 1996, and its principal
offices are located in Fremont, California. The Company designs, develops and markets proprietary, high-performance analog and mixed-signal power management semiconductors.

Basis of Presentation

The accompanying condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All significant inter-company balances and transactions have been
eliminated in consolidation. Foreign currency transaction gains and losses are recorded in income. The functional currency of the Company and its significant subsidiaries is the United States dollar. For all periods presented, there have been no
material foreign currency transaction gains or losses.

The Companys accompanying condensed consolidated financial
statements have been prepared without audit in accordance with the rules and regulations of the Securities and Exchange Commission (SEC). Certain information and disclosures normally included in financial statements prepared in accordance with
accounting principles generally accepted in the United States have been condensed or omitted in accordance with these rules and regulations. The information in this report should be read in conjunction with the Companys audited consolidated
financial statements and notes thereto included in its annual report on Form 10-K filed with the SEC on March 4, 2009.

In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all adjustments (consisting only of normal recurring adjustments) necessary to present fairly the Companys financial
position, results of operations and cash flows for the interim periods presented. The operating results for the three and nine months ended September 30, 2009 are not necessarily indicative of the results that may be expected for any other
future interim period or full year. The condensed consolidated balance sheet as of December 31, 2008 is derived from the audited consolidated financial statements as of and for the year then ended.

We have evaluated subsequent events through the time of filing this Form 10-Q with the SEC on November 3, 2009. During this period we
did not have any material subsequent events.

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles in the United States of America requires
management to make estimates and assumptions that affect the amounts reported in the financial statements and the accompanying notes.

The accounting estimates that require our most significant, difficult and subjective judgments include:



| |  |  | the recognition and measurement of current and deferred income taxes (including the measurement of uncertain tax positions); and
| | - |  | --------------------------------------------------------------------------------------------------------------------------------



| |  |  | the valuation of inventory.
| | - |  | ---------------------------

Actual results could differ from those estimates.

Concentrations of Credit
Risk

The Company sells its products to international distributors and original equipment manufacturers (and their
outsourced suppliers) in the computing, storage, networking, and consumer electronic industries. The Company performs continuing credit evaluations of its customers financial condition and generally does not require collateral from its
customers. An allowance is provided for when it is probable and estimable that accounts receivable will not be collected.



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VOLTERRA SEMICONDUCTOR CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

(In thousands, except per share data)

(Unaudited)



Financial Instruments

Financial instruments consist of cash equivalents, short-term investments, accounts receivable, and accounts payable. The carrying value of
the Companys financial instruments approximates the respective fair value due to the relatively short maturities of these instruments. Financial instruments that potentially subject the Company to concentrations of credit risk consist
principally of investments and trade accounts receivable.

The Company maintains cash, cash equivalents, and short-term
investments with high credit quality financial institutions. Cash equivalents consist of highly liquid investments maturing in 90 days or less from the date of purchase. Short-term investments are comprised of U.S. Treasury and government agency
debt securities with remaining contractual maturities on the date of purchase greater than 90 days but less than one year. Investments in debt securities are classified as held-to-maturity and carried at amortized cost. The following table
reconciles the amortized cost to the fair value of investments:



|                  |  |                         |        |   |                        |   |       
|----------------- |  | ----------------------- | ------ | - | ---------------------- | - | ------
|                  |  | As of September 30,2009 |        |   | As of December 31,2008
|Amortized cost    |  | $                       | 10,545 |   |                        | $ | 10,461
|Unrealized gains  |  |                         |       |   |                        |   | 35    
|Unrealized losses |  |                         | (1     | ) |                        |   |      
|                  |  |                         |        |   |                        |   |       
|Fair value        |  | $                       | 10,544 |   |                        | $ | 10,496
|                  |  |                         |        |   |                        |   |       

Segment Reporting and Significant Customers

The Company is organized and operates as a single business segment: analog and mixed-signal power management semiconductors. The
Companys chief operating decision maker, the Chief Executive Officer, reviews financial information presented on a consolidated basis for the purposes of making operating decisions and assessing financial performance.

Significant customers are those customers directly accounting for more than 10% of the Companys net revenue or accounts receivable in
the relevant period. For each significant customer, net revenue as a percentage of total net revenue and accounts receivable as a percentage of total accounts receivable are as follows:



|         |  |                                 |   |               |                                |   |                  |                     |   |  |      |   |  |    |   |  |    |  
|-------- |  | ------------------------------- | - | ------------- | ------------------------------ | - | ---------------- | ------------------- | - |  | ---- | - |  | -- | - |  | -- | -
|         |  | Net Revenue                     |   |               | Net Revenue                    |   |                  | Accounts Receivable |  
|         |  | Three Months EndedSeptember 30, |   |               | Nine Months EndedSeptember 30, |   |                  | As of               |  
|         |  |                                 |   | September2009 |                                |   | December 31,2008 |                    
|Customer |  | 2009                            |   |               | 2008                           |   |                  | 2009                |   |  | 2008 |   |  |   
|A        |  | 41                              | % |               | 25                             | % |                  | 37                  | % |  | 27   | % |  | 50 | % |  | 21 | %
|B        |  | 17                              | % |               | 11                             | % |                  | *                   |   |  | *    |   |  | 13 | % |  | *  |  
|C        |  | 12                              | % |               | *                              |   |                  | 17                  | % |  | *    |   |  | 11 | % |  | 21 | %
|D        |  | *                               |   |               | *                              |   |                  | 14                  | % |  | *    |   |  | 10 | % |  | 19 | %
|E        |  | *                               |   |               | 10                             | % |                  | *                   |   |  | 12   | % |  | *  |   |  | 10 | %
|F        |  | *                               |   |               | 38                             | % |                  | *                   |   |  | 36   | % |  | *  |   |  | 18 | %



|* | Less than 10%
|- | -------------



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VOLTERRA SEMICONDUCTOR CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

(In thousands, except per share data)

(Unaudited)



The Company reports its net revenue by geographic areas according to the destination to
which the product was shipped. The geographic area to which a product was shipped is not necessarily the same location in which the product is ultimately used. In all periods, substantially all of the Companys net revenue was denominated in
U.S. dollars. Net revenue by geographic area was as follows:



|              |  |                                 |   |  |                                |   |  |      |   |  |      |  
|------------- |  | ------------------------------- | - |  | ------------------------------ | - |  | ---- | - |  | ---- | -
|              |  | Three Months EndedSeptember 30, |   |  | Nine Months EndedSeptember 30, |  
|              |  | 2009                            |   |  | 2008                           |   |  | 2009 |   |  | 2008 |  
|Singapore     |  | 48                              | % |  | 35                             | % |  | 46   | % |  | 39   | %
|China         |  | 43                              | % |  | 51                             | % |  | 44   | % |  | 48   | %
|Taiwan        |  | 3                               | % |  | 4                              | % |  | 4    | % |  | 5    | %
|Japan         |  | 2                               | % |  | 7                              | % |  | 2    | % |  | 4    | %
|United States |  | 2                               | % |  | 1                              | % |  | 2    | % |  | 2    | %
|Other         |  | 2                               | % |  | 2                              | % |  | 2    | % |  | 2    | %

Revenue Recognition

Revenue from the sale of semiconductor products is recognized upon shipment when title transfers to the customer provided that persuasive
evidence of an arrangement exists, the price is fixed or determinable, and collection of the resulting receivable is reasonably assured. An allowance is recorded at the time of sale to provide for estimated future warranty returns. The allowance is
based upon historical experience, current trends, and the Companys expectations regarding future returns. Sales returns must be authorized by Volterra and are generally limited to instances of actual or potential product failure under the
Company warranties that generally provide that products will be free from defects for a limited period of time following shipment.

The Company has made no sales to U.S. distributors. Volterras sales to international distributors are made under agreements that do not provide for price adjustments after purchase and provide limited return rights under the
Companys standard warranty. Revenue on these sales is recognized upon shipment when title passes to the distributor. Volterra estimates future international distributor sales returns based on historical data and current business expectations
and reduces revenue for estimated future returns and allowances through the allowance for sales returns.



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VOLTERRA SEMICONDUCTOR CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

(In thousands, except per share data)

(Unaudited)



Stock-Based Compensation

The cost of stock-based compensation is measured at the date of grant based on the fair value of the award that is ultimately expected to
vest and is recognized as an expense over the requisite service period.

The effect of stock-based compensation was as
follows:



|                                       |  |                                 |       |                                |   |       |  |      |       |  |   |      
|-------------------------------------- |  | ------------------------------- | ----- | ------------------------------ | - | ----- |  | ---- | ----- |  | - | -----
|                                       |  | Three Months EndedSeptember 30, |       | Nine Months EndedSeptember 30,
|                                       |  | 2009                            |       | 2008                           |   | 2009  |  | 2008
|Stock-based compensation expense:      |  |                                 |       |                                |   |       |  |      |       |  |   |      
|Cost of revenue                        |  | $                               | 131   |                                | $ | 73    |  | $    | 299   |  | $ | 177  
|Research and development               |  |                                 | 669   |                                |   | 564   |  |      | 1,929 |  |   | 1,410
|Sales, general and administrative      |  |                                 | 584   |                                |   | 495   |  |      | 1,683 |  |   | 1,450
|                                       |  |                                 |       |                                |   |       |  |      |       |  |   |      
|Total stock-based compensation expense |  |                                 | 1,384 |                                |   | 1,132 |  |      | 3,911 |  |   | 3,037
|Tax effect of stock-based compensation |  |                                 |      |                                |   |      |  |      |      |  |   |     
|                                       |  |                                 |       |                                |   |       |  |      |       |  |   |      
|Effect on net income                   |  | $                               | 1,384 |                                | $ | 1,132 |  | $    | 3,911 |  | $ | 3,037
|                                       |  |                                 |       |                                |   |       |  |      |       |  |   |      
|Effect on basic net income per share   |  | $                               | 0.06  |                                | $ | 0.05  |  | $    | 0.17  |  | $ | 0.13 
|                                       |  |                                 |       |                                |   |       |  |      |       |  |   |      
|Effect on diluted net income per share |  | $                               | 0.06  |                                | $ | 0.04  |  | $    | 0.16  |  | $ | 0.12 
|                                       |  |                                 |       |                                |   |       |  |      |       |  |   |      

The Company has not recognized any tax benefit related to stock-based compensation
expense as a result of the full valuation allowance of its net deferred tax assets.

Provision for Income Taxes

Income taxes are accounted for under the assets and liability method. Deferred tax assets and liabilities are recognized for
future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and
liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax
rates is recognized in income in the period that includes the enactment date.

As of September 30, 2009 and
December 31, 2008, the total amount of unrecognized tax benefits were $4,808 and $4,107, of which $4,118 and $3,507 would affect the effective tax rate if recognized.

The Company recognizes interest and penalties accrual related to uncertain tax positions in income tax expense. Cumulative interest and
penalties for all periods presented are immaterial.

The Company files U.S. federal, state and foreign income tax returns and
is subject to examination in these jurisdictions for all tax years since inception. Although timing of the resolution or closure on audits is highly uncertain, the Company does not believe it is reasonably possible that the unrecognized tax benefits
would materially change in the next 12 months.

Earnings Per Share

Basic net income per share is calculated by dividing net income by the weighted average shares of common stock outstanding during the period.
Diluted net income per share is calculated by dividing the net income by the weighted average shares outstanding of common stock and dilutive potential common shares outstanding during the period. Dilutive potential common shares consist of dilutive
shares issuable upon the exercise of outstanding stock options and warrants, computed using the treasury stock method, and conversion of convertible preferred stock.



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VOLTERRA SEMICONDUCTOR CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

(In thousands, except per share data)

(Unaudited)



The following table sets forth for all periods presented the computation of basic and
diluted net income per share, including the reconciliation of the numerator and denominator used in the calculation:



|                                             |  |                                 |        |                                |   |        |  |      |        |  |   |       
|-------------------------------------------- |  | ------------------------------- | ------ | ------------------------------ | - | ------ |  | ---- | ------ |  | - | ------
|                                             |  | Three Months EndedSeptember 30, |        | Nine Months EndedSeptember 30,
|                                             |  | 2009                            |        | 2008                           |   | 2009   |  | 2008
|Numerator:                                   |  |                                 |        |                                |   |        |  |      |        |  |   |       
|Net income                                   |  | $                               | 3,427  |                                | $ | 5,391  |  | $    | 3,982  |  | $ | 13,164
|                                             |  |                                 |        |                                |   |        |  |      |        |  |   |       
|Denominator:                                 |  |                                 |        |                                |   |        |  |      |        |  |   |       
|Weighted average shares outstanding, basic   |  |                                 | 22,973 |                                |   | 23,914 |  |      | 22,868 |  |   | 23,827
|                                             |  |                                 |        |                                |   |        |  |      |        |  |   |       
|Effect of dilutive securities:               |  |                                 |        |                                |   |        |  |      |        |  |   |       
|Stock options                                |  |                                 | 1,797  |                                |   | 1,723  |  |      | 1,317  |  |   | 1,584 
|                                             |  |                                 |        |                                |   |        |  |      |        |  |   |       
|Weighted average shares outstanding, diluted |  |                                 | 24,770 |                                |   | 25,637 |  |      | 24,185 |  |   | 25,411
|                                             |  |                                 |        |                                |   |        |  |      |        |  |   |       
|Basic net income per share                   |  | $                               | 0.15   |                                | $ | 0.23   |  | $    | 0.17   |  | $ | 0.55  
|                                             |  |                                 |        |                                |   |        |  |      |        |  |   |       
|Diluted net income per share                 |  | $                               | 0.14   |                                | $ | 0.21   |  | $    | 0.16   |  | $ | 0.52  
|                                             |  |                                 |        |                                |   |        |  |      |        |  |   |       

Stock options outstanding in the amount of 1,621 and 2,217 shares for the three
months ended September 30, 2009 and 2008, respectively, and 3,276 and 2,755 shares for the nine months ended September 30, 2009 and 2008, respectively, were excluded from the computation of diluted earnings per share because they were
anti-dilutive in the period. The securities outstanding as of September 30, 2009 could dilute net income per share in the future.

Accounting for Lease Incentives

As part of the Companys existing leased facilities, the Company
has received various lease incentives which take the form of a fixed allowance towards lease improvements on the facility. The Company used the allowance to make leasehold improvements which will be depreciated over the useful life of the
assets or the lease term, whichever is shorter. The lease incentives liability is amortized over the term of the lease as an offset to rent expense.

Accounting Standards Adopted in the Nine Months Ended September 30, 2009

FASB Accounting Standards Codification

In June 2009, the Financial
Accounting Standards Board (FASB) issued the FASB Accounting Standards Codification(the Codification), the authoritative guidance for GAAP. The Codification, which changes the referencing of financial standards,
became effective for interim and annual periods ending on or after September 15, 2009. The Codification is now the single official source of authoritative U.S. GAAP (other than guidance issued by the SEC), superseding existing FASB,
American Institute of Certified Public Accountants, Emerging Issues Task Force (EITF), and related literature. Only one level of authoritative U.S. GAAP now exists. All other literature is considered non-authoritative. The
Codification does not change U.S. GAAP. We adopted the Codification during the quarter ended September 30, 2009. The adoption of the Codification did not have any substantive impact on our condensed consolidated financial statements or
related footnotes.

Fair Value Measurements and Disclosures

In April 2009, the FASB issued additional guidance included in Accounting Standards Codification (ASC) 820 Fair Value
Measurements and Disclosures (previously FSP FAS 157-4, Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly) for
estimating fair value when the market activity for an asset or liability has declined significantly. We adopted the guidance during the quarter ended June 30, 2009. The adoption of the guidance did not have a significant impact on our condensed
consolidated financial statements or related footnotes.



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VOLTERRA SEMICONDUCTOR CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

(In thousands, except per share data)

(Unaudited)



In April 2009, the FASB issued authoritative fair value disclosure guidance included in
ASC 825 Financial Instruments (previously FSP FAS 107-1 and APB 28-1, Interim Disclosures about Fair Value of Financial Instruments) for financial instruments. The guidance requires disclosures for interim reporting periods
of publicly traded companies as well as in annual financial statements. The guidance also requires those disclosures in summarized financial information at interim reporting periods. We adopted the guidance during the quarter ended June 30,
2009. The adoption of the guidance did not have a significant impact on our condensed consolidated financial statements or related footnotes.

In September 2006, the FASB issued authoritative guidance included in ASC 820 Fair Value Measurements and Disclosures (previously SFAS 157, Fair Value Measurements, and FSP FAS 157-2,
Effective Date of FASB Statement No. 157) for fair value measurements, which defines fair value, establishes a framework and gives guidance regarding the methods used for measuring fair value, and expands disclosures about fair
value measurements. Effective January 1, 2008, we adopted the guidance as it applies to our financial instruments. Effective January 1, 2009, we adopted the guidance for our non-financial assets and non-financial liabilities. The adoption
of the guidance did not have a significant impact on our condensed consolidated financial statements or related footnotes.

2. Inventory

Inventory consisted of the following:



|                |  |                   |       |                  |   |       
|--------------- |  | ----------------- | ----- | ---------------- | - | ------
|                |  | September 30,2009 |       | December 31,2008
|Work-in-process |  | $                 | 4,670 |                  | $ | 5,672 
|Finished goods  |  |                   | 3,815 |                  |   | 7,996 
|                |  |                   |       |                  |   |       
|                |  | $                 | 8,485 |                  | $ | 13,668
|                |  |                   |       |                  |   |       

3. Property and Equipment

Property and equipment consisted of the following:



|                                               |  |                   |         |   |                  |   |        |  
|---------------------------------------------- |  | ----------------- | ------- | - | ---------------- | - | ------ | -
|                                               |  | September 30,2009 |         |   | December 31,2008 |  
|Computer hardware                              |  | $                 | 1,641   |   |                  | $ | 1,544  |  
|Computer software                              |  |                   | 5,325   |   |                  |   | 4,587  |  
|Equipment and furniture                        |  |                   | 6,347   |   |                  |   | 6,222  |  
|Leasehold improvements                         |  |                   | 1,994   |   |                  |   | 1,994  |  
|                                               |  |                   |         |   |                  |   |        |  
|                                               |  |                   | 15,307  |   |                  |   | 14,347 |  
|Less accumulated depreciation and amortization |  |                   | (10,408 | ) |                  |   | (9,062 | )
|                                               |  |                   |         |   |                  |   |        |  
|                                               |  | $                 | 4,899   |   |                  | $ | 5,285  |  
|                                               |  |                   |         |   |                  |   |        |  

4. Stock Repurchase Program

Under the Companys previously announced stock repurchase program, the Company repurchased 650 shares for $5,095 at an average cost of
$7.84 per share including commissions during the three months ended March 31, 2009. On April 24, 2009, the Companys Board of Directors approved an increase of $5 million to the previously authorized $15 million share repurchase plan.
There were no further stock repurchases during the three months ended June 30, 2009 or the three months ended September 30, 2009.



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VOLTERRA SEMICONDUCTOR CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

(In thousands, except per share data)

(Unaudited)



The Companys policy is to consider shares to have been repurchased upon the
settlement date of the transaction, which is typically three days subsequent to the trading date. Shares repurchased during the nine months ended September 30, 2009 have been reported as treasury stock.

5. Fair Value Measurements

On January 1, 2008, The Company adopted a newly issued accounting standard for fair value measurements of financial assets and liabilities. The accounting standard for fair value measurements provides a framework for measuring fair
value and requires expanded disclosures regarding fair value measurements. Fair value is defined as the price that would be received for an asset or the exit price that would be paid to transfer a liability in the principal or most advantageous
market in an orderly transaction between market participants on the measurement date. The accounting standard established a fair value hierarchy which requires an entity to maximize the use of observable inputs, where available. The following
summarizes the three levels of inputs required as well as the assets and liabilities that we value using those levels of inputs.

The Company currently has cash and cash equivalents and short-term investments held and used in the ordinary course of business that must be measured under the new fair value standard. The Company does not have other non-financial assets or
non-financial liabilities that are required to be measured at fair value on a recurring basis. The Companys cash and cash equivalents and short-term investments are measured using inputs from Level 1 of the fair value hierarchy. Level 1 and
Level 2 are described as follows:

Level 1 - Inputs are unadjusted quoted prices in active markets for identical assets that
the Company has the ability to access at the measurement date.

Level 2 - Observable inputs other than Level 1 prices, such as
quoted prices for similar assets or liabilities, quoted prices in markets with insufficient volume or infrequent transactions (less active markets), or model-derived valuations in which all significant inputs are observable or can be derived
principally from or corroborated with observable market data for substantially the full term of the assets or liabilities.

Based on the nature of cash and cash equivalents and the underlying securities, there are no realized or unrealized gains and losses recorded from holding these assets.

Short-term investments have remaining contractual maturities on the date of purchase greater than 90 days but less than one year.
Investments in debt securities are classified as available-for-sale. Unrealized gain and losses were not material at September 30, 2009.

The Company measures certain financial assets at fair value on a recurring basis. The fair value of those financial assets was determined using the following inputs at September 30, 2009:



|                         |  |                                                 |        |                                                             |   |                                             |  |                                        |   |  |   |  
|------------------------ |  | ----------------------------------------------- | ------ | ----------------------------------------------------------- | - | ------------------------------------------- |  | -------------------------------------- | - |  | - | -
|                         |  | Fair value measurements at reporting date using
|                         |  | Total                                           |        | Quoted prices inactive markets foridentical assets(Level 1) |   | Significant otherobservable inputs(Level 2) |  | Significantunobservableinputs(Level 3)
|Money market funds       |  | $                                               | 57,826 |                                                             | $ | 57,826                                      |  | $                                      |  |  | $ | 
|U.S. treasury securities |  |                                                 | 10,545 |                                                             |   | 10,545                                      |  |                                        |   |  |   | 
|                         |  |                                                 |        |                                                             |   |                                             |  |                                        |   |  |   |  
|Total                    |  | $                                               | 68,371 |                                                             | $ | 68,371                                      |  | $                                      |  |  | $ | 
|                         |  |                                                 |        |                                                             |   |                                             |  |                                        |   |  |   |  



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VOLTERRA SEMICONDUCTOR CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

(In thousands, except per share data)

(Unaudited)



6. Litigation

The Company is engaged in patent infringement litigation with Primarion, Inc., Infineon Technologies AG and Infineon Technologies North America Corporation (collectively, the Defendants), as
disclosed in Legal Proceedings in Item 1 of Part II of this quarterly report on Form 10-Q. Volterra has alleged infringement by Defendants of several of our patents, and Defendants have generally denied the allegations and asserted
affirmative defenses and counterclaims, including claims for declaratory relief for inequitable conduct before the U.S. patent office and for Sherman Act violations. The Company filed a notice and motion for preliminary injunction and a motion for
summary judgment against the Defendants, and at a hearing held on September 30, 2009, the court issued a minute order granting the Companys motion for preliminary injunction and denying the motion for summary judgment without prejudice.
As of the date of filing of this quarterly report on Form 10-Q, the Court has not issued a final order on the preliminary injunction.



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|Item 2. | Managements Discussion and Analysis of Financial Condition and Results of Operations
|------- | -------------------------------------------------------------------------------------

The following discussion should be read in conjunction with our condensed consolidated financial statements and the related notes contained
elsewhere in this quarterly report on Form 10-Q. All statements in the following discussion that are not reports of historical information or descriptions of current accounting policy are forward-looking statements. Please see the Cautionary
Note Regarding Forward-Looking Statements at the beginning of this quarterly report and consider our forward-looking statements in light of the factors that may affect operating results set forth herein.

Overview

We design,
develop, and market proprietary, high-performance analog and mixed-signal power management semiconductors. We sell integrated voltage regulator semiconductors and scalable voltage regulator semiconductor chipsets in the computing, storage,
networking, and consumer markets, primarily to original equipment manufacturers, or OEMs, original design manufacturers, or ODMs, contract equipment manufacturers, or CEMs, or merchant power supply manufacturers.

Our net revenue was $74.7 million, $104.2 million and $70.8 million in 2007, 2008 and the nine months ending September 30, 2009,
respectively. We generated net income of $0.3 million, $14.3 million and $4.0 million in 2007, 2008 and the nine months ending September 30, 2009, respectively.

Our net revenue consists primarily of sales of our power management semiconductor products. When evaluating our net revenue, we categorize our sales into four major market segments: servers and storage;
desktop and workstation; networking and communications; and consumer and portable. The electronics manufacturing industry is complex and disaggregated, and electronic system designers typically rely upon distributors and outsourced suppliers to
provide procurement, manufacturing, design, and other supply chain related services within the industry. We attempt to quantify the amount of sales within the major markets identified above, but such quantified amounts are approximations only, as we
must rely upon estimates and assumptions regarding the incorporation of our products sold to distributors or other outsourced suppliers into the systems of the OEMs, ODMs, CEMs, or merchant power supply manufacturers for each particular market. In
the third quarter of 2009, we estimate that 62% of our net revenue was derived from sales in the server and storage market, 19% from the desktop and workstation market, 10% from the consumer and portable market; and 9% from the networking and
communications market. We believe that a significant portion of our revenues for the remainder of the current fiscal year will continue to be derived from sales in the server and storage market.

Our operations and performance depend significantly on worldwide economic conditions and their impact on purchases of our products by our
customers. In the past year, these economic conditions had deteriorated significantly in many countries and regions, which impacted our financial results. Future economic turmoil could have a significant effect on our operations and financial
results on a period to period basis. Customers in any of our target market segments could experience unexpected fluctuations in demand for their products, as consumers may alter purchasing activities in response to this economic uncertainty. We
would have limited visibility in the revenues we anticipated in any given period, and may not be able to accurately plan the appropriate spending and inventory necessary to satisfy the more volatile demand for our products. Our customers could
change or scale back product development efforts, product purchases or other sales activities that affect purchases of our products, and this could affect the amount and timing of revenue for the long term future. These economic conditions may also
affect our third party manufacturers, and if they are unable to obtain the necessary capital to operate their business, this may also impact their ability to provide us with the foundry capacity we need, or may adversely affect their ability to
provide timely services or to make timely deliveries of products to us.

Our sales and accounts receivable are currently
concentrated with a small group of customers, and we expect this to continue in the future. Certain of these customers in turn sell more broadly to multiple companies that directly address consumer demand. In the third quarter of 2009, three
customers each accounted for 10% or more of our net revenue, and collectively accounted for 70% of our net revenue. In the third quarter of 2008, four customers each accounted for 10% or more of our net revenue, and



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collectively accounted for 84% of our net revenue. While we report revenue for direct sales to particular customers, our sales data may not accurately reflect the additional indirect
demand from distributors and outsourced suppliers who purchase our products pursuant to their business relationships with such significant customers. Because we have less visibility into and are not able to quantify this indirect demand,
we are unable to determine how much additional revenue these significant customers may generate. In addition, our sales data also may not identify customers who do not directly account for 10% of our net revenue, but may be significant in that such
customers also generate substantial indirect demand from distributors and outsourced suppliers. If any such significant customer were to stop incorporating our products or third party products containing our components into its designs,
we would not only lose the direct revenue we receive from the significant customer, but we could also lose a portion of the indirect revenue from third parties who do business with such significant customer. If we were to lose or experience a
significant reduction in demand from one or more of our key customers either to which we sell directly or which generates demand at an intermediary or if we were to fail to collect our accounts receivable from one or more of our key customers, our
operating results and financial position would be materially adversely impacted.

Because demand for our products is impacted
by demand for our customers products, our revenue depends on the timing, size, and speed of commercial introductions of systems that use our products, and our customers ability to manage their inventory in relationship to such demand. We
continue to expect a significant amount of our revenue to come from the commercial introduction of new systems, which is often more difficult to forecast than ongoing demand for previously introduced systems. A number of our customers
applications, particularly in the desktop and workstation market and consumer and portable market, are subject to short product cycles and prone to delays in development and commercial introduction or significant changes in demand, making it
inherently difficult to accurately forecast demand for such applications in any period. A number of our customers, such as ODMs, CEMs, and merchant power supply manufacturers, also are dependent upon the demand of other companies, which makes sales
to such parties more difficult to forecast accurately. These fluctuations in demand could materially affect our operating results on a period by period basis.

We recognize revenue on our sales upon shipment with a provision for estimated sales returns and allowances. A portion of our revenues come from customer orders that are both received and shipped against
within the same quarter, or turns business, which is inherently difficult to forecast. We estimate turns business as a percent of net revenue as the ratio of net revenue less beginning backlog to net revenue making adjustments for the
effect of sales return reserves or other adjustments to net revenue not included in backlog. Turns business was approximately 15% to 25% of our revenue in each of the second and third quarters of 2009, as well as in the third quarter of 2008. If our
turns business increases, forecasting revenue becomes more difficult. Generally, our current sales practice allows customers to, and customers routinely do, revise and cancel orders and reschedule delivery dates on relatively short notice pursuant
to changes in the customers requirements. In addition, in circumstances when we have limited or insufficient inventory available or have achieved our objectives in a period and have fulfilled our customers requirements, we may delay
shipment of orders. For these reasons, backlog has limited value as a predictor of future revenues.

We typically sell
directly through our internal sales force to customers in North America. We sell both directly and indirectly through distributors internationally. We have made no sales to U.S. distributors. During the third quarter of 2009, sales to international
distributors represented 29% of net revenue, compared to 51% in the second quarter of 2009 and 53% in the third quarter of 2008. We expect the sales channels we use and the mix of business between distribution and direct sales to change over time as
our product offerings and customers evolve. Our sales to international distributors are made under agreements that do not provide for price adjustments after purchase and provide limited return rights in the event of product failure. Our sales
through distributors are typically at lower gross margins, but also typically have lower associated selling expenses than direct sales.

At the end of March 2009, in settlement of a $2.7 million outstanding receivable from one of our distributors, we received $1.0 million in cash and accepted the return of $1.7 million in inventory. This
transaction was recorded in the first quarter of 2009 as a reduction in revenue of $1.7 million, which was



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partially offset by the reversal of $0.3 million of deferred revenue previously recorded for products shipped in the fourth quarter of 2008 to this distributor. The returned parts were included
in our finished goods inventory at the end of the first quarter of 2009 at their original cost of $0.6 million. During the third quarter of 2009, we sold approximately $0.2 million of the returned parts included in our finished goods inventory at
the end of March 2009. We continue to expect to sell all of the returned parts through our existing sales channel either through direct sales or through our distributors.

Our cost of revenue consists primarily of purchases of silicon wafers and related costs of assembly, test and shipment of our products, and compensation and related costs of personnel and equipment
associated with production management and quality assurance. Our gross margins have historically varied significantly, and may continue to vary, based on a variety of factors, including changes in the relative mix of the products we sell, the
markets and geographies where we sell, the size and nature of our customers in these markets, the levels of sales to distributors, manufacturing volumes and yields, discounts or other financial incentives to customers and inventory and overhead
costs. Generally, as we introduce new products, we initially incur higher unit production costs, and as the product ramp progresses, our overall unit production costs decrease as manufacturing efficiency improves. In addition, because our power
management products are highly complex and the manufacturing process for our products is technically challenging, previously undetected design defects and minor deviations in the manufacturing process can cause substantial decreases in yields or
quality. Such decreases in yields or quality can impact our gross margins due to a reduction in our revenue as a result of significant product returns, may cause us to incur product replacement costs, and may cause us to rework or scrap inventory
that had been manufactured with the defect. If we are unable to manage these risks, our revenue and gross margins and financial position may be materially adversely impacted. Finally, consistent with the overall market for power management
solutions, we expect to face price pressure over time. In order to maintain or improve our gross margins, we will need to introduce new, lower cost products, increase volumes, reduce unit costs or achieve a combination of these objectives.

We purchase our inventory pursuant to standard purchase orders. As lead times at our manufacturing vendors can be up to three
months or more, we typically build inventory based on our sales forecasts rather than customers orders, subjecting us to inventory risk. If, after initial orders are placed, we change certain features of our product to accommodate customer
requirements, we may create additional inventory that we may not be able to sell. In the event of an inventory write-down either because the inventory exceeds demand, becomes obsolete, or contains previously undetected defects and must be reworked
or scrapped, our gross margins could be materially adversely impacted. On the other hand, because our manufacturing lead times tend to be longer than our order lead times and capacity at our manufacturing vendors may be constrained, our net revenue
and relationship with our customers could be adversely impacted if we do not have adequate inventory available to meet customer demand. Our inventory levels were $8.5 million at the end of the third quarter of 2009, and inventory turns,
calculated as our cost of revenue for the quarter annualized divided by our inventory as of the end of such quarter, increased to 5.7 turns in the third quarter of 2009 compared to 3.9 turns in the second quarter of 2009 and 4.6 turns in third
quarter of 2008. If the amount of inventory we are holding increases or our inventory turns decrease, the risk of a potential inventory write-down and adverse impact on our gross margins increases.

Our research and development expense consists primarily of compensation and related costs for employees involved in the design and
development of our products, prototyping and other development expense, and the depreciation costs related to equipment used for research and development. All research and development costs are expensed as incurred. Research and development expenses
can fluctuate as a result of long design cycles with periods of relatively low expenses punctuated with increased expenditures for prototypes and product development toward the end of the design cycle.

Selling, general and administrative expense consists primarily of compensation and related costs for employees involved in sales and
marketing, general management, finance, human resources and information technology, as well as legal expenses, including expenses related to our intellectual property litigation, and expenses related to travel and entertainment, professional
services, and insurance. In connection with our pending litigation referenced under Legal Proceedings in Item 1 of Part II of this quarterly report on Form 10-Q, our legal expenses related to this litigation were approximately $1.7
million



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in the third quarter of 2009 and $3.6 million for the nine months ended September 30, 2009. At this time, we cannot predict the duration of the litigation but our legal expenditures in
future periods will be dependent on the legal developments, hearings, motion practices and other activities in such periods. Any such expenses could be material in amount.

Our income tax provision is dependent on our estimated annual effective tax rate. Our annual effective tax rate has fluctuated and is
dependent on the mix of income and losses between domestic and international operations, as well as the utilization of available net operating loss carryforwards to offset taxable income and tax credit carryforwards that offsets income tax in the
United States and changing assessments of statutory income tax rates. Our domestic deferred tax assets are fully offset by a valuation allowance because, dependent on the available objective evidence, we believe it is more likely than not that the
net deferred tax assets will not be realizable. If we later determine that it is more likely than not that the deferred tax assets would be realized, we may revise this assessment, which could result in a favorable adjustment to the reported income
tax provision in the period of re-assessment followed by higher reported tax rates in subsequent periods. Our foreign income is typically subject to lower statutory rates than our domestic income. We expect that both our geographical mix of taxable
income and losses as well as the statutory rates we are subject to internationally may change over time, resulting in changes to our effective tax rate and reported income tax provision.

Critical Accounting Policies

There have been no significant changes to our
critical accounting policies during the nine months ended September 30, 2009 as compared to the previous disclosures in Managements Discussion and Analysis of Financial Condition and Results of Operations included in our annual report on
Form 10-K for the fiscal year ended December 31, 2008, as filed with the SEC on March 4, 2009.

Results of Operations

The following table sets forth our results of operations as a percentage of net revenue for the periods indicated:



|                                    |  |                                 |   |  |                                |   |  |      |   |  |      |  
|----------------------------------- |  | ------------------------------- | - |  | ------------------------------ | - |  | ---- | - |  | ---- | -
|                                    |  | Three Months EndedSeptember 30, |   |  | Nine Months EndedSeptember 30, |  
|                                    |  | 2009                            |   |  | 2008                           |   |  | 2009 |   |  | 2008 |  
|Net revenue                         |  | 100                             | % |  | 100                            | % |  | 100  | % |  | 100  | %
|Cost of revenue                     |  | 41                              |   |  | 42                             |   |  | 42   |   |  | 43   |  
|                                    |  |                                 |   |  |                                |   |  |      |   |  |      |  
|Gross margin                        |  | 59                              |   |  | 58                             |   |  | 58   |   |  | 57   |  
|                                    |  |                                 |   |  |                                |   |  |      |   |  |      |  
|                                    |  |                                 |   | 
|Operating expenses:                 |  |                                 |   |  |                                |   |  |      |   |  |      |  
|Research and development            |  | 23                              |   |  | 23                             |   |  | 27   |   |  | 24   |  
|Selling, general and administrative |  | 24                              |   |  | 17                             |   |  | 25   |   |  | 17   |  
|                                    |  |                                 |   |  |                                |   |  |      |   |  |      |  
|Total operating expenses            |  | 47                              |   |  | 40                             |   |  | 52   |   |  | 41   |  
|                                    |  |                                 |   |  |                                |   |  |      |   |  |      |  
|Income from operations              |  | 12                              |   |  | 18                             |   |  | 6    |   |  | 16   |  
|Interest and other income, net      |  | 0                               |   |  | 1                              |   |  |     |   |  | 1    |  
|                                    |  |                                 |   |  |                                |   |  |      |   |  |      |  
|Income before income taxes          |  | 12                              |   |  | 19                             |   |  | 6    |   |  | 17   |  
|Income tax expense                  |  | 1                               |   |  | 1                              |   |  |     |   |  | 1    |  
|                                    |  |                                 |   |  |                                |   |  |      |   |  |      |  
|Net Income                          |  | 11                              | % |  | 18                             | % |  | 6    | % |  | 16   | %
|                                    |  |                                 |   |  |                                |   |  |      |   |  |      |  

Comparison of Three Months Ended September 30, 2009 to Three Months Ended September 30,
2008

Net Revenue.Net revenue was $29.7 million in the three months ended September 30, 2009 and
$30.6 million in the three months ended September 30, 2008, a decrease of 3%. The decrease in net revenue was primarily due to decreases of $1.1 million in the desktop and workstation market and $1.1 million in the consumer and portable
market, partially offset by an increase of $1.5 million in the server and storage market.



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Cost of Revenue and Gross Margin.Cost of revenue was $12.1 million for the
three months ended September 30, 2009 and $12.9 million for the three months ended September 30, 2008, a decrease of 6%. Included in cost of revenue for the third quarter of 2009 is approximately a $0.5 million benefit due to
shipments of previously written down inventory that had previously been considered to have been excess inventory during 2008 and approximately a $0.2 million benefit from release of inventory reserves previously recorded in 2009. Gross margin
remained relatively flat at $17.6 million for the three months ended September 30, 2009 compared to $17.7 million for the three months ended September 30, 2008. Gross margin as a percent of net revenue was 59.3% for the three months
ended September 30, 2009 and 57.8% for the three months ended September 30, 2008. The increase in gross margin percentage was primarily due to the $0.5 million benefit related to the sale of previously written down inventory, the $0.2
million benefit from release of inventory reserves, cost reduction activities and operational improvements.

Research and Development.Research and development expenses were $6.8 million for the three months ended September 30, 2009 and $7.1 million for the three months ended September 30, 2008, a decrease of 5%. The
decrease was primarily due to a decrease in product development and prototype expenses of $0.6 million, partially offset by an increase in wages and related expenses of $0.4 million.

Selling, General and Administrative.Selling, general and administrative expenses were $7.1 million for the three months ended
September 30, 2009 and $5.1 million for the three months ended September 30, 2008, an increase of 40%. The increase was primarily due to an increase of $1.7 million in expenses in connection with our litigation referenced under Legal
Proceedings in Item 1 of Part II of this quarterly report on Form 10-Q.

Income Tax.Income tax
provision was $0.2 million and $0.2 million for the three months ended September 30, 2009 and 2008, respectively.

Comparison of Nine
Months Ended September 30, 2009 to Nine Months Ended September 30, 2008

Net Revenue.Net revenue
was $70.8 million in the nine months ended September 30, 2009 and $82.3 million in the nine months ended September 30, 2008, a decrease of 14%. The decrease in net revenue was primarily due to decreases of $6.7 million, $4.8 million,
and $0.4 million in the desktop and workstation, server and storage and networking and communications markets, respectively, partially offset by an increase of $0.4 million in the consumer and portable market.

Cost of Revenue and Gross Margin.Cost of revenue was $29.6 million for the nine months ended September 30, 2009 and
$35.6 million for the nine months ended September 30, 2008, a decrease of 17%. Included in cost of revenue for the first nine months of 2009 is approximately a $1.6 million benefit due to shipments of previously written down inventory that
had previously been considered to have been excess inventory during 2008, partially offset by $0.4 million of charges to reduce the carrying value of inventory to its net realizable value. Gross margin was $41.1 million for the nine months ended
September 30, 2009 and $46.7 million for the nine months ended September 30, 2008, a decrease of 12%. Gross margin as a percent of net revenue was 58.1% for the nine months ended September 30, 2009 and 56.7% for the nine months
ended September 30, 2008. The increase in gross margin percentage was primarily due to the $1.6 million benefit related to the sale of previously written down inventory, cost reduction activities and operational improvements partially offset by
lower volumes.

Research and Development.Research and development expenses were $19.1 million for the nine
months ended September 30, 2009 and $19.8 million for the nine months ended September 30, 2008, a decrease of 3%. The decrease was primarily due to a decrease in product development and prototype expenses of $1.3 million, partially
offset by an increase of $0.5 million in stock-based compensation expenses.



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Selling, General and Administrative.Selling, general and administrative
expenses were $17.7 million for the nine months ended September 30, 2009 and $14.0 million for the nine months ended September 30, 2008, an increase of 26%. The increase was primarily due to an increase of $3.6 million in expenses in
connection with our litigation referenced under Legal Proceedings in Item 1 of Part II of this quarterly report on Form 10-Q.

Income Tax.Income tax provision was $0.4 million and $0.5 million for the nine months ended September 30, 2009 and 2008, respectively.

Liquidity and Capital Resources

As of September 30, 2009, we had working capital of $80.0 million, including cash, cash equivalents and short-term investments of $72.1 million, compared to working capital of $71.7 million, including cash, cash equivalents and
short-term investments of $57.4 million, as of December 31, 2008. We currently have no debt and believe that our current cash, cash equivalents and investments, as well as cash flows from operations, will be sufficient to fund our operations
and meet our capital needs for the current fiscal year.

Our operating activities provided net cash of $16.0 million for the
nine months ended September 30, 2009 compared to net cash provided of $17.7 million for the nine months ended September 30, 2008. The increase in cash provided from operating activities was primarily due to net income of $4.0 million, a
decrease in inventory of $5.2 million and an increase in accrued liabilities of $2.2 million. The decrease in inventory was mainly due to increased sales during the third quarter of 2009. The increase in accrued liabilities is primarily due to legal
accruals of $1.5 million. Partially offsetting the above increases in cash was an increase in accounts receivable of $1.9 million due to an increase in revenue. The primary sources of cash from operations for the nine months ended September 30,
2008 were primarily due to net income of $13.2 million, adjustments for depreciation and amortization of $1.8 million, stock-based compensation of $3.0 million, and an increase in accrued liabilities of $4.4 million. The increases were partially
offset by an increase in inventory of $4.9 million.

Our investing activities used net cash of $1.0 million for the nine
months ended September 30, 2009 for the purchase of short-term investments of $15.0 million and purchase of property and equipment of $1.0 million, partially offset by the maturity of short-term investments of $15.0 million. Our investing
activities used net cash of $8.0 million for the nine months ended September 30, 2008 from the purchase of $2.1 million in property and equipment and $6.9 million in short-term investments, partially offset by the maturity of short-term
investments of $1.0 million.

Our financing activities used net cash of $0.3 million for the nine months ended
September 30, 2009 for common stock repurchases of $5.1 million, partially offset by proceeds of $4.8 million from the exercise of employee stock options and proceeds from our employee stock purchase plan. Our financing activities provided net
cash of $0.9 million for the nine months ended September 30, 2008 from $3.4 million from the exercise of employee stock options and proceeds from our employee stock purchase plan, partially offset by the use of $2.4 million to repurchase
shares of our common stock.

Contractual Obligations

The following table sets forth our contractual obligations as of September 30, 2009 (in thousands) and the periods in which such obligations are expected to be settled:



|                            |  |       |       |                 |   |          |  |          |       |                  |   |    |  |   |  
|--------------------------- |  | ----- | ----- | --------------- | - | -------- |  | -------- | ----- | ---------------- | - | -- |  | - | -
|                            |  | Total |       | Less than1 year |   | 1-3years |  | 3-5years |       | More than5 years
|Operating lease obligations |  | $     | 2,429 |                 | $ | 942      |  | $        | 1,427 |                  | $ | 60 |  | $ | 
|Purchase obligations        |  |       | 2,633 |                 |   | 2,633    |  |          |      |                  |   |   |  |   | 
|                            |  |       |       |                 |   |          |  |          |       |                  |   |    |  |   |  
|                            |  | $     | 5,062 |                 | $ | 3,575    |  | $        | 1,427 |                  | $ | 60 |  | $ | 
|                            |  |       |       |                 |   |          |  |          |       |                  |   |    |  |   |  



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Operating lease obligations consist of the estimated obligations under the Companys
real property or facility leases. Purchase obligations are comprised of the estimated obligation for in-process silicon wafers. We depend entirely upon third-party foundries to manufacture our silicon wafers. Due to lengthy foundry lead times, we
typically order these materials up to three months or more in advance of required delivery dates, and we are obligated to pay for the materials in accordance with their payment terms, which typically require payment within three months.

The amounts in the table above exclude $1.0 million of uncertain income tax liabilities as we are unable to reasonably estimate the
timing of settlement.

Recent Accounting Pronouncements

Accounting Standards

In June 2009, the Financial Accounting
Standards Board (FASB) issued an amendment to the accounting and disclosure requirements for transfers of financial assets to be included in ASC 860 Transfers and Servicing (previously FAS No. 166, Accounting for Transfers of
Financial Assets  an amendment of FASB Statement No. 140). This amendment requires greater transparency and additional disclosures for transfers of financial assets and the entitys continuing involvement with them and changes
the requirements for derecognizing financial assets. In addition, this amendment eliminates the concept of a qualifying special-purpose entity (QSPE). This amendment is effective for financial statements issued for fiscal years beginning after
November 15, 2009. This amendment will not have a material effect on our financial position, results of operations or liquidity.

In June 2009, the FASB also issued an amendment to the accounting and disclosure requirements for the consolidation of variable interest entities (VIEs) to be included in ASC 810 Consolidation (previously SFAS No. 167,
Amendments to FASB Interpretation No. 46(R)). The elimination of the concept of a QSPE, as discussed above, removes the exception from applying the consolidation guidance within this amendment. This amendment requires an enterprise
to perform a qualitative analysis when determining whether or not it must consolidate a VIE. The amendment also requires an enterprise to continuously reassess whether it must consolidate a VIE. Additionally, the amendment requires enhanced
disclosures about an enterprises involvement with VIEs and any significant change in risk exposure due to that involvement, as well as how its involvement with VIEs impacts the enterprises financial statements. Finally, an enterprise
will be required to disclose significant judgments and assumptions used to determine whether or not to consolidate a VIE. This amendment is effective for financial statements issued for fiscal years beginning after November 15, 2009. This
amendment will not have a material effect on our financial position, results of operations or liquidity.



|Item 3. | Quantitative and Qualitative Disclosures About Market Risk
|------- | ----------------------------------------------------------

The primary objective of our investment activities is to preserve principal while maximizing income without significantly increasing risk. Some of the securities in which we invest may be subject to
interest rate risk. This means that a change in prevailing interest rates may cause the market value of the investment to fluctuate. To minimize this risk, we may maintain our portfolio of cash equivalents and short-term investments in a variety of
securities, including money market funds, government treasury and agency securities. The risk associated with fluctuating interest rates is limited to our investment portfolio. As of September 30, 2009, all of our short-term investments were
U.S. treasury securities and our cash equivalents were held in checking and money market accounts, which is unchanged from December 31, 2008. If market interest rates were to increase or decline by 10% from interest rates as of
September 30, 2009 and December 31, 2009, the impact on our portfolio on these dates would not have been material. We do not currently use derivative instruments in our investment portfolio.



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Our sales outside the United States are transacted in U.S. dollars; accordingly, our sales
are not generally impacted by foreign currency rate changes. As of September 30, 2009 and December 31, 2008, fluctuations in foreign currency exchange rates did not have a material impact on our results of operations.



|Item 4. | Controls and Procedures
|------- | -----------------------

Evaluation of
Disclosure Controls and Procedures

As of the end of the period covered by this report, an evaluation was performed under
the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer (collectively, our certifying officers), of the effectiveness of the design and operation of our disclosure
controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended) as required by Rules 13a-15(b) or 15d-15(b) of the Securities Exchange Act of 1934, as amended. Based on their evaluation, our
certifying officers concluded that these disclosure controls and procedures were effective.

We believe that a system of
internal controls, no matter how well designed and operated, is based in part upon certain assumptions about the likelihood of future events, and can be affected by limitations inherent in all internal controls systems including the realities that
human judgment in decision-making can be faulty, that persons responsible for establishing controls need to consider their relative costs and benefits, that breakdowns can occur because of human failures such as simple error or mistake, and that
controls can be circumvented by collusion of two or more people. Accordingly, we believe that our system of internal controls, while effective, can only provide reasonable, not absolute, assurance that the objectives of the controls system are met,
and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within our company have been detected.

We have reviewed our internal controls over financial reporting and have made no changes during the quarter ended September 30, 2009, that our certifying officers concluded materially affected, or
are reasonably likely to materially affect, our internal control over financial reporting.

PART
II. OTHER INFORMATION



|Item 1. | Legal Proceedings
|------- | -----------------

From
time to time, we may become subject to legal proceedings in the ordinary course of our business. Except as set forth below, we are not currently involved in any legal proceedings that we believe will, either individually or in the aggregate,
materially adversely affect our business.

In November 2008, we filed a lawsuit in the United States District Court in the
Northern District of California against Primarion, Inc., Infineon Technologies AG and Infineon Technologies North America Corporation, as previously described in the Companys Annual Report on Form 10-K for the year ended December 31,
2008. On July 10, 2009, Volterra filed a notice and motion for preliminary injunction and a motion for summary judgment against the Defendants. At a hearing held September 30, 2009, the court issued a minute order granting the motion for
preliminary injunction and denying the motion for summary judgment without prejudice. As of the date of filing of this quarterly report on Form 10-Q, the Court has not issued a final order on the preliminary injunction.



|Item 1A. | Risk Factors
|-------- | ------------

Included
below is a description of risk factors related to our business to enable readers to assess, and be appropriately apprised of, many of the risks and uncertainties applicable to the forward-looking statements made in this quarterly report on Form
10-Q. The risks and uncertainties set forth below are not all of the risks and uncertainties facing our business, but we do believe that they reflect important ones. You should carefully consider the risks described below and elsewhere in this
report, which could materially adversely affect our business, results of operations or financial condition. In those cases, the



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trading price of our common stock could decline and you may lose all or part of your investment. Given these risks and uncertainties, you are cautioned not to place undue reliance on
forward-looking statements. The risk factors described in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2008, as filed with the SEC on March 4, 2009, are set forth below. These risk factors
have not substantively changed, except for those identified by asterisk and restated below.

Risks Related to our Financial Performance

Worldwide economic turmoil may affect our financial performance or our ability to forecast our business.*

The Companys operations and performance can depend significantly on worldwide economic conditions and its impact on purchases of our
products by our customers. In the past year, these economic conditions had deteriorated significantly in many countries and regions, which impacted our financial results. Future economic turmoil could cause unexpected fluctuations in demand for our
customers products that could adversely affect our financial results. Consumers may alter purchasing activities in response to economic uncertainty, or customers could change or scale back product development efforts or other sales activities
that could affect purchases of our products. This economic uncertainty could also affect our ability to provide or meet specific forecasted results, as it could be unclear as to what long-term effect these economic conditions and uncertainties would
have on the marketplace or our future business. If we are unable to adequately respond to unforeseeable changes in demand resulting from general economic conditions, or if these economic conditions persist or continue to deteriorate, our financial
condition and operating results may be materially adversely affected.

Our financial performance in the past has fluctuated and may
continue to do so in the future.*

We have been profitable on an annual basis since 2004, following annual net losses from
1996 through 2003, and as of September 30, 2009, we had an accumulated deficit of $12.8 million. While we have experienced revenue growth in recent years, the rate of revenue growth has fluctuated significantly over such periods.
Specifically, our annual net revenue increased 39% to $104.2 million in 2008, from $74.7 million in 2007, and revenue increased 0.1% to $74.7 million in 2007 from $74.6 million in 2006. We expect our quarterly and annual revenue to continue to
fluctuate between periods. Our net revenue may decline over a period to period basis and we may not maintain profitability on a quarterly or annual basis. Accordingly, you should not rely on the results of any prior quarterly or annual periods as an
indication of our future revenue growth or financial results. Our ability to maintain profitability on a quarterly or annual basis depends in part on the rate of growth of our target markets, the continued acceptance of our and our customers
products, the competitive position of our products, our ability to develop new products, our ability to secure adequate manufacturing capacity and our ability to manage expenses. Because many of our expenses are fixed in the short term or incurred
in advance of anticipated revenue, we may not be able to decrease our expenses in a timely manner to offset any shortfall in revenue.

Our
operating results have fluctuated in the past, and we expect a number of factors to cause our operating results to fluctuate in the future, making it difficult for us to accurately forecast our operating results.*

In the past, our net revenue and operating results have fluctuated from quarter to quarter and year to year, and we expect them to continue
to do so in the future. A number of factors, many of which are beyond our control, are likely to cause our net revenue and operating results to fluctuate. These factors include, but are not limited to:



| |  |  | instability or deterioration in worldwide economic conditions;
| | - |  | --------------------------------------------------------------



| |  |  | our customers failure to pay us on a timely basis, or at all;
| | - |  | --------------------------------------------------------------



| |  |  | varying order patterns in the markets in which we sell our products;
| | - |  | --------------------------------------------------------------------



| |  |  | the loss of one or more key customers, or a significant reduction in sales to, or significant product returns by, one or more key customers;
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------



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| |  |  | the loss of one or more key distributors, or a significant reduction in orders from one or more key distributors;
| | - |  | -----------------------------------------------------------------------------------------------------------------



| |  |  | demand for our products or the electronic systems into which our products are incorporated and our ability to accurately forecast such demand;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | our ability to develop new products or new generations and versions of our existing products that achieve market acceptance in a timely manner;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the timing of introductions of competing products or technologies;
| | - |  | ------------------------------------------------------------------



| |  |  | changes in orders both received and shipped during the same quarter (our turns business);
| | - |  | -------------------------------------------------------------------------------------------



| |  |  | our management of our own inventory levels to meet changes in demand;
| | - |  | ---------------------------------------------------------------------



| |  |  | our ability to fulfill orders for our products in a timely manner, or at all;
| | - |  | -----------------------------------------------------------------------------



| |  |  | the volatile nature of the semiconductor industry;
| | - |  | --------------------------------------------------



| |  |  | changes in the prices of our products or the electronic systems into which our products are incorporated;
| | - |  | ---------------------------------------------------------------------------------------------------------



| |  |  | disputes regarding intellectual property rights;
| | - |  | ------------------------------------------------



| |  |  | litigation involving us or our products;
| | - |  | ----------------------------------------



| |  |  | our ability to obtain sufficient capacity from foundries and other third-party subcontractors to manufacture, assemble and test our products on a
timely and cost-effective basis;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the ability of our foundries and third-party subcontractors to achieve satisfactory yields or quality;
| | - |  | ------------------------------------------------------------------------------------------------------



| |  |  | the ability of our manufacturing subcontractors to obtain an adequate supply of the raw materials used in the manufacture of our products on a timely
and cost-effective basis;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | changes in the level of our expenses, including the cost of materials used to manufacture our products and expenses incurred in complying with new laws
and regulations applicable to us; and
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | our ability to adequately support our future growth;
| | - |  | ----------------------------------------------------

Due to these and other factors discussed in this report, you should not rely upon the results of any prior quarter or year as an indication of our future operating performance.

We are exposed to credit risk and payment delinquencies on our accounts receivable, and this risk has been heightened during the current decline in
economic conditions.

A substantial majority of our outstanding accounts receivables are not covered by collateral or
credit insurance. In addition, our standard terms and conditions permit payment within a specified number of days following shipment of product. While we have procedures to monitor and limit exposure to credit risk on our receivables, there can be
no assurance such procedures will effectively limit our credit risk and avoid losses. As economic conditions change and worsen, certain of our customers may face liquidity concerns and may be unable to satisfy their payment obligations, which would
have a material adverse effect on our financial condition and operating results.

Risks Related to our Markets and Customers

We target our sales and marketing efforts in particular markets, and in these markets we have experienced varying order patterns, and
if demand for our products in these markets declines, or if we are unable to adjust to the varying order patterns in these markets or expand into new markets, our business would be harmed.*

In 2008 and during the first three quarters of 2009, a significant portion of our net revenue was derived from the sale of our products in
the server and storage markets. If the demand for our products in these markets declines, or if demand for products in the other markets we are targeting, such as the consumer and networking markets, does not continue to develop, we would need to
further diversify and expand our target markets. If we are unable to do so in a timely and cost-effective manner, our business and operating results could be harmed.



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In addition, our business in these markets has been subject to varying order patterns, and
we expect business in new markets we enter into will similarly be subject to varying order patterns. In particular, our operating results could be negatively impacted during the first quarter of each year due to the lunar New Year holidays in Asia,
during which time many of our customers, manufacturers, and subcontractors cease or significantly reduce their operations. We also address higher-volume applications across multiple markets, which applications could include desktop and notebook
computers, digital cameras, digital televisions, digital video recorders, or DVRs, game consoles, graphics cards, hard disk drives, printers and set-top boxes. In these higher-volume applications, we expect a disproportionate amount of our net
revenue to be generated during the second half of the year as a result of the December holiday season. If we are unable to adjust production of our products or the levels of our operating expenses to address changes in demand, our operating results
would be harmed.

We depend on a small number of customers for substantially all of our net revenue and the loss of, or a significant
reduction in orders from, any of them would significantly reduce our net revenue and adversely affect our operating results.*

We sell our products primarily to original equipment manufacturers, or OEMs, original design manufacturers, or ODMs, contract equipment manufacturers, or CEMs, and merchant power supply manufacturers, either directly through our internal
sales force or indirectly through distributors and outsourced suppliers. Certain of these customers in turn sell more broadly to multiple companies that directly address consumer demand. The markets in which we sell products, particularly in the
workstation and desktop market and the consumer and portable market, are prone to significant and unpredictable changes in demand, and our product sales are directly affected by the ability of our concentrated customer base to sell their products or
electronic systems that incorporate our products. If these electronic systems are not commercially successful or if the development or commercial introduction of such electronic systems is delayed or fails to occur as planned or forecasted, or if
our customers do not consistently manage their inventory of products we sell to them, our operating results will be adversely affected. We expect a significant amount of our revenue to continue to come from the commercial introduction of new systems
making our revenue more difficult to forecast.

In the third quarter of 2009, three customers each accounted for more than 10%
of our net revenue, and collectively accounted for at least 70% of our net revenue, and in 2008, three customers each accounted for over 10% of our net revenue, and collectively accounted for approximately 71% of our net revenue. While we report
revenue for direct sales to particular customers, our sales data may not accurately reflect the additional indirect demand from distributors and outsourced suppliers who purchase our products pursuant to their business relationships with
such significant customers. Because we have less visibility into and are not able to quantify this indirect demand, we are unable to determine how much additional revenue these significant customers may affect. In addition, our sales
data also may not identify customers who do not directly account for 10% of our net revenue, but may be significant in that such customers also generate significant indirect demand from distributors and outsourced suppliers. If any such
significant customer were to stop incorporating our products or third party products containing our components into its designs, we would not only lose the direct revenue we receive from the significant customer, but we could also lose a portion of
the revenue from third parties who do business with such significant customer. We expect demand from a small number of customers to continue to account for a substantial portion of our net revenue for the current fiscal year. In addition, our
accounts receivable tend to be concentrated with a small group of customers and we expect this to continue. Consolidation among our customers may increase our customer concentration. The loss of any of our major customers could materially adversely
impact our operating results and financial position.

We sell a limited number of products and a reduction in demand for these products
would harm our business and operating results.

We derive substantially all of our net revenue from the sale of integrated
voltage regulator semiconductors and scalable voltage regulator semiconductor chipsets, and we expect to continue to derive substantially all of our net revenue from these products for the current fiscal year. If demand for these products declines
or does not grow, we may be forced to diversify our product offerings. Factors that could



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cause the demand for our products to decline include downturns in the semiconductor industry or general economic conditions, the introduction of competing products, our pricing strategies and the
pricing strategies of our competitors, or a decline in demand for the electronic systems into which our products are incorporated. Our inability to diversify our products in a timely and cost-effective manner would harm our business and operating
results.

If we are unable to timely develop new products or new generations and versions of our existing products that
achieve market acceptance, our operating results and competitive position could be harmed.

Our industry is characterized
by intense competition, rapidly evolving technology, and continually changing customer requirements. These factors could render our existing products obsolete. Accordingly, our ability to compete in the future will depend in large part on our
ability to identify and develop new products or new generations and versions of our existing products that achieve market acceptance on a timely and cost-effective basis, and to respond to changing requirements. If we are unable to do so, our
business, operating results, and financial condition could be negatively affected.

The successful development and market
acceptance of our products depend on a number of factors, including, but not limited to:



| |  |  | our accurate prediction of changing customer requirements;
| | - |  | ----------------------------------------------------------



| |  |  | timely development of new designs;
| | - |  | ----------------------------------



| |  |  | timely qualification and certification of our products for use in electronic systems;
| | - |  | -------------------------------------------------------------------------------------



| |  |  | commercial acceptance and production of the electronic systems into which our products are incorporated;
| | - |  | --------------------------------------------------------------------------------------------------------



| |  |  | availability, quality, price, performance, and size of our products relative to competing products and technologies;
| | - |  | --------------------------------------------------------------------------------------------------------------------



| |  |  | our customer service and support capabilities and responsiveness;
| | - |  | -----------------------------------------------------------------



| |  |  | successful development of relationships with existing and potential new customers;
| | - |  | ----------------------------------------------------------------------------------



| |  |  | successful development of relationships with key developers of advanced digital semiconductors; and
| | - |  | ---------------------------------------------------------------------------------------------------



| |  |  | changes in technology, industry standards or consumer preferences.
| | - |  | ------------------------------------------------------------------

Products we have recently developed and which we are currently developing may not achieve market acceptance. If these products fail to
achieve market acceptance, or if we fail to timely develop new products that achieve market acceptance, our business, operating results, and competitive position could be adversely affected.

Because we often manufacture products in advance of receiving purchase orders, or if existing purchase orders are changed or cancelled, we are subject to
inventory risks and manufacturing costs that could negatively impact our operating results.*

To ensure availability of
our products for our customers, we typically start the manufacturing of our products based on forecasts provided by these customers in advance of receiving purchase orders. However, these forecasts do not represent binding purchase commitments, and
we do not recognize revenue from these products until they are shipped to the customer. In addition, because we primarily sell our products to distributors and outsourced suppliers and not directly to electronic system designers, we have more
limited visibility into ultimate product demand, which makes forecasting more difficult for us. We incur inventory and manufacturing costs in advance of anticipated revenue. Demand for our products may not materialize and if we overestimate customer
demand for our products, manufacturing based on forecasts subjects us to risks of high inventory carrying costs and obsolescence and may increase our costs. Similarly, if we underestimate demand, we may not have sufficient product inventory and may
lose market share and damage customer relationships, which also could harm our business.



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In addition, our current sales practice generally allows customers to, and customers
routinely do, revise and cancel orders and reschedule delivery dates on relatively short notice pursuant to changes in the customers requirements. If, after initial orders are placed, we change certain features of our product to accommodate
customer requirements, we may create additional inventory that we may not be able to sell. If purchase orders are changed or cancelled, or if shipments are delayed, we may end up with excess inventory that we cannot sell, which could result in the
loss of anticipated revenue and an increase in our costs due to excess inventory charges which could materially impact our financial results.

Our inventory levels were $8.5 million at the end of the third quarter of 2009, and inventory turns, calculated as our annualized cost of revenue for the quarter divided by our inventory as of the
end of such quarter, increased to 5.7 turns in the third quarter of 2009 compared to 3.9 turns in the second quarter of 2009 and 4.6 turns in the third quarter of 2008. If the amount of inventory we are holding increases or our inventory turns
decrease, the risk of a potential inventory write-down and adverse impact on our financial results increases.

We rely primarily on a small
number of distributors to market and distribute our products, and if we fail to maintain or expand these relationships, our net revenue would likely decline.*

Many purchases of our products are made through a concentrated group of distributors. Sales to these distributors account for a significant portion of our net revenue. Our sales to distributors accounted
for 29% of our net revenue in the third quarter of 2009 compared to 54% in 2008. None of our distributors are required to purchase a specified minimum level of products from us. Currently, our sales to distributors are made pursuant to standard
purchase orders rather than long-term contracts and although we do not grant them a right of return pursuant to these purchase orders, their orders may be cancelled or changed more readily than if we had long-term purchase commitments. In the event
of a cancellation, reduction or delay of an order, we may not have enough time to reduce operating expenses to minimize the effect of the lost revenue on our business. We also rely on our distributors to provide certain support services and other
customer service to our customers. If they fail to provide appropriate levels of support and service to our customers on a timely basis, our relationships with our customers will suffer.

We need to maintain and expand our relationships with distributors, develop additional channels for the distribution and sale of our
products, and effectively manage these relationships. If we fail to do so, our distributors may decide not to include our products among those that they sell or they may not make marketing and selling our products a priority. In addition, our
distributors may sell product lines that are competitive with ours. If we fail to successfully manage our relationships with distributors, our business would be harmed.

We are subject to the highly cyclical nature of the semiconductor industry and any future downturns could significantly harm our business.

Our business is heavily influenced by the cyclical nature of the semiconductor industry. The semiconductor industry has experienced
significant downturns, often in connection with, or in anticipation of, maturing product cycles of both semiconductor companies and their customers and declines in general economic conditions. These downturns have been characterized by production
overcapacity, high inventory levels, and accelerated erosion of average selling prices. Any future downturns could significantly harm our business or reduce our revenue from one period to the next or for a prolonged period of time. From time to
time, the semiconductor industry also has experienced periods of increased demand and production capacity constraints. We may experience substantial changes in future operating results due to factors that affect the semiconductor industry generally.



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Risks Related to Competition, Intellectual Property, Litigation and Regulation

We face significant competition and many of our competitors have greater resources than we have, and thus we may be unsuccessful in competing against
current and future competitors.

The markets for semiconductors generally, and power management semiconductors in
particular, are intensely competitive, and we expect competition to increase and intensify in the future as larger semiconductor manufacturers enter into our market space. Increased competition may result in price pressure, reduced profitability,
and loss of market share, any of which could seriously harm our business, revenue, and operating results. Our ability to compete effectively and to expand our business will depend on a number of factors, including, but not limited to:



| |  |  | our ability to continue to recruit and retain engineering talent;
| | - |  | -----------------------------------------------------------------



| |  |  | our ability to introduce new products in a timely manner;
| | - |  | ---------------------------------------------------------



| |  |  | the pricing of components used in competing solutions;
| | - |  | ------------------------------------------------------



| |  |  | the pace at which our customers incorporate our products into their systems;
| | - |  | ----------------------------------------------------------------------------



| |  |  | the availability of foundry, assembly, and test capacity for our products;
| | - |  | --------------------------------------------------------------------------



| |  |  | protection of our products by effective utilization of intellectual property laws; and
| | - |  | --------------------------------------------------------------------------------------



| |  |  | general economic conditions.
| | - |  | ----------------------------

We consider our primary competitors to include International Rectifier, Intersil, Linear Technology, Maxim Integrated Products, Infineon Technologies and Texas Instruments. In addition, we compete with a
number of other companies, some of which may become significant competitors. We may also face competition from new and emerging companies that may enter our existing or future markets. Many of our competitors and potential competitors have longer
operating histories, greater name recognition, complementary product offerings, a larger customer base, longer relationships with customers and distributors, and significantly greater financial, sales, marketing, manufacturing, distribution,
technical, and other resources than we do. As a result, they may be able to respond more quickly to customer requirements, to devote greater resources to the development, promotion, and sales of their products and to influence industry acceptance of
their products better than we can. These competitors may also be able to adapt more quickly to new or emerging technologies or standards and may be able to deliver products with performance comparable or superior to that of our products at a lower
cost. In addition, in the event of a manufacturing capacity shortage, these competitors may have or be able to obtain silicon wafer fabrication capacity when we are unable to obtain such capacity.

We expect our competitors to continue to introduce new or enhanced products technologies with greater performance and improved pricing,
which could cause our products to become obsolete or uncompetitive and harm our operating results.

The average selling prices of our
products could decrease rapidly, which may negatively impact our net revenue and operating results.

The average selling
prices for power management solutions have historically declined over time. Factors that we expect to cause downward pressure on the average selling price for our products include competitive pricing pressures, the cost sensitivity of our customers,
particularly in the higher-volume markets, new product introductions by us or our competitors, and other factors. To maintain acceptable operating results, we will need to offset any reduction in the average selling prices of our products by
developing and introducing new products and developing new generations and versions of existing products on a timely basis, increasing sales volume, and reducing costs. If the average selling prices for our products decline and we are unable to
offset those reductions, our operating results will suffer.

Our ability to compete will be harmed if we are unable to adequately protect
our intellectual property.*

We rely primarily on a combination of patent, trademark, trade secret, and copyright law and
contractual restrictions to protect our intellectual property. These afford only limited protection. Despite our efforts to protect our proprietary rights, unauthorized parties may attempt to obtain, copy, or use information that we regard as
proprietary, such as product design and manufacturing process expertise. In November 2008, we filed a lawsuit in the United States District Court in the Northern District of California against Primarion, Inc., Infineon Technologies AG and Infineon
Technologies North America Corporation



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(collectively, the Defendants) for infringement of several of our patents. On or about December 18, 2008, the Defendants filed an answer generally denying the allegations, and
stating affirmative defenses and counterclaims, including claims for declaratory relief for inequitable conduct before the U.S. patent office and for Sherman Act violations. On July 10, 2009, Volterra filed a notice and motion for preliminary
injunction and a motion for summary judgment against the Defendants. The hearing was held September 30, 2009, at which time the court issued a minute order granting the motion for preliminary injunction and denying the motion for summary
judgment without prejudice. As of the date of filing of this quarterly report on Form 10-Q, the Court has not issued a final order on the preliminary injunction. Such action or any similar action could consume significant financial and other
resources, and in the third quarter of 2009, our litigation related expenses were approximately $1.7 million. Although the Company strongly believes in the validity of its position, we are unable to assess the possible outcome of this litigation,
and there is no guarantee that any such proceedings would be successful on its merits or that we will receive monetary damages awards or recoup our legal expenses. Because of the nature and inherent uncertainties of litigation, should the outcome of
these actions be unfavorable, our business, financial condition, results of operations or cash flows could be materially adversely affected.

As of September 30, 2009, we had 53 issued patents and 34 patent applications pending in the United States, and nine foreign patent applications pending. These patents have expiration dates ranging
from December 2017 to June 2027. Our pending patent applications and any future applications may not result in issued patents or may not be sufficiently broad to protect our proprietary technologies. Moreover, policing any unauthorized use of our
products is difficult and costly, and we cannot be certain that the measures we have implemented will prevent misappropriation or unauthorized use of our technologies, particularly in foreign jurisdictions where the laws may not protect our
proprietary rights as fully as the laws of the United States. The enforcement of patents by others may harm our ability to conduct our business. Others may independently develop substantially equivalent intellectual property or otherwise gain access
to our trade secrets or intellectual property. Our failure to effectively protect our intellectual property could harm our business.

Assertions by third parties of infringement by us or our vendors of their intellectual property rights could result in significant costs and cause our operating results to suffer.

The semiconductor industry is characterized by vigorous protection and pursuit of intellectual property rights and positions, which has
resulted in protracted and expensive litigation for many companies. In the future we may receive communications from various industry participants alleging infringement of patents, trade secrets or other intellectual property rights. Any lawsuits
resulting from such allegations could subject us to significant liability for damages and invalidate our proprietary rights. These lawsuits, regardless of their success, would likely be time-consuming and expensive to resolve and would divert
managements time and attention. Any potential intellectual property litigation also could force us to take steps that may be harmful to our business, including, but not limited to:



| |  |  | stop selling products or using technology that contain the allegedly infringing intellectual property;
| | - |  | ------------------------------------------------------------------------------------------------------



| |  |  | pay damages to the party claiming infringement;
| | - |  | -----------------------------------------------



| |  |  | attempt to obtain a license to the relevant intellectual property, which may not be available on reasonable terms or at all; and
| | - |  | --------------------------------------------------------------------------------------------------------------------------------



| |  |  | attempt to redesign those products that contain the allegedly infringing intellectual property.
| | - |  | -----------------------------------------------------------------------------------------------

In addition, the third-party foundries or subcontractors that manufacture our products may also face litigation for claims of intellectual
property. Although not directly creating liabilities for us, such litigation may cause such third parties to cease providing services to us, or may cause us to incur increased costs, either of which may harm our business.

We may also initiate claims or litigation against third parties for infringement of our proprietary rights or to establish the validity of
our proprietary rights. In some cases, we may have an existing direct or indirect relationship with these third parties, such as customers, vendors, partners or companies within the industry that generally affect our business. Such claims or
litigation could not only affect our intellectual property or proprietary rights, but may also affect and disrupt our business relationship with such third parties, impairing our ability to conduct our business and adversely affecting our financial
and operational results.



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Any potential dispute involving our patents or other intellectual property could also include our
customers, which could trigger our indemnification obligations to them and result in substantial expense to us.

In any
potential dispute involving our patents or other intellectual property, our customers could also become the target of litigation. Because we indemnify our customers against claims made against them based on allegations that our products infringe
intellectual property rights, such litigation could result in substantial expense for us. In addition to the time and expense required for us to indemnify our customers, any such litigation could hurt our relations with our customers and cause our
operating results to be harmed.

Our stock price will fluctuate and may be volatile, which could result in substantial losses for investors
and significant costs related to litigation.

Investors may be unable to resell their shares at or above the purchase
price and this could result in substantial losses for those investors. The market price of our common stock may fluctuate significantly in response to a number of factors, some of which are beyond our control. These factors include, but are not
limited to:



| |  |  | actual or anticipated fluctuations in our revenue, operating results or growth rate;
| | - |  | ------------------------------------------------------------------------------------



| |  |  | failure to meet the expectations of securities analysts or investors with respect to our financial performance;
| | - |  | ---------------------------------------------------------------------------------------------------------------



| |  |  | actual or anticipated fluctuations in our competitors operating results or changes in their growth rates;
| | - |  | ----------------------------------------------------------------------------------------------------------



| |  |  | sales of our common stock or other securities in the future;
| | - |  | ------------------------------------------------------------



| |  |  | stock market price and trading volume fluctuations of publicly-traded companies in general and semiconductor companies in particular;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the trading volume of our common stock;
| | - |  | ---------------------------------------



| |  |  | changes in financial estimates and ratings by securities analysts for us, our competitors or companies in the semiconductor industry generally;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | changes in the condition of the financial markets, the economy as a whole, the semiconductor industry, our customers or our competitors;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------



| |  |  | publicity about the semiconductor industry, our competitors or our customers; and
| | - |  | ---------------------------------------------------------------------------------



| |  |  | changes in key personnel.
| | - |  | -------------------------

The stock market in general, and the Nasdaq Global Select Market in particular, has experienced extreme price and volume fluctuations in recent years that have often been unrelated or disproportionate to
the operating performance of the listed companies. Broad market and industry factors may materially harm the market price of our common stock, regardless of our operating performance.

In the past, securities class action litigation has often been brought against companies following periods of volatility and decline in the
market price of their securities. If our stock price is volatile or declines, we may be the target of similar litigation in the future. Securities litigation could result in significant costs and divert managements attention and resources,
which could seriously harm our business and operating results.

Environmental laws and regulations could cause a disruption in our business
and operations.

We are subject to various state, federal and international laws and regulations governing the
environment, including those restricting the presence of certain substances in electronic products and making manufacturers of those products financially responsible for the collection, treatment, recycling and



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disposal of certain products. Such laws and regulations have been passed in several jurisdictions in which we operate, including various European Union member countries. We will need to ensure
that we comply with such laws and regulations as they are enacted, and that our third-party semiconductor assembly subcontractors such as Amkor Technology, STATS ChipPAC Ltd., Carsem, Advanced Semiconductor Engineering and UTAC, timely comply with
such laws and regulations. Because we work with subcontractors to make specified modifications to their standard processes, transitioning the manufacturing of our products can require substantial lead time. Any future delay resulting from such
transition could negatively affect product performance, delivery, and yields or increase manufacturing costs. If we, or the subcontractors that we use, fail to timely comply with such laws, our customers may refuse to purchase our products. Such
refusal or delay would have a materially adverse effect on our business, financial condition and results of operations.

Risks Related to
our Manufacturing and Development Activities

Our dependence on third-party semiconductor manufacturers, or foundries, reduces our
control over the manufacture of our products and increases our exposure to third party solvency risks, which could harm our business.

We are a fabless semiconductor company and, as such, we rely on third-party semiconductor manufacturers, or foundries, such as Chartered Semiconductor Corporation and Taiwan Semiconductor Manufacturing
Corporation. The ability of these foundries to provide silicon wafers to us is limited by their available capacity. Moreover, the price of our silicon wafers has in the past fluctuated and is expected to continue to fluctuate, based on changes in
available industry capacity. We do not have long-term supply contracts with any of our foundries. Therefore, our manufacturers could choose to prioritize capacity for other customers, particularly larger customers, reduce or eliminate deliveries to
us on short notice or increase the prices they charge us. There are significant risks associated with our reliance on these third-party manufacturers, including, but not limited to:



| |  |  | inability to increase production and achieve acceptable yields on a timely basis;
| | - |  | ---------------------------------------------------------------------------------



| |  |  | reduced control over delivery schedules and product quality;
| | - |  | ------------------------------------------------------------



| |  |  | inability of our foundries to obtain an adequate supply of the raw materials used in the manufacturing of our products on a timely and cost-effective
basis;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | increased exposure to potential misappropriation of our intellectual property;
| | - |  | ------------------------------------------------------------------------------



| |  |  | limited warranties on silicon wafers or products supplied to us;
| | - |  | ----------------------------------------------------------------



| |  |  | labor shortages or labor strikes;
| | - |  | ---------------------------------



| |  |  | natural disasters affecting countries in which we conduct our business or in which our products are manufactured; and
| | - |  | ---------------------------------------------------------------------------------------------------------------------



| |  |  | political instability in countries where our products are manufactured.
| | - |  | -----------------------------------------------------------------------

In addition, these third party manufacturers may elect or may be forced to shut down particular facilities for reasons beyond our control,
which may require us to transition the manufacturing of our products to other facilities of such third party manufacturer or to other third party manufacturers. Because we work with foundries to make specified modifications to their standard process
technologies, transitioning the manufacturing of our products to other foundries or other facilities of an existing foundry can require process design changes and may require substantial lead time. Any such delay resulting from such transition could
negatively affect product performance, delivery, and yields or increase manufacturing costs. If we are not able to obtain foundry capacity as required, our relationships with our customers would be harmed and our net revenue would likely decline.

Deterioration of worldwide economic conditions and financial markets and tightening in credit markets may adversely impact
the financial position of our third party manufacturers. If our third party manufacturers are unable to obtain the necessary capital to operate their business, this may also impact their ability to provide us with the foundry capacity we need, or
may adversely affect their ability to provide timely services or to make timely deliveries of products to us. Any such result could adversely affect our operations and financial condition.



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We rely on third-party subcontractors to assemble and test our products and our failure to successfully
manage our relationships with these subcontractors could damage our relationships with our customers, decrease our net revenue, and limit our growth.

We rely on third-party subcontractors, such as Amkor Technology, STATS ChipPAC Ltd., Carsem, Advanced Semiconductor Engineering and UTAC, to assemble and test our products. None of these third-party
vendors are obligated to perform services or supply products to us for any specific period, or in any specific quantities, except as may be provided in a particular purchase order. Moreover, none of our assembly and test subcontractors has provided
contractual assurances to us that adequate capacity will be available to us to meet future demand for our products. We are subject to many of the same risks with these vendors as with our foundries, including risks related to the ability of such
vendors to continue to provide us with the agreed-upon services or products as needed, and our ability to control delivery schedules and product quality. If we do not successfully manage these relationships, the quality of products shipped to our
customers may decline, which would damage our relationships with customers, decrease our net revenue, and negatively impact our growth.

Our products are highly complex and may require modifications to resolve previously undetected design or process errors or defects and to meet our customers specifications, which could lead to an increase in our costs, a loss of
revenue and customers, a delay in market acceptance of our products, or product liability claims.

Our power management
products are highly complex and may contain previously undetected errors or defects in design or that occur in the manufacturing or assembly process that may significantly affect yields or quality. If we deliver products with errors or defects, we
may suffer a reduction in or deferral of our revenue as a result of significant product returns and our operating results and financial position could be materially impacted. We may incur product replacement costs, and we may have to rework or scrap
inventory that is returned. In addition, we may incur additional manufacturing and/or development costs to fix the defect or error and may have to rework or scrap inventory that had been built with the error or defect resulting in additional costs.
If we are unable to fully recover or be reimbursed for all or a portion of these costs, our financial position and operating results may be adversely impacted. Also as a result of shipping products with defects or errors, our credibility and the
market acceptance of our products could be harmed. Defects could also lead to liability for defective products as a result of lawsuits against our customers or us. We have agreed to indemnify our customers in some circumstances against liability
from defects in our products. In the future, as we increase the amount of business with any given customer, we may be expected to agree upon additional terms and conditions of sale regarding product quality or product defects which may increase our
costs, obligations and liabilities in connection with our product sales. Although we maintain insurance coverage consistent with customary industry practice to defray potential costs from lawsuits, including lawsuits arising from product liability,
if liabilities arise that are not effectively limited or covered by such insurance, a successful product liability claim could require us to pay a significant amount of damages, which could have a material adverse impact on our financial results and
financial position.

Our products comprise only part of the complex electronic systems in which they are used. As a result,
our products must operate according to specifications with the other components in the electronic system. If other components of the electronic system fail to operate properly with our products, we may be required to incur additional development
time and costs to enable interoperability of our products with these other components and may not be able to sell our existing inventory resulting in additional cost of revenue and materially adversely affecting our financial results.

Any disruption to our operations or the operations of our foundries or assembly and test subcontractors resulting from earthquakes, droughts, or other
natural disasters, public health issues or other catastrophic events beyond our control could significantly delay the production or shipment of our products.



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Our principal offices are located in California. In addition, we rely on foundries and
assembly and test subcontractors in South Korea, Malaysia, the Philippines, Singapore, Taiwan, Thailand and China. The risk of an earthquake in these Pacific Rim locations is significant. The occurrence of an earthquake, drought, floods, fires or
other natural disaster near our principal offices or our subcontractors locations could result in damage, power outages, and other disruptions that impair our design, manufacturing, and assembly capacity and otherwise interfere with our
ability to conduct our business. In addition, public health issues, acts of terrorism or other catastrophic events could significantly delay the production or shipment of our products. Any disruption resulting from such events could cause
significant delays in the shipment of our products until we are able to shift our fabrication, assembling, testing or other operations from the affected subcontractor to another third-party vendor.

Because we rely on third party foundries and assembly and test subcontractors, we have experienced, and may in the future experience, delays in the
manufacture, development and introduction of our new products, which may harm our business and operating results.*

The
development of our products is highly complex, costly and inherently risky. Because we rely on third party foundries and assembly and test subcontractors, we have experienced, and may in the future experience, delays in the manufacture, development
and introduction of new products or new generations and versions of our existing products. If we are unable to manufacture, develop or introduce products on a timely basis, we may lose new or existing market and customer opportunities and our
financial results or competitive position could be harmed. We cannot assure you that the procedures that we have implemented to minimize delays will be effective or that delays may not occur in the future. In particular, we expect to continue to
bring new products to production in new manufacturing and assembly processes. Any future delays in the introduction of new products or new generations or versions of our existing products could materially harm our business and operating results.

The nature of the design process requires us to incur expenses prior to earning revenue associated with those expenses, and we will have
difficulty selling our products and generating profits if electronic system designers do not design our products into their electronic systems.

We devote significant time and resources in working with electronic system designers to get our products designed into their systems. If the system designer chooses a competitors product for its
electronic system, it becomes significantly more difficult for us to sell our products for use in that electronic system because changing suppliers involves significant cost, time, effort, and risk for electronic system designers. If electronic
system designers do not design our products into their systems, our business would be materially adversely affected.

We often
incur significant expenditures in the development of a new product without any assurance that electronic system designers will select our product for use in their electronic systems. If we incur such expenditures and fail to be selected, or if we
are selected and subsequently excluded from such designs, our operating results will be adversely affected. Furthermore, even if electronic system designers use our products in their electronic systems, we cannot be assured that these systems will
be commercially successful or that we will receive any associated revenue.

Even if our products are selected for design into
a particular electronic system, a substantial period of time will elapse before we generate revenue related to the significant expenses we have incurred. The reasons for this delay generally include, but are not limited to, the following:



| |  |  | it can typically take up to 12 months from the time our products are selected to complete the design process, and in some cases such design
process may take substantially more time to complete;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | it can typically take an additional six to 12 months to complete commercial introduction of the electronic systems that use our products, and in
some cases such introduction may take substantially more time to complete, if they are introduced at all;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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| |  |  | our customers usually require a comprehensive technical evaluation of our products before they incorporate them into their electronic systems, which
may also result in our products being excluded from the system design for reasons other than our design specifications;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | OEMs typically limit the initial release of their electronic systems to evaluate performance and consumer demand; and
| | - |  | ---------------------------------------------------------------------------------------------------------------------



| |  |  | the development and commercial introduction of products incorporating new technology are frequently delayed.
| | - |  | ------------------------------------------------------------------------------------------------------------

As a result, we may be unable to accurately forecast the volume and timing of our orders and revenue. In addition, incurring research and
development expenses prior to generating revenue may cause our operating results to fluctuate significantly from period to period.

Risks
Related to our International Activities

We have significant international activities and customers, and plan to continue such efforts,
which subjects us to additional business risks including increased logistical complexity, additional regulatory restrictions and political instability.*

A number of our customers are multinational corporations, with operations located throughout the world. In both 2008 and during the nine months ending September 30, 2009, 98% of our net revenue was
attributable to customers, or customers operations, located outside of the United States, primarily in Asia, and we anticipate that a significant portion of our future revenue will continue to be generated by sales to these customers or
to the customers operations in Asia. We have engineering, sales, and operations personnel in Japan, Singapore, Taiwan, China and the United Kingdom. Our foundries, assembly and test subcontractors, and distributors are also primarily located
in Asia. Our international operations and sales are subject to a number of risks, including, but not limited to:



| |  |  | cultural and language barriers;
| | - |  | -------------------------------



| |  |  | increased complexity and costs of managing international operations;
| | - |  | --------------------------------------------------------------------



| |  |  | protectionist laws and business practices that favor local competition in some countries;
| | - |  | -----------------------------------------------------------------------------------------



| |  |  | multiple, conflicting and changing laws and regulatory and tax environments;
| | - |  | ----------------------------------------------------------------------------



| |  |  | potentially longer and more difficult collection periods;
| | - |  | ---------------------------------------------------------



| |  |  | political instability, international terrorism, and anti-American sentiment, particularly in emerging markets;
| | - |  | --------------------------------------------------------------------------------------------------------------



| |  |  | highly volatile economies in Asia;
| | - |  | ----------------------------------



| |  |  | difficulty in hiring qualified management, technical sales personnel, and applications engineers; and
| | - |  | -----------------------------------------------------------------------------------------------------



| |  |  | less effective protection of intellectual property than is afforded to us in the United States.
| | - |  | -----------------------------------------------------------------------------------------------

Our inability to overcome these risks could adversely affect our foreign operations, and some of our customers and suppliers, and could harm
our business and operating results.

We do not hedge fluctuations in currency exchange rates, which could harm our financial results.*

Substantially all sales to international customers and purchases of production materials and manufacturing services from
international suppliers in 2008 and during the nine months ending September 30, 2009 were denominated in U.S. dollars. However, fluctuations in currency exchange rates could have an effect on our results of operations and financial
condition. An increase in the value of the U.S. dollar relative to foreign currencies could make our products more expensive for our international customers to purchase, thus rendering the prices of our products less competitive. If the value
of the U.S. dollar decreases relative to foreign currencies, this could result in an increase in the effective costs of working with our international vendors or suppliers, and our ability to control our cost structure and maintain our
financial results could be harmed.



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Risks Related to our Growth and Organization

We may undertake acquisitions to expand our business that may pose risks to our business and dilute the ownership of our existing stockholders.

We will evaluate opportunities to acquire other businesses, products or technologies that would complement our current
offerings, expand the breadth of markets we can address or enhance our technical capabilities. Acquisitions that we may potentially make in the future entail a number of risks that could materially adversely affect our operating and financial
results, including, but not limited to:



| |  |  | our lack of experience acquiring other businesses;
| | - |  | --------------------------------------------------



| |  |  | problems integrating the acquired operations, technologies, or products with our existing business and products;
| | - |  | ----------------------------------------------------------------------------------------------------------------



| |  |  | diversion of managements time and attention from our core business;
| | - |  | --------------------------------------------------------------------



| |  |  | the need for financial resources above our planned investment levels;
| | - |  | ---------------------------------------------------------------------



| |  |  | overestimation of potential synergies or a delay in realizing those synergies;
| | - |  | ------------------------------------------------------------------------------



| |  |  | difficulties in retaining business relationships with suppliers and customers of the acquired company;
| | - |  | ------------------------------------------------------------------------------------------------------



| |  |  | risks associated with entering markets in which we lack prior experience; and
| | - |  | -----------------------------------------------------------------------------



| |  |  | the potential loss of key employees of the acquired company.
| | - |  | ------------------------------------------------------------

Future acquisitions also could cause us to incur debt or contingent liabilities or cause us to issue equity securities that would reduce the
ownership percentages of existing stockholders. Furthermore, acquisitions could result in adverse tax consequences, substantial depreciation, deferred compensation charges, impairment of goodwill, or the amortization of amounts related to deferred
compensation and to identifiable purchased intangible assets, any of which would negatively affect our operating results.

If we do not
effectively manage our growth, our resources, systems, and controls may be strained and our operating results may suffer.

In recent periods, we have continued to increase the scope of our operations and the size of our workforce. This growth has placed, and any future growth of our operations will continue to place, a significant strain on our management
personnel, systems, and resources. We anticipate that we will need to implement a variety of new and upgraded operational and financial systems, procedures, and controls, including the improvement of our accounting and other internal management
systems. We also will need to continue to expand, train, manage, and motivate our workforce, and manage our customer and distributor relationships, develop our internal sales force, and manage our foundry and assembly and test subcontractors. All of
these endeavors will require substantial management effort and skill, and we anticipate that we will require additional personnel and internal processes to manage these efforts. We plan to fund the costs of our operational and financial systems,
additional personnel, and internal processes from current cash balances and funds generated from operations. If we are unable to effectively manage our expanding operations, our revenue and operating results could be materially adversely affected.

We evaluate our internal controls over financial reporting in order to allow management to report on, and our independent
auditors to attest to, our internal controls over financial reporting, as required by Section 404 of the Sarbanes-Oxley Act of 2002 and the rules and regulations of the SEC, which we collectively refer to as Section 404. As we grow and
implement new and upgraded operational and financial systems, procedures, and controls, we will need to maintain internal control over financial reporting. In addition, in the course of our Section 404 compliance, we may identify deficiencies
in our internal controls, some of which may be categorized as significant deficiencies. In the future, we may identify material weaknesses in our internal controls. If we fail to correct the deficiencies that we identify and to maintain the adequacy
of our internal control over financial reporting, as such standards are modified, supplemented or amended from time to time, we may not be able to ensure that we can conclude on an ongoing basis that we have effective internal control over financial
reporting in accordance with Section 404. If we cannot favorably assess, or our independent registered public accountants are unable to provide an unqualified report on the effectiveness of our internal control over financial reporting,
investor confidence in the reliability of our financial reports may be adversely affected, which could have a material adverse effect on our stock price.



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We rely on the services of our key personnel, and if we are unable to retain our current personnel and
hire additional personnel, our ability to develop and successfully market our products could be harmed.

We rely upon the
continued service and performance of a relatively small number of key technical and senior management personnel. If we are unable to retain any of our key technical or senior management personnel, such as Jeffrey Staszak, our President and Chief
Executive Officer, or are unable to fill key positions, our business could be harmed. As a result, our future success depends on retaining our management team and other key employees. We rely on these individuals for the management of our company,
development of our products and business strategy, and management of our strategic relationships, and for the reliability of our financial reporting and the design and maintenance of our internal controls over financial reporting. In addition, we
rely on a relatively small number of analog and mixed-signal design engineers who have the training and experience to design our products. Any of these employees could leave our company with little or no prior notice and could work with our
competitors, subject to their continuing confidentiality obligations to us. We do not have key person life insurance policies covering any of our employees. Additionally, there are a limited number of qualified technical personnel with
significant experience in the design, development, manufacture, and sale of power management semiconductors, and we may face challenges in hiring and retaining these types of employees.

If our computer and communications hardware fails, our business, results of operations and financial condition would be harmed.

Our ability to successfully operate our business depends in part on the efficient and uninterrupted operation of our computer and
communications systems. Substantially all of the computer and communications hardware necessary to operate our business is located at a single leased facility. Our systems and operations are vulnerable to damage or interruption from human error,
fire, flood, power loss, telecommunications failure, terrorist attacks, acts of war, break-ins, computer viruses, earthquakes and similar events, any of which may result in interruptions, delays, loss of critical data, the inability to accept and
fulfill customer orders or the unauthorized disclosure of confidential customer data or proprietary technical information. We do not presently have redundant systems in multiple locations or a formal disaster recovery plan, and our business
interruption insurance may be insufficient to compensate us for losses that may occur. If any of these events or interruptions were to occur, our business and results of operations could be substantially harmed.

Our principal stockholders have significant voting power and may influence actions that may not be in the best interests of our other stockholders.*

As of September 30, 2009, our executive officers, directors, and principal stockholders held a significant portion of
our outstanding common stock. As a result, these stockholders, acting together, may have the ability to exert substantial influence over matters requiring approval of our stockholders, including the election and removal of directors and the approval
of mergers or other business combinations. This concentration of beneficial ownership could be disadvantageous to other stockholders whose interests are different from those of our executive officers, directors, and principal stockholders. For
example, our executive officers, directors, and principal stockholders, acting together with stockholders owning a relatively small percentage of our outstanding stock, could delay or prevent an acquisition or merger even if the transaction would
benefit other stockholders.

Anti-takeover provisions of our charter documents and Delaware law could prevent or delay transactions
resulting in a change in control.

Our certificate of incorporation and our bylaws may make more difficult or discourage,
delay or prevent a change in the ownership of our company or a change in our management or our board of directors. The following are examples of provisions that are included in our certificate of incorporation and bylaws that might have those
effects:



| |  |  | our board of directors is classified so that not all members of our board of directors may be elected at one time;
| | - |  | ------------------------------------------------------------------------------------------------------------------



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| |  |  | directors may only be removed for cause and only with the approval of stockholders holding a majority of our outstanding voting stock;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the ability of our stockholders to call a special meeting of stockholders is prohibited;
| | - |  | ----------------------------------------------------------------------------------------



| |  |  | advance notice is required for nominations for election to our board of directors or for proposing matters that can be acted upon at stockholder
meetings;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | stockholder action by written consent is prohibited, thereby requiring all stockholder actions to be taken at a meeting of our stockholders; and
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | our board of directors may designate the terms of and issue new series of preferred stock, commonly referred to as blank check preferred
stock, with rights senior to those of common stock without stockholder approval.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

In addition, we are also
subject to Section 203 of the Delaware General Corporation Law, which provides, subject to enumerated exceptions, that if a person acquires 15% or more of our voting stock, the person is an interested stockholder and may not engage
in business combinations with us for a period of three years from the time the person acquired 15% or more of our voting stock.

These provisions may have the effect of entrenching our management team and may deprive you of the opportunity to sell your shares to potential acquirers at a premium over prevailing prices. This
potential inability to obtain a premium could reduce the price of our common stock.



|Item 6. | Exhibits
|------- | --------



|            |  |                                                                                                                                                                         
|----------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit No. |  | Description                                                                                                                                                             
|            | 
|3.1(1)      |  | Amended and Restated Certificate of Incorporation of Volterra Semiconductor Corporation.                                                                                
|            | 
|3.2(2)      |  | Amended and Restated Bylaws of Volterra Semiconductor Corporation.                                                                                                      
|            | 
|4.1         |  | Reference is made to Exhibits 3.1 and 3.2.                                                                                                                              
|            | 
|4.2(3)      |  | Specimen stock certificate.                                                                                                                                             
|            | 
|10.1(4)+    |  | 2009 Executive Compensation                                                                                                                                             
|            | 
|31.1        |  | Certification of Chief Executive Officer required under Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended.                            
|            | 
|31.2        |  | Certification of Chief Financial Officer required under Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended.                            
|            | 
|32.1*       |  | Certification of Chief Executive Officer required under Rule 13a-14(b) or Rule 15d-14(b) of the Securities Exchange Act of 1934, as amended, and 18 U.S.C. Section
1350.
|            | 
|32.2*       |  | Certification of Chief Financial Officer required under Rule 13a-14(b) or Rule 15d-14(b) of the Securities Exchange Act of 1934, as amended, and 18 U.S.C. Section
1350.



|(1) | Previously filed as Exhibit 3.1 to Volterra Semiconductor Corporations Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2004, as
filed with the Securities and Exchange Commission on September 9, 2004, and incorporated by reference herein.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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|(2) | Previously filed as Exhibit 3.2 to Volterra Semiconductor Corporations Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2007,
as filed with the Securities and Exchange Commission on November 1, 2007, and incorporated by reference herein.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(3) | Previously filed as Exhibit 4.2 to Volterra Semiconductor Corporations Registration Statement on Form S-1/A (No. 333-115614), as filed with the
Securities and Exchange Commission on July 9, 2004, as amended, and incorporated by reference herein.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(4) | Previously disclosed in Item 5.02 to Volterra Semiconductor Corporations Current Report on Form 8-K, as filed with the Securities and Exchange Commission on
July 1, 2009, and incorporated by reference herein.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|+ | Indicates a management contract or compensatory plan or arrangement.
|- | --------------------------------------------------------------------

|* | The certifications attached as Exhibits 32.1 and 32.2 accompany this Quarterly Report on Form 10-Q pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and
shall not be deemed filed by Volterra Semiconductor Corporation for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.
|- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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Signature

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.



|                        |  |  |  |                                    |  |                                           
|----------------------- |  |  |  | ---------------------------------- |  | ------------------------------------------
|Dated: November 4, 2009 |  |  |  | VOLTERRA SEMICONDUCTOR CORPORATION
|                        |  |  | 
|                        |  |  |  | By:                                |  | /s/    MIKE
BURNS                         
|                        |  |  |  |                                    |  | Mike Burns                                
|                        |  |  |  |                                    |  | Chief Financial Officer                   
|                        |  |  |  |                                    |  | (Principal Financial, Chief Accounting and
|                        |  |  |  |                                    |  | Duly Authorized Officer)                  



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EXHIBIT INDEX



|            |  |                                                                                                                                                                         
|----------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit No. |  | Description                                                                                                                                                             
|            | 
|3.1(1)      |  | Amended and Restated Certificate of Incorporation of Volterra Semiconductor Corporation.                                                                                
|            | 
|3.2(2)      |  | Amended and Restated Bylaws of Volterra Semiconductor Corporation.                                                                                                      
|            | 
|4.1         |  | Reference is made to Exhibits 3.1 and 3.2.                                                                                                                              
|            | 
|4.2(3)      |  | Specimen stock certificate.                                                                                                                                             
|            | 
|10.1(4)+    |  | 2009 Executive Compensation                                                                                                                                             
|            | 
|31.1        |  | Certification of Chief Executive Officer required under Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended.                            
|            | 
|31.2        |  | Certification of Chief Financial Officer required under Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended.                            
|            | 
|32.1*       |  | Certification of Chief Executive Officer required under Rule 13a-14(b) or Rule 15d-14(b) of the Securities Exchange Act of 1934, as amended, and 18 U.S.C. Section
1350.
|            | 
|32.2*       |  | Certification of Chief Financial Officer required under Rule 13a-14(b) or Rule 15d-14(b) of the Securities Exchange Act of 1934, as amended, and 18 U.S.C. Section
1350.



|(1) | Previously filed as Exhibit 3.1 to Volterra Semiconductor Corporations Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2004, as
filed with the Securities and Exchange Commission on September 9, 2004, and incorporated by reference herein.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | Previously filed as Exhibit 3.2 to Volterra Semiconductor Corporations Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2007,
as filed with the Securities and Exchange Commission on November 1, 2007, and incorporated by reference herein.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(3) | Previously filed as Exhibit 4.2 to Volterra Semiconductor Corporations Registration Statement on Form S-1/A (No. 333-115614), as filed with the
Securities and Exchange Commission on July 9, 2004, as amended, and incorporated by reference herein.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(4) | Previously disclosed in Item 5.02 to Volterra Semiconductor Corporations Current Report on Form 8-K, as filed with the Securities and Exchange Commission on
July 1, 2009, and incorporated by reference herein.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|+ | Indicates a management contract or compensatory plan or arrangement.
|- | --------------------------------------------------------------------

|* | The certifications attached as Exhibits 32.1 and 32.2 accompany this Quarterly Report on Form 10-Q pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and
shall not be deemed filed by Volterra Semiconductor Corporation for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.
|- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



40