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UNITED STATES SECURITIES AND
    EXCHANGE COMMISSIONWashington, D.C.
    20549
      Form 10-K
  (Mark One)þ

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended
    January 6, 2008ORo

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934   Commission file number 0-21970
      ACTEL CORPORATION
 (Exact name of Registrant as
    specified in its charter)
  California

77-0097724(State or other jurisdiction
    of

(I.R.S. Employerincorporation or
    organization)

Identification No.)2061 Stierlin Court

94043-4655Mountain View, California

(Zip Code)(Address of principal executive
    offices)   (650) 318-4200
 (Registrants telephone
    number, including area code)
      Securities registered pursuant to Section 12(b) of the
    Act:
 None
  Securities registered pursuant to Section 12(g) of the
    Act:
  Common Stock, $.001 par value
 Preferred Stock Purchase Rights
 (Title of class)
      o þ
  o þ
    þ o
  Regulation S-K Form 10-K Form 10-K. þ
    Large accelerated filer
    o

Accelerated
    filer þ

Non-accelerated filer
    o

Smaller reporting company
    o(Do not check if a smaller reporting company)   Rule 12b-2 o þ
  $337,300,407
          In this Annual Report on
    Form 10-K,
    Actel Corporation and its consolidated subsidiaries are referred
    to as we, us, our, The
    Company or Actel. You should read the
    information in this Annual Report with the Risk Factors in
    Item 1A. Unless otherwise indicated, the information in
    this Annual Report is given as of March 17, 2008, and we
    undertake no obligation to update any of the information,
    including forward-looking statements. All forward-looking
    statements are made under the safe harbor provisions of the
    Private Securities Litigation Reform Act of 1995. Statements
    containing words such as anticipates,
    believes, estimates,
    expects, intends, plans,
    seeks, and variations of such words and similar
    expressions are intended to identify the forward-looking
    statements. Actual results could differ materially from those
    projected in the forward-looking statements due to the risks
    identified in the Risk Factors or for other reasons.




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##### 





TABLE OF
    CONTENTS
  PagePART IITEM 1.

BUSINESS


1ITEM 1A.

RISK FACTORS


13ITEM 1B.

UNRESOLVED STAFF COMMENTS


28ITEM 2.

PROPERTIES


28ITEM 3.

LEGAL PROCEEDINGS


28ITEM 4.

SUBMISSION OF MATTERS TO A VOTE OF SECURITY
    HOLDERS


30PART IIITEM 5.

MARKET FOR THE REGISTRANTS COMMON STOCK,
    RELATED SHAREHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY
    SECURITIES


30ITEM 6.

SELECTED FINANCIAL DATA


31ITEM 7.

MANAGEMENTS DISCUSSION AND ANALYSIS OF
    FINANCIAL CONDITION AND RESULTS OF OPERATIONS


32ITEM 7A.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
    MARKET RISK


43ITEM 8.

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA


44ITEM 9.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
    ACCOUNTING AND FINANCIAL DISCLOSURE


77ITEM 9A.

CONTROLS AND PROCEDURES


77ITEM 9B.

OTHER INFORMATION


78PART IIIITEM 10.

DIRECTORS AND EXECUTIVE OFFICERS OF THE
    REGISTRANT AND CORPORATE GOVERNANCE


78ITEM 11.

EXECUTIVE COMPENSATION


78ITEM 12.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
    AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS


78ITEM 13.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS,
    AND DIRECTOR INDEPENDENCE


78ITEM 14.

PRINCIPAL ACCOUNTANT FEES AND SERVICES


78PART IVITEM 15.

EXHIBITS, FINANCIAL STATEMENT SCHEDULES


79EXHIBIT 21EXHIBIT 23EXHIBIT 24EXHIBIT 31.1EXHIBIT 31.2EXHIBIT 32   i




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PART I  ITEM 1.
    BUSINESS    www.actel.com Form 10-K, Form 10-Q, Form 8-K,
  Industry
    Overview
       1




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The Actel
    Solution
  live-at-power-up boot-up
  The Actel
    Strategy
  live-at-power-up,
   
    Low Power
     
    Single Chip
   2




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power-up.
   Live
    At
    Power-Up
  power-up
   Security
     Firm-Error
    Immunity
  failure-in-time
  Products
        and/or
 3




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 Actel
    IGLOO FPGAs
  
    The lowest power FPGA solutions
    Density: 15,000 to 3,000,000 system gates  EDN China EE
    Times Portable Design China EDN
    Automotive

Personal occupancy detection systems
    Rear- and side-view cameras
    Space- and power-constrained safety systems
    TelematicsCommunications

Handheld radios 
    PC card-based wideband solutions (UMTS, 3G, EDO)
    Wireless access pointsConsumer

Digital cameras
    GPS devices
    Multimedia entertainment systems
    PDAs
    Portable gaming
    Smart phonesIndustrial

Portable medical instruments
    Portable test equipment    Actel
    Fusion PSCs
  
    The worlds first mixed-signal PSC, incorporating analog
    functions, embedded Flash, and FPGA fabric in a single chip,
    making it suitable for system management and intelligent power
    management
    Density: 90,000 to 1,500,000 system gates  EDN EDN EDN China EE Times
   4




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Automotive

Engine control units
    GPS navigation systems
    In-cab entertainment
    Safety systemsCommunications

Handheld radios
    Telecom and networking line-card management
    Wireless base stationsConsumer

Digital cameras
    Home networking
    Multimedia entertainment systems
    Plasma displays
    Set-top boxes
    Smart handsetsIndustrial

Instrumentation and test equipment
    Medical instrumentation systems
    Point of sale
    RFID infrastructure
    Surveillance and automation systems    ProASIC3/E
    FPGAs
  
    The third generation of low-power, single-chip, LAPU, secure,
    firm-error immune Flash-based FPGAs, which are both nonvolatile
    and reprogrammable
    Density: 15,000 to 3,000,000 system gates    Automotive

Engine control units
    GPS navigation systems
    In-cab entertainment
    Safety systemsCommunications

Handheld radios
    Telecom and networking line-card management
    Wireless base stationsConsumer

Digital cameras
    Gaming
    Home networking
    Multimedia entertainment systems
    Plasma displays
    Set-top boxes
    Smart handsetsIndustrial

Instrumentation and test equipment
    Medical instrumentation systems
    Point of sale
    RFID infrastructure
    Surveillance and automation systems  5




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 RTAX-S
    and RTAX-SL FPGAs
  
    Space-optimized, radiation-tolerant, nonvolatile antifuse-based
    FPGAs offering low-power, single-chip, LAPU, security, and
    firm-error immunity benefits for applications requiring the
    highest reliability
    RTAX-SL devices are the lowest-power FPGAs for space applications
    Density: 250,000 to 4,000,000 system gates  time-to-market
  Aerospace and Military

Attitude and orbit control
    Camera electronics
    Command and data handling
    Instrumentation
    Management of spacecraft power and environmental controls
    Propulsion system electronics
    Radio communication
    Sensor control
    Sensor data processing
    TelemetryMedical

Imaging equipment with high exposure to radiation   Supporting
    Products and Services
     Design
    and Development Software and Tools
  best-in-class
   IP
    Cores
   6




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 Programming
    Hardware
     Starter
    Kits
  M1-IGLOO,
   Services
    and Support
    Markets
    and Applications
     Automotive
    
    We support the Production Part Approval Process, a process
    used by the automotive industry to ensure the availability of
    specific, in-depth documentation for all parts in the automotive
    supply chain.
    Delphi Corp., a leading global supplier of mobile electronics
    and transportation systems, will use our ProASIC3 FPGA in a
    production engine control module being designed into a
    heavy-duty diesel engine.
    Magna Electronics selected our ProASIC3 FPGA for its automotive
    vision systems. 7




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 Communications
     Consumer
     Industrial
     Military
    and Aerospace
   8




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
    Aldec, a pioneer in
    mixed-language
    simulation and advanced design tools for ASIC and FPGA devices,
    announced the availability of an RTAX-S Prototyping Board for
    our radiation-tolerant RTAX-S FPGAs. Aldecs solution
    allows customers to tap the flexibility and reprogrammability of
    Flash-based prototypes for multiple applications, which enables
    the acceleration of design and validation cycles and translates
    into faster time-to-market and lower development costs.
    We announced that our RTAX-S FPGAs were aboard NASAs
    Phoenix mission to Mars.  Sales and
    Distribution
        Backlog
    Customer
    Service and Support
   9




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Manufacturing
    and Assembly
    
    Chartered in Singapore using 0.45- and 0.35-micron design rules;
    Infineon in Germany using 0.25- and 0.13-micron design rules;
    Matsushita in Japan using 1.0-, 0.9-, 0.8- and 0.25-micron
    design rules;
    UMC in Taiwan using 0.25/0.22-, 0.15-, and 0.13-micron design
    rules; and
    Winbond in Taiwan using 0.8- and 0.45-micron design rules.  and/or
    Strategic
    Relationships
     Aldec,
    Inc.
   10




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 Arasan
    Chip Systems
     ARM
     Attodyne
     iWave
    Systems Technologies Pvt. Ltd
  point-of-sale
   Mentor
    Graphics
     Mouser
  www.mouser.com/actel
   Palmchip
    Research
    and Development
   11




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power
    Competition
        Patents
    and Licenses
       12




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Employees
    ITEM 1A.
    RISK
    FACTORS  Before deciding to purchase, hold, or sell our Common Stock,
    you should carefully consider the risks described below in
    addition to the other cautionary statements and risks described
    elsewhere (and the other information contained) in this Annual
    Report on
    Form 10-K
    and subsequent reports on
    Forms 10-Q
    and 8-K. The
    risks and uncertainties described below are not the only ones we
    face. Additional risks and uncertainties not currently known to
    us or that we currently deem immaterial may also affect our
    business. If any of these known or unknown risks or
    uncertainties actually occurs and has a materially adverse
    effect on us, our business, financial condition, and results of
    operations could be seriously harmed. In that event, the market
    price for our Common Stock will likely decline and you may lose
    all or part of your investment.
  Risks
    Related to the Investigation of Past Stock Option Practices and
    the Related Restatement of our Prior Financial Results
  1996-2001; 1996-2001
 13




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2002-2004,
  Our
    historical stock option granting practices and the restatement
    of our financial statements have exposed us to civil litigation
    claims and regulatory proceedings, and may expose us to future
    civil litigation claims, regulatory proceedings, government
    inquiries, and enforcement actions, that could burden Actel and
    have a materially adverse effect on our financial condition,
    business, results of operations, and/or cash
    flows.
  day-to-day and/or
  and/or
  A
    number of our current and former executive officers and
    Directors have been named as parties to a derivative action
    lawsuit related to our historical stock option grant practices,
    and there is a possibility of additional civil litigation
    claims, regulatory proceedings, government inquiries, and
    enforcement actions, any of which could result in significant
    legal expenses.
   14




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Risks
    Related to Our Failure to Meet Expectations
    We
    derive a large percentage of our quarterly revenues from
    bookings received during the quarter, making quarterly revenues
    difficult to predict.
    We
    derive a significant percentage of our quarterly revenues from
    shipments made in the final weeks of the quarter, making
    quarterly revenues difficult to predict.
    Our
    military and aerospace shipments tend to be large and are
    subject to complex scheduling uncertainties, making quarterly
    revenues difficult to predict.
    We
    derive a majority of our quarterly revenues from products resold
    by our distributors, making quarterly revenues difficult to
    predict.
  and/or
 15




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An
    unanticipated shortage of products available for sale may cause
    our quarterly revenues and/or operating results to fall short of
    expectations.
    Unanticipated
    increases, or the failure to achieve anticipated reductions, in
    the cost of our products may cause our quarterly operating
    results to fall short of expectations.
    Unanticipated
    reductions in the average selling prices of our products may
    cause our quarterly revenues and operating results to fall short
    of expectations.
  and/or
  In
    preparing our financial statements, we make good faith estimates
    and judgments that may change or turn out to be
    erroneous.
   16




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Our
    gross margin may decline as we increasingly compete with ASICs
    and serve the value-based market.
    We may
    not win sufficient designs, or the designs we win may not
    generate sufficient revenues, for us to maintain or expand our
    business.
  and/or
  Risks
    Related to Defective Product
    device-hours, device-hours.
 17




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Any
    error or defect in our products could have a material adverse
    effect on our business, financial condition, and operating
    results.
  and/or
  Any
    product liability claim could pose a significant risk to our
    business, financial condition, and operating
    results.
  and/or
  Risks
    Related to New Products
  and/or 90-nanometer
    Our
    introduction of the Actel Fusion PSC presents numerous
    significant challenges.
   18




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and/or
  Numerous
    factors can cause the development or introduction of new
    products to fail or be delayed.
    
    anticipate future customer demand and the technology that will
    be available to meet the demand;
    define the product and its architecture, including the
    technology, silicon, programmer, IP, software, and packaging
    specifications;
    obtain access to advanced manufacturing process technologies;
    design and verify the silicon;
    develop and release evaluation software;
    layout the FPGA and other functional blocks along with the
    circuitry required for programming;
    integrate the FPGA block with the other functional blocks;
    simulate (i.e., test) the design of the product;
    tapeout the product (i.e., compile a database containing the
    design information about the product for use in the preparation
    of photomasks);
    generate photomasks for use in manufacturing the product and
    evaluate the software;
    manufacture the product at the foundry;
    verify the product; and
    qualify the process, characterize the product, and release
    production software.  and/or
  New
    products are subject to greater design and operational
    risks.
  and/or
  New
    products are subject to greater technology risks.
  state-of-the-art
 19




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and/or
  New
    products generally have lower gross margins.
    Risks
    Related to Competitive Disadvantages
    Many
    of our current and potential competitors are larger and have
    more resources.
    Our
    antifuse technology is not reprogrammable, which is a
    competitive disadvantage in most cases.
    Our
    Flash and antifuse technologies are not manufactured on standard
    processes, which is a competitive disadvantage.
   20




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Risks
    Related to Events Beyond Our Control
  and/or
  Our
    operations and those of our partners are located in areas
    subject to volatile natural, economic, social, and political
    conditions.
  and/or
  We
    have only limited insurance coverage.
  and/or
  Risks
    Related to Dependence on Third Parties
    Our
    independent wafer manufacturers may be unable or unwilling to
    satisfy our needs in a timely manner, which could harm our
    business.
  and/or
 21




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Our
    limited volume and customized process requirements generally
    make us less attractive to independent wafer
    manufacturers.
  and/or
  Identifying
    and qualifying new independent wafer manufacturers is difficult
    and might be unsuccessful.
  and/or
  Our
    independent assembly subcontractors may be unable or unwilling
    to meet our requirements, which could delay product shipments
    and result in the loss of customers or revenues.
  and/or
  Our
    independent software and hardware developers and suppliers may
    be unable or unwilling to satisfy our needs in a timely manner,
    which could impair the introduction of new products or the
    support of existing products.
  and/or and/or and/or
  Our
    future performance will depend in part on the effectiveness of
    our independent distributors in marketing, selling, and
    supporting our products.
   22




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and/or
  Distributor
    contracts generally can be terminated on short
    notice.
  and/or
  Fluctuations
    in inventory levels at our distributors can affect our operating
    results.
    Risk
    Related to the Conduct of International Business
  and/or and/or
  We
    depend on international operations for almost all of our
    products.
  and/or
  We
    depend on international sales for a substantial portion of our
    revenues.
   23




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and/or
  Risk
    Related to Economic and Market Fluctuations
  period-to-period
  Our
    revenues and operating results may be adversely affected by
    future downturns in the semiconductor industry.
  and/or
  Our
    revenues and operating results may be adversely affected by
    future downturns in the military and aerospace
    market.
  and/or
  Our
    revenues and operating results may be adversely affected by
    changes in the military and aerospace market.
  off-the-shelf and/or off-the-shelf off-the-shelf and/or
  Our
    revenues and/or operating results may be adversely affected by
    future downturns at any of our major customers.
   24




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and/or
  Any
    acquisition we make may harm our business, financial condition,
    and/or operating results.
  and/or and/or
  Risks
    Related to Changing Rules and Practices
  and/or
  Changes
    in accounting for equity compensation adversely affected our
    operating results and may adversely affect our ability to
    attract and retain employees.
    and/or
  Compliance
    with the Sarbanes-Oxley Act of 2002 and related corporate
    governance and public disclosure requirements have resulted in
    significant additional expense.
   25




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Other
    Risks
  We may
    face significant business and financial risk from claims of
    intellectual property infringement asserted against us, and we
    may be unable to adequately enforce our intellectual property
    rights.
  and/or
  and/or and/or
  and/or
  We may
    be unable to attract or retain the personnel necessary to
    successfully develop our technologies, design our products, or
    operate, manage, or grow our business.
   26




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and/or and/or
  We
    have some arrangements that may not be neutral toward a
    potential change of control and our Board of Directors could
    adopt others.
        Our
    stock price may decline significantly, possibly for reasons
    unrelated to our operating performance.
    
    quarterly fluctuations in our financial results or the financial
    results of our competitors or other semiconductor companies;
    changes in the expectations of analysts regarding our financial
    results or the financial results of our competitors or other
    semiconductor companies;
    announcements of new products or technical innovations by Actel
    or by our competitors; or
    general conditions in the semiconductor industry, financial
    markets, or economy. 27




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If our
    stock price declines sufficiently, we would write down our
    goodwill, which may have a materially adverse affect on our
    operating results.
    ITEM 1B.
    UNRESOLVED
    STAFF COMMENTS    ITEM 2.
    PROPERTIES    ITEM 3.
    LEGAL
    PROCEEDINGS  Legal
    Proceedings Related to Stock Options
  In re
    Actel Derivative Litigation, 5:06-cv-05352-JW
  Frank Brozovich v. John
    C. East, et al., Section 10(b)/Rule 10b-5 Samir Younan v. John C. East, et al., Younan In
    re Actel Derivative Litigation Younan Brozovich
 28




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SEC
    Informal Inquiry
    The
    Nasdaq Stock Market Proceedings, Docket NQ
    5272N-06
  Form 10-Q
  Form 10-K
  Form 10-Q Form 10-Q
  Form 10-Q Form 10-Q Form 10-K Form 10-Q
 29




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Form 10-Q Form 10-Q 2006-2007
  ITEM 4.
    SUBMISSION
    OF MATTERS TO A VOTE OF SECURITY HOLDERS   PART II  ITEM 5.
    MARKET
    FOR THE REGISTRANTS COMMON STOCK, RELATED SHAREHOLDER
    MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES    2007


2006High


Low


High


LowFirst Quarter

$
18.79


$
15.29


$
15.95


$
12.64Second Quarter


17.72



13.01



17.53



13.20Third Quarter


14.30



9.63



16.40



12.40Fourth Quarter


13.77



9.83



19.36



15.00      30




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ITEM 6.
    SELECTED
    FINANCIAL DATA  Form 10-K
  ACTEL
    CORPORATION
    SELECTED CONSOLIDATED FINANCIAL DATA
  Years EndedJan. 6,


Dec. 31,


Jan. 1,


Jan. 2,


Jan. 4,2008


2006


2006


2005


2004(In thousands, except per share data)Consolidated Statements of Operations Data:Net revenues

$
197,043


$
191,499


$
178,947


$
165,402


$
149,910Costs and expenses:Total cost of revenues(1)(3)


82,363



75,618



73,282



70,404



59,867Research and development(3)(6)


63,726



56,926



48,242



45,701



41,720Selling, general, and administrative(3)(4)(5)


63,053



67,959



49,649



47,975



46,422Amortization of acquisition-related intangibles(2)






15



1,908



2,651



2,670Total costs and expenses


209,142



200,518



173,081



166,731



150,679Income (loss) from operations


(12,099
)


(9,019
)


5,866



(1,329
)


(769
)Interest income and other, net of expense


8,607



7,128



3,912



3,398



3,190Gain (loss) on sales and write-downs of equity investments


















91Income (loss) before tax provision (benefit)


(3,492
)


(1,891
)


9,778



2,069



2,512Tax provision (benefit)


(588
)


264



2,742



(705
)


(1,043
)Net income (loss)

$
(2,904
)

$
(2,155
)

$
7,036


$
2,774


$
3,555Net income (loss) per share:Basic

$
(0.11
)

$
(0.08
)

$
0.28


$
0.11


$
0.14Diluted

$
(0.11
)

$
(0.08
)

$
0.28


$
0.11


$
0.14Shares used in computing net income(loss) per share:Basic


26,888



26,106



25,277



25,584



24,808Diluted


26,888



26,106



25,545



26,381



26,190   As ofJan. 6,


Dec. 31,


Jan. 1,


Jan. 2,


Jan. 4,2008


2006


2006


2005


2004(In thousands)Consolidated Balance Sheet Data:Working capital

$
207,910


$
191,278


$
177,491


$
194,613


$
190,545Total assets


363,616



368,922



343,196



318,171



319,637Total shareholders equity


291,492



290,616



276,057



267,816



266,780     (1)
    
    During the fourth quarter of 2004 we incurred incremental
    charges included in cost of revenues of $3.2 million for
    expenses associated with the testing of the RTSX-S space
    qualified FPGAs and the write down of RTSX-S 31




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inventory from the original manufacturer. During the fourth
    quarter of fiscal 2006 we recorded charges of $2.2 million
    in connection with the write-down of certain excess inventory.
    During the fourth quarter of fiscal 2007 we recorded charges of
    $2.2 million for excess reserves associated with commercial
    last time buy products.(2)
    
    Beginning in 2002, we ceased to amortize goodwill in accordance
    with SFAS No. 142, Goodwill and Other Intangible
    Assets. Instead, goodwill is subject to annual impairment
    tests and written down only when identified as impaired.
    Non-goodwill intangible assets with definite lives continue to
    be amortized under SFAS No. 141 and 142. See
    Notes 1 and 3 of Notes to Consolidated Financial
    Statements for further information.(3)
    
    On January 2, 2006, we adopted SFAS No. 123(R),
    Share-Based Payment, which requires us to measure
    all employee stock-based compensation awards using a fair value
    method and record such expense in our consolidated financial
    statements. As a result, we recorded pre-tax, stock based
    compensation expense of $7.9 million and $11.0 million
    for fiscal 2007 and 2006, respectively, under
    SFAS No. 123(R).(4)
    
    During fiscal 2006 we recorded charges of $10.0 million and
    $0.4 million in connection with the settlement of certain
    patent and license infringement claims.(5)
    
    During fiscal 2007 and 2006 we incurred $5.5 million and
    $2.0 million, respectively, of legal and accounting costs
    in connection with the Companys stock options
    investigation that was initiated during the fourth quarter of
    fiscal 2006.(6)
    
    During the second quarter of fiscal 2007 we recorded a
    $3.7 million charge for certain prepaid wafer costs that
    had been included in other assets in the accompanying
    consolidated balance sheet. This charge was recorded due to
    changes in the Companys product plans.  ITEM 7.
    MANAGEMENTS
    DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
    OPERATIONS  You should read the following discussion of our financial
    condition and results of operations in conjunction with our
    Consolidated Financial Statements and the related Notes to
    Consolidated Financial Statements, and Financial
    Statement Schedules, and Supplementary Financial
    Data included in this Annual Report on
    Form 10-K.
    This Annual Report on
    Form 10-K,
    including the Managements Discussion and Analysis of
    Financial Condition and Results of Operations, contains
    forward-looking statements regarding future events and the
    future results of our Company that are based on current
    expectations, estimates, forecasts, and projections about the
    industry in which we operate and the beliefs and assumptions of
    our management. Words such as expects,
    anticipates, targets,
    goals, projects,
    intends, plans,
    believes, seeks,
    estimates, variations of such words, and
    similar expressions are intended to identify such
    forward-looking statements. These forward-looking statements are
    only predictions and are subject to risks, uncertainties, and
    assumptions that are difficult to predict. Therefore, actual
    results may differ materially and adversely from those expressed
    in any forward-looking statements. Factors that might cause or
    contribute to such differences include, but are not limited to,
    those discussed in this Report under the section entitled
    Risk Factors in Item 1A of Part I and
    elsewhere, and in other reports we file with the SEC,
    specifically the most recent reports on
    Form 10-Q.
    We undertake no obligation to revise or update publicly any
    forward-looking statements for any reason.
  Overview
     32




---



##### Table of Contents



 Semiconductor
    Industry
     Logic
    Market
     Technology
  live-at-power-up,
   Flash
  side-by-side. power-up power-up,
   Antifuse
   33




---



##### Table of Contents



 Strategy
  live-at-power-up,
   Key
    Indicators
    Results
    of Operations
    Years EndedJan. 6,


Dec. 31,


Jan. 1,2008


2006


2006Net revenues


100.0
%


100.0
%


100.0
%Cost of revenues


41.8



39.5



41.0Gross margin


58.2



60.5



59.0Research and development


32.3



29.7



27.0Selling, general, and administrative


32.0



35.5



27.7Amortization of acquisition-related intangibles


0.0



0.0



1.1Income (loss) from operations


(6.1
)


(4.7
)


3.2Interest income and other, net of expense


4.3



3.7



2.2Income (loss) before tax provision (benefit)


(1.8
)


(1.0
)


5.4Tax provision (benefit)


(0.3
)


0.1



1.5Net income (loss)


(1.5
)%


(1.1
)%


3.9
%    Net
    Revenues
     34




---



##### Table of Contents



 Gross
    Margin
       Research
    and Development (R&D)
     35




---



##### Table of Contents



 Selling,
    General, and Administrative (SG&A)
       Amortization
    of Other Acquisition-Related Intangibles
     Interest
    Income and Other, Net of Expense
     Tax
    Provision (Benefit)
      Financial
    Condition, Liquidity, and Capital Resources
   36




---



##### Table of Contents



As of


As ofJan. 6, 2008


Dec. 31, 2006


$ Change


% ChangeIn thousandsCash and cash equivalents, short and long term investments

$
189,170


$
191,955


$
(2,785
)


(2
)%Accounts receivable, net

$
18,116


$
22,017


$
(3,901
)


(18
)%Inventories

$
35,587


$
39,203


$
(3,616
)


(9
)%   Year EndedJan. 6,


Dec. 31,2008


2006In thousandsNet cash provided by operating activities

$
10,764


$
24,529Net cash used in investing activities

$
(11,884
)

$
(22,066
)Net cash (used in) provided by financing activities

$
(2,460
)

$
7,203    Cash,
    Cash Equivalents, and Investments
           37




---



##### Table of Contents



Payments Due by Period2013Total


2008


2009


2010


2011


2012


and Later(In thousands)Operating leases

$
18,779


$
3,305


$
3,191


$
3,020


$
2,982


$
2,969


$
3,312        Accounts
    Receivable
       Inventories
   38




---



##### Table of Contents



 Property
    and Equipment
     Goodwill
       Other
    Assets
     Current
    Liabilities
     Shareholders
    Equity
  No. 06-2,
 39




---



##### Table of Contents



Impact of
    Recently Issued Accounting Standards
    No. FAS 157-1 FAS 157-1), No. FAS 157-2 FAS 157-2), FAS 157-1 FAS 157-2 FAS 157-1 FAS 157-2
    No. 07-3, (EITF 07-3). EITF 07-3 EITF 07-3
     40




---



##### Table of Contents



Critical
    Accounting Policies and Estimates
     Revenues
     41




---



##### Table of Contents



 Inventories
         Legal
    Matters and Loss Contingencies
  and/or and/or
   Income
    Taxes
   42




---



##### Table of Contents



 Stock-Based
    Compensation Expense
      ITEM 7A.
    QUANTITATIVE
    AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK       43




---



##### Table of Contents



ITEM 8.
    FINANCIAL
    STATEMENTS AND SUPPLEMENTARY DATA  ACTEL
    CORPORATION
  CONSOLIDATED
    BALANCE SHEETS
  Jan. 6,


Dec. 31,2008


2006(In thousands, except share and per share amounts)ASSETSCurrent assets:Cash and cash equivalents

$
30,119


$
33,699Short-term investments


152,609



124,022Accounts receivable, net


18,116



22,017Inventories


35,587



39,203Deferred income taxes


19,350



30,389Prepaid expenses and other current assets


10,259



9,492Total current assets


266,040



258,822Long-term investments


6,442



34,234Property and equipment, net


25,417



22,770Goodwill


30,197



30,209Deferred income taxes


16,082



3,055Other assets, net


19,438



19,832$
363,616


$
368,922LIABILITIES AND SHAREHOLDERS EQUITYCurrent liabilities:Accounts payable

$
16,972


$
15,799Accrued compensation and employee benefits


6,181



5,984Accrued licenses


4,927



9,098Other accrued liabilities


3,941



7,366Deferred income on shipments to distributors


26,109



29,297Total current liabilities


58,130



67,544Deferred compensation plan liability


5,479



4,428Deferred rent liability


1,417



1,367Accrued sabbatical compensation


3,380



Other long-term liabilities, net


3,718



4,967Total liabilities


72,124



78,306Commitments and contingenciesShareholders equity:Preferred stock, $.001 par value per share;
    4,500,000 shares authorized; 1,000,000 issued and converted
    to common stock; and none outstanding






Series A Preferred stock, $.001 par value per share;
    500,000 shares authorized; none issued or outstanding






Common Stock, $.001 par value; 55,000,000 shares
    authorized; 26,516,850 shares issued and outstanding at
    January 6, 2008 and December 31, 2006


26



26Additional paid-in capital


231,491



226,443Retained earnings


59,189



64,578Accumulated other comprehensive income (loss)


786



(431
)Total shareholders equity


291,492



290,616$
363,616


$
368,922    44




---



##### Table of Contents



ACTEL
    CORPORATION
  CONSOLIDATED
    STATEMENTS OF OPERATIONS
  Years Ended,Jan. 6, 2008


Dec. 31, 2006


Jan. 1, 2006(In thousands, except per share amounts)Net revenues

$
197,043


$
191,499


$
178,947Costs and expenses:Cost of revenues


82,363



75,618



73,282Research and development


63,726



56,926



48,242Selling, general, and administrative


63,053



67,959



49,649Amortization of acquisition-related intangibles






15



1,908Total costs and expenses


209,142



200,518



173,081Income (loss) from operations


(12,099
)


(9,019
)


5,866Interest income and other, net of expense


8,607



7,128



3,912Income (loss) before tax provision (benefit)


(3,492
)


(1,891
)


9,778Tax provision (benefit)


(588
)


264



2,742Net income (loss)

$
(2,904
)

$
(2,155
)

$
7,036Net income (loss) per share:Basic

$
(0.11
)

$
(0.08
)

$
0.28Diluted

$
(0.11
)

$
(0.08
)

$
0.28Shares used in computing net income (loss) per share:Basic


26,888



26,106



25,277Diluted


26,888



26,106



25,545    45




---



##### Table of Contents



ACTEL
    CORPORATION
  CONSOLIDATED
    STATEMENTS OF SHAREHOLDERS EQUITY AND ACCUMULATED OTHER
 COMPREHENSIVE
    INCOME/(LOSS)
  AccumulatedAdditional


Deferred





Other


TotalCommon


Paid-in


Stock


Retained


Comprehensive


ShareholdersStock


Capital


Compensation


Earnings


Income (Loss)


Equity(In thousands, except share amounts)Balance at January 2, 2005

$
25


$
203,695


$
(255
)

$
64,791


$
(440
)

$
267,816Net income














7,036







7,036Other comprehensive income (loss):Change in unrealized loss on investments


















(300
)


(300
)Total comprehensive income






















6,736Adjustment for stock-based compensation expense associated with
    remeasured grants






186















186Other adjustments for stock-based compensation expense






(431
)














(431
)Reversal of unearned compensation expense due to expiration of
    options






646















646Tax impact of stock-based compensation






(88
)














(88
)Reversal of unearned stock-based compensation expense due to
    employee terminations, net






(192
)


192











Issuance of 951,835 shares of Common Stock under employee
    stock plans


1



10,987















10,988Repurchase of 627,500 shares of Common Stock






(4,702
)






(5,094
)






(9,796
)Balance at January 1, 2006


26



210,101



(63
)


66,733



(740
)


276,057Net loss














(2,155
)






(2,155
)Other comprehensive income (loss):Change in unrealized loss on investments


















309



309Total comprehensive loss






















(1,846
)Stock-based compensation






11,256















11,256Reversal of deferred tax assets upon cancellation of options






(2,054
)














(2,054
)Issuance of 906,380 shares of Common Stock under employee
    stock plans






9,437















9,437Tax withholding on restricted stock






(2,234
)














(2,234
)Reversal of unearned stock-based compensation upon adoption of
    SFAS No. 123(R)






(63
)


63











Balance at December 31, 2006


26



226,443







64,578



(431
)


290,616Net loss














(2,904
)






(2,904
)Other comprehensive income (loss):Change in unrealized gain/loss on investments


















1,217



1,217Total comprehensive loss






















(1,687
)Cumulative effect  adoption of EITF
    06-2, net of
    tax














(2,485
)






(2,485
)Stock-based compensation






7,508















7,508Tax withholding on restricted stock






(2,798
)














(2,798
)Receipt of price differential for remeasured options






338















338Balance at January 6, 2008

$
26


$
231,491


$



$
59,189


$
786


$
291,492    46




---



##### Table of Contents



ACTEL
    CORPORATION
  CONSOLIDATED
    STATEMENTS OF CASH FLOWS
  Years Ended,Jan. 6, 2008


Dec. 31, 2006


Jan. 1, 2006(In thousands)Operating activities:Net income (loss)

$
(2,904
)

$
(2,155
)

$
7,036Adjustments to reconcile net income (loss) to net cash provided
    by operating activities:Depreciation and amortization


10,373



9,782



11,033Stock compensation cost recognized


7,872



10,990



(233
)Wafer prepayment charge


3,700







Changes in operating assets and liabilities:Accounts receivable


3,901



3,270



(8,854
)Inventories


3,491



(1,564
)


3,846Deferred income taxes


(1,210
)


(434
)


2,187Prepaid expenses and other current assets


(767
)


(938
)


(2,446
)License agreements and other long-term assets


(1,909
)


(5,627
)


(7,894
)Accounts payable, accrued compensation and employee benefits,
    and other accrued liabilities


(8,595
)


10,159



11,992Deferred income on shipments to distributors


(3,188
)


1,046



5,918Net cash provided by operating activities


10,764



24,529



22,585Investing activities:Purchases of property and equipment


(13,020
)


(8,678
)


(10,180
)Purchases of available-for-sale securities


(44,264
)


(145,200
)


(72,252
)Sales and maturities of available-for-sale securities


45,479



131,731



75,767Changes in other long term assets


(79
)


81



516Net cash used in investing activities


(11,884
)


(22,066
)


(6,149
)Financing activities:Issuance of Common Stock under employee stock plans






9,437



10,988Tax withholding on Restricted Stock


(2,798
)


(2,234
)


Receipt of price differential for remeasured options


338







Repurchase of Common Stock










(9,796
)Net cash provided by (used in) financing activities


(2,460
)


7,203



1,192Net increase (decrease) in cash and cash equivalents


(3,580
)


9,666



17,628Cash and cash equivalents, beginning of year


33,699



24,033



6,405Cash and cash equivalents, end of year

$
30,119


$
33,699


$
24,033Supplemental disclosures of cash flow information:Cash paid during the year for income taxes

$
428


$
510


$
435Supplemental schedule of non-cash activities:Accrual of long-term license agreements

$
3,451


$
9,557


$
10,678    47




---



##### Table of Contents



ACTEL
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
  1.
    Organization
    and Summary of Significant Accounting Policies    Basis
    of Presentation
      Use of
    Estimates
    Advertising
    and Promotion Costs
    Cash
    Equivalents and Investments
     48




---



##### Table of Contents



ACTEL
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
          Concentration
    of Credit Risk
     49




---



##### Table of Contents



ACTEL
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      and/or
  Fair
    Value of Financial Instruments
    
    Accounts Payable and Accrued Liabilities    
    Cash and Cash Equivalents    
    Insurance Contracts    
    Investment Securities    Goodwill
    and other Acquisition-Related Intangibles
   50




---



##### Table of Contents



ACTEL
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Sabbatical
    Leave
  No. 06-2,
  Impact
    of Recently Issued Accounting Standards
    No. FAS 157-1 FAS 157-1), No. FAS 157-2 FAS 157-2), FAS 157-1 FAS 157-2 FAS 157-1 FAS 157-2
    No. 07-3, (EITF 07-3). EITF 07-3 EITF 07-3
   51




---



##### Table of Contents



ACTEL
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Income
    Taxes
    Inventories
  (first-in,
     52




---



##### Table of Contents



ACTEL
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Legal
    Matters and Loss Contingencies
  and/or and/or
  Property
    and Equipment
    Equipment

2 to 5 yearsFurniture and fixtures

3 to 5 yearsLeasehold improvements

Shorter of useful life or remaining term of lease     Revenue
    Recognition
   53




---



##### Table of Contents



ACTEL
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
          Stock-Based
    Compensation
  Adoption
    of SFAS 123(R)
   54




---



##### Table of Contents



ACTEL
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Determining
    Fair Value
  Valuation and amortization method
  Expected Term
  Expected Volatility 
  Expected Dividend
  Risk-Free Interest Rate
  Estimated Forfeitures
 55




---



##### Table of Contents



ACTEL
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Fair Value
  Jan, 6, 2008


Dec. 31, 2006Option Plan SharesExpected term (in years)


4.72



4.65Volatility


42.3
%


44.4
%Risk-free interest rate


4.0
%


4.5
%Estimated forfeitures


3
%


3
%Weighted-average fair value

$
4.90


$
7.22ESPP SharesExpected term (in years)






1.27Volatility






32.0
%Risk-free interest rate






4.6
%Estimated forfeitures






3
%Weighted-average fair value





$
4.07       Pro
    Forma Information for Periods Prior to Adoption of
    FAS 123(R)
    StockYear Ended January 1, 2006

Options


ESPPExpected life of options (years)


3.90



1.29Expected stock price volatility


51
%


48
%Risk-free interest rate


3.7
%


3.7
%    56




---



##### Table of Contents



ACTEL
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Net income as reported

$
7,036Add back:Stock-based compensation included in reported net income, net of
    tax


(149
)Less:Total stock-based employee compensation expense determined under
    the fair value method for all awards, net of tax


(12,514
)Pro forma net loss

$
(5,627
)Net income per share as reported:Basic

$
0.28Diluted

$
0.28Pro forma net loss per share:Basic

$
(0.22
)Diluted

$
(0.22
)   Reclassifications
    2.
    Balance
    Sheet Detail  Jan. 6, 2008


Dec. 31, 2006(In thousands)Accounts receivable:Trade accounts receivable

$
18,810


$
22,631Allowance for doubtful accounts


(694
)


(614
)$
18,116


$
22,017     57




---



##### Table of Contents



ACTEL
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Jan. 6, 2008


Dec. 31, 2006(In thousands)Inventories:Purchased parts and raw materials

$
7,185


$
7,537Work-in-process


17,253



21,336Finished goods


11,149



10,330$
35,587


$
39,203Property and equipment:Equipment

$
93,068


$
81,294Furniture and fixtures


2,762



2,729Leasehold improvements


4,060



3,75299,890



87,775Accumulated depreciation


(74,473
)


(65,005
)$
25,417


$
22,770     Goodwill:
    Jan. 6, 2008


Dec. 31, 2006(In thousands)Other Assets:Prepaid long-term license fees

$
13,857


$
13,584Deferred compensation plan assets


5,187



4,104Identifiable intangible assets from acquisitions


12,728



12,728Acquired patents


1,842



1,842Other


394



2,144Subtotal


34,008



34,402Less accumulated amortization


(14,570
)


(14,570
)$
19,438


$
19,832     Gross


AccumulatedAssets


Amortization


Net(In thousands)Acquisition-related developed technology

$
11,454


$
(11,454
)

$
Other acquisition-related intangibles


1,274



(1,274
)


Acquired patents


1,842



(1,842
)


Total identified intangible assets

$
14,570


$
(14,570
)

$
  58




---



##### Table of Contents



ACTEL
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    3.
    Financial
    Instruments    Gross


Gross


EstimatedUnrealized


Unrealized


FairCost


Gains


Losses


Values(In thousands)January 6, 2008Money market mutual funds

$
9,345


$



$



$
9,345Asset backed obligations


33,786



149



(106
)


33,829Corporate bonds


68,106



602



(165
)


68,543U.S. Treasury obligations


2,809



90







2,899U.S. government agency securities


47,074



666







47,740Floating rate notes


3,499



22







3,521Municipal obligations


2,497



22







2,519Total available-for-sale securities

$
167,116


$
1,551


$
(271
)

$
168,396Included in cash and cash equivalents













$
9,345Included in short term investments














152,609Included in long term investments














6,442Total available-for-sale securities













$
168,396   Gross


Gross


EstimatedUnrealized


Unrealized


FairCost


Gains


Losses


Values(In thousands)December 31, 2006Money market mutual funds

$
337


$



$



$
337Asset backed obligations


27,755



1



(42
)


27,714Corporate bonds


64,788



19



(413
)


64,394U.S. Treasury obligations


32,896







(155
)


32,741U.S. government agency securities


14,431



11



(79
)


14,363Floating rate notes


10,589



10



(30
)


10,569Municipal obligations


8,527







(52
)


8,475Total available-for-sale securities

$
159,323


$
41


$
(771
)

$
158,593Included in cash and cash equivalents













$
337Included in short term investments














124,022Included in long term investments














34,234Total available-for-sale securities













$
158,593  59




---



##### Table of Contents



ACTEL
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Aggregate

AggregateValue of

Fair ValueUnrealized

ofLoss

Investments(In thousands)Unrealized loss position for less than twelve months

$
(177
)

$
9,639Unrealized loss position for greater than twelve months

$
(94
)

$
26,931         (In thousands)Available-for-sale debt securities:Due in less than one year

$
69,470Due in one to five years


89,581$
159,051     4.
    Commitments
    and Contingencies  
    Commitments   60




---



##### Table of Contents



ACTEL
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
          Payments Due by Period2013Total

2008

2009

2010

2011

2012

and Later(In thousands)Operating leases

$
18,779


$
3,305


$
3,191


$
3,020


$
2,982


$
2,969


$
3,312     
    Contingencies     61




---



##### Table of Contents



ACTEL
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  5.
    Retirement
    Plan      6.
    Stock
    Based Compensation  
    Stock-Based
    Compensation Expense    Jan. 6, 2008


Dec. 31, 2006Cost of revenues

$
554


$
506Research and development


4,024



5,648Selling, general, and administrative


3,294



4,836Total stock-based compensation expense, before income taxes


7,872



10,990Tax benefit


1,518



1,632Total stock-based compensation expense, net of income taxes

$
6,354


$
9,358          62




---



##### Table of Contents



ACTEL
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
            
    Stock
    Option Plans       63




---



##### Table of Contents



ACTEL
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Weighted-Weighted-


AverageAverage


Remaining


AggregateNumber


Exercise


Contractual


IntrinsicOptions

of Shares


Price


Term


Value(In thousands)Outstanding at January 2, 2005


8,979,409


$
19.94Granted


1,219,365



15.45Exercised


(250,166
)


11.02Cancelled


(302,121
)


21.06Outstanding at January 1, 2006


9,646,487


$
19.57Granted


1,009,927



15.13Exercised


(540,221
)


12.43Exchanged


(4,182,027
)


23.39Forfeitures and cancellations


(269,312
)


18.08Outstanding at December 31, 2006


5,664,854



16.71Granted


978,595



11.84Forfeitures and cancellations


(770,023
)


15.41Outstanding at January 6, 2008


5,873,426



16.07



5.83


$
1,771Vested and expected to vest at January 6, 2008


5,741,453



16.12



5.77


$
1,694Exercisable at January 6, 2008


3,803,382



17.30



4.34


$
503    64




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##### Table of Contents



ACTEL
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    January 6, 2008Options Outstanding


Options ExercisableWeightedAverageRemaining


Weighted





WeightedContract


Average





AverageNumber of


Life


Exercise


Number of


ExerciseRange of Exercise Prices

Shares


(In Years)


Price


Shares


Price$ 0.07 - 10.06


116,818



0.66


$
9.46



116,818


$
9.4610.25 - 11.05


711,550



9.60



11.04



15,700



10.4211.07 - 13.78


692,307



3.59



12.95



573,138



13.1413.81 - 14.77


981,810



7.40



14.53



297,808



14.4714.78 - 15.13


193,971



4.78



14.97



142,966



14.9715.15 - 15.15


609,893



4.79



15.15



609,893



15.1515.25 - 15.42


9,341



8.45



15.41



3,194



15.4015.70 - 15.70


732,603



6.77



15.70



501,354



15.7015.83 - 17.97


606,541



6.32



16.98



371,096



17.1018.91 - 54.45


1,218,592



3.99



23.06



1,171,415



23.075,873,426



5.83


$
16.07



3,803,382


$
17.30     
    Employee
    Stock Purchase Plan       65




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##### Table of Contents



ACTEL
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  
    Restricted
    Stock Units (RSUs)      EITF 00-23. EITF 00-23
    Weighted-AverageNumber of


Grant Date FairShares


ValueNonvested at January 1, 2006





$
Granted


125,160



12.66Granted under exchange program


1,130,965



13.17Vested


(350,870
)


13.17Forfeited


(94,569
)


13.23Nonvested at December 31, 2006


810,686



13.48Granted


127,523



11.05Vested


(535,136
)


13.17Forfeited


(59,713
)


13.65Nonvested at January 6, 2008


343,360


$
13.03  66




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##### Table of Contents



ACTEL
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  7.
    Comprehensive
    Income (Loss)    Years EndedJan. 6, 2008


Dec. 31, 2006


Jan. 1, 2006(In thousands)Net income (loss)

$
(2,904
)

$
(2,155
)

$
7,036Change in gain (loss) on available-for-sale securities, net of
    tax of $768 in 2007, $207 in 2006, and ($210) in 2005


1,224



329



(315
)Reclassification adjustment for gains or losses included in net
    income (loss), net of tax of ($4) in 2007, ($13) in 2006, and
    $11 in 2005


(7
)


(20
)


15Other comprehensive income (loss), net of tax of $764 in 2007,
    $194 in 2006, and ($199) in 2005


1,217



309



(300
)Total comprehensive income (loss)

$
(1,687
)

$
(1,846
)

$
6,736     8.
    Tax
    Provision      Balance at January 1, 2007

$
2,610Increases relating to current year provisions


623Ending balance at January 6, 2008

$
3,233        67




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##### Table of Contents



ACTEL
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Years EndedJan. 6,


Dec. 31,


Jan. 1,2008


2006


2006(In thousands)U.S.

$
(4,002
)

$
(2,598
)

$
9,130Foreign


510



707



648Income(loss) before income taxes

$
(3,492
)

$
(1,891
)

$
9,778     Years EndedJan. 6,


Dec. 31,


Jan. 1,2008


2006


2006(In thousands)Federal  current

$



$
(158
)

$
150Federal  deferred


(232
)


2,149



2,706State  current


50



105



50State  deferred


(770
)


(2,240
)


(519
)Foreign  current


364



408



355$
(588
)

$
264


$
2,742     Jan. 6,


Dec. 31,


Jan. 1,2008


2006


2006(In thousands)Tax provision (benefit) at federal statutory rate

$
(1,222
)

$
(662
)

$
3,414Tax exempt interest income










(31
)Federal research credits


(481
)


(260
)


(452
)State taxes, net of federal benefit


(469
)


(1,387
)


(305
)Non-deductible stock compensation


1,380



2,518



(8
)Non-deductible meals and entertainment expenses


80



91



112Settlement of tax contingencies






(386
)


Foreign tax rate differential


185



297



Other


(61
)


53



12Tax provision (benefit)

$
(588
)

$
264


$
2,742  68




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##### Table of Contents



ACTEL
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Jan. 6,


Dec. 31,2008


2006(In thousands)Deferred tax assets:Deferred income on shipments to distributors

$
9,634


$
11,558Intangible assets


2,393



3,186Inventories


5,754



5,458Net operating losses


10,547



6,398Capitalized research and development expenses


1,111



1,938Research and development and other tax credits


11,851



7,141Stock options


770



2,200Compensation and sabbatical accrual


3,721



Non-deductible accruals and other, net


304



6,57546,085



44,454Valuation allowance


(9,801
)


(9,920
)Deferred tax assets

$
36,284


$
34,534Deferred tax liabilities:Depreciation

$
(852
)

$
(1,090
)Net deferred tax assets

$
35,432


$
33,444          69




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##### Table of Contents



ACTEL
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  9.
    Shareholders
    Equity  
    Preferred Stock
    
    Stock Repurchase
    
    Shareholder Rights Plan
    10.
    Segment
    Disclosures      Years EndedJanuary 6,


December 31,


January 1,2008


2006


2006(In thousands, except percentages)United States

$
98,394



50
%

$
97,716



51
%

$
99,159



56
%Export:Europe


56,820



29
%


51,401



27
%


49,042



27
%Japan


10,003



5
%


12,427



6
%


10,296



6
%Other international


31,826



16
%


29,955



16
%


20,450



11
%$
197,043



100
%

$
191,499



100
%

$
178,947



100
%  70




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##### Table of Contents



ACTEL
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Jan. 6,


Dec. 31,2008


2006(In thousands)United States

$
24,650


$
21,849Europe


711



873Japan


13



13Other international


43



35$
25,417


$
22,770   11.
    Net
    Income (Loss) Per Share    Years EndedJan. 6,


Dec. 31,


Jan. 1,2008


2006


2006(In thousands, except per share amounts)Basic:Weighted-average common shares outstanding


26,888



26,106



25,277Net income(loss)

$
(2,904
)

$
(2,155
)

$
7,036Net income(loss) per share

$
(0.11
)

$
(0.08
)

$
0.28Diluted:Weighted-average common shares outstanding


26,888



26,106



25,277Net effect of dilutive stock options based on the treasury stock
    method










268Shares used in computing net income per share


26,888



26,106



25,545Net income(loss)

$
(2,904
)

$
(2,155
)

$
7,036Net income(loss) per share

$
(0.11
)

$
(0.08
)

$
0.28       12.
    Legal
    Proceedings  and/or
 71




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##### Table of Contents



ACTEL
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  and/or
  13.
    Subsequent
    Events    15-month
   72




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##### Table of Contents



ACTEL
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  14.
    Unaudited
    Quarterly Information    Year Ended January 6, 2008Fourth Quarter


Third Quarter


Second Quarter


First Quarter(In thousands, except per share amounts)Net revenues

$
51,769


$
47,880


$
48,790


$
48,604Costs and expenses:Cost of revenues


23,291



19,306



19,928



19,838Research and development


15,475



13,754



18,778



15,719Selling, general, and administrative


16,768



14,800



15,400



16,085Total costs and expenses


55,534



47,860



54,106



51,642Income (loss) from operations


(3,765
)


20



(5,316
)


(3,038
)Interest income and other, net of expense


2,231



2,156



2,092



2,128Income (loss) before tax (benefit) provision


(1,534
)


2,176



(3,224
)


(910
)Tax (benefit) provision


(237
)


391



(579
)


(163
)Net income (loss)

$
(1,297
)

$
1,785


$
(2,645
)

$
(747
)Net income (loss) per share:Basic

$
(0.05
)

$
0.07


$
(0.10
)

$
(0.03
)Diluted(1)

$
(0.05
)

$
0.07


$
(0.10
)

$
(0.03
)Shares used in computing net income (loss) per share:Basic


27,026



26,935



26,845



26,747Diluted(1)


27,026



27,234



26,845



26,747     (1)
    For the fourth, second and first quarters of 2007, we incurred a
    quarterly net loss and the inclusion of stock options in the
    shares used for computing diluted earnings per share would have
    been anti-dilutive and reduced the loss per share. Accordingly,
    all Common Stock equivalents (such as stock options) have been
    excluded from the shares used to calculate diluted earnings per
    share for that period.  73




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##### Table of Contents



ACTEL
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Year Ended December 31, 2006Fourth Quarter


Third Quarter


Second Quarter


First Quarter(In thousands, except per share amounts)Net revenues

$
48,151


$
49,639


$
47,576


$
46,133Costs and expenses:Cost of revenues


20,583



18,471



18,067



18,496Research and development


14,294



14,475



14,428



13,728Selling, general, and administrative


24,861



14,105



14,202



14,792Amortization of acquisition-related intangibles










7



8Total costs and expenses


59,738



47,051



46,704



47,024Income (loss) from operations


(11,587
)


2,588



872



(891
)Interest income and other, net of expense


2,103



2,021



1,641



1,363Income (loss) before tax (benefit) provision


(9,484
)


4,609



2,513



472Tax (benefit) provision


(1,961
)


1,198



864



162Net income (loss)

$
(7,523
)

$
3,411


$
1,649


$
310Net income (loss) per share:Basic

$
(0.28
)

$
0.13


$
0.06


$
0.01Diluted(1)

$
(0.28
)

$
0.12


$
0.06


$
0.01Shares used in computing net income (loss) per share:Basic


26,515



26,281



25,874



25,753Diluted(1)


26,515



27,393



27,087



26,879     (1)
    For the fourth quarter of 2006, we incurred a quarterly net loss
    and the inclusion of stock options in the shares used for
    computing diluted earnings per share would have been
    anti-dilutive and reduced the loss per share. Accordingly, all
    Common Stock equivalents (such as stock options) have been
    excluded from the shares used to calculate diluted earnings per
    share for that period. 74




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##### Table of Contents



REPORT OF
    ERNST & YOUNG LLP
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
               /s/ Ernst & Young LLP
    75




---



##### Table of Contents



REPORT OF
    ERNST & YOUNG LLP
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
                 /s/ Ernst & Young LLP
    76




---



##### Table of Contents



ITEM 9.
    CHANGES
    IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
    FINANCIAL DISCLOSURE    ITEM 9A.
    CONTROLS
    AND PROCEDURES  Evaluation
    of Effectiveness of Disclosure Controls and Procedures
  Rule 13a-15(e) Form 10-K. Form 10-K
  Managements
    Annual Report on Internal Control over Financial
    Reporting
      Inherent
    Limitations of Internal Controls
    
    pertain to the maintenance of records that, in reasonable
    detail, accurately and fairly reflect the transactions and
    dispositions of our assets;
    provide reasonable assurance that transactions are recorded as
    necessary to permit preparation of financial statements in
    accordance with generally accepted accounting principles, and
    that our receipts and expenditures are being made only in
    accordance with authorizations of our management and
    directors; and
    provide reasonable assurance regarding prevention or timely
    detection of unauthorized acquisition, use, or disposition of
    our assets that could have a material effect on the financial
    statements.   77




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##### Table of Contents



Changes
    in Internal Control over Financial Reporting
    ITEM 9B.
    OTHER
    INFORMATION   PART III  ITEM 10.
    DIRECTORS
    AND EXECUTIVE OFFICERS OF THE REGISTRANT AND CORPORATE
    GOVERNANCE    Code of
    Ethics
  http://www.actel.com. http://www.actel.com
  Form 10-K.
  ITEM 11.
    EXECUTIVE
    COMPENSATION    ITEM 12.
    SECURITY
    OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
    RELATED STOCKHOLDER MATTERS    ITEM 13.
    CERTAIN
    RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
    INDEPENDENCE    ITEM 14.
    PRINCIPAL
    ACCOUNTANT FEES AND SERVICES   78




---



##### 



PART IV  ITEM 15.
    EXHIBITS,
    FINANCIAL STATEMENT SCHEDULES  Form 10-K:
  Financial Statements. Form 10-K:
   
 Consolidated balance sheets at January 6,
    2008 and December 31, 2006


44Consolidated statements of operations for each of
    the three years in the period ended January 6, 2008


45Consolidated statements of shareholders
    equity and other comprehensive income/(loss) for each of the
    three years in the period ended January 6, 2008


46Consolidated statements of cash flows for each of
    the three years in the period ended January 6, 2008


47Notes to consolidated financial statements


48    Financial Statement Schedule. Form 10-K.
  Exhibits. Form 10-K.
  Exhibits. Form 10-K:
  ExhibitNumber

Description3
.1

Restated Articles of Incorporation, as amended (filed as
    Exhibit 3.1 to the Registrants Annual Report on
    Form 10-K
    (File
    No. 0-21970)
    for the fiscal year ended January 5, 2003).3
.2

Restated Bylaws (filed as Exhibit 3.1 to the
    Registrants Annual Report on
    Form 10-K
    (File
    No. 0-21970)
    for the fiscal year ended January 5, 2003).3
.3

Certificate of Amendment to Certificate of Determination of
    Rights, Preferences and Privileges of Series A
    Participating Preferred Stock of Actel Corporation (filed as
    Exhibit 3.3 to the Registrants Registration Statement
    on
    Form 8-A
    (File
    No. 000-2197),
    filed on October 24, 2003).4
.1

Preferred Stock Rights Agreement, dated as of October 17,
    2003, between the Registrant and Wells Fargo Bank, MN N.A.,
    including the Certificate of Amendment of Certificate to
    Determination, the form of Rights Certificate and the Summary of
    Rights attached thereto as Exhibits A, B, and C,
    respectively (filed as Exhibit 4.1 to the Registrants
    Registration Statement on
    Form 8-A
    (File
    No. 000-2197),
    filed on October 24, 2003).10
.1(1)

Form of Indemnification Agreement for directors and officers
    (filed as Exhibit 10.1 to the Registrants
    Registration Statement on
    Form S-1
    (File
    No. 33-64704),
    declared effective on August 2, 1993).10
.2(1)

Amended and Restated 1986 Equity Incentive Plan (filed as
    Exhibit 10.1 to the Registrants Quarterly Report on
    Form 10-Q
    (File
    No. 0-21970)
    for the fiscal quarter ended July 3, 2005).10
.3(1)

2003 Director Stock Option Plan (filed as Exhibit 4.4
    to the Registrants Registration Statement on
    Form S-8
    (File
    No. 333-112215),
    declared effective on January 26, 2004).10
.4(1)

Amended and Restated 1993 Employee Stock Purchase Plan (filed as
    Exhibit 10.2 to the Registrants Annual Report on
    Form 10-K
    (File
    No. 0-21970)
    for the fiscal quarter ended July 3, 2005).10
.5

1995 Employee and Consultant Stock Plan, as amended and restated
    (filed as Exhibit 10.2 to the Registrants Quarterly
    Report on
    Form 10-Q
    (File
    No. 0-21970)
    for the fiscal quarter ended July 7, 2002).10
.6(1)

Amended and Restated Employee Retention Plan (filed as
    Exhibit 10.6 to the Registrants Current Report on
    Form 8-K
    (File
    No. 0-21970)
    field with the Securities and Exchange Commission on
    December 5, 2005).10
.7(1)

Deferred Compensation Plan, as amended and restated (filed as
    Exhibit 10.7 to the Registrants Annual Report on
    Form 10-K
    (File
    No. 0-21970)
    for the fiscal year ended December 31, 2000). 79




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##### Table of Contents



ExhibitNumber

Description10
.8

Form of Distribution Agreement (filed as Exhibit 10.13 to
    the Registrants Registration Statement on
    Form S-1
    (File
    No. 33-64704),
    declared effective on August 2, 1993).10
.9

Patent Cross License Agreement dated April 22, 1993 between
    the Registrant and Xilinx, Inc. (filed as Exhibit 10.14 to
    the Registrants Registration Statement on
    Form S-1
    (File
    No. 33-64704),
    declared effective on August 2, 1993).10
.10

Manufacturing Agreement dated February 3, 1994 between the
    Registrant and Chartered Semiconductor Manufacturing Pte Ltd
    (filed as Exhibit 10.17 to the Registrants Annual
    Report on
    Form 10-K
    (File
    No. 0-21970)
    for the fiscal year ended January 2, 1994).10
.11

Foundry Agreement dated as of June 29, 1995, between the
    Registrant and Matsushita Electric Industrial Co., Ltd and
    Matsushita Electronics Corporation (filed as Exhibit 10.25
    to the Registrants Quarterly Report on
    Form 10-Q
    (File
    No. 0-21970)
    for the fiscal quarter ended July 2, 1995).10
.12

Asset Purchase Agreement dated as of March 16, 2007,
    between the Registrant and BTR, Inc., Advantage Logic Inc.,
    Benjamin Ting, Peter Pani, and Richard Abraham.10
.13

Patent Cross License Agreement dated August 25, 1998,
    between the Registrant and QuickLogic Corporation. (filed as
    Exhibit 10.19 to the Registrants Annual Report on
    Form 10-K
    (File
    No. 0-21970)
    for the fiscal year ended January 3, 1999).10
.14

Development Agreement by and between the Registrant and Infineon
    Technologies AG effective as of June 6, 2002 (filed as
    Exhibit 10.19 to the Registrants Annual Report on
    Form 10-K
    (File
    No. 0-21970)
    for the fiscal year ended January 5, 2003).10
.15

Supply Agreement by and between the Registrant and Infineon
    Technologies AG effective as of June 6, 2002 (filed as
    Exhibit 10.20 to the Registrants Annual Report on
    Form 10-K
    (File
    No. 0-21970)
    for the fiscal year ended January 5, 2003).10
.16

Office Lease Agreement for the Registrants facilities in
    Mountain View, California, dated February 27, 2003 (filed
    as Exhibit 10.21 to the Registrants Annual Report on
    Form 10-K
    (File
    No. 0-21970)
    for the fiscal year ended January 5, 2003).14


Code of Ethics for Principal Executive and Senior Financial
    Officers (filed as Exhibit 14 to the Registrants
    Annual Report on
    Form 10-K
    (File
    No. 0-21970)
    for the fiscal year ended January 4, 2004).21


Subsidiaries of Registrant.23


Consent of Ernst & Young LLP, Independent Registered
    Public Accounting Firm.24


Power of Attorney.31
.1

Rule 13a-14(a)/15d-14(a)
    Certification of Chief Executive Officer.31
.2

Rule 13a-14(a)/15d-14(a)
    Certification of Chief Financial Officer.32


Section 1350 Certifications.     (1)
    
    This Exhibit is a management contract or compensatory plan or
    arrangement.  Financial Statement Schedule. Form 10-K
  Schedule

Description


PageII


Valuation and qualifying accounts



82    80




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##### Table of Contents



SIGNATURES
      By:
    /s/  John
    C. East       Form 10-K
  Signature

Title

Date/s/  John
    C. East(John
    C. East)

President and Chief Executive Officer (Principal Executive
    Officer) and Director

March 19, 2008/s/  Jon
    A. Anderson(Jon
    A. Anderson)

Vice President of Finance and Chief Financial Officer (Principal
    Financial and Accounting Officer)

March 19, 2008/s/  James
    R. Fiebiger(James
    R. Fiebiger)

Director

March 19, 2008/s/  Jacob
    S. Jacobsson(Jacob
    S. Jacobsson)

Director

March 19, 2008/s/  J.
    Daniel McCranie(J.
    Daniel McCranie)

Director

March 19, 2008/s/  Robert
    G. Spencer(Robert
    G. Spencer)

Director

March 19, 2008  81




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##### Table of Contents



SCHEDULE II
  ACTEL
    CORPORATION
  VALUATION
    AND QUALIFYING ACCOUNTS
  Balance at








Balance atBeginning








End ofof Period


Provisions


Write-Offs


Period(In thousands)Allowance for doubtful accounts:Year ended January 1, 2006

$
879



329







1,208Year ended December 31, 2006

$
1,208



(594
)






614Year ended January 6, 2008

$
614



80







694  82




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##### Table of Contents



Exhibit Index
  ExhibitNumber.

Description3
.1

Restated Articles of Incorporation, as amended (filed as
    Exhibit 3.1 to the Registrants Annual Report on
    Form 10-K
    (File
    No. 0-21970)
    for the fiscal year ended January 5, 2003).3
.2

Restated Bylaws (filed as Exhibit 3.1 to the
    Registrants Annual Report on
    Form 10-K
    (File
    No. 0-21970)
    for the fiscal year ended January 5, 2003).3
.3

Certificate of Amendment to Certificate of Determination of
    Rights, Preferences and Privileges of Series A
    Participating Preferred Stock of Actel Corporation (filed as
    Exhibit 3.3 to the Registrants Registration Statement
    on
    Form 8-A
    (File
    No. 000-2197),
    filed on October 24, 2003).4
.1

Preferred Stock Rights Agreement, dated as of October 17,
    2003, between the Registrant and Wells Fargo Bank, MN N.A.,
    including the Certificate of Amendment of Certificate to
    Determination, the form of Rights Certificate and the Summary of
    Rights attached thereto as Exhibits A, B, and C,
    respectively (filed as Exhibit 4.1 to the Registrants
    Registration Statement on
    Form 8-A
    (File
    No. 000-2197),
    filed on October 24, 2003).10
.1(1)

Form of Indemnification Agreement for directors and officers
    (filed as Exhibit 10.1 to the Registrants
    Registration Statement on
    Form S-1
    (File
    No. 33-64704),
    declared effective on August 2, 1993).10
.2(1)

Amended and Restated 1986 Equity Incentive Plan (filed as
    Exhibit 10.1 to the Registrants Quarterly Report on
    Form 10-Q
    (File
    No. 0-21970)
    for the fiscal quarter ended July 3, 2005).10
.3(1)

2003 Director Stock Option Plan (filed as Exhibit 4.4
    to the Registrants Registration Statement on
    Form S-8
    (File
    No. 333-112215),
    declared effective on January 26, 2004).10
.4(1)

Amended and Restated 1993 Employee Stock Purchase Plan (filed as
    Exhibit 10.2 to the Registrants Annual Report on
    Form 10-K
    (File
    No. 0-21970)
    for the fiscal quarter ended July 3, 2005).10
.5

1995 Employee and Consultant Stock Plan, as amended and restated
    (filed as Exhibit 10.2 to the Registrants Quarterly
    Report on
    Form 10-Q
    (File
    No. 0-21970)
    for the fiscal quarter ended July 7, 2002).10
.6(1)

Amended and Restated Employee Retention Plan (filed as
    Exhibit 10.6 to the Registrants Current Report on
    Form 8-K
    (File
    No. 0-21970)
    field with the Securities and Exchange Commission on
    December 5, 2005).10
.7(1)

Deferred Compensation Plan, as amended and restated (filed as
    Exhibit 10.7 to the Registrants Annual Report on
    Form 10-K
    (File
    No. 0-21970)
    for the fiscal year ended December 31, 2000).10
.8

Form of Distribution Agreement (filed as Exhibit 10.13 to
    the Registrants Registration Statement on
    Form S-1
    (File
    No. 33-64704),
    declared effective on August 2, 1993).10
.9

Patent Cross License Agreement dated April 22, 1993 between
    the Registrant and Xilinx, Inc. (filed as Exhibit 10.14 to
    the Registrants Registration Statement on
    Form S-1
    (File
    No. 33-64704),
    declared effective on August 2, 1993).10
.10

Manufacturing Agreement dated February 3, 1994 between the
    Registrant and Chartered Semiconductor Manufacturing Pte Ltd
    (filed as Exhibit 10.17 to the Registrants Annual
    Report on
    Form 10-K
    (File
    No. 0-21970)
    for the fiscal year ended January 2, 1994).10
.11

Foundry Agreement dated as of June 29, 1995, between the
    Registrant and Matsushita Electric Industrial Co., Ltd and
    Matsushita Electronics Corporation (filed as Exhibit 10.25
    to the Registrants Quarterly Report on
    Form 10-Q
    (File
    No. 0-21970)
    for the fiscal quarter ended July 2, 1995).10
.12

Asset Purchase Agreement dated as of March 16, 2007,
    between the Registrant and BTR, Inc., Advantage Logic Inc.,
    Benjamin Ting, Peter Pani, and Richard Abraham.10
.13

Patent Cross License Agreement dated August 25, 1998,
    between the Registrant and QuickLogic Corporation. (filed as
    Exhibit 10.19 to the Registrants Annual Report on
    Form 10-K
    (File
    No. 0-21970)
    for the fiscal year ended January 3, 1999).10
.14

Development Agreement by and between the Registrant and Infineon
    Technologies AG effective as of June 6, 2002 (filed as
    Exhibit 10.19 to the Registrants Annual Report on
    Form 10-K
    (File
    No. 0-21970)
    for the fiscal year ended January 5, 2003).10
.15

Supply Agreement by and between the Registrant and Infineon
    Technologies AG effective as of June 6, 2002 (filed as
    Exhibit 10.20 to the Registrants Annual Report on
    Form 10-K
    (File
    No. 0-21970)
    for the fiscal year ended January 5, 2003).




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##### Table of Contents



ExhibitNumber.

Description10
.16

Office Lease Agreement for the Registrants facilities in
    Mountain View, California, dated February 27, 2003 (filed
    as Exhibit 10.21 to the Registrants Annual Report on
    Form 10-K
    (File
    No. 0-21970)
    for the fiscal year ended January 5, 2003).14


Code of Ethics for Principal Executive and Senior Financial
    Officers (filed as Exhibit 14 to the Registrants
    Annual Report on
    Form 10-K
    (File
    No. 0-21970)
    for the fiscal year ended January 4, 2004).21


Subsidiaries of Registrant.23


Consent of Ernst & Young LLP, Independent Registered
    Public Accounting Firm.24


Power of Attorney.31
.1

Rule 13a-14(a)/15d-14(a)
    Certification of Chief Executive Officer.31
.2

Rule 13a-14(a)/15d-14(a)
    Certification of Chief Financial Officer.32


Section 1350 Certifications.     (1)
    
    This Exhibit is a management contract or compensatory plan or
    arrangement.