##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, DC 20549
 FORM 10-Q
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
 For the quarterly period ended June 30, 2008
 OR
 o
    
    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
  Delaware
    
    94-3251865(State or other jurisdiction of 
incorporation or organization)
    
    (I.R.S. Employer
Identification No.)
 
  þ o
  Large accelerated filer o
    
    Accelerated filer þ
    
    Non-accelerated filer o
    
    Smaller reporting company o(Do not check if a smaller reporting company)
 o þ




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Cautionary Note Regarding Forward-Looking Statements
  2




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##### 



Volterra Semiconductor Corporation and Subsidiaries
  
 PagePART I. FINANCIAL INFORMATION

4Item 1.
Financial Statements

4Condensed Consolidated Balance Sheets as of June 30, 2008 and December 31, 2007


4Condensed Consolidated Statements of Operations for the three and six months
ended June 30, 2008 and 2007

5Condensed Consolidated Statements of Cash Flows for the six months ended June
30, 2008 and 2007


6Notes to the Condensed Consolidated Financial Statements

7Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations

13Item 3. Quantitative and Qualitative Disclosures About Market Risk

18Item 4. Controls and Procedures

18PART II. OTHER INFORMATION

19Item 1. Legal Proceedings

19Item 1A. Risk Factors

19Item 4. Submission of Matters to a Vote of Security Holders

33Item 6. Exhibits

33SIGNATURES

35EXHIBIT 31.1EXHIBIT 31.2EXHIBIT 32.1EXHIBIT 32.2
  3




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PART I. FINANCIAL INFORMATION
 
 ITEM 1. Financial Statements
 VOLTERRA SEMICONDUCTOR CORPORATION AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED BALANCE SHEETS
 (In thousands, except per share amounts)
 (Unaudited)
 June 30,
    
    
    December 31,2008
    
    
    2007AssetsCurrent assets:Cash and cash equivalents
    
    $
    50,884
    
    
    $
    47,414Short-term investments
    
    
    984
    
    
    
    Accounts receivable, net of allowances of $1,447 and $986, respectively
    
    
    15,435
    
    
    
    12,318Inventory
    
    
    10,822
    
    
    
    6,185Prepaid expenses and other current assets
    
    
    1,780
    
    
    
    1,764Total current assets
    
    
    79,905
    
    
    
    67,681Property and equipment, net
    
    
    6,291
    
    
    
    5,647Other assets
    
    
    645
    
    
    
    767Total assets
    
    $
    86,841
    
    
    $
    74,095Liabilities and Stockholders EquityCurrent liabilities:Accounts payable
    
    $
    5,627
    
    
    $
    5,127Accrued liabilities
    
    
    6,799
    
    
    
    4,680Total current liabilities
    
    
    12,426
    
    
    
    9,807Lease Incentive
    
    
    809
    
    
    
    930Commitments and contingenciesStockholders 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;
23,871 and 23,567 shares issued and outstanding, respectively
    
    
    24
    
    
    
    24Additional paid-in capital
    
    
    99,326
    
    
    
    94,410Accumulated deficit
    
    
    (23,303
    )
    
    
    (31,076
    )Treasury stock at cost, 284 and 0 shares, respectively
    
    
    (2,441
    )
    
    
    Total stockholders equity
    
    
    73,606
    
    
    
    63,358Total liabilities and stockholders equity
    
    $
    86,841
    
    
    $
    74,095
  4




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VOLTERRA SEMICONDUCTOR CORPORATION AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
 Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2008
    
    
    2007
    
    
    2008
    
    
    2007Net revenue
    
    $
    28,703
    
    
    $
    18,480
    
    
    $
    51,714
    
    
    $
    36,033Cost of revenue
    
    
    12,545
    
    
    
    12,492
    
    
    
    22,694
    
    
    
    20,458Gross margin
    
    
    16,158
    
    
    
    5,988
    
    
    
    29,020
    
    
    
    15,575Operating expenses:Research and development
    
    
    6,216
    
    
    
    5,347
    
    
    
    12,640
    
    
    
    11,419Selling, general and administrative
    
    
    4,680
    
    
    
    4,024
    
    
    
    8,921
    
    
    
    7,482Total operating expenses
    
    
    10,896
    
    
    
    9,371
    
    
    
    21,561
    
    
    
    18,901Income (loss) from operations
    
    
    5,262
    
    
    
    (3,383
    )
    
    
    7,459
    
    
    
    (3,326
    )Interest and other income
    
    
    296
    
    
    
    625
    
    
    
    726
    
    
    
    1,253Interest and other expense
    
    
    (54
    )
    
    
    (50
    )
    
    
    (118
    )
    
    
    (70
    )Income (loss) before income taxes
    
    
    5,504
    
    
    
    (2,808
    )
    
    
    8,067
    
    
    
    (2,143
    )Income tax expense (benefit)
    
    
    217
    
    
    
    (267
    )
    
    
    294
    
    
    
    (218
    )Income (loss) before cumulative effect of accounting change
    
    
    5,287
    
    
    
    (2,541
    )
    
    
    7,773
    
    
    
    (1,925
    )Cumulative effect of accounting change, net of income
tax of $16
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    255Net income (loss)
    
    $
    5,287
    
    
    $
    (2,541
    )
    
    $
    7,773
    
    
    $
    (2,180
    )Net income (loss) per share:Basic:Net income (loss) per share before cumulative effect of
accounting change
    
    $
    0.22
    
    
    $
    (0.10
    )
    
    $
    0.33
    
    
    $
    (0.08
    )Cumulative effect of accounting change
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    0.01Net income (loss) per share
    
    $
    0.22
    
    
    $
    (0.10
    )
    
    $
    0.33
    
    
    $
    (0.09
    )Diluted:Net income (loss) per share before cumulative effect of
accounting change
    
    $
    0.21
    
    
    $
    (0.10
    )
    
    $
    0.31
    
    
    $
    (0.08
    )Cumulative effect of accounting change
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    0.01Net income (loss) per share
    
    $
    0.21
    
    
    $
    (0.10
    )
    
    $
    0.31
    
    
    $
    (0.09
    )Weighted average shares outstanding:Basic
    
    
    23,780
    
    
    
    24,560
    
    
    
    23,783
    
    
    
    24,496Diluted
    
    
    25,529
    
    
    
    24,560
    
    
    
    25,298
    
    
    
    24,496
  5




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VOLTERRA SEMICONDUCTOR CORPORATION AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
 Six Months EndedJune 30,2008
    
    
    2007Cash flows from operating activities:Net income (loss)
    
    $
    7,773
    
    
    $
    (2,180
    )Adjustments to reconcile net income to net cash used
by operating activities:Stock-based compensation
    
    
    1,906
    
    
    
    2,220Depreciation and amortization
    
    
    1,198
    
    
    
    957Accretion of discount in debt securities
    
    
    
    
    
    
    14Loss on disposal of fixed assets
    
    
    3
    
    
    
    Provision for doubtful accounts
    
    
    57
    
    
    
    155Changes in operating assets and liabilities:Accounts receivable, net
    
    
    (3,174
    )
    
    
    (2,827
    )Inventory
    
    
    (4,605
    )
    
    
    4,949Prepaid expenses, other current, and other assets
    
    
    (16
    )
    
    
    (75
    )Accounts payable
    
    
    (60
    )
    
    
    (3,261
    )Accrued liabilities
    
    
    1,909
    
    
    
    145Net cash provided by operating activities
    
    
    4,991
    
    
    
    97Cash flows from investing activities:Purchases of property and equipment
    
    
    (1,073
    )
    
    
    (422
    )Purchases of short-term investments
    
    
    (984
    )
    
    
    Proceeds from maturity of short-term investments
    
    
    
    
    
    
    4,933Net cash provided by (used in) investing activities
    
    
    (2,057
    )
    
    
    4,511Cash flows from financing activities:Proceeds from issuance of common stock, net
    
    
    2,977
    
    
    
    1,143Purchase of treasury stock
    
    
    (2,441
    )
    
    
    Net cash provided by financing activities
    
    
    536
    
    
    
    1,143Net increase (decrease) in cash and cash equivalents
    
    
    3,470
    
    
    
    5,751Cash and cash equivalents, beginning of period
    
    
    47,414
    
    
    
    41,814Cash and cash equivalents, end of period
    
    $
    50,884
    
    
    $
    47,565Supplemental disclosure of cash flows:Income tax (paid) refunds, net
    
    $
    (160
    )
    
    $
    124
  6




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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
  Basis of Presentation
    Use of Estimates
  Concentrations of Credit Risk
  Segment Reporting and Significant Customers
   7




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VOLTERRA SEMICONDUCTOR CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except per share data)
(Unaudited)
  Net Revenue
    
    Net Revenue
    
    Accounts ReceivableThree Months Ended
    
    Six Months Ended
    
    As ofJune 30,
    
    June 30,
    
    June 30,
    
    December 31,Customer
    
    2008
    
    2007
    
    2008
    
    2007
    
    2008
    
    2007A
    
    
    24
    %
    
    
    36
    %
    
    
    27
    %
    
    
    34
    %
    
    
    22
    %
    
    
    38
    %B
    
    
    40
    %
    
    
    22
    %
    
    
    35
    %
    
    
    21
    %
    
    
    41
    %
    
    
    13
    %C
    
    
    13
    %
    
    
    16
    %
    
    
    13
    %
    
    
    15
    %
    
    
    13
    %
    
    
    23
    %D
    
    
    *
    
    
    
    11
    %
    
    
    *
    
    
    
    14
    %
    
    
    *
    
    
    
    14
    %
 
 *
    
    Less than 10%  Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2008
    
    
    2007
    
    
    2008
    
    
    2007Singapore
    
    
    36
    %
    
    
    51
    %
    
    
    40
    %
    
    
    49
    %China
    
    
    50
    %
    
    
    27
    %
    
    
    46
    %
    
    
    30
    %Taiwan
    
    
    6
    %
    
    
    14
    %
    
    
    6
    %
    
    
    13
    %Japan
    
    
    3
    %
    
    
    3
    %
    
    
    3
    %
    
    
    3
    %United States
    
    
    3
    %
    
    
    3
    %
    
    
    3
    %
    
    
    3
    %Other
    
    
    2
    %
    
    
    2
    %
    
    
    2
    %
    
    
    2
    %
 Revenue Recognition
   Stock-Based Compensation
  8




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VOLTERRA SEMICONDUCTOR CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except per share data)
(Unaudited)
 Accounting for Stock Appreciation
Rights and Other Variable Stock Options or Award Plans
  Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2008
    
    
    2007
    
    
    2008
    
    
    2007Stock-based compensation expense:Cost of revenue
    
    $
    61
    
    
    $
    80
    
    
    $
    105
    
    
    $
    145Research and development
    
    
    555
    
    
    
    561
    
    
    
    846
    
    
    
    1,169Sales, general and administrative
    
    
    554
    
    
    
    403
    
    
    
    955
    
    
    
    906Total stock-based compensation expense
    
    
    1,170
    
    
    
    1,044
    
    
    
    1,906
    
    
    
    2,220Tax effect of stock-based compensation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Effect on net income (loss)
    
    $
    1,170
    
    
    $
    1,044
    
    
    $
    1,906
    
    
    $
    2,220Effect on basic net income (loss) per share
    
    $
    0.05
    
    
    $
    0.04
    
    
    $
    0.08
    
    
    $
    0.09Effect on diluted net income (loss) per share
    
    $
    0.05
    
    
    $
    0.04
    
    
    $
    0.08
    
    
    $
    0.09
  Income Taxes
  Accounting for
Uncertainty in Income Taxes
  Earnings Per Share
  9




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VOLTERRA SEMICONDUCTOR CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except per share data)
(Unaudited)
   Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2008
    
    
    2007
    
    
    2008
    
    
    2007Numerator:Net income (loss)
    
    $
    5,287
    
    
    $
    (2,541
    )
    
    $
    7,773
    
    
    $
    (2,180
    )Denominator:Weighted average shares outstanding, basic
    
    
    23,780
    
    
    
    24,560
    
    
    
    23,783
    
    
    
    24,496Effect of dilutive securities:Stock options
    
    
    1,749
    
    
    
    
    
    
    
    1,515
    
    
    
    Weighted average shares outstanding, diluted
    
    
    25,529
    
    
    
    24,560
    
    
    
    25,298
    
    
    
    24,496Basic net income (loss) per share
    
    $
    0.22
    
    
    $
    (0.10
    )
    
    $
    0.33
    
    
    $
    (0.09
    )Diluted net income (loss) per share
    
    $
    0.21
    
    
    $
    (0.10
    )
    
    $
    0.31
    
    
    $
    (0.09
    )
  Accounting for Lease Incentives
  Fair Value Measurements
  2. Inventory
 10




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VOLTERRA SEMICONDUCTOR CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except per share data)
(Unaudited)
  June 30,
    
    
    December 31,2008
    
    
    2007Work-in-process
    
    $
    7,756
    
    
    $
    2,964Finished goods
    
    
    3,066
    
    
    
    3,221$
    10,822
    
    
    $
    6,185
 3. Property and Equipment
  June 30,
    
    
    December 31,2008
    
    
    2007Computer hardware
    
    $
    1,495
    
    
    $
    1,401Computer software
    
    
    4,575
    
    
    
    4,532Equipment and furniture
    
    
    6,167
    
    
    
    4,524Leasehold improvements
    
    
    1,994
    
    
    
    1,93414,231
    
    
    
    12,391Less accumulated depreciation and amortization
    
    
    (7,940
    )
    
    
    (6,744
    )$
    6,291
    
    
    $
    5,647
 4. Change in Accounting Principle
 Accounting for Sabbatical Leave and Other Similar
Benefits Pursuant to FASB Statement No. 43
  5. Stock Repurchase Program
  6. Fair Value Measurements
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VOLTERRA SEMICONDUCTOR CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except per share data)
(Unaudited)
       Fair value measurements at reporting date usingQuoted prices in
    
    
    
    
    
    
    Significantactive markets for
    
    
    Significant other
    
    
    unobservableidentical assets
    
    
    observable inputs
    
    
    inputsTotal
    
    
    (Level 1)
    
    
    (Level 2)
    
    
    (Level 3)Money market funds
    
    $
    42,334
    
    
    $
    42,344
    
    
$
    
    
    
$
    Available-for-sale
securities
    
    
    2,033
    
    
    
    2,033
    
    
    
    
    
    
    
    Total
    
    $
    44,367
    
    
    $
    44,367
    
    
$
    
    
    
$
    
 12




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Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
  Overview
     13




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14




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Accounting for Income Taxes
 Critical Accounting Policies
  15




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Results of Operations
  Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2008
    
    
    2007
    
    
    2008
    
    
    2007Net revenue
    
    
    100
    %
    
    
    100
    %
    
    
    100
    %
    
    
    100
    %Cost of revenue
    
    
    44
    
    
    
    68
    
    
    
    44
    
    
    
    57Gross margin
    
    
    56
    
    
    
    32
    
    
    
    56
    
    
    
    43Operating expenses:Research and development
    
    
    22
    
    
    
    29
    
    
    
    24
    
    
    
    31Selling, general and administrative
    
    
    16
    
    
    
    21
    
    
    
    17
    
    
    
    21Total operating expenses
    
    
    38
    
    
    
    50
    
    
    
    41
    
    
    
    52Income (loss) from operations
    
    
    18
    
    
    
    (18
    )
    
    
    15
    
    
    
    (9
    )Interest and other income, net
    
    
    1
    
    
    
    3
    
    
    
    1
    
    
    
    3Income (loss) before income taxes
    
    
    19
    
    
    
    (15
    )
    
    
    16
    
    
    
    (6
    )Income tax expense (benefit)
    
    
    1
    
    
    
    (1
    )
    
    
    1
    
    
    
    (1
    )Income (loss) before cummulative
effect of accounting
    
    
    18
    
    
    
    (14
    )
    
    
    15
    
    
    
    (5
    )Cumulative effect of accounting change
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1Net Income (loss)
    
    
    18
    %
    
    
    (14)
    %
    
    
    15
    %
    
    
    (6)
    %
 Comparison of Three Months Ended June 30, 2008 to Three Months Ended June 30, 2007
 Net Revenue.
 Cost of Revenue and Gross Margin.
 Research and Development.
 Selling, General and Administrative.
 Income Tax.
 Comparison of Six Months Ended June 30, 2008 to Six Months Ended June 30, 2007
 16




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Net Revenue.
 Cost of Revenue and Gross Margin.
 Research and Development.
 Selling, General and Administrative.
 Income Tax.
 Liquidity and Capital Resources
     17




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Contractual Obligations
  2011 and2008
    
    
    2009
    
    
    2010
    
    
    Thereafter
    
    
    TotalOperating lease obligations
    
    $
    648
    
    
    $
    1,063
    
    
    $
    741
    
    
    $
    1,312
    
    
    $
    3,764Purchase obligations
    
    
    2,033
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,033$
    2,681
    
    
    $
    1,063
    
    
    $
    741
    
    
    $
    1,312
    
    
    $
    5,797
  Recent Accounting Pronouncements
  
 Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
 Item 4. Controls and Procedures
 Evaluation of Disclosure Controls and Procedures
 18




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PART II. OTHER INFORMATION
 
 Item 1. Legal Proceedings
  
 Item 1A. Risk Factors
 The risk factors described in Part II, Item 1A of our Annual Report on Form 10-K for the year ended
December 31, 2007, as filed with the SEC on March 5, 2008, are set forth below. These risk factors
have not substantively changed, except for those identified by asterisk and restated below. Risk
factors marked with a  +  have been reordered from the presentation in the Annual
Report.
 Our financial performance in the past has fluctuated and we may not be able to maintain
profitability on a quarterly or annual basis.*
  19




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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.*
  
    
    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;
    
    demand for our products or the electronic systems into which our products are
incorporated and our ability to accurately forecast such demand;
    
    the ability of our foundries and third-party subcontractors to achieve
satisfactory yields or quality;
    
    our customers and distributors management of the inventory they hold;
    
    our management of our own inventory levels to meet changes in demand;
    
    changes in orders both received and shipped during the same quarter (our
turns business);
    
    our ability to develop new products or new generations and versions of our
existing products that achieve market acceptance in a timely manner;
    
    our ability to fulfill orders for our products in a timely manner, or at all;
    
    the timing of introductions of competing products or technologies;
    
    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;
    
    varying order patterns in the markets in which we sell our products;
    
    our customers failure to pay us on a timely basis, or at all;
    
    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;
    
    the volatile nature of the semiconductor industry;
    
    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 the Company;
    
    the loss of one or more key distributors, or a significant reduction in
orders from one or more key distributors;
    
    changes in the prices of our products or the electronic systems into which
our products are incorporated;
    
    our ability to adequately support our future growth;
    
    disputes regarding intellectual property rights;
    
    litigation involving us or our products; and
    
    changes in accounting principles, policies and estimates.
  Our dependence on third-party semiconductor manufacturers, or foundries, reduces our control over
the manufacture of our products, which could harm our business.* +
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
    
    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.
  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. +
  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.* +
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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.* +
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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 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.* +
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We sell a limited number of products and a reduction in demand for these products would harm our
business and operating results. +
  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.*
  
    
    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.
   If we do not effectively manage our growth, our resources, systems, and controls may be strained
and our operating results may suffer. +
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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 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.
 
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We have experienced, and may in the future experience, delays in the development and introduction
of our new products, which may 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.
    
    
    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;
    
    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.
 
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Our ability to compete will be harmed if we are unable to adequately protect our intellectual
property.*
  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.
  
    
    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.
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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.
  We are subject to the highly cyclical nature of the semiconductor industry and any future downturns
could significantly harm our business.
  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.*
   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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The average selling prices of our products could decrease rapidly, which may negatively impact our
net revenue and operating results.
  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.*
  
    
    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.
  We do not hedge fluctuations in currency exchange rates, which could harm our financial results.
  29




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Environmental laws and regulations could cause a disruption in our business and operations.
  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.
  If our computer and communications hardware fails, our business, results of operations and
financial condition would be harmed.
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We may undertake acquisitions to expand our business that may pose risks to our business and dilute
the ownership of our existing stockholders.
  
    
    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.
  Our stock price will fluctuate and may be volatile, which could result in substantial losses for
investors and significant costs related to litigation.
  
    
    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.
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Our principal stockholders have significant voting power and may influence actions that may not be
in the best interests of our other stockholders.
  Anti-takeover provisions of our charter documents and Delaware law could prevent or delay
transactions resulting in a change in control.
  
    
    our board of directors is classified so that not all members of our board of
directors may be elected at one time;
    
    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.
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Item 4. Submission of Matters to a Vote of Security Holders
  Proposal 1
  Nominee
    
    For
    
    WithheldEdward Ross
    
    20,037,180
    
    639,476
  Proposal 2
  For
    
    Against
    
    Abstain
    
    Broker Non-Votes20,497,726
    
    174,471
    
    4,459
    
    0
 
 Item 6. Exhibits
 Exhibit No.
    
    Description3.1 (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.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 33




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##### Table of Contents



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.*
    
    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. 34




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##### Table of Contents



Signature
  Dated: August 1, 2008
    
    VOLTERRA SEMICONDUCTOR CORPORATIONBy:
    
    /s/ Mike BurnsMike BurnsChief Financial Officer(Principal Financial, Chief Accounting andDuly Authorized Officer)
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##### Table of Contents



EXHIBIT INDEX
 Exhibit No.
    
    Description3.1 (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.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.*
    
    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. 36