UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                     --------------------------------------

                                    FORM 10-K

(Mark One)

   X     ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2000

                                       OR

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

Commission file number 0-21970

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                                ACTEL CORPORATION
             (Exact name of Registrant as specified in its charter)

                 California                                  77-0097724
       (State or other jurisdiction of                    (I.R.S. Employer
       incorporation or organization)                   Identification No.)
           955 East Arques Avenue
            Sunnyvale, California                            94086-4533
  (Address of principal executive offices)                   (Zip Code)

                                 (408) 739-1010
              (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
                                (Title of class)

                     --------------------------------------

       Indicate by check mark whether the  Registrant  (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
Registrant  was required to file such  reports) and (2) has been subject to such
filing requirements for the past 90 days. Yes  X   No

       Indicate by check mark if  disclosure of  delinquent  filers  pursuant to
Item 405 of Regulation S-K is not contained  herein,  and will not be contained,
to the best of  Registrant's  knowledge,  in  definitive  proxy  or  information
statements  incorporated  by reference in Part III of this Annual Report on Form
10-K or any amendment to this Annual Report on Form 10-K.       X

       The aggregate market value of the voting stock held by  non-affiliates of
the  Registrant,  based upon the  closing  price for shares of the  Registrant's
Common Stock on March 31, 2001, as reported by the National Market System of the
National  Association of Securities  Dealers  Automated  Quotation  System,  was
approximately  $320,361,000.  In calculating such aggregate market value, shares
of Common Stock owned of record or beneficially by all officers,  directors, and
persons  known to the  Registrant  to own more than five percent of any class of
the  Registrant's  voting  securities were excluded  because such persons may be
deemed to be affiliates.  The  Registrant  disclaims the existence of control or
any admission thereof for any purpose.

       Number  of  shares  of Common  Stock  outstanding  as of March 31,  2001:
23,565,643.


                     --------------------------------------

                       DOCUMENTS INCORPORATED BY REFERENCE

       The following  documents are  incorporated by reference in Parts II, III,
and IV of this Annual Report on Form 10-K: (i) portions of  Registrant's  annual
report to security holders for the fiscal year ended December 31, 2000 (Parts II
and IV),  and (ii)  portions  of  Registrant's  proxy  statement  for its annual
meeting of shareholders to be held on May 18, 2001 (Part III).

<PAGE>


       All  information  contained or  incorporated  by reference in this Annual
Report on Form 10-K should be read in conjunction with and in the context of the
Risk  Factors set forth at the end of Part I. Unless  otherwise  indicated,  the
statements contained in this Annual Report on Form 10-K are made as of March 31,
2001, and Actel  undertakes no obligation to update such  statements,  including
all forward-looking statements.

                                     PART I

ITEM 1.  BUSINESS

Overview

       Actel  designs,  develops,  and markets  field  programmable  gate arrays
(FPGAs) and associated design and development software and programming hardware.
FPGAs are used by designers of communications,  computer, consumer,  industrial,
space,  and other electronic  systems to differentiate  products and get them to
market  faster.  Actel  is the  leading  supplier  of FPGAs  based  on  antifuse
technology,  and has  introduced  FPGAs based on flash  technology  and embedded
programmable gate array (EPGA) intellectual  property (IP) cores based on static
random  access  memory  (SRAM)  technology.   Actel's  strategy  is  to  be  The
Programmable  ASIC  Solutions  Company,  a  provider  of  complete  programmable
solutions for  application  specific  integrated  circuit (ASIC) and application
specific standard product (ASSP) system designers and manufacturers.

       Actel shipped its first products in 1988 and thousands of its development
systems are in the hands of customers, including Alcatel; Cabletron Systems, Inc
(Cabletron);   General  Electric  Company  (GE);  Honeywell  International  Inc.
(Honeywell);   Hughes   Electronics   Corporation   (Hughes);   Lockheed  Martin
Corporation  (Lockheed Martin);  Lucent  Technologies,  Inc.  (Lucent);  Marconi
Corporation  plc  (Marconi);  Nortel  Networks  Corporation  (Nortel);  Rockwell
International  Corporation (Rockwell);  and Siemens AG (Siemens).  Actel derived
11% of its net revenues for 2000 from  Nortel.  Actel has foundry  relationships
with Chartered  Semiconductor  Manufacturing  Pte Ltd  (Chartered) in Singapore;
Infineon   Technologies   AG  (Infineon)  in  Germany;   Lockheed  Martin  Space
Electronics  &   Communications   (LMSEC)  in  the  United  States;   Matsushita
Electronics Company (MEC) in Japan; United Microelectronics Corporation (UMC) in
Taiwan; and Winbond Electronics Corp. (Winbond) in Taiwan.

       Actel's product line consists of twelve  families of FPGAs,  one based on
flash  technology and the rest based on antifuse  technology;  Designer  Series,
DeskTOP,  and ASICmaster PRO development  systems;  CoreACT and VariCore EPGA IP
cores;  Activator and Silicon Sculptor  programming  hardware;  Silicon Explorer
debugging and  diagnostic  tools;  and sockets.  Actel also offers  system-level
design,  prototyping,  and  consulting  services  through  its  Protocol  Design
Services Group and programming services.

       To meet the diverse customer  requirements in the broad FPGA market, each
member of a product  family  generally is offered in a variety of speed  grades,
package types,  and ambient  temperature  tolerances.  Designers can use Actel's
DeskTOP  integrated  suite of design tools or  third-party  software for circuit
design and then translate the design into a programmed FPGA using Actel's highly
automated  Designer Series  development system and Activator or Silicon Sculptor
programmers.  CoreACT IP cores can  reduce  development  time by being  "dropped
into"  designs,  and Silicon  Explorer  can reduce  design-verification  time by
enabling the user to monitor the  functionality  of a  programmed  FPGA in "real
time." Sockets permit designers to replace an FPGA without damaging the board.

       Actel was added to the Standard & Poor's  "SmallCap  600 Index" after the
close of trading on January 7, 2000.  Actel is included in the S&P  SmallCap 600
Electronics (Semiconductors) industry group.

       In March  2000,  Actel  announced  that it had  successfully  developed a
0.22-micron  antifuse process technology at UMC. The new 0.22-micron process was
developed more quickly than any previous Actel antifuse process.

       On May 11,  2000,  Actel  signed a letter of intent to acquire  GateField
Corporation  (GateField).  On November 15, 2000, Actel completed its acquisition
of  GateField  in a  transaction  accounted  for  using the  purchase  method of
accounting.  For accounting purposes, the total purchase price was approximately
$45.7 million. As a result of the acquisition,  Actel procured all rights to the
ProASIC  family  of  non-volatile,  single-chip,  low-power,  "live-at-power-up"
family of  reprogrammable  gate  arrays.  The product  family,  which  currently
consists  of four  devices  with  capacities  ranging  up to 473,000  gates,  is
manufactured  on a mainstream,  0.25-micron  embedded  flash process at Infineon
(formerly Siemens Semiconductor) in Germany.  Flash-based ProASIC products offer
benefits over other  programmable  logic devices (PLDs)  available on the market
today,  which are either  volatile or  non-reprogrammable.  ProASIC  devices are
non-volatile  and  reprogrammable.  ProASIC devices also exhibit a high level of
portability  between  PLD and ASIC design  flows.  ProASIC  devices  permit ASIC
designers to use their standard  design flow, and can be seamlessly  migrated to
standard ASIC designs.  ProASIC products are closely coupled with the ASICmaster
automated place-and-route  electronic design automation (EDA) software, which is
optimized  for  hardware  description  language  (HDL)  design and  methodology.
ASICmaster performs place and route (P&R) of the design into the selected device
and provides back-annotated delay information for simulation. Once the design is
verified,  ASICmaster  downloads  the layout into a device  programmer  for chip
programming.

       In June 2000,  Actel  announced  its  strategy  to enable  embedded  FPGA
designs in ASICs and ASSPs.  Actel  seeks to  position  itself as a  significant
force in this rapidly  developing  market segment,  which some analysts estimate
will grow to $2.4 billion by 2004.  Actel's plan is to bring together all of the
elements  required  to  successfully   support  ASSP  manufacturers  and  system
designers  served by the  leading  ASIC  providers.  Actel's  goal is to include
technology,  products,  design  tools,  methodologies,  and  key  EDA  and  ASIC
partnerships as part of the embedded FPGA solution it offers to designers.

       In a move to  initiate  the  embedded  strategy,  Actel  acquired  Prosys
Technologies,  Inc.  (Prosys),  an embedded FPGA IP innovator,  on June 2, 2000.
Prosys  had  developed  a  high-density  embedded  FPGA  core  well  suited  for
general-purpose  applications.  Prosys had also created a robust set of software
tools,  following  standard  ASIC  design  methodologies  and design  flows,  to
integrate  its cores into  standard  cell  designs.  This  acquisition  enhanced
Actel's core  competencies and complemented its agreement to acquire  GateField,
which may have been the first programmable logic company to embrace the embedded
logic IP business model. Actel expected these acquisitions to help it create the
first solution by an established FPGA provider in this new market segment.

       In September 2000,  Actel  introduced the eX family of programmable  ASIC
products  aimed  at  the  e-appliance   market  of   internet-related   consumer
electronics.    This   market   includes   products   such   as   MP3   internet
recorders/players,  digital  cameras,  cable and xDSL modems,  personal  digital
assistants,  and digital set-top boxes. The eX family's streamlined feature set,
including a sleep mode to conserve battery power, is differentiated for consumer
and  e-appliance  applications.  By  featuring  low  cost,  low  power,  a small
footprint,  and an easy  design  process,  the eX family is expected by Actel to
extend the success it has experienced in the e-appliance market.

       In  December  2000,  Actel  announced  the  availability  of  the  48,000
system-gate  member of its new RTSX-S family of  radiation-tolerant  FPGAs,  the
first family developed by Actel  specifically for space  applications.  Based on
Actel's 0.25-micron  antifuse SX-A family, the architecture of the RTSX-S family
was  modified  and  optimized  to  meet  the  stringent  requirements  of  space
applications,  including added  capability in the input and output (I/O) modules
and the device core sequential logic. More specifically,  RTSX-S devices contain
hardened  registers,  which provide  unprecedented  levels of single event upset
(SEU)  tolerance and permit  designers to use all available  logic. In addition,
RTSX-S  devices  offer a high  degree  of  interface  flexibility,  making  them
compatible with other system components using established or emerging  interface
standards.

       In February  2001,  Actel  introduced its new VariCore EPGA star IP cores
for ASIC and ASSP  systems on a chip  (SoCs).  The  VariCore  EPGA cores are the
first  available  commercial  embeddable and  reconfigurable  "soft hardware" IP
products  broadly  offered to the ASIC and ASSP market.  VariCore EPGA products,
which were built from the ground up to be embedded in SoC  silicon,  support the
standard  ASIC design  methodology  and flow and are  supported at several major
independent  silicon  foundries,  which should simplify  adoption and use of the
cores by both ASIC and ASSP providers.

       Actel markets its products  through a worldwide,  multi-tiered  sales and
distribution  network.  In 2000,  a majority of Actel's  sales were made through
distributors.  Actel's principal distributors are Pioneer-Standard  Electronics,
Inc. (Pioneer) and Unique Technologies, Inc. (Unique) in North America and Arrow
Electronics,  Inc.  and Zeus  Electronics  (Arrow)  worldwide.  In 2000,  Arrow,
Pioneer,  and Unique accounted for 17%, 13%, and 15%,  respectively,  of Actel's
net revenues. In addition to the three major industrial distributors,  the North
American  sales network  includes 25 sales  offices and 20 sales  representative
firms. The European network includes five sales offices and 12 distributors. The
Pan-Asia  network  includes  four sales  offices and seven  distributors.  Three
additional distributors serve the remaining international markets in which Actel
offers its  products.  In 2000,  sales to  customers  outside the United  States
accounted  for 32% of Actel's net  revenues,  compared with 29% for 1999 and 33%
for 1998.

       Actel was  incorporated  in California in 1985 and has been authorized by
shareholders  to  reincorporate  as  a  Nevada  corporation.  Actel's  principal
facilities  and  executive  offices  are  located  at 955  East  Arques  Avenue,
Sunnyvale,  California  94086-4533,  and its telephone number at that address is
(408) 739-1010. Actel's World Wide Web address is http://www.actel.com.  As used
in this Annual  Report on Form 10-K,  "Actel"  means Actel  Corporation  and its
consolidated  subsidiaries;  and, unless otherwise indicated,  "gate" or "gates"
means "PLD  gates"  when used in  reference  to ACT 1, ACT 2, ACT 3, XL, DX, and
RadTolerant FPGAs and "system gates" when used in reference to MX, SX, SX-A, eX,
RadHard, and ProASIC FPGAs.

       "Actel,"  "ASICmaster,"  "ProASIC,"  and the  Actel  logo are  registered
trademarks of Actel. This Annual Report on Form 10-K also includes  unregistered
trademarks of Actel and trademarks of companies other than Actel.

Actel Strategy

       Actel's strategy is to be The Programmable  ASIC Solutions  Company.  For
customers  requiring discrete logic solutions,  Actel's FPGAs offer the benefits
of both ASICs and programmable devices:

       *      Like   ASICs,   Actel's   FPGA   devices   provide   non-volatile,
              "live-at-power-up," low-power, single-chip solutions at low prices
              in volume  production.  Like other programmable  devices,  Actel's
              FPGAs  reduce  design  risk,  inventory  investment,  and  time to
              market.

       *      To further shorten the design cycle, logic designers can choose to
              use either ASIC or FPGA software  tools and design  methodologies,
              and the  architectures  of Actel's FPGAs enable the utilization of
              predefined IP cores,  which can be reused across multiple  designs
              or product versions.

       *      Depending upon their  requirements or  preferences,  customers can
              choose to use either FPGAs based on antifuse technology, which are
              one-time  programmable and have ASIC-like speed; or FPGAs based on
              flash technology, which are reprogrammable.  In either case, Actel
              can provide programming  services,  making the offering a "virtual
              ASIC" from the customer's point of view.

       For customers  requiring SoC  solutions,  Actel's  SRAM-based  EPGA logic
cores will  enable  the  integration  of  reprogrammable  logic with  predefined
functions on a single chip using a standard process.

       For customers  requiring  either  discrete or SoC  solutions,  Actel's IP
cores and design services can be provided as needed to help customers accelerate
design creation and verification, prototyping, and time to market.

Products and Services

       Actel's product line consists of twelve  families of FPGAs,  one based on
flash  technology and the rest based on antifuse  technology;  Designer  Series,
DeskTOP,  and ASICmaster PRO development  systems;  CoreACT and VariCore EPGA IP
cores;  Activator and Silicon Sculptor  programming  hardware;  Silicon Explorer
debugging and diagnostic  tools;  and sockets.  In 2000, Actel introduced the eX
and RTSX-S  families of antifuse  FPGAs,  as well as  0.22-micron  SX-A devices.
Actel also offers  system-level  design,  prototyping,  and consulting  services
through its Protocol Design Services Group and programming services.

         FPGAs

       To meet the diverse customer requirements in the broad programmable logic
market,  all Actel FPGAs  (except  the two  members of the  RadHard  family) are
offered in a variety of speed grades,  package types, and/or ambient temperature
tolerances.  Devices offered in plastic packages are certified for commercial (0
to  +70(0)C),  industrial  (-40 to  +85(0)C),  or  military  (-55  to  +125(0)C)
temperature  ranges.  The plastic  package  types  offered are plastic ball grid
array (BG),  fine pitch  plastic ball grid array (FG),  chip scale package (CS),
plastic j-leaded chip carrier (PL),  plastic quad flat pack (PQ),  plastic power
quad flat pack  (RQ),  thin  quad flat pack  (TQ),  and very thin quad flat pack
(VQ).

       RadHard devices are offered in ceramic  packages and certified with Class
VQ (QML)  qualification.  All other  devices  offered  in ceramic  packages  are
certified  for  commercial  or  military  temperature  ranges  or  with  Class B
(MIL-STD-883)  or  Class E  (extended  flow/space)  qualification.  The  ceramic
package types offered are ceramic quad flat pack (CQ) and ceramic pin grid array
(PG).

       Speed options include  standard,  approximately  15% faster than standard
(-1), approximately 25% faster than standard (-2), approximately 35% faster than
standard  (-3),  and  approximately  40% slower than standard (-F). The -F speed
grade is offered for commercial devices only. The -2 and -3 speed grades are not
offered for military,  Class B, or Class E devices.  RadHard and ProASIC devices
are offered only at standard speed.

              ACT 1

              The ACT 1 family of FPGAs consists of two products: the 2,000-gate
       A1010,  which was first shipped for revenue in 1988;  and the  4,000-gate
       A1020,  which was first  shipped  for  revenue  in 1989.  This  family of
       devices was introduced at 2.0 micron and is manufactured using 1.0-micron
       design  rules.  Actel  offers  5.0- and  3.3-volt  versions of both ACT 1
       products, which can be ordered in approximately 125 speed, packaging, and
       temperature variations.

              ACT 2

              The  ACT 2  family  of  FPGAs  consists  of  three  products:  the
       9,000-gate A1240 and the 16,000-gate  A1280, which were first shipped for
       revenue in 1991;  and the 6,000-gate  A1225,  which was first shipped for
       revenue in 1992.  This family of devices was introduced at 1.2 micron and
       is  manufactured  using  1.0-micron  design rules.  Actel offers 5.0- and
       3.3-volt  versions of all three ACT 2  products,  which can be ordered in
       approximately 95 speed, packaging, and temperature variations.

              ACT 3

              The  ACT  3  family  of  FPGAs  consists  of  five  products:  the
       6,000-gate A1425 and the 11,000-gate  A1460, which were first shipped for
       revenue in 1993; and the 3,000-gate  A1415, the 9,000-gate A1440, and the
       20,000-gate A14100, which were first shipped for revenue in 1994. The ACT
       3 family was designed for  applications  requiring  high speed and a high
       number of I/Os.  The ACT 3 family  was  introduced  at 0.8  micron and is
       manufactured  using  0.6-micron  design  rules.  Actel  offers  5.0-  and
       3.3-volt  versions  of all five ACT 3  products,  which can be ordered in
       approximately 235 speed, packaging, and temperature variations.

              XL

              The 1200XL family of FPGAs, which was first shipped for revenue in
       1995, consists of three products:  the 6,000-gate A1225XL, the 9,000-gate
       A1240XL,  and the  16,000-gate  A1280XL.  Taking  advantage of 0.6 micron
       design rules and redesigned I/O modules and clock distribution  networks,
       1200XL products offer system performance  significantly in excess of that
       offered by pin-compatible  ACT 2 devices.  Actel offers 5.0- and 3.3-volt
       versions of all three members of the 1200XL family,  which can be ordered
       in approximately 130 speed, packaging, and temperature variations.

              DX

              The  3200DX  family  of  FPGAs  consists  of  five  products:  the
       12,000-gate  A3265DX,  which was first  shipped for revenue in 1995;  the
       24,000-gate  A32140DX  and the  36,000-gate  A32200DX,  which  were first
       shipped  for  revenue  in  1996;  and the  20,000-gate  A32100DX  and the
       52,000-gate  A32300DX,  which were first shipped for revenue in 1997. The
       3200DX  family  permits  designers  to integrate  the  register-intensive
       datapath  functions  of FPGAs,  the control and decode  modules  commonly
       implemented  in  complex  PLDs  (CPLDs),  and  the  fast  dual-port  SRAM
       typically used for high-speed  buffering.  Supported by Actel's extensive
       selection of automated  design tools,  the 3200DX family is optimized for
       synthesis  design  methodologies  to yield  predictable  performance  for
       system logic  integration.  To further assist designers,  most members of
       the family offer JTAG boundary scan logic,  which permits  testing of the
       design during manufacture. Actel offers 5.0- and 3.3-volt versions of all
       five members of the 3200DX family, which is manufactured using 0.6-micron
       design rules and can be ordered in  approximately  185 speed,  packaging,
       and temperature variations.

              MX

              The MX family of FPGAs  consists of six products:  the  6,000-gate
       A40MX04 and the 24,000-gate A42MX16, which were first shipped for revenue
       in  1997;  and the  3,000-gate  A40MX02,  the  14,000-gate  A42MX09,  the
       36,000-gate  A42MX24,  and the  54,000-gate  A42MX36,  which  were  first
       shipped for revenue in 1998.  The MX family  includes  the best  features
       from Actel's ACT 1, ACT2,  1200XL,  and 3200DX families and should,  over
       time, replace those earlier families in new 5.0-volt  commercial designs.
       The largest MX devices include system logic integration  functions,  such
       as  embedded  SRAM  and  decode  logic,  that are  used by  designers  to
       integrate disparate functions in data networking,  telecommunication, and
       industrial  control  applications.  The MX family is  manufactured  using
       0.45-micron design rules, which permits it to work in pure 5.0-volt, pure
       3.3-volt,  and mixed 5.0- and 3.3-volt systems. The family can be ordered
       in more than 300 speed, packaging, and temperature variations.

              As Actel's first line of low-cost,  single-chip ASIC alternatives,
       the MX family  ramped to volume  faster than any other product in Actel's
       history. In April 2000, Actel announced that it had shipped more than one
       million  units of the MX family  in two  consecutive  quarters.  The unit
       volume of MX shipments demonstrates the acceptance of antifuse technology
       in high-volume  applications,  such as those serving the internet, and is
       evidence that electronics  engineers are opting with increasing frequency
       for the  time-to-market  advantage  of FPGAs over the  longer  lead times
       associated with traditional ASICs. The MX family is currently  positioned
       as a line of low-cost, single-chip,  mixed-voltage ASIC-alternative FPGAs
       for 5.0-volt applications.

              SX

              The SX family of FPGAs  consists  of four  products,  all of which
       were first  shipped for revenue in 1998:  the  12,000-gate  A54SX08,  the
       24,000-gate  A54SX16 and A54SX16P,  and the 48,000-gate  A54SX32.  The SX
       family is manufactured  using  0.35-micron  design rules.  All SX devices
       have full pin compatibility  within the family and provide mixed 5.0- and
       3.3-volt support with 3.3-volt output drive and 5.0-volt tolerant inputs.
       The SX family  can be  ordered  in more than 200  speed,  packaging,  and
       temperature variations.

              SX was the first family to be built on Actel's triple-layer metal,
       "sea of modules"  architecture.  The foundation for the architecture is a
       "sea" of logic  modules  laid out as a grid  across  the  entire  silicon
       floor. This sea-of-modules  design minimizes chip area by covering almost
       the entire silicon  substrate with logic  resources.  To further increase
       design  efficiency  and  device  performance,  these  modules  have  been
       organized  into  "superclusters."  Two different  levels of local routing
       resources within superclusters give designers the ability to achieve very
       fast performance. The interconnect resources are located on the upper two
       layers of metal. The result is reduced die size (regardless of capacity),
       increased device performance, and reduced cost.

              The SX family's performance and density allow designers to combine
       multiple high-performance CPLDs into a single FPGA, thereby cutting power
       consumption,  saving board space,  and reducing costs.  The SX family and
       the SX-A family,  discussed below,  are currently  positioned as industry
       price/performance/power leaders, permitting customers to use programmable
       devices with ASIC-like speed,  power  consumption,  and pricing in volume
       production.

              SX-A

              The SX-A family of FPGAs,  which was first  shipped for revenue in
       1999,  consists  of  four  products:   the  12,000-gate   A54SX08A,   the
       24,000-gate  A54SX16A,  the 48,000-gate  A54SX32A,  and the  108,000-gate
       A54SX72A.  The  SX-A  family  can be  ordered  in more  than  200  speed,
       packaging, and temperature variations.

              The family's fine-grained  "sea-of-modules"  antifuse architecture
       and small process geometry permit Actel to offer fast, low-power FPGAs at
       competitive prices,  delivering "performance without penalty":  designers
       can achieve their system  performance  specifications  without paying the
       power penalty common when using SRAM-based  FPGAs. In addition,  the SX-A
       family   offers  I/O   capabilities   that   provide   full  support  for
       "hot-swapping." Hot-swapping permits boards to be exchanged while systems
       are   running,   which  is  a   capability   important   in   networking,
       telecommunication,  and fault-tolerant  computing applications.  The SX-A
       family  includes  other  I/O  features,  such as slew rate  control,  and
       supports mixed-voltage (2.5-, 3.3-, and 5.0-volt) systems.

              The SX-A  was  initially  manufactured  using  0.25-micron  design
       rules. In March 2000, Actel announced that it had successfully  developed
       a  0.22-micron  antifuse  process  technology  at UMC.  This new  process
       reduced  die  size by  approximately  20%  and  improved  performance  by
       approximately 10% compared with Actel's 0.25-micron SX-A devices.

              eX

              In September 2000,  Actel introduced the eX family of programmable
       ASIC  products  aimed  at  the  e-appliance  market  of  internet-related
       consumer electronics.  This market includes products such as MP3 internet
       recorders/players,  digital  cameras,  cable  and xDSL  modems,  personal
       digital assistants, and digital set-top boxes.

              The eX family consists of three devices:  the 3,000-gate eX64, the
       6,000-gate eX128, and the 12,000-gate eX256. As single-chip solutions, eX
       devices  are priced to compete  with the  alternatives:  multiple  CPLDs,
       low-density ASICs, and two-chip FPGAs. The new family is fabricated using
       0.25-micron  design rules and can be ordered in  approximately  45 speed,
       packaging, and temperature variations.

              The eX family's streamlined feature set, including a sleep mode to
       conserve  battery power, is  differentiated  for consumer and e-appliance
       applications.  The eX line  also  offers  the  benefits  of  high  design
       security and a small,  single-chip form factor. The combination of eX and
       Actel's  software tools make it  straightforward  to achieve  performance
       specifications  during the design  process,  enabling faster design turns
       and more rapid time to market.  By featuring low cost, low power, a small
       footprint, and an easy design process, the eX family is expected by Actel
       to extend the success it has experienced in the e-appliance market.

              RadTolerant

              The RadTolerant  family of FPGAs consists of eight  products:  the
       4,000-gate RT1020, the 6,000-gate RT1425A,  the 11,000-gate  RT1460A, the
       16,000-gate  RT1280A,  the 20,000-gate  RT14100A,  the 24,000 system-gate
       RT54SX16, and the 48,000 system-gate RT54SX32 and RT54SX32S.  RadTolerant
       FPGAs are offered in ceramic  packages and certified  with either Class B
       or Class E qualification.  Complete total dose radiation test reports are
       also provided on each lot of devices.

              RadTolerant FPGAs are designed to meet the logic  requirements for
       all types of space  applications,  including  satellites  and  deep-space
       probes. They provide  cost-effective  alternatives to  radiation-hardened
       devices for applications requiring high reliability. One such application
       is the growing market for commercial satellites, which are widely used in
       telecommunications  for cellular phones,  pagers,  and global positioning
       system  products  and  services.  In addition,  RadTolerant  devices have
       design- and pin-compatible  commercial  versions for easy and inexpensive
       prototyping.

              In  November  1999,  Actel  announced a plan to expand its line of
       RadTolerant  FPGAs with a new  family  developed  specifically  for space
       applications based on 0.25-micron antifuse SX-A devices. To determine the
       appropriate  device  specifications and feature set, Actel consulted with
       customers,  including NASA's Goddard Space Flight Center.  As a result of
       these   extensive   discussions,   Actel   modified  and   optimized  its
       architecture   to  meet   the   stringent   requirements   of   aerospace
       applications,  including  added  capability  in the I/O  modules  and the
       device core sequential logic.

              In July 2000,  Actel announced that it had implemented the concept
       of triple module redundancy (TMR) in silicon. Prior to that time, no FPGA
       device  register  was  considered  immune from SEU caused by  space-borne
       heavy ion bombardment.  Users of Actel's RadTolerant FPGAs had the option
       of making  registers SEU immune by implementing TMR using three registers
       and a "majority voting" module.  However, this method of using four logic
       elements to implement a single  register  severely  limited the amount of
       logic (or  capacity)  that was  available  for the user's  design.  These
       manually created TMR registers are also often susceptible to glitches. By
       "hardwiring"  an internal  self-refreshing  TMR register into the silicon
       design,  Actel customers no longer need to worry about  implementing  TMR
       registers  in their  design or trading off between SEU  immunity  and the
       device's logic  capacity.  In addition,  since these  registers are built
       into the device and are not  implemented  using  placement  or routing of
       user gates, they are not prone to glitches.

              In December 2000,  Actel  announced the  availability of the first
       member of its RTSX-S family, the 48,000  system-gate  RT54SX32S FPGA. The
       second member of the family, the 108,000  system-gate  RT54SX72S FPGA, is
       expected to be  available  in 2001.  In  addition to hardened  registers,
       which provide  unprecedented levels of SEU tolerance and permit designers
       to use all available logic in RTSX-S  devices,  the I/O modules were also
       specifically  designed for the  requirements  of  high-reliability  space
       applications.  These  specifications  included  increased  noise margins,
       decreased  power, and provision for control of the I/O signals during the
       power-on and power-off  transients.  In addition,  RTSX-S devices offer a
       high degree of interface flexibility. The family supports 2.5-, 3.3-, and
       5-volt input  signals;  configurable  I/O for 3.3- and 5-volt  peripheral
       component interface (PCI) and transistor-transistor logic (TTL) levels in
       any combination;  and the 33 MHz, 32-bit PCI bus. This range of interface
       support makes the RTSX-S family  compatible with other system  components
       using either established or emerging interface standards.

              RadHard

              The  RadHard  family  of  FPGAs  consists  of  two  products:  the
       16,000-gate RH1280,  which was first shipped for revenue in 1996; and the
       4,000-gate  RH1020,  which was first shipped for revenue in 1998. RadHard
       devices are offered in ceramic packages and certified with Class VQ (QML)
       qualification.  Actel's  RadHard FPGAs are  manufactured  by LMSEC at its
       Qualified  Manufacturers  Listing (QML)  facility in Manassas,  Virginia,
       using a high-reliability,  radiation-hardened  0.8-micron process.  Actel
       and LMSEC  jointly  developed  the RadHard  family to meet the demands of
       applications  requiring  guaranteed  levels of performance  and radiation
       survivability.  Applications  for  RadHard  FPGAs  include  military  and
       civilian  satellites,  deep space  probes  and  planetary  missions,  and
       ground-based  military  applications in which radiation  survivability is
       required.

              ProASIC

              The ProASIC  family of FPGAs,  which was first shipped for revenue
       in  1999,  consists  of four  products:  the  98,000-gate  A500K050,  the
       287,000-gate  A500K130,  the 369,000-gate  A500K180, and the 473,000-gate
       A500K270.  The family is currently manufactured on a 0.25-micron embedded
       flash process at Infineon in Germany. Each device is offered in PQ and BG
       packages and certified for commercial or industrial temperature ranges.

              Flash-based  ProASIC  products  offer  benefits  over  other  PLDs
       available   on  the  market   today,   which  are  either   volatile   or
       non-reprogrammable.  ProASIC devices are non-volatile and reprogrammable.
       ProASIC devices also operate at very low power,  using only a fraction of
       the power  consumed by SRAM FPGAs and other PLDs based on look-up  tables
       (LUTs). In addition,  ProASIC is a single-chip solution,  making it "live
       at power up" and  simplifying  board design,  conserving  board area, and
       eliminating the need for the boot device (e.g.,  serial PROM)  associated
       with SRAM FPGAs.  Furthermore,  ProASIC  devices  exhibit a high level of
       portability  between PLD and ASIC design  flows.  ASIC  designers can use
       their  standard  design flow with  ProASIC  devices,  so there are no new
       design  methodologies  to learn,  and ProASIC  devices can be  seamlessly
       migrated to standard ASIC designs.  The design  methodology  also enables
       designers  to use IP cores  from  proprietary  and  third-party  sources,
       eliminating much of the architecture-specific  re-engineering required by
       other PLDs. On the other hand,  ProASIC devices reduce time to market and
       minimize  design  risk and  investment,  like other PLDs.  In short,  the
       ProASIC    family    of     non-volatile,     single-chip,     low-power,
       "live-at-power-up"  reprogrammable  gate  arrays  brings the  benefits of
       ASICs and PLDs to designers of high-density logic.

       Development Systems

       A key element of Actel's  strategy is to support  designers' EDA tools of
choice by facilitating the use of leading synthesis software as a "front end" to
Actel's  proprietary  Designer Series development  system software.  Rather than
developing  this  capability  alone,  Actel has  established  the Actel Industry
Alliance,  which  Actel uses to maintain  relationships  with EDA vendors and to
develop  interfaces  between  such  vendors'  EDA tools and Actel's  proprietary
software.  Under the Alliance  program,  Actel  provides  members with access to
Actel's proprietary software specifications, early access to software revisions,
verification  services,  and  participation  in  joint  marketing  efforts.  The
Alliance  includes all major EDA vendors  supporting  high-level design for both
VHDL  and  Verilog.  Actel  provides  comprehensive  HDL  support  for  the  EDA
environments of Aldec, Inc.; Cadence Design Systems,  Inc. (Cadence);  Innoveda,
Inc.  (Innoveda);  Mentor  Graphics  Corp.  (Mentor  Graphics);  Synopsys,  Inc.
(Synopsys); and Synplcity, Inc. (Synplicity).

              Designer Series

              The  Designer  Series  tool set is a  software  suite  built on an
       object-oriented  database  that helps  optimize and simplify FPGA circuit
       design,  implementation,  and testing.  Actel believes Designer Series is
       among the  easiest to use and most  complete  sets of  high-level  design
       tools  available for FPGA devices.  Designer is available on the personal
       computer (PC) running  Windows  95/98/NT4.0 or better and on workstations
       running Sun Solaris 2.6/2.7 or better or HPUX 10.2/11 or better.

              The   Designer*Advantage  and   Designer*Workstation   development
       systems are for customers who already own front-end design software. Both
       systems  include  Actel's  standard  P&R,  DirectTime  P&R,  ACTmap  VHDL
       synthesis,  ACTgen  macro  builder,  timing  analysis,  Verilog and VITAL
       simulation  libraries,  and program file generation.  They do not include
       schematic entry or simulation.  Designer*Workstation includes support for
       Cadence Concept,  Cadence Composer,  Cadence,  RapidSim,  Mentor Graphics
       Design Architect,  and Innoveda PowerDraw schematic capture packages; and
       Cadence  Verilog-XL,  Cadence Leapfrog,  Mentor Graphics QuickSim II, and
       Innoveda PowerSim simulators.

              Designer*Synplify  is a complete original  equipment  manufacturer
       (OEM) version of Synplify for Actel, a premier FGPA synthesis tool for PC
       configurations.  It includes  Designer*Advantage  and Synplicity's  scope
       functionality and timing constraints  editor.  Synplify's HDL Analyser is
       available separately from Synplicity.  The Designer*Synopsys  development
       system is for customers  who already own  Synopsys's  Design  Compiler or
       FPGA  Compiler.  It  includes  Designer*Workstation  as well  as  Actel's
       synthesis and DesignWare libraries.

              In  August  2000,  Actel  announced  the  R1-2000  release  of its
       Designer  Series  software,  which  included  support  for new Actel FPGA
       families  and packages as well as a series of  performance  enhancements.
       These new  features  benefit  users by making  Designer  Series  software
       easier  to learn  and use and  faster to  design  and  perform  debugging
       operations.  By making routing  improvements  to the software,  Actel was
       able to reduce a design's power  consumption  by up to 35%,  making Actel
       antifuse  FPGA  devices  even more  attractive  for  portable,  low-power
       applications.  In addition,  a new  graphical  user  interface  (GUI) web
       portal was added for  downloading  Actel  software  updates,  advisories,
       design tips,  and  application  notes.  The portal feature is expected to
       improve  Actel's  service and response  capabilities  and to increase the
       level of interaction between Actel and its users.

              Designer  Series version  R1-2000 also included timing and editing
       tools to speed FPGA design and timing  verification.  Timer, the Designer
       Series static timing  verification and analysis engine, was enhanced with
       a  back-annotated  schematic  viewer that displays  critical paths in the
       design.  As a result,  it is now  easier and faster to trace the cause of
       any timing  problem in the design.  This engine is more flexible and user
       friendly than previous  versions and has been designed to accept  greater
       functionality in subsequent  releases.  Using Pin Edit,  Designer Series'
       enhanced  I/O  pin  attribute  editor,  engineers  can  now  specify  I/O
       attributes,  such as slew rate,  power-up state, and voltage levels,  for
       individual signal pins. In addition,  the engineer can specify individual
       pin  capacitance to fine tune line  termination,  thereby  minimizing the
       transmission line effects prevalent in high-speed designs.

              DeskTOP

              The DeskTOP  development  system is for customers  designing Actel
       FPGAs of  32,000  gates or less who want a  complete,  low-cost  PC-based
       design  system for Windows.  It includes  Designer*Advantage,  Synplicity
       synthesis,  and VeriBest schematic capture and VHDL simulation  software.
       The VeriBest software is now owned by Mentor Graphics. DeskTOP is offered
       free of charge for a 60-day  evaluation period and licensed for less than
       $1,000 a year.  DeskTOP  Pro is for power  users  designing  system-level
       devices who want a complete,  reasonably-priced  design system. It offers
       the same functionality as DeskTOP with no maximum size limitation for all
       supported  Actel  devices.   DeskTOP  Open  provides  an  open  synthesis
       environment  for  customers  who  have  already  invested  in  their  own
       synthesis tools.  Except for synthesis,  it offers the same functionality
       as DeskTOP Pro.  DeskTOP Open also provides easy  integrated  support for
       Synplicity's Synplify and Synopsys's FPGA Express synthesis software.

              ASICmaster Pro

              ASICmaster  Pro is the  design  suite for  Actel's  ProASIC  flash
       devices.  It includes standard P&R,  timing-driven P&R, Memory Master for
       memory macro  generation,  Power  Calculator  for power  estimation,  and
       Layout Viewer for identifying and optimizing  critical paths.  ASICmaster
       Pro  was   designed  to  support   both  ASIC  and  FPGA  design   flows.
       Consequently,  ProASIC design tools can be used in almost any ASIC design
       environment.  This  permits  ASIC  designers to operate from within their
       existing design environments and to use their existing tools and scripts,
       and  also  frees  them  from  having  to  modify  HDL code  with  special
       directives  and  instantiations,   as  is  required  with  SRAM  devices.
       Designers  utilizing  an FPGA  design flow value the ease of use and fast
       run  times  they  have  come  to  expect  from  FPGA  design  tools.  The
       achievement  of timing  convergence  using standard ASIC tools was one of
       the key  technical  challenges  resolved in the  development  of ProASIC.
       Perhaps  the most  significant  outcome is that the  decision to choose a
       programmable  or masked silicon  solution can be deferred to a much later
       point in the design cycle. In addition,  it blurs the distinction between
       ASIC and FPGA designs by  permitting  engineers to focus on system logic,
       rather than specific silicon solutions.

       I P Cores

       As  integrated  circuits  move to ever  higher  levels  of  capacity  and
integration,  the use of IP in the  form of cores  becomes  more  important.  In
offering CoreACT IP models,  Actel is targeting  high-density FPGA designers who
are interested in combining customized logic with predefined functions optimized
for high performance  applications.  By using predefined  cores,  designers save
engineering  resources  for the  value-added  portions  of their  designs  while
shortening the design cycle.  In addition,  the portable nature of cores enables
design reuse across multiple product versions.

       With the advent of SoC design methodologies came a corresponding increase
in the level of time and complexity required to complete these ASIC designs. The
embedded FPGA is an emerging  market segment brought about by the desire of OEMs
to minimize market risks by means of in-system field reprogrammability.  Some of
those  risks  include  evolving   standards  and  changing   product   features;
lengthening  design  cycles;  the growing  complexity and number of mask sets of
ASIC designs; and the rising expense of non-recurring engineering (NRE) respins.
All of these factors  significantly impact design complexity and time to market,
ultimately  affecting  the  ability  of OEMs to  compete  in their  markets.  If
reprogrammable  FPGA IP cores  were  embedded  in a portion  of the die on large
SoCs, OEMs could avoid the risks and costs  associated with "fixed silicon" ASIC
designs and also reduce the SoC's time to market.

       In June 2000,  Actel  announced  its  strategy  to enable  embedded  FPGA
designs in ASICs and ASSPs.  The  strategy  is to provide  the  industry  with a
framework  for the first  complete  embeddable  FPGA  solution.  It included the
formation  of  a  new  organization  within  Actel  tasked  with  acquiring  key
technology,  generating partner relationships,  and coordinating the adoption of
standard  methodologies  and design flows. In addition,  this group will define,
develop, and market Actel IP products for this emerging market sector.  However,
the ultimate goal is to provide  high-value,  critical-need  "star IP" to enable
this market.  Actel plans to add  increasing  flexibility  to its embedded  FPGA
solution so that it will  eventually  include IP cores of varying  technologies,
functionality,  and  performance,  supported  by the leading  ASIC EDA  software
providers,  in  popular  process  geometries  at all of  the  major  independent
foundries worldwide.

              CoreACT IP Models

              In November 2000,  Actel  announced the  availability  of five new
       high-performance  IP cores for  communications,  networking,  and telecom
       applications.  The five new  solutions  were Core  8b/10b  (8 bit/10  bit
       encoder/decoder  interface);  CoreARBITER (PCI arbiter);  CoreCRC (cyclic
       redundancy   code   generator/checker);   CoreSDRAM   (SDRAM   controller
       interface);   and  CoreUART  (serial  communication   controller).   When
       implemented  in  high-performance  Actel SX-A or eX devices,  these cores
       offer  designers the benefits of faster  time-to-market,  reduced  design
       cost, and increased performance.

              Actel's  8b/10b   encoder/decoder   enables  the  physical  coding
       sublayer used in gigabit ethernet and fibre channel.  The encoder/decoder
       supports data rates in excess of 125 MHz,  appropriate for the high-speed
       data services  required by emerging  communications  and telecom systems,
       and has advanced  technical  features  such as disparity and illegal code
       error checking. The cyclic redundancy code (CRC) generator validates data
       frames and ensures that data corruption during  transmission is detected.
       The CRC  supports  operating  speeds of up to 270 MHz as well as  various
       communications standards.

              Actel's   CoreACT  IP  portfolio  also  includes   CoreASYNC  (PCI
       asynchronous backend interface) and CorePCI.  Actel's CorePCI Version 5.2
       was the first  programmable  64-bit,  66MHz PCI core to offer a  complete
       solution,   including  Target  Only,   Master  Only,  and   Master/Target
       (containing  Target+DMA  and  Target+Master)  functions.  By offering the
       complete  PCI  solution,   Actel  provides  designers  with  a  flexible,
       cost-effective solution for design reuse, as well as a low-cost migration
       path to ASICs and next-generation process technologies. Actel also offers
       a CorePCI  evaluation board, which enables designers to conduct real-time
       evaluation of functionality and performance in an SX device. In addition,
       a connector is provided to allow easy access to Silicon  Explorer so that
       internal functionality and delays can be investigated.

              Unlike  many other core  suppliers,  Actel  provides  its cores as
       source RTL code,  making the cores both portable and  low-cost.  RTL code
       provides a great  degree of  flexibility,  enabling  designers of complex
       systems  to  quickly  make  changes  that may be  required  for  specific
       applications. The cores are written in HDL code and supplied to customers
       in either Verilog or VHDL. Each core includes comprehensive documentation
       and  testbenches,  enabling  designers  to get  started  quickly  and, if
       necessary, make modifications to suit their specific needs.

              Actel also makes available to its customers twelve cores developed
       by Inicore  AG, a Swiss IP  provider,  which are  available  only in VHDL
       source code; and eight cores developed by Inventra,  a division of Mentor
       Graphics, which are available as optimized netlists over the internet. In
       general,  these cores are targeted to  telecommunications  and industrial
       control applications.

              VariCore EPGAs

              In February 2001,  Actel  introduced its new VariCore EPGA star IP
       cores  for ASIC and ASSP  SoCs.  The  VariCore  EPGA  cores are the first
       available  commercial  embeddable and  reconfigurable  "soft hardware" IP
       products  broadly  offered  to the ASIC and ASSP  market.  The new  cores
       benefited  from  technology  and  expertise   acquired  from  Prosys  and
       GateField, both of which Actel purchased in 2000.

              VariCore  EPGA  cores  increase  SoC design  flexibility  and help
       reduce design time and costs. These cores have application  whenever time
       to market and  version  variants of the same  product  are  advantageous.
       VariCore  EPGA cores will help get SoC products to market sooner and keep
       them there longer, thereby helping ASIC and ASSP providers gain or retain
       their  competitive  edge.  Pricing for VariCore  EPGA cores will vary and
       follow the "star IP" sliding-scale model of license plus royalties.

              VariCore  EPGA logic is a versatile  and  efficient  embedded FPGA
       core architecture that provides scaleable reprogrammability for ASICs and
       ASSPs.  These  EPGA  blocks  have  been  designed  in  0.18  micron  SRAM
       technology. Additional cores are being developed for the next generations
       of smaller process geometries.  EPGA cores are targeted at customer-owned
       tool users from the ASSP world using  independent  silicon  foundries  as
       well as at ASIC  suppliers for use in their own IP  portfolios.  VariCore
       programmable  logic is proven in silicon and three of the world's leading
       wafer foundries are supporting EPGA reprogrammable cores: UMC and TSMC in
       Taiwan and Chartered in Singapore.

              VariCore  EPGA  blocks  are,  in  essence,   reprogrammable  "soft
       hardware" core tiles.  VariCore EPGA cores are based on a three-input LUT
       structure.  PEGs,  consisting  of  2,500  ASIC  gates,  are the  "primary
       embedded  gate"  blocks of EPGAs.  These PEG  blocks  are  scaleable  and
       configurable  in VariCore's  ".18um family" from a 2x1 EPGA of 5,000 ASIC
       gates up to a 4x4 EPGA  core of  40,000  ASIC  gates.  In  addition,  the
       family's 4x4 and 4x2 members offer eight optional, cascadable RAM modules
       with  aspect  ratios  of 1k*9  or  512*18.  VariCore  EPGAs  can  also be
       partitioned  where needed in any ASIC or ASSP design.  In a 4x4 EPGA core
       utilized at 80%, VariCore EPGA cores can handle system clock speeds of up
       to 100MHz while  maintaining  100-200mW power  consumption,  depending on
       core performance.

              VariCore P&R is performed by the  efficient,  high-speed  VariCore
       Compiler  design tool available in Windows NT or UNIX versions.  VariCore
       EPGA blocks can be tested and verified  after being  embedded  within the
       complete SoC design.  VariCore EPGAs also are observable and controllable
       with built-in self-test features,  pin-fixing capability, and up to 1,280
       I/O ports per core.  VariCore  Compiler supports design entry in VHDL and
       Verilog  RTL-based design flows.  VariCore  Compiler is also supported by
       industry leading third-party design entry, verification,  and test tools.
       Synthesis  support  is  provided  by  Synopsys  Design.  In the  area  of
       front-end design verification,  VariCore Compiler supports VHDL, Verilog,
       and VITAL  simulations and is also  compatible with Synopsys's  PrimeTime
       and  PrimePower  performance  and power  simulation  tools.  For physical
       design,  files output in hard GDSII IP flows  compatible  with  Cadence's
       Virtuoso and Avant!  Corporation's  (Avant's) Apollo. For physical design
       verification,  layout versus schematic,  and design rule checks, Compiler
       supports   Cadence's   Dracula  and  Avant!'s   Hercules  II.  To  enable
       verification  of the EPGA  core  within  the  complete  SoC  environment,
       VariCore  Compiler  generates  "enhanced"  EPGA  netlists and models that
       permit the complete  EPGA  function,  including  control  interfaces  and
       internal scan chains, to be verified within the SoC.

              A VariCore EPGA  Developer's  Kit is available  for  evaluation of
       proof of silicon,  design compatibility,  and EPGA performance as well as
       for the debug and test of user designs incorporating VariCore EPGA cores.
       The Kit includes an emulation board, 0.18 micron VariCore EPGA test chip,
       and user's guide.

       Programming Hardware

       Actel's  FPGAs  can  be  programmed  by  Activator  or  Silicon  Sculptor
programmers.  Actel also supports programmers that are offered by third parties,
including  BP  Microsystems  Inc.;  Data I/O  Corporation;  and  System  General
Corporation.  Programmers execute instructions included in fuse files, which are
obtained from Actel's Designer Series  development  system software,  to program
Actel FPGAs.

              Activator

              There are two Activator programmers:  Activator 2S, which programs
       one FPGA at a time; and Activator 2, which programs up to four FPGAs at a
       time. The Activator  programmers run on workstations;  support the ACT 1,
       ACT 2, ACT 3, XL, DX, MX, and SX families of antifuse FPGAs;  and execute
       all  programming,   verification,  and  debugging  functions.  Customized
       programming adapters for each device type permit different packages to be
       programmed by switching adapters.

              Silicon Sculptor

              Actel offers single- and six-site versions of the Silicon Sculptor
       programmer. The compact size of the Silicon Sculptor permits designers to
       program  Actel FPGAs from their desktop PC rather than in a lab. Up to 12
       Actel devices can be  concurrently  programmed  from a single PC by daisy
       chaining two six-site Silicon Sculptors together with an expansion cable.
       A single  adapter  module can be used to program  all Actel  antifuse  or
       flash devices within a package type, regardless of pinout.

       Design Diagnostics and Debugging Tools

       Silicon  Explorer  is a powerful  debugging  and  verification  tool that
enables the user to monitor the internal  operation  of a programmed  FPGA as it
performs its functions at speed within a real system.  By  permitting  real-time
probing,  Silicon Explorer can significantly reduce the amount of time necessary
to debug and verify an FPGA design.

       In  February  2000,  Actel  announced  a new  generation  of its  Silicon
Explorer debugging and diagnostic tool: Silicon Explorer II and Silicon Explorer
II Lite. Silicon Explorer II further optimizes design performance,  flexibility,
and ease of use for all of Actel's  antifuse  FPGA product  families.  The logic
analysis system in Silicon Explorer II was enhanced to support an external power
supply;  internal  probing of 5.0-,  3.3-,  and 2.5-volt  FPGAs;  four levels of
triggering;  decompression  on  download;  and  system  acquisition  rates up to
100MHz.  In  addition  to being a logic  analyzer  that  captures  external  bus
activity,  Silicon  Explorer II includes  "Probe Pilot." Probe Pilot attaches to
the system being tested,  providing access to internal FPGA signals. Probe Pilot
hardware samples up to eighteen channels of synchronous or asynchronous  signals
in real time at system rates up to 100MHz. Its "Explore" software permits a user
to dynamically set two of the eighteen  channels to analyze signals  internal to
the FPGA.  "Action  Probe," a  function  available  only with  Actel's  devices,
permits  dynamic  access to any  internal  node.  The Silicon  Explorer II logic
analysis  system is compliant  with Windows  95/98/NT and offers a  Windows-like
GUI. Silicon Explorer II Lite is a less-expensive version of Silicon Explorer II
without the real-time logic analyzer.

       Sockets

       Sockets for Actel's  FPGAs are  available  in prototype  quantities  from
Actel and in production  quantities from Actel-qualified  socket  manufacturers.
Sockets  permit  designers to replace a chip without  damaging the board,  which
reduces  some of the risk  commonly  associated  with using an antifuse  FPGA in
prototype board design. The line of sockets  accommodates Actel FPGAs in BG, FG,
CQ, CS, PQ, RQ, TQ, and VQ packages.

       Protocol Design Services

       Actel's  Protocol  Design  Services Group is a leading  provider of FPGA,
ASIC, software, and electronic system design solutions. With Actel's acquisition
of the Protocol  Design  Services  Group from  GateField  in August 1998,  Actel
became the first FPGA  provider to offer  system-level  design  expertise to its
customers,  expanding  Actel's  capability  to  support  a  greater  portion  of
customers'  overall design and risk  management.  The Protocol  Design  Services
Group is located in a secure  facility  in Mt.  Arlington,  New  Jersey,  and is
certified to handle government,  military, and proprietary designs. Protocol has
a  twelve-year  history of providing  engineering  design  solutions to both the
commercial and government sectors in North America and Europe.  Protocol's focus
has been in  telecommunications  and  networking  applications,  but it also has
significant  experience in the  automotive,  computer,  military/aerospace,  and
consumer markets.  Using  industry-standard  tools and  methodologies,  Protocol
provides  varying  levels of design  services,  including  system-level  and SoC
design, turnkey FPGA and ASIC design and verification, software development, and
circuit card design.

       In February 2000, Actel announced that the Protocol Design Services Group
had opened a design center in the Boston area.  The new Protocol  Design Center,
located in Chelmsford,  Mass.,  offers a broad range of expertise in engineering
design and verification  services for FPGAs, ASICs, and electronic systems.  The
Boston area design  center is the newest of a several  North  American  regional
centers planned by the Protocol Design Services Group.

       In  August  2000,  Kentron  Technologies,  Inc.  (Kentron),  a leader  in
next-generation  memory  architectures,  announced  that it had  chosen  Actel's
Protocol  Design  Services  Group to create  the  first  memory  subsystem  that
interfaces with Kentron's Quad Band Memory (QBM).  QBM is a technology that uses
standard  double data rate (DDR)  memory  along with  Kentron's  patented use of
field effect transistor switches on a module to double the bandwidth of DDR from
200MHz to 400MHz  data rate.  According  to  Kentron,  the QBM  technology  will
increase the bandwidth of the DDR module solution from 1.6GB/sec to 3.2GB/sec, a
dramatic  improvement  over  the  capabilities  of  other  non-compatible,  more
expensive   memory   technologies.   QBM  operates  at  100MHz  clock  achieving
400Mbit/sec data transfer rates during reads/writes.  The new QBM subsystem will
utilize  Actel's SX-A  high-speed  FPGAs to reduce the cost of  development  and
provide chipset designers with the valuable data to aid with the  implementation
of QBM ASIC controller(s). Migration to a next-generation Actel device family in
2001 is expected  to provide a faster  controller  design  that  allows  running
current QBM designs at 133MHz clock and 532Mbit/sec data rates.

       Programming Services

       Actel programs significant volumes of FPGAs each month for its customers.
This makes Actel's devices  "virtual  ASICs" from the customer's  point of view.
Production  programming charges are based on the type of device and quantity per
order.  The  minimum  order is 500  units  and  full  tube/tray  quantities  are
required.  The programming  yield for Actel devices  normally  averages  98-99%.
However, the yield can show a lot-to-lot spread, which generally ranges from 95%
to 100%.

Market and Applications

       In 2000,  FPGAs accounted for 98% of Actel's net revenues,  virtually all
of which was derived from antifuse FPGAs.  FPGAs can be used in a broad range of
applications across nearly all electronic system market segments. Most customers
use Actel's antifuse FPGAs in low to medium volumes in the final production form
of their products.  Some high-volume electronic system manufacturers use Actel's
antifuse  FPGAs as a  prototyping  vehicle and convert  production to lower-cost
conventional  gate arrays or standard  cells,  while others with  time-to-market
constraints  use Actel's  FPGAs in the initial  production  and then  convert to
conventional  gate arrays or standard  cells. As product life cycles continue to
shorten, foundry capacity becomes more expensive, and manufacturing efficiencies
for antifuse FPGAs increase,  some high-volume  electronic system  manufacturers
are electing to retain antifuse FPGAs in volume production because conversion to
conventional gate arrays or standard cells may not yield sufficiently attractive
savings  before the  electronic  system  reaches  the end of its life.  With the
introduction  of the MX, SX, and SX-A, and eX families,  Actel believes that its
antifuse FPGAs will be used increasingly in high volume production.

       Communications

       In 2000,  communications  accounted  for an estimated  56% of Actel's net
revenues.  The high density,  high  performance,  and low power  consumption  of
antifuse  FPGAs  make  them  appropriate  for use in  communications  equipment.
Increasingly  complex  equipment must frequently be designed to fit in the space
occupied by previous  product  generations.  In addition,  the rapidly  changing
communications  environment  rewards  short  development  times and early market
entry.

       Representative  customers of Actel in the communications  market include:
3Com   Corporation;   ADC   Telecommunications,   Inc.  (ADC);   Advanced  Fibre
Communications, Inc.; Alcatel; Cabletron; Cisco Systems, Inc.; Ericsson, Hughes;
Lucent; Marconi;  Motorola,  Inc.; Nokia Corporation;  and Nortel. Actel derived
11% of its net revenues for 2000 from Nortel.

       Space

       In 2000, aerospace and military accounted for an estimated 23% of Actel's
net revenues.  Rigorous  quality and  reliability  standards,  stringent  volume
requirements,  and the need  for  design  security  are  characteristics  of the
military and  aerospace  market.  Actel's  antifuse  FPGAs have high quality and
reliability  and are  virtually  impossible  to reverse  engineer,  making  them
appropriate for many military and aerospace applications. Actel's antifuse FPGAs
are  especially  well suited for space  applications,  due to the high radiation
tolerance  of  the  antifuse,   and  for  many   aircraft  and  missile   flight
applications,  due to the high density and high  performance of antifuse  FPGAs.
For  these  reasons,   Actel  is  the  world's  leading  supplier  of  military,
radiation-tolerant, and radiation-hardened FPGAs.

       Actel's  antifuse FPGAs were first designed into a space mission in 1992.
Since then,  thousands of Actel's  programmable  logic  circuits have  performed
aboard manned space  vehicles,  earth  observation  satellites,  and  deep-space
probes.  Actel's  FPGAs often  perform  mission-critical  functions on important
scientific missions in space. They have, for example,  been aboard numerous Mars
missions,  were included in the controlling  electronics for the Mars Pathfinder
Rover,  and are performing  functions on the repaired  Hubbell Space  Telescope.
Actel  participates in programs  administered by NASA's  Goddard,  Johnson,  and
Marshall Space Flight Centers  (including the Space Shuttle) as well as programs
at  California  Institute  of  Technology's  Jet  Propulsion  Laboratory  (JPL).
However,  Actel's  success  has not been  limited to the United  States.  Today,
Actel's  FPGAs  can be found on board the  International  Space  Station  and in
spacecraft  launched by virtually  every civilian space agency around the world,
including the European Space Agency and the Japanese  National Space Development
Agency.

       Representative customers of Actel in the space market include: The Boeing
Company;  Harris  Corporation;  Honeywell;  JPL; Lockheed Martin;  Loral Space &
Communications, Ltd.; Marconi; National Aeronautics Space Administration (NASA);
Northrup Grumman  Corporation;  Olin Corporation;  Raytheon Systems Company; SCI
Systems, Inc.; and TRW, Inc.

       Industrial

       In 2000,  industrial control and instrumentation  applications  accounted
for  an  estimated  13%  of  Actel's  net  revenues.   Industrial   control  and
instrumentation applications often require complex electronic functions tailored
to specific needs.  FPGAs offer  programmability  and high density,  making them
attractive to this segment of the electronic equipment market.

       Representative  customers  of Actel  in the  industrial  market  include:
Agilent Technologies,  Inc.; Eastman Kodak Company; GE; Hewlett-Packard  Company
(HP); Rockwell; Siemens: and Varian Medical Systems, Inc.

       Computer

       In 2000,  computer systems and peripherals  accounted for an estimated 5%
of Actel's net revenues.  The computer systems market is intensely  competitive,
placing a premium on early market entry for new products.  FPGAs reduce the time
to  market  and  facilitate  early  completion  of  production  models  so  that
development of hardware and software can occur in parallel.

       Representative  customers of Actel in the computer market include: Compaq
Computer  Corporation;  HP; Hypercom  Corporation;  and  International  Business
Machines Corporation.

       Consumer

       In 2000, consumer and e-appliance applications accounted for an estimated
3% of Actel's net revenues. The high performance, low power consumption, and low
cost of antifuse FPGAs make them  appropriate  for use in products  enabling the
portability of the internet, or "e-appliances," and other high-volume electronic
systems   targeted  for   consumers.   E-appliance   applications   include  MP3
"music-off-the-internet"  players,  digital cable set-top  boxes,  DSL and cable
modems,  digital cameras, and digital film. Like the computer market, the market
for consumer and e-appliance products places a premium on early market entry for
new products and is characterized by short product life cycles.

       Representative  customers of Actel in the consumer market  include:  ADC;
Motorola; NEC Corporation; NuCam Corporation; and SONICblue Incorporated.

       In May 2000,  Actel  announced  that it had shipped more than one million
FPGAs for use in MP3 internet digital audio  player/recorder  applications.  MP3
player/recorders are small,  battery-powered  devices that digitally record high
quality music and audio off of the internet and allow users to play it back much
as they would with a portable CD player.  With InStat  Research  estimating that
750,000 MP3  player/recorders  were sold in 1999, the volume of Actel  shipments
substantiates  the claim that Actel FPGAs are  included  in the  majority of MP3
internet audio player/recorder products in the hands of consumers worldwide. MP3
is an  abbreviation  of the Motion Picture Expert Group industry  organization's
Layer 3 third-generation audio/video standard.

       In May 2000, Actel also announced low-cost speed-grade options for its MX
and SX-A families to serve the high-volume internet-related consumer e-appliance
market. For applications not requiring extremely high performance,  the new "-F"
speed  grades  offer up to 30% reduced  pricing  from  standard  speed grades in
Actel's two most popular product families.  High-volume applications,  including
those for the consumer  e-appliance market,  traditionally used ASICs to achieve
cost  savings.  However,  the -F speed  grades of Actel's  ASIC-like MX and SX-A
FPGAs approach cost parity with ASICs,  especially  when taking into account the
significant NRE commonly  charged for ASICs.  Actel FPGAs also provide the added
benefit of rapid design and verification, enabling much faster time to market.

       In November  2000,  Actel  announced  that  Tescina,  Inc.  (Tescina) had
introduced  the  DataGet  BCD  cartridge,  the  first  gauge  interface  for the
HandSpring  Visor and the first gauge  multiplexer for any Palm operating system
device.  The HandSpring  Visor is the most expandable  handheld  platform on the
market and second  only to Palm in sales.  The main  benefits of the DataGet BCD
cartridge  over  existing  DataGet  ports are faster data  collection  times and
better   ergonomics.   The  DataGet  BCD  cartridge   utilizes  the  SpringBoard
architecture to bring gauge  connectivity to the platform.  To utilize the power
of the  SpringBoard  slot,  Tescina  used  Actel's  new eX64 FPGA.  Aimed at the
growing e-appliance market,  Actel's eX family of FPGAs enables designers to use
single-chip   programmable   logic  instead  of  ASICs  for  their   low-density
requirements,  eliminating the long lead times and costly NRE charges. Designing
with the eX64 FPGA permitted Tescina to deliver the precise features, low power,
and  small  package  DataGet   customers  need  without   compromising  cost  or
performance.

Sales and Distribution

       Actel  maintains a  worldwide,  multi-tiered  selling  organization  that
includes  a  direct  sales  force,   independent  sales   representatives,   and
electronics  distributors.  Actel's North  American  sales force  consists of 52
sales and  administrative  personnel  and  field  application  engineers  (FAEs)
operating  from 25 sales offices  located in major  metropolitan  areas.  Direct
sales  personnel  call on target  accounts  and  support  direct  OEMs.  Besides
overseeing the activities of direct sales personnel, Actel's sales managers also
oversee  the  activities  of 20 sales  representative  firms that  operate  from
approximately  55 office  locations.  The sales  representatives  concentrate on
selling to major  industrial  companies in North  America.  To service  smaller,
geographically  dispersed  accounts  in North  America,  Actel  has  distributor
agreements with Arrow,  Pioneer,  and Unique.  Arrow,  Pioneer,  and Unique have
approximately 39, 39, and 32 offices in North America, respectively.

       Actel generates a significant  portion of its revenues from international
sales.  Sales to customers outside the United States accounted for 32%, 29%, and
33% of net revenues for 2000,  1999, and 1998,  respectively.  Sales to European
customers  accounted for 19%, 17%, and 19% of net revenues 2000, 1999, and 1998,
respectively.  Actel's  European  sales  organization  consists of 20  employees
operating from five sales offices and 12 distributors and sales  representatives
having approximately 33 offices (including Arrow and Unique, which have nine and
seven offices in Europe,  respectively).  Sales to Japan and other international
customers  accounted for 13%, 12%, and 14% of net revenues 2000, 1999, and 1998,
respectively.  Actel's  Pan-Asia  sales  organization  consists of 11  employees
operating from four sales offices and seven distributors having approximately 16
offices (including Unique, which has nine offices in Pan-Asia). Three additional
distributors serve the remaining international markets in which Actel offers its
products.

       Actel's  sales cycle for the initial sale of a design system is generally
lengthy and often requires the ongoing participation of sales, engineering,  and
managerial  personnel.  After a sales representative or distributor  evaluates a
customer's  logic design  requirements and determines if there is an application
suitable for Actel's FPGAs,  the next step typically is a visit to the qualified
customer by a regional  sales manager or the FAE from Actel or its  distributor.
The sales manager or FAE may then determine that additional analysis is required
by engineers based at Actel's headquarters.

       In 2000, sales made through  distributors  accounted for an estimated 58%
of Actel's  net  revenues.  As is common in the  semiconductor  industry,  Actel
generally  grants  price   protection  to   distributors.   Under  this  policy,
distributors  are granted a credit  upon a price  reduction  for the  difference
between their original  purchase price for products in inventory and the reduced
price. From time to time,  distributors are also granted credit on an individual
basis for  Company-approved  price  reductions on specific  transactions to meet
competition.  Actel also generally grants distributors  limited rights to return
products.  To date,  product  returns under this policy have not been  material.
Actel  maintains  reserves  against which these credits and returns are charged.
Because of its price  protection and return  policies,  Actel does not recognize
revenue on products  sold to  distributors  until the products are resold to end
customers.

Backlog

       At December 31, 2000,  Actel's backlog was  approximately  $44.4 million,
compared with  approximately  $49.6 million at December 31, 1999. Actel includes
in its backlog all OEM orders  scheduled  for delivery over the next nine months
and all  distributor  orders  scheduled  for delivery  over the next six months.
Actel sells standard  products that may be shipped from inventory within a short
time after receipt of an order. Actel's business,  and to a large extent that of
the entire  semiconductor  industry,  is  characterized  by short-term order and
shipment schedules,  rather than volume purchase  contracts.  In accordance with
industry  practice,  Actel's  backlog may be  cancelled  or  rescheduled  by the
customer on short  notice  without  significant  penalty.  As a result,  Actel's
backlog may not be indicative  of actual sales and therefore  should not be used
as a measure of future revenues.

Customer Service and Support

       Actel believes that superior  customer service and technical  support are
essential for success in the FPGA market.  Actel facilitates service and support
through  service team  meetings that address  particular  aspects of the overall
service strategy and support. The most significant areas of customer service and
technical support are regularly measured.  Actel's customer service organization
emphasizes  prompt,  accurate  responses to questions about product delivery and
order status.

       Actel's FAEs located in Canada,  England,  France, Germany, Italy, Japan,
Korea,  and the United States  provide  technical  support to customers in North
America,  Europe, and Asia. This network of experts is augmented by FAEs working
for  Actel's  sales  representatives  and  distributors  throughout  the  world.
Customers  in any  stage of  design  can also  obtain  assistance  from  Actel's
technical support hotline or web-based technical support database called "Guru."
In addition,  Actel offers technical  seminars on its products and comprehensive
training classes on its software.

       Actel  generally  warrants  that its FPGAs  will be free from  defects in
material and  workmanship  for one year,  and that its software  will conform to
Actel's published specifications for 90 days. To date, Actel has not experienced
significant warranty returns.

Manufacturing and Assembly

       Actel's strategy is to utilize  third-party  manufacturers  for its wafer
requirements,  which permits Actel to allocate its resources to product  design,
development,  and marketing.  Wafers used in Actel's FPGAs are  manufactured  by
Chartered in Singapore; by Infineon in Germany; by LMSEC in Manassas,  Virginia;
by MEC in Japan;  by UMC in Taiwan;  and by Winbond in Taiwan.  Actel's FPGAs in
production are manufactured by Chartered using 0.6, 0.45, and 0.35 micron design
rules;  by Infineon  using 0.25 micron design  rules;  by LMSEC using 0.8 micron
design rules;  by MEC using 1.0, 0.8, and 0.25 micron design rules; by UMC using
0.22 and .018  micron  design  rules;  and by  Winbond  using 0.8 and 0.6 micron
design rules.

       In March  2000,  Actel  announced  that it had  successfully  developed a
0.22-micron  antifuse process technology at UMC. The new 0.22-micron process was
developed more quickly than any previous Actel  antifuse  process.  Before that,
the  0.25-micron  process had, in  partnership  with MEC, also been developed in
record time. In recent years, most standard logic processes have adopted the use
of multi-voltage  transistors and polishing  methods that were previously unique
to antifuse  FPGAs.  This,  together with the narrowing  difference in mask sets
between  standard and antifuse  processes,  has  significantly  reduced the time
required to bring up new antifuse processes.

       Wafers  purchased  by Actel from its  suppliers  are  assembled,  tested,
marked,  and inspected by Actel and/or a subcontractor  of Actel before shipment
to customers.  Actel assembles most of its plastic  commercial  products in Hong
Kong,  Korea,  and  Singapore.  Ceramic  package  assembly,  which is  generally
required for military  applications,  is performed at one or more  subcontractor
manufacturing facilities, some of which are in the United States.

       Actel is ISO 9002  certified  for the  manufacturing  and  testing of its
FPGAs.  The  certification  was granted by the Defense Supply Center,  Columbus,
Ohio (DSCC). The ISO standards,  developed by the International Organization for
Standardization,   provide  an  international  benchmark  for  quality  systems.
Specifically,  ISO 9002 requires  compliance in the following areas:  management
responsibility,  customer service, supplier management, internal quality audits,
training process control, and inspection. As Actel continues to establish itself
as a leading  supplier  of  high-quality  FPGAs,  ISO  certification  provides a
globally  recognized  benchmark  that Actel's  devices have been  certified  for
integrity in the manufacturing and test process.

       Actel  has also been  awarded  Full  Certification  to QML  status.  This
certification  confirms that Actel has an approved quality system and control of
its  processes  and  procedures  according  to the  standards  set  forth in the
MIL-PRF-38535.  QML  certification,  which is also  granted  by DSCC,  qualifies
processes  and materials  rather than  individual  products or production  lots.
Actel  has  even  received  complete  QML  certification  for its  full  line of
plastic-packaged antifuse FPGAs, giving customers using commercial off-the-shelf
(COTS) components access to a wide range of package type, density,  performance,
and price  points.  With QML  plastic  certification,  the entire  line of Actel
devices can be integrated into design  applications that would otherwise require
higher-cost  ceramic  package  devices,   thereby  providing  designers  with  a
lower-cost   solution.   The  certification  also  permits  the  integration  of
commercial and military production without  compromising quality or reliability.
In addition,  many suppliers of microelectronic  components have implemented QML
as their primary worldwide business  standard.  Appropriate use of this standard
helps  not only in the  implementation  of  advanced  technologies,  but also in
providing more  effective  logistical  support  throughout the life cycle of the
product.

       In  January  2000,  Actel  announced  that it had  registered  as a STACK
International  supplier.  STACK International members consist of a distinguished
worldwide  group  of  major  electronic  equipment   manufacturers  serving  the
high-reliability and communications markets. STACK registration signifies formal
acceptance by Actel of the requirements in the "STACK Purchase  Specification --
General Requirements for Integrated Circuits." Registration is the first step in
acquiring full STACK certification.

       In April 2000,  Actel announced that it had been qualified by PURE, which
stands for PEDs (plastic encapsulated devices) Used in Rugged Environments. PURE
is an  association  of  European  equipment  makers  dedicated  to  quality  and
reliability:  Thomson-CSF;  Ericsson;  SAAB Bofors  Dynamics AB;  Ericsson  SAAB
Avionics AB; Bofors Missiles AB; and SaabTech. Members have committed to sharing
data and results among themselves  related to plastic  components used in rugged
environments.  The  association  is also  supported  by the French  and  Swedish
Ministries of Defense. The qualification is for PQ packages.  This accreditation
further  confirms  that  Actel's  quality  and  reliability  systems  conform to
internationally  recognized  standards  and  requirements.  It also  underscores
Actel's long-term commitment to quality, reliability, and continuous improvement
in products, processes, and systems.

Strategic Relationships

       In addition to ongoing strategic relationships that Actel enjoys with its
foundries, suppliers, assembly houses, distributors, sales representatives,  and
OEM customers,  Actel entered into the following strategic  relationships during
the past year:

       Mentor Graphics

       In March and November 2000, Mentor announced the availability of Inventra
IP cores  for use with  Actel's  SX-A  family  of  high-performance  FPGAs.  The
partnership  with Actel was the first  strike in  Mentor's  IP  strategy to make
cores for the surging  FPGA market.  According to Mentor,  FPGAs are moving into
the  traditional  ASIC space of high density and high  performance,  without the
ASIC drawbacks of large NRE costs and up-front volume  commitments.  Recognizing
this,  Mentor'  Inventra IP division  entered this market,  with renewed  focus,
through  an  internet  approach.   The  online  strategy  gives  FPGA  designers
unprecedented convenience to access desired IP for evaluation and licensing.

       Available  risk-free  over  the  worldwide  web,  the  Inventra  IP cores
targeted to Actel SX-A FPGAs are optimized  for use in Mentor's  FPGA  Advantage
design flow. FPGA Advantage is a complete HDL design  solution  tailored to meet
the needs of  high-end  FPGA  designers.  Netlists  of these  cores  enable easy
integration into system designs in applications that include  telecommunications
infrastructure,  networking, and e-appliances.  The combination of speed and low
cost found in Actel's SX-A FPGA family opens the door to next-generation designs
that could not previously be implemented in programmable logic.

       UMC

       In February  2001,  Actel  announced  that it had joined  UMC's Gold IPSM
program with Actel's VariCore EPGA star IP cores. Concurrently,  Actel taped out
a VariCore EPGA IP test chip in UMC's 0.18-micron fab in Taiwan.  VariCore IP is
the first complete (front end to back end),  commercially  available  product of
its kind in 0.18 micron technology. Actel's embeddable reprogrammable EPGA logic
cores are based on SRAM technology. See "BUSINESS -- Products and Services -- IP
Core -- VariCore  EPGAs." Actel will license VariCore EPGA cores directly to UMC
customers.

       Research and Development

       In 2000,  1999, and 1998, Actel spent $36.6 million,  $32.3 million,  and
$31.2 million, respectively, on research and development, which represented 16%,
19%, and 20%, of net revenues,  respectively, for such periods. Actel's research
and  development   expenditures  are  divided  among  circuit  design,  software
development, and process technology activities, all of which are involved in the
development of new products based on existing or emerging  technologies.  In the
areas of circuit design and process technology, Actel's research and development
activities  also  involve  continuing  efforts to cut the cost and  improve  the
performance of current products,  including reductions in the design rules under
which such products are manufactured.  Actel's software research and development
activities include enhancing the functionality,  usability,  and availability of
high-level  computer-aided  engineering  tools  and IP cores in a  complete  and
automated desktop design environment on popular PC and workstation platforms.

       Actel publicly  disclosed in 2000 that it was working on next  generation
antifuse,  flash, and embedded SRAM products,  but provided no details regarding
those research and development projects.

Competition

       The FPGA market is highly competitive, and Actel expects that competition
will  continue to  increase as the market  grows.  Actel's  competitors  include
suppliers of standard TTLs and  custom-designed  ASICs,  including  conventional
gate  arrays,  standard  cells,  CPLDs,  and  FPGAs.  Of these,  Actel  competes
principally with suppliers of conventional gate arrays,  standard cells,  CPLDs,
and FPGAs.

       The primary advantages of conventional gate arrays and standard cells are
high capacity,  high density,  high speed,  and low cost in production  volumes.
Actel  competes  with  conventional  gate array and standard  cell  suppliers by
offering lower design costs, shorter design cycles, and reduced inventory risks.
However,  some customers elect to design and prototype with Actel's products and
then  convert to  conventional  gate arrays or standard  cells to achieve  lower
costs for volume production.  For this reason, Actel also faces competition from
companies  that  specialize  in  converting  CPLDs and  FPGAs,  including  Actel
products, into conventional gate arrays or standard cells.

       Actel also competes with  suppliers of CPLDs.  Suppliers of these devices
include Altera Corporation (Altera) and Lattice-Vantis Semiconductor Corporation
(Lattice).  The  circuit  architecture  of  CPLDs  may give  them a  performance
advantage in certain lower capacity  applications,  although Actel believes that
its MX, SX, and SX-A, and eX families  compete  favorably  with CPLDs.  However,
Altera and Lattice  have larger  installed  bases of  development  systems  than
Actel. In addition, many newer CPLDs are reprogrammable, which permits customers
to  reuse  a  circuit   multiple  times  during  the  design   process   (unlike
antifuse-based FPGAs, which permanently retain the programmed configuration). No
assurance  can be given that Actel will be able to  overcome  these  competitive
disadvantages.

       Actel competes most directly with  established  FPGA  suppliers,  such as
Xilinx, Inc. (Xilinx),  Lucent (which is a licensed second source of some Xilinx
products),  and Altera.  While Actel  believes its products and  technology  are
superior to those of Xilinx in many applications  requiring greater speed, lower
cost, and/or  nonvolatility,  Xilinx came to market with its FPGAs approximately
three years before Actel,  has a larger  installed base of development  systems,
and its SRAM-based products are reprogrammable.

       Actel's antifuse FPGAs are  manufactured  using customized steps that are
added  to  otherwise  standard  manufacturing  processes  of  independent  wafer
suppliers.  As a result,  Actel's products  typically have been fabricated using
processes  one or  two  generations  behind  the  processes  used  by  competing
products.  As a consequence,  Actel  generally has not fully realized the price,
performance,  and power benefits of its antifuse technology. Actel is attempting
to  accelerate  the rate at which its  products  are  migrated to finer  process
geometries  and is working with its wafer  suppliers to obtain earlier access to
advanced  processes,  but no  assurance  can be given that Actel will be able to
overcome this competitive disadvantage.

       Several   companies  have  marketed   antifuse-based   FPGAs,   including
QuickLogic Corporation  (QuickLogic).  In 1995, Actel acquired the antifuse FPGA
business of TI,  which was the only  second-source  supplier of Actel  products.
Xilinx,  which  is  a  licensee  of  certain  of  Actel's  patents,   introduced
antifuse-based  FPGAs in 1995 and  abandoned its antifuse FPGA business in 1996.
Cypress  Semiconductor  Corporation,  which  was a  licensed  second  source  of
QuickLogic, sold its antifuse FPGA business to QuickLogic in 1997. QuickLogic is
also a licensee  of certain of Actel's  patents.  See  "BUSINESS  -- Patents and
Licenses."

       Actel  believes  that  important  competitive  factors  in its market are
price;  performance;  density  (concentration of usable gates);  capacity (total
number of usable gates);  ease of use and  functionality  of development  system
software; installed base of development systems; reprogrammability;  strength of
sales   organization   and  channels;   adaptability  of  products  to  specific
applications and IP; ease, speed,  cost, and consistency of programming;  length
of development cycle (including reductions to finer micron design rules); number
of I/Os; reliability;  wafer fabrication and assembly capacity;  availability of
packages,  adapters, sockets,  programmers,  and IP; utilization of intellectual
property  laws; and technical  service and support.  Failure of Actel to compete
successfully  in any of these or other  areas  could have a  materially  adverse
effect on its business, financial condition, or results of operations.

Patents and Licenses

       As  of  March  31,  2001,   Actel  had  192  United  States  patents  and
applications pending for an additional 56 United States patents.  Actel also had
50 foreign patents and  applications  pending for 122 patents outside the United
States.  Actel's  patents  cover,  among other  things,  Actel's  basic  circuit
architecture,  antifuse  structure,  and  programming  method.  Actel expects to
continue  filing patent  applications  as appropriate to protect its proprietary
technologies.   Actel  believes  that  patents,   along  with  such  factors  as
innovation,  technological  expertise,  and experienced  personnel,  will become
increasingly important.

       Actel attempts to protect its circuit designs,  software,  trade secrets,
and other  proprietary  information  through  patent and  copyright  protection,
agreements with customers and suppliers, proprietary information agreements with
employees, and other security measures. No assurance can be given that the steps
taken by Actel will be adequate to protect its proprietary rights.

       On March 29, 2000, Unisys Corporation (Unisys) brought suit in the United
States District Court for the Northern District of California, San Jose Division
(Court),  against Actel seeking  monetary  damages and  injunctive  relief.  The
summons and  complaint  were served on Actel on April 10,  2000.  The  complaint
alleges that Actel has infringed and is currently  infringing four United States
patents that belong to plaintiff:  U.S. Patent No.  4,442,507,  issued April 10,
1984;  U.S.  Patent  No.  5,296,722,  issued  March 22,  1994;  U.S.  Patent No.
5,407,851, issued April 18, 1995; and U.S. Patent No. 5,496,763, issued March 5,
1996. On May 15, 2000, Unisys served its Initial  Disclosure of Asserted Claims,
identifying the SX and SX-A family of FPGAs as the specific Actel products being
accused of  infringement,  and  identifying  the specific  claims of each of the
patents in suit  alleged to be  infringed by those  products.  On September  25,
2000, Actel filed its First Amended Answer to the Complaint, denying that it has
infringed or is infringing any of the patents in suit, and alleging, among other
things,  that each of those patents is invalid for failure to meet the statutory
requirements  for  patentability.  With its amended  answer,  Actel also filed a
counterclaim  against  Unisys  seeking a judicial  declaration  that each of the
Unisys patents in suit is invalid, unenforceable, and not infringed by Actel. On
October 26, 2000,  the Court entered its Order for Pretrial  Preparation,  which
established  various  deadlines  in the case and set the case for trial on March
25,  2002.  The case is in its  early  stages  and,  as of March  30,  2001,  no
depositions  or  other  substantial  discovery  had yet  been  conducted.  Actel
believes that it has  meritorious  defenses to the claims asserted by Unisys and
intends to defend itself vigorously in this matter.  After  consideration of the
information currently known, Actel does not believe that the ultimate outcome of
case will  have a  materially  adverse  effect on  Actel's  business,  financial
condition, or results of operations,  although no assurance can be given to that
effect. The foregoing is a forward-looking statement subject to all of the risks
and  uncertainties  of a  legal  proceeding,  including  the  discovery  of  new
information and unpredictability as to the ultimate outcome.

       In connection with the settlement of patent litigation in 1993, Actel and
Xilinx entered into a Patent Cross License Agreement (Xilinx  Agreement),  under
which Xilinx was granted a license under certain of Actel's patents that permits
Xilinx to make and sell  antifuse-based  PLDs,  and Actel was  granted a license
under  certain of Xilinx's  patents to make and sell  SRAM-based  PLDs. In 1996,
Xilinx announced that it had discontinued its antifuse-based  FPGA product line.
In February 2001,  Actel  introduced its new SRAM-based  VariCore EPGA IP cores.
Under the Xilinx  Agreement,  Actel did not receive  sublicense rights under any
Xilinx patents.

       In 1995,  Actel and BTR,  Inc.  (BTR)  entered  into a License  Agreement
pursuant  to  which  BTR  licensed  its  proprietary  technology  to  Actel  for
development  and  use  in  FPGAs  and  certain  multichip  modules.  As  partial
consideration  for the grant of the  license,  Actel pays to BTR  non-refundable
advance royalties. Actel has also employed the principals of BTR to assist Actel
in its development and implementation of the licensed technology.

       In connection with the settlement of patent litigation in 1998, Actel and
QuickLogic  entered  into a Patent Cross  License  Agreement  that  protects all
existing FPGA products of both  companies  for the lives of those  products.  In
1998, Actel also entered into a patent litigation  settlement agreement with the
Lemelson Medical, Education & Research Foundation.

       As is typical in the semiconductor  industry,  Actel has been and expects
to be  notified  from time to time of claims that it may be  infringing  patents
owned by others.  During 2000,  Actel continued to hold discussions with several
third parties  regarding  potential patent  infringement  issues,  including two
semiconductor   manufacturers   with   significantly   greater   financial   and
intellectual  property  resources than Actel.  As it has in the past,  Actel may
obtain  licenses  under  patents  that it is alleged to  infringe.  While  Actel
believes that reasonable  resolution will occur,  there can be no assurance that
these  claims will be resolved or that the  resolution  of these claims will not
have a materially adverse effect on Actel's business,  financial  condition,  or
results of operations. In addition, Actel's evaluation of the probable impact of
these pending disputes could change based upon new information learned by Actel.
Subject to the foregoing, Actel does not believe that any pending patent dispute
is likely to have a materially  adverse effect on Actel's  financial  condition,
results of operations, or liquidity.

Employees

       At the end of 2000, Actel had 484 full-time  employees,  including 132 in
marketing, sales, and customer support; 154 in research and development;  144 in
operations;  18 in  Protocol  Design  Services;  and  36 in  administration  and
finance.  This  compares  with 449  full-time  employees at the end of 1999,  an
increase of 8%. As a result of the  acquisitions  of GateField and Prosys during
2000,  26 employees  were added.  Net revenues per employee  were  approximately
$468,000  for  2000,  compared  with  approximately  $382,000  for  1999,  which
represents an increase of 23%.  None of Actel's  employees is  represented  by a
labor union nor does Actel have employment agreements with any of its employees.
Actel has not  experienced  any work  stoppages  and believes  that its employee
relations are satisfactory.

       In July 2000, Actel announced the appointment of Barbara McArthur as Vice
President of Human  Resources.  In this role, Ms.  McArthur is  responsible  for
managing all of Actel's strategic staffing and human resources programs.

Risk Factors

       Shareholders  of  Actel  and  prospective   investors   should  carefully
consider,  along with the other  information in this Annual Report on Form 10-K,
the following risk factors:

       "Blank Check" Preferred Stock; Change in Control Arrangements

       Actel's  Articles  of  Incorporation  authorize  the  issuance  of  up to
5,000,000  shares of "blank check"  Preferred Stock (of which  4,000,000  shares
remain available for issuance) with such  designations,  rights, and preferences
as may be determined  from time to time by the Board of Directors.  Accordingly,
the Board is empowered,  without approval by holders of Actel's Common Stock, to
issue  Preferred  Stock  with  dividend,  liquidation,  redemption,  conversion,
voting,  or other rights that could  adversely  affect the voting power or other
rights of the holders of the Common Stock.  Issuance of Preferred Stock could be
used as a method of discouraging, delaying, or preventing a change in control of
Actel. In addition, such issuance could adversely affect the market price of the
Common Stock.  Although Actel does not currently  intend to issue any additional
shares of its Preferred Stock,  there can be no assurance that it will not do so
in the future.

       Actel has adopted an Employee Retention Plan that provides for payment of
a benefit to Actel's employees who hold unvested stock options in the event of a
change of control of Actel.  Payment is contingent  upon the employee  remaining
with Actel for six months  after the change of control.  Actel has also  entered
into Management Continuity Agreements with each of its executive officers, which
provide for the  acceleration of stock options  unvested at the time of a change
of  control in the event the  executive  officer's  employment  is  actually  or
constructively terminated other than for cause following the change of control.

       Competition

       The semiconductor  industry is intensely competitive and is characterized
by rapid rates of technological change, product obsolescence, and price erosion.
Actel's  existing  competitors  include  suppliers of conventional  gate arrays,
standard cells,  CPLDs, and FPGAs.  Actel's principal  competitors are Xilinx, a
supplier of SRAM-based FPGAs;  Altera, a supplier of CPLDs and SRAM-based FPGAs;
QuickLogic,  a supplier of  antifuse-based  FPGAs;  and  Lattice,  a supplier of
CPLDs. Actel also faces competition from companies that specialize in converting
FPGAs,  including  Actel's  products,  into conventional gate arrays or standard
cells. See "BUSINESS -- Competition."

       In addition,  all  existing  FPGAs not based on antifuse  technology  and
certain CPLDs are  reprogrammable,  a feature that makes them more attractive to
designers.  In addition,  Actel's antifuse and, to a lesser extent,  flash FPGAS
are manufactured  using  customized  steps that are added to otherwise  standard
manufacturing  processes of independent  wafer suppliers.  As a result,  Actel's
products  typically have been fabricated  using processes one or two generations
behind the processes used by competing products.  No assurance can be given that
Actel will be able to overcome these competitive disadvantages.

       Actel also  believes  that,  if there  were a downturn  in the market for
CPLDs and  FPGAs,  companies  with  broader  product  lines and  longer-standing
customer  relationships  may be in a stronger  competitive  position than Actel.
Many of  Actel's  current  competitors  offer  broader  product  lines  and have
significantly  greater  financial,  technical,   manufacturing,   and  marketing
resources than Actel.

       Significant  additional  competition  is possible from major domestic and
international  semiconductor  suppliers.  All such  companies are larger,  offer
broader  product  lines,  and have  substantially  greater  financial  and other
resources than Actel,  including the capability to manufacture their own wafers.
Additional  competition  could  adversely  affect  Actel's  business,  financial
condition, or results of operations.

       Actel may also face competition from suppliers of logic products based on
new or emerging  technologies.  Actel seeks to monitor  developments in existing
and emerging technologies.  No assurance can be given that Actel will be able to
compete  successfully with suppliers  offering products based on new or emerging
technologies.  In any event,  given the  intensity  of the  competition  and the
research and  development  being done,  no  assurance  can be given that Actel's
technologies will remain competitive.

       Customer Concentration

       A small number of customers are  responsible  for a  significant  portion
Actel's net revenues.  Actel has experienced periods in which sales to its major
customers  fluctuated  as a  percentage  of net  revenues  due to  push-outs  or
cancellations of orders, or delays or failures to place expected orders.  Nortel
accounted for 11% of Actel's net revenues for 2000. Actel believes that sales to
a limited number of customers will continue to account for a substantial portion
of net revenues in future periods. The loss of a major customer, or decreases or
delays in shipments to major customers,  could have a materially  adverse effect
on Actel's business, financial condition, or results of operations.

       Dependence on Communications Customers

       Although Actel is unable to determine with certainty the ultimate uses of
its  products,  Actel  estimates  that sales of its products to customers in the
communications   market  accounted  for  56%  of  net  revenues  for  2000.  The
communications  market has  experienced  economic  downturns  at various  times,
characterized  by  diminished  product  demand,  accelerated  erosion of average
selling  prices,  and  production  overcapacity.  In the  past  few  years,  the
communications  market  has  grown  rapidly,  but  it is  currently  enduring  a
significant slowdown, which may become more severe and could be prolonged. Actel
is  experiencing,   and  may  again  in  the  future   experience,   substantial
period-to-period  fluctuations  in operating  results due to  conditions  in the
communications market or the general economy.

       Dependence on Customized Manufacturing Processes

       Actel's antifuse-based FPGAs and, to a lesser extent, flash-based ProASIC
FPGAs are  manufactured  using  customized  steps  that are  added to  otherwise
standard  manufacturing  processes  of  independent  wafer  suppliers.  There is
considerably  less operating  history for the customized  process steps than for
the  foundries'  standard  manufacturing  processes.  The dependence of Actel on
customized  processing  steps means that,  in contrast  with  competitors  using
standard   manufacturing   processes,   Actel   generally  has  more  difficulty
establishing relationships with independent wafer manufacturers; takes longer to
qualify  a  new  wafer  manufacturer;  takes  longer  to  achieve  satisfactory,
sustainable wafer yields on new processes;  may experience a higher incidence of
production  yield  problems;  must pay more for wafers;  and generally  will not
obtain early access to the most  advanced  processes.  Any of the above  factors
could  be  a  material   disadvantage  against  competitors  that  use  standard
manufacturing  processes.  As  a  result  of  these  factors,  Actel's  products
typically have been fabricated using processes one or two generations behind the
processes used by competing products. As a consequence,  Actel generally has not
fully  realized  the price,  performance,  and power  benefits  of its  antifuse
technology. Actel is attempting to accelerate the rate at which its products are
reduced to finer  geometries  and is working with its wafer  suppliers to obtain
earlier  access to advanced  processes,  but no assurance can be given that such
efforts will be successful.

       Dependence on Design Wins

       In order  for  Actel to sell an FPGA to a  customer,  the  customer  must
incorporate  the FPGA into the  customer's  product in the design  phase.  Actel
therefore  devotes  substantial  resources,  which  it may not  recover  through
product sales, in support of potential customer design efforts (including, among
other things,  providing  development system software) and to persuade potential
customers  to  incorporate  Actel's  FPGAs into new or updated  products.  These
efforts usually precede by many months (and often a year or more) the generation
of FPGA sales,  if any, by Actel.  The value of any design win,  moreover,  will
depend in large part upon the ultimate  success of the  customer's  product.  No
assurance can be given that Actel will win sufficient designs or that any design
win will result in significant revenues. Actel's design win efforts in 2000 were
hindered by availability constraints on its ProASIC and new eX product families.

       Dependence on Independent Assembly Subcontractors

       Actel  relies  primarily on foreign  subcontractors  for the assembly and
packaging  of its  products  and,  to a lesser  extent,  for the  testing of its
finished  products.  Actel  generally  relies  on one or two  subcontractors  to
provide particular  services and has from time to time experienced  difficulties
with the  timeliness and quality of product  deliveries.  Actel has no long-term
contracts with its subcontractors and certain of those subcontractors  sometimes
operate  at or  near  full  capacity.  There  can  be no  assurance  that  these
subcontractors will continue to be able and willing to meet Actel's requirements
for  components or services.  Any  significant  disruption in supplies  from, or
degradation  in the  quality  of  components  or  services  supplied  by,  these
subcontractors  could delay  shipments  and result in the loss of  customers  or
revenues or otherwise  have a  materially  adverse  effect on Actel's  business,
financial condition, or results of operations.

       Dependence on Independent Software and Hardware Developers

       Actel is dependent upon independent  software and hardware developers for
the development, maintenance, and support of certain elements of its development
systems, IP cores,  debugging and verification  tools,  device programmers,  and
sockets.  Actel's  reliance on  independent  software  and  hardware  developers
involves certain risks,  including lack of control over development and delivery
schedules and the  availability of customer  support.  No assurance can be given
that Actel's  independent  developers  will be able to complete  software and/or
hardware under  development,  or provide updates or customer support in a timely
manner,  which could delay future  software or FPGA releases and disrupt Actel's
ability to provide  customer  support  services.  Any significant  delays in the
availability  of Actel's  software  and/or  hardware could be detrimental to the
capability of Actel's new families of products to win designs,  delay  shipments
and result in the loss of customers or revenues,  or otherwise have a materially
adverse  effect  on  Actel's  business,   financial  condition,  or  results  of
operations.

       Dependence on Independent Wafer Manufacturers

       Actel does not  manufacture  any of the wafers used in the  production of
its FPGAs. Such wafers are manufactured by Chartered in Singapore,  LMSEC in the
United  States,  MEC in Japan,  UMC in Taiwan,  and  Winbond in Taiwan.  Actel's
reliance on independent  wafer  manufacturers  to fabricate its wafers  involves
significant risks, including the risk of events limiting production and reducing
yields, such as technical difficulties or damage to production facilities,  lack
of control over capacity allocation and delivery schedules, and lack of adequate
capacity.

       Actel has from time to time  experienced  delays in obtaining wafers from
its  foundries,  and no  assurance  can be given that Actel will not  experience
similar or more severe  delays in the future.  In addition,  although  Actel has
supply  agreements  with several of its wafer  manufacturers,  a shortage of raw
materials or production  capacity  could lead any of Actel's wafer  suppliers to
allocate  available capacity to customers other than Actel, or to internal uses,
which  could  interrupt   Actel's   capability  to  meet  its  product  delivery
obligations.  Any  inability  or  unwillingness  of Actel's  wafer  suppliers to
provide  adequate  quantities of finished  wafers to satisfy  Actel's needs in a
timely  manner would delay  production  and product  shipments  and could have a
materially adverse effect on Actel's business,  financial condition,  or results
of operations.

       If  Actel's  current  independent  wafer  manufacturers  were  unable  or
unwilling  to  manufacture  Actel's  products as  required,  Actel would have to
identify and qualify additional  foundries.  The qualification process typically
takes one year or longer.  No assurance can be given that any  additional  wafer
foundries would become available or be able to satisfy Actel's requirements on a
timely  basis  or that  qualification  would be  successful.  In  addition,  the
semiconductor   industry  has  from  time  to  time  experienced   shortages  of
manufacturing  capacity.  To secure an  adequate  supply  of  wafers,  Actel has
considered, and continues to consider, various possible transactions,  including
the  use of  substantial  nonrefundable  deposits  to  secure  commitments  from
foundries for specified levels of manufacturing  capacity over extended periods,
equity investments in exchange for guaranteed  production,  and the formation of
joint ventures to own  foundries.  No assurance can be given as to the effect of
any such transaction on Actel's  business,  financial  condition,  or results of
operations.

       Dependence on International Operations

       Actel purchases  almost all of its wafers from foreign  foundries and has
almost  all of its  commercial  products  assembled,  packaged,  and  tested  by
subcontractors  located outside the United States.  These activities are subject
to  the  uncertainties   associated  with  international   business  operations,
including  trade  barriers and other  restrictions,  changes in trade  policies,
foreign  governmental  regulations,  currency  exchange  fluctuations,   reduced
protection  for  intellectual  property,  war  and  other  military  activities,
terrorism, changes in political or economic conditions, and other disruptions or
delays in production or shipments,  any of which could have a materially adverse
effect on Actel's business, financial condition, or results of operations.

       In order to expand  international  sales and service,  Actel will need to
maintain  and expand  existing  foreign  operations  or  establish  new  foreign
operations.   This  entails  hiring  additional  personnel  and  maintaining  or
expanding  existing  relationships  with  international  distributors  and sales
representatives.   This  will  require  significant   managerial  attention  and
financial  resources and could adversely affect Actel's financial  condition and
operating  results.  No assurance  can be given that Actel will be successful in
its   maintenance  or  expansion  of  existing   foreign   operations,   in  its
establishment of new foreign operations, or in its efforts to maintain or expand
its relationships with international distributors or sales representatives.

       Dependence on Key Personnel

       The success of Actel is dependent in large part on the continued  service
of its key managerial,  engineering,  marketing,  sales, and support  employees.
Competition for qualified  personnel is intense in the  semiconductor  industry,
and the loss of Actel's  key  employees,  or the  inability  of Actel to attract
other  qualified  personnel,  could have a materially  adverse  effect on Actel.
Actel does not have employment agreements with any of its key employees.

       Dependence on Military and Aerospace Customers

       Although Actel is unable to determine with certainty the ultimate uses of
its  products,  Actel  estimates  that sales of its products to customers in the
military and aerospace  industries,  which sometimes carry higher profit margins
than sales of products to other customers, accounted for 23% of net revenues for
2000. In general, Actel believes that the military and aerospace industries have
accounted for a significantly  greater  percentage of Actel's net revenues since
the  introduction of RH1280 in 1996. No assurance can be given that future sales
to customers in the military and aerospace  industries  will continue at current
volume or margin levels.  In 1994,  Secretary of Defense  William Perry directed
the  Department of Defense to adopt a new way of doing business as it relates to
acquisition by avoiding  government-unique  requirements and relying more on the
commercial  marketplace.  Under the Perry initiative,  the Department of Defense
must increase  access to commercial  state-of-the-art  technology and facilitate
the  adoption  by  its  suppliers  of  business   processes   characteristic  of
world-class  suppliers.  Integration of commercial and military  development and
manufacturing facilitates the development of dual-use processes and products and
contributes to an expanded  industrial  base that is capable of meeting  defense
needs at lower costs. To that end, many of the cost-driving  specifications that
have been part of military  procurements  for many years were  cancelled  in the
interest of buying commercial products. Actel anticipates that this trend toward
the use of COTS  products  will  continue,  and that it may erode  the  revenues
and/or  margins  that Actel  derives from sales to customers in the military and
aerospace  industries,  which could have a materially  adverse effect on Actel's
business, financial condition, or results of operations.

       Orders from the military  and  aerospace  customers  tend to be large and
irregular,  which creates operational challenges and contributes to fluctuations
in Actel's net revenues and gross margins.  These sales are also subject to more
extensive  governmental   regulations,   including  greater  import  and  export
restrictions.  In addition,  products for  military and  aerospace  applications
require  processing  and testing  that is more  lengthy and  stringent  than for
commercial  applications,  increasing  the  risk of  failure.  It is  often  not
possible to determine  before the end of processing and testing whether products
intended for military or aerospace  applications will fail and, if they do fail,
a significant period of time is often required to process and test replacements.
This makes it difficult to accurately estimate quarterly revenues and could have
a materially adverse effect on Actel's business, financial condition, or results
of operations.

       The Strom Thurmond National Defense  Authorization Act for 1999 required,
among other things, that communications  satellites and related items (including
components) be controlled on the U.S.  Munitions List. The effect of the Act was
to transfer  jurisdiction  over  commercial  communications  satellites from the
Department  of  Commerce to the  Department  of State and to expand the scope of
export  licensing  applicable  to  commercial  satellites.  The  need to  obtain
additional export licenses has caused significant delays in the shipment of some
of Actel's FPGAs.  Actel does not believe that this will have a long-term effect
on its business,  although significant delays might cause some customers to seek
an alternative solution.

       Dividend Policy

       Actel has never declared or paid any cash dividends on its capital stock.
Actel  intends  to retain  any  earnings  for use in its  business  and does not
anticipate paying any cash dividends in the future.

       Fluctuations in Operating Results

       Actel's   quarterly   and  annual   operating   results  are  subject  to
fluctuations  resulting from general economic  conditions and a variety of risks
specific to Actel or  characteristic of the  semiconductor  industry,  including
booking and shipment  uncertainties,  supply problems, and price erosion. Any of
these  factors  can  have a  materially  adverse  effect  on  Actel's  business,
financial  condition,  or results of  operations,  and they make it difficult to
accurately project quarterly revenues and other operating results.

              Booking and Shipment Uncertainties

              Actel  typically  generates a large  percentage  of its  quarterly
       revenues from orders received during the quarter and shipped in the final
       weeks of the quarter, making it difficult to accurately project quarterly
       revenues.  Actel's  backlog  (which  may  be  cancelled  or  deferred  by
       customers on short notice without  significant  penalty) at the beginning
       of a quarter  accounts for only a fraction of Actel's revenues during the
       quarter.  This  means  that  Actel  generates  the rest of its  quarterly
       revenues  from  orders  received  during the  quarter  and  "turned"  for
       shipment  within the quarter,  and that any  shortfall in "turns"  orders
       will have an immediate and adverse  impact on quarterly  revenues.  There
       are many factors that can cause a shortfall in "turns" orders,  including
       but not  limited  to a decline  in  general  economic  conditions  or the
       businesses of end users,  excess inventory in the channel,  conversion to
       conventional  gate arrays,  or the loss of business to other  competitors
       for price or other reasons.

              Historically,   Actel  has  shipped  a  disproportionately   large
       percentage of its  quarterly  revenues in the final weeks of the quarter.
       Any  failure  by Actel to effect  scheduled  shipments  by the end of the
       quarter  can  have a  materially  adverse  effect  on  revenues  for such
       quarter.  Since Actel does not recognize revenue on the sale of a product
       to a  distributor  until the  distributor  resells the  product,  Actel's
       quarterly revenues are also dependent on, and subject to fluctuations in,
       shipments by Actel's distributors. When there is a shortfall in revenues,
       operating  results are likely to be  adversely  affected  because most of
       Actel's expenses do not vary with revenues.

              Supply Problems

              In a typical semiconductor  manufacturing process,  silicon wafers
       produced by a foundry are sorted and cut into  individual  die, which are
       then assembled into individual  packages and tested for performance.  The
       manufacture,  assembly,  and testing of semiconductor  products is highly
       complex  and  subject to a wide  variety of risks,  including  defects in
       masks, impurities in the materials used, contaminants in the environment,
       and  performance  failures  by  personnel  and  equipment.  Semiconductor
       products   intended   for  military  and   aerospace   applications   are
       particularly susceptible to these risks.

              As is common in the semiconductor  industry,  Actel's  independent
       wafer  suppliers  from time to time  experience  lower  than  anticipated
       yields of usable die. To the extent  yields of usable die  decrease,  the
       average cost to Actel of each usable die  increases,  which reduces gross
       margin. Wafer yields can decline without warning and may take substantial
       time to analyze and  correct,  particularly  for a company  such as Actel
       that  does  not  operate  its own  manufacturing  facility,  but  instead
       utilizes independent facilities,  almost all of which are offshore. Yield
       problems may also  increase  the time to market for Actel's  products and
       create inventory shortages and dissatisfied  customers.  No assurance can
       be given that Actel will not  experience  wafer  supply  problems  in the
       future.

              In addition,  Actel typically experiences  difficulties and delays
       in achieving satisfactory,  sustainable yields on new processes or at new
       foundries,  particularly when new technologies are involved. For example,
       Actel and  GateField  have  struggled  for more than two years to achieve
       acceptable  yields on the flash process for ProASIC  devices at Infineon.
       Although Actel  believes it has been able to overcome these  difficulties
       in the past, no assurance can be given that it will be able to do so with
       respect to the flash process at Infineon or any other new process  and/or
       new foundry.

              Price Erosion

              The   semiconductor   industry   is   characterized   by   intense
       competition.  Historically,  the average selling price of products in the
       semiconductor  industry  generally have declined  significantly  over the
       life of each product.  While Actel expects to reduce the average  selling
       prices  of its  products  over  time as it  achieves  manufacturing  cost
       reductions,  Actel is  sometimes  required by  competitive  pressures  to
       reduce  the  prices  of its new  products  more  quickly  than  such cost
       reductions can be achieved.  In addition,  Actel sometimes approves price
       reductions on specific sales to meet competition. Declines in the average
       selling prices of Actel's products will reduce net revenues unless offset
       by  greater  unit  sales or a shift in the mix of  products  sold  toward
       higher-priced  products.  In  addition,  declines in the average  selling
       prices of Actel's  products  will reduce gross  margins  unless offset by
       reductions  in  costs or by a shift in the mix of  products  sold  toward
       higher-margin products.

       Force Majeure

       The   performance  of  Actel  and  each  of  its  foundries,   suppliers,
subcontractors,  distributors,  agents,  and  customers  is subject to events or
conditions beyond such party's control, including labor disputes, acts of public
enemies   or   terrorists,   war  or  other   military   conflicts,   blockades,
insurrections, riots, epidemics, quarantine restrictions, landslides, lightning,
earthquakes,  fires,  storms,  floods,  washouts,  arrests,  civil disturbances,
restraints by or actions of governmental  bodies acting in a sovereign  capacity
(including export or security restrictions on information,  material, personnel,
equipment, or otherwise),  breakdowns of plant or machinery, inability to obtain
transport  or  supplies,  and the like.  Actel's  foundry  partners in Japan and
Taiwan and its  operations  in  California  are centered in areas that have been
seismically active in the recent past. In addition, the countries outside of the
United  States  in  which  Actel's  foundry  partners  and  assembly  and  other
subcontractors are located have unpredictable and potentially volatile economic,
social, or political  conditions,  including the risk of conflict between Taiwan
and the People's Republic of China. The occurrence of any of these circumstances
could disrupt  Actel's  operations  and may have a materially  adverse effect on
Actel's business, financial condition, or results of operations.

       Actel's corporate  offices are located in California,  which is currently
susceptible  to power outages and  shortages as well as increased  energy costs,
which will increase Actel's operating  expenses.  More extensive power shortages
in the state could  disrupt  Actel's  operations  and interrupt its research and
development activities.

       Forward-Looking Statements

       All  forward-looking  statements  contained in this Annual Report on Form
10-K,  including  all  forward-looking  statements  contained  in  any  document
incorporated  herein  by  reference,  are  made  pursuant  to  the  safe  harbor
provisions of the Public Securities Litigation Reform Act of 1995. Words such as
"anticipates,"    "believes,"   "estimates,"   "expects,"   intends,"   "plans,"
"projects,"  "seeks," and variations of such words and similar  expressions  are
intended  to  identify  the  forward-looking   statements.  The  forward-looking
statements include projections and trends relating to acquisitions; amortization
of goodwill and other  acquisition-related  expenses;  average  selling  prices;
competition and competitive  factors;  customer  service and technical  support;
distributors;  dividends and  retention of earnings;  embedded  logic  strategy;
employee  relations  and  hiring;   expansion  and  growth;   export  licensing;
facilities;  financial  condition  and  liquidity;  gross  margin;  hardware and
software availability and features; intellectual property protection and claims;
issuance and  repurchase of securities  and  dilution;  litigation  and dispute;
markets,  including the e-appliance,  embedded logic, and space markets; process
development;   product  availability  and  delivery;  research  and  development
expenditures;  revenues,  including  international sales; selling,  general, and
administrative  expenditures;  useful  life  estimates;  and wafer  yields.  All
forward-looking  statements are based on current  expectations  and  projections
about the semiconductor  industry and programmable logic market, and assumptions
made by Actel's management that reflect its best judgment based on other factors
currently   known  by  management,   but  they  are  not  guarantees  of  future
performance.  Thus,  actual events and results may differ  materially from those
expressed or forecast in the forward-looking  statements due to the risk factors
identified herein or for other reasons. Actel undertakes no obligation to update
any  forward-looking  statement  contained or  incorporated by reference in this
Annual Report on Form 10-K.

       Future Capital Needs


       Actel must  continue to make  significant  investments  in  research  and
development as well as capital  equipment and expansion of  facilities.  Actel's
future  capital  requirements  will  depend on many  factors,  including  (among
others) product development, investments in working capital, and acquisitions of
complementary  businesses,  products,  or technologies.  Wafer manufacturers are
increasingly  demanding  financial  support from customers in the form of equity
investments  and  advance  purchase  price  deposits,  which in some  cases  are
substantial.  Should Actel require  additional  capacity,  it may be required to
incur significant expenditures to secure such capacity.

       To  the  extent  that  existing   resources   and  future   earnings  are
insufficient  to fund  Actel's  operations,  Actel may need to raise  additional
funds through public or private debt or equity  financings.  If additional funds
are raised through the issuance of equity securities,  the percentage  ownership
of current  shareholders  will be reduced  and such equity  securities  may have
rights,  preferences,  or  privileges  senior to those of the holders of Actel's
Common  Stock.  No  assurance  can be given that  additional  financing  will be
available or that, if available,  it can be obtained on terms favorable to Actel
and its shareholders. If adequate funds are not available, Actel may be required
to delay, limit, or eliminate some or all of its proposed operations.

       Gross Margin

       Actel's gross margin is the  difference  between the revenues it receives
from the sale of its  products and the cost of those  products.  The price Actel
can charge for a product is constrained  principally by its  competitors.  While
competition  has always  been  intense,  Actel  believes  price  competition  is
becoming more acute. This may be due in part to the transition toward high-level
design  methodologies,  which permit designers to wait until later in the design
process  before  selecting a  programmable  or masked silicon device and make it
easier to convert  between PLDs or between a  programmable  and a masked silicon
device. These competitive  pressures may cause Actel to reduce the prices of its
products  more quickly than it can achieve cost  reductions,  which would reduce
Actel's gross margin and may have a materially  adverse  effect on its operating
results.

       One of the  most  important  variables  affecting  the  cost  of  Actel's
products  is  manufacturing  yields.  With its  customized  antifuse  and  flash
manufacturing   process  requirements,   Actel  almost  invariably   experiences
difficulties  and delays in achieving  satisfactory,  sustainable  yields on new
processes or at new foundries. Actel introduced the ProASIC family of devices in
1999. Until  satisfactory  yields are achieved on this new product family,  they
generally  will be sold at lower  gross  margins  than  Actel's  mature  product
families.  Depending upon the rate at which sales of these new products ramp and
the extent to which they displace mature products, the lower gross margins could
have a materially adverse effect on Actel's operating results.

       Management of Growth

       Actel has in the past experienced and expects to again experience  growth
in the number of its  employees  and the scope of its  operations,  resulting in
increased  responsibilities  for management  personnel.  To manage future growth
effectively,  Actel will need to continue to hire, train, motivate, and manage a
growing number of employees. The future success of Actel will also depend on its
ability to attract and retain  qualified  technical,  marketing,  and management
personnel. In particular,  the current availability of qualified silicon design,
software design,  process,  and test engineers is limited, and competition among
companies  for skilled and  experienced  engineering  personnel  is very strong.
During strong business cycles, Actel expects to experience difficulty in filling
its needs for qualified engineers and other personnel. No assurance can be given
that Actel will be able to achieve or manage  effectively  any such growth,  and
failure to do so could delay product  development and introductions or otherwise
have a materially adverse effect on Actel's business,  financial  condition,  or
results of operations.

       Manufacturing Yields

       Actel depends upon its independent wafer suppliers to produce wafers with
acceptable  yields and to deliver them to Actel in a timely  manner.  Currently,
substantially all of Actel's revenues are derived from products based on Actel's
proprietary antifuse process technologies. Successful implementation of antifuse
process technology requires a high degree of coordination  between Actel and its
foundry. Therefore, significant lead-time is required to reach volume production
on new processes and at new  foundries.  Accordingly,  no assurance can be given
that  volume  production  on Actel's  new or  next-generation  families  will be
achieved in the near term or at all.

       Actel  introduced  the ProASIC  family of devices in 1999.  While ProASIC
products are based on a flash process technology that is less customized than an
antifuse  process,  it is also a technology less familiar to Actel. In addition,
it is generally  more difficult to bring up an advanced flash process than it is
to  bring  up  an  advanced  antifuse  process.  Actel  has  always  experienced
difficulty   achieving   satisfactory,   sustainable   yields  on  new   process
technologies  at new  foundries,  and the flash  process for ProASIC  devices at
Infineon has been no different. Although Actel believes that it has been able to
overcome these  difficulties in the past, no assurance can be given that it will
be able to do so with  respect to the  ProASIC  products.  In any  event,  until
satisfactory yields are achieved on ProASIC devices, they generally will be sold
at lower gross margins than Actel's mature product families,  which could have a
materially adverse effect on operating results.

       The  fabrication  of antifuse or flash  wafers is a complex  process that
requires a high  degree of  technical  skill,  state-of-the-art  equipment,  and
effective  cooperation  between the wafer  supplier and the circuit  designer to
produce  acceptable  yields.  Minute  impurities,  errors  in  any  step  of the
fabrication process, defects in the masks used to print circuits on a wafer, and
other  factors can cause a  substantial  percentage  of wafers to be rejected or
numerous  die  on  each  wafer  to  be  non-functional.  As  is  common  in  the
semiconductor industry, Actel has experienced from time to time in the past, and
expects to  experience  in the future,  production  yield  problems and delivery
delays.  Any prolonged  inability to obtain adequate yields or deliveries  could
have a materially adverse effect on Actel's business,  financial  condition,  or
results of operations.

       One-Time Programmability and In-System Reprogrammability

       The  nonvolatility of Actel's antifuse FPGAs is necessary or desirable in
some applications,  but all other things being equal, logic designers  generally
would prefer to prototype with a  reprogrammable  logic device.  This is because
the  designer can reuse the device if he or she makes an error.  The  visibility
associated with discarding a one-time programmable device often causes designers
to  select  a   reprogrammable   device  even  when  the  alternative   one-time
programmable  device  offers  significant  advantages.  This  bias in  favor  of
designing with  reprogrammable  logic devices appears to increase as the size of
the  design   increases,   and  is  a  major  reason  Actel   decided  to  offer
reprogrammable  ProASIC  devices.  No assurance  can be given that Actel will be
able to overcome this competitive disadvantage.

       While  Actel's  ProASIC  flash FPGAs are  reprogrammable,  designers  and
end-users  desire the ability to reprogram PLDs after they have been placed on a
printed circuit board.  Currently,  ProASIC does not generally support in-system
reprogrammability. No assurance can be given that Actel will be able to overcome
this competitive disadvantage.

       Patent Infringement

       On March 29,  2000,  Unisys  brought suit in the United  States  District
Court for the Northern District of California,  San Jose Division, against Actel
seeking  monetary  damages  and  injunctive  relief  based  on  Actel's  alleged
infringement  of  four  patents  held  by  Unisys.  Actel  believes  that it has
meritorious  defenses  to the claims  asserted  by Unisys and  intends to defend
itself  vigorously  in  this  matter.  After  consideration  of the  information
currently  known,  Actel does not believe that the ultimate outcome of this case
will have a materially adverse effect on Actel's business,  financial condition,
or results of operations, although no assurance to that effect can be given. The
foregoing  is a  forward-looking  statement  subject  to all of  the  risks  and
uncertainties of a legal proceeding,  including the discovery of new information
and unpredictability as to the ultimate outcome.

       As is typical in the semiconductor  industry,  Actel has been and expects
to be  notified  from time to time of claims that it may be  infringing  patents
owned by others.  During 2000,  Actel continued to hold discussions with several
third parties  regarding  potential patent  infringement  issues,  including two
semiconductor   manufacturers   with   significantly   greater   financial   and
intellectual  property  resources than Actel.  As it has in the past,  Actel may
obtain  licenses under patents that it is alleged to infringe.  Although  patent
holders commonly offer licenses to alleged infringers, no assurance can be given
that licenses will be offered or that the terms of any offered  licenses will be
acceptable to Actel.  Failure to obtain a license for technology  allegedly used
by Actel could result in litigation.  All litigation,  whether or not determined
in favor of Actel, can result in significant expense to Actel and can divert the
efforts of Actel's  technical and management  personnel from  productive  tasks.
While Actel  believes that  reasonable  resolution  will occur,  there can be no
assurance  that these  claims will be resolved or that the  resolution  of these
claims will not have a materially adverse effect on Actel's business,  financial
condition,  or results of  operations.  In addition,  Actel's  evaluation of the
probable  impact  of  these  pending   disputes  could  change  based  upon  new
information learned by Actel.  Subject to the foregoing,  Actel does not believe
that any pending patent dispute is likely to have a materially adverse effect on
Actel's financial condition, results of operations, or liquidity.

       Actel has obtained patents covering aspects of its FPGA  architecture and
logic modules and certain  techniques  for  manufacturing  its antifuse,  but no
assurance  can be given that Actel's  patents will be  determined to be valid or
that any assertions of  infringement  or invalidity by other parties will not be
successful. In addition, Actel has agreed to defend and indemnify customers from
and against claims that Actel products infringe the patent or other intellectual
rights of third  parties.  In the event of an adverse  ruling in any  litigation
involving  intellectual  property,  Actel could suffer significant (and possibly
treble)  monetary  damages,  which  could have a  materially  adverse  effect on
Actel's business,  financial condition, or results of operations. Actel may also
be  required  to  discontinue  the  use  of  infringing  processes;   cease  the
manufacture,  use, and sale of infringing products; expend significant resources
to develop non-infringing  technology;  or obtain licenses under patents that it
is infringing. In the event of a successful claim against Actel, Actel's failure
to develop or license a substitute  technology on commercially  reasonable terms
could have a materially adverse effect on Actel's business, financial condition,
and results of operations.

       In February 2001,  Actel  introduced its new SRAM-based  VariCore EPGA IP
cores. Under the Xilinx Agreement, Actel did not receive sublicense rights under
any Xilinx patents.

       Potential Acquisitions

       In  pursuing  its  business   strategy,   Actel  may  acquire   products,
technologies,  or businesses  from third parties.  Identifying  and  negotiating
these  acquisitions  may divert  substantial  management  time away from Actel's
operations.  An acquisition  could absorb  substantial  cash resources,  require
Actel to incur or assume  debt  obligations,  and/or  involve  the  issuance  of
additional Actel equity securities. The issuance of additional equity securities
may dilute, and could represent an interest senior to the rights of, the holders
of Actel's  Common  Stock.  An  acquisition  accounted  for as a purchase  could
involve significant one-time write-offs (possibility resulting in a loss for the
fiscal  year in which it is taken) and would  require  the  amortization  of any
goodwill  and  indentifiable  intangibles  over a number of years,  which  would
adversely  affect  earnings  in  those  years.  Any  acquisition  would  require
attention from Actel's  management to integrate the acquired entity into Actel's
operations,  may  require  Actel  to  develop  expertise  outside  its  existing
business,  and could result in departures of management from either Actel or the
acquired  entity.  An  acquired  entity may have  unknown  liabilities,  and its
business may not achieve the results  anticipated  at the time it is acquired by
Actel.  The  occurrence  of any of these  circumstances  could  disrupt  Actel's
operations  and may  have a  materially  adverse  effect  on  Actel's  business,
financial condition, or results of operations.

       Protection of Intellectual Property

       Actel has  historically  devoted  significant  resources  to research and
development  and  believes  that the  intellectual  property  derived  from such
research and  development is a valuable asset that has been and will continue to
be important  to the success of Actel's  business.  Actel relies  primarily on a
combination of  nondisclosure  agreements,  other  contractual  provisions,  and
patent and copyright laws to protect its proprietary rights. No assurance can be
given that the steps taken by Actel will be adequate to protect its  proprietary
rights. In addition,  the laws of certain  territories in which Actel's products
are or may be developed,  manufactured,  or sold, including Asia and Europe, may
not protect Actel products and  intellectual  property rights to the same extent
as the laws of the United  States.  Failure of Actel to enforce  its  patents or
copyrights  or to protect  its trade  secrets  could have a  materially  adverse
effect on Actel's business, financial condition, or results of operations.

       Reliance on Distributors

       In 2000,  a majority  of Actel's  sales were made  through  distributors.
Three of Actel's distributors,  Arrow,  Pioneer, and Unique,  accounted for 17%,
13%, and 15%, respectively, of Actel's net revenues in 2000. No assurance can be
given that future sales by these or other  distributors will continue at current
levels or that Actel will be able to retain its  current  distributors  on terms
that are acceptable to Actel.

       Actel's  distributors  generally  offer  products  of  several  different
companies,  including  products  that are  competitive  with  Actel's  products.
Accordingly, there is a risk that these distributors may give higher priority to
products  of other  suppliers,  thus  reducing  their  efforts  to sell  Actel's
products.  In addition,  Actel's  agreements with its distributors are generally
terminable at the  distributor's  option. A reduction in sales efforts by one or
more of Actel's  current  distributors  or a  termination  of any  distributor's
relationship  with  Actel  could  have a  materially  adverse  effect on Actel's
business, financial condition, or results of operations.

       Actel defers  recognition of revenue on shipments to  distributors  until
the product is resold by the distributor to the end user.  Actel's  distributors
have on occasion built  inventories  in  anticipation  of substantial  growth in
sales  and,  when  such  growth  did  not  occur  as  rapidly  as   anticipated,
substantially  reduced the amount of product  ordered  from Actel in  subsequent
quarters.  Such a slowdown  in orders  would  generally  reduce  Actel's  profit
margins on future sales of higher cost products because Actel would be unable to
take  advantage  of any  manufacturing  cost  reductions  while the  distributor
depleted its inventory at lower average selling prices. In addition, while Actel
believes that its major distributors are currently  adequately  capitalized,  no
assurance  can be  given  that  one or more of  Actel's  distributors  will  not
experience  financial  difficulties.  The  failure  of one or  more  of  Actel's
distributors  to pay for products  ordered from Actel or to continue  operations
because of financial  difficulties  or for other reasons could have a materially
adverse  effect  on  Actel's  business,   financial  condition,  or  results  of
operations.

       Reliance on International Sales

       Sales to customers  outside the United States accounted for 32%, 29%, and
33% of Actel's net revenues for 2000,  1999,  and 1998,  respectively.  Of these
export sales,  the largest  portion was derived from European  customers.  Actel
expects  that  revenues  derived  from  international  sales  will  continue  to
represent a significant  portion of its total revenues.  International sales are
subject  to a  variety  of  risks,  including  longer  payment  cycles,  greater
difficulty in accounts receivable collection,  currency exchange risks, currency
restrictions,  tariffs, trade barriers, taxes, export license requirements,  and
the impact of recessionary  environments in economies outside the United States.
All of  Actel's  foreign  sales are  denominated  in U.S.  dollars,  so  Actel's
products  become less price  competitive in countries with  currencies  that are
declining in value against the dollar. In addition,  since a majority of Actel's
foreign sales are made through distributors, such sales are subject to the risks
described above in "Reliance on Distributors."

       Semiconductor Industry Risks

       The   semiconductor   industry  has   historically   been   cyclical  and
periodically subject to significant economic downturns,  which are characterized
by diminished  product  demand,  accelerated  price erosion,  and  overcapacity.
Beginning  in the fourth  quarter of fiscal  2000,  Actel and the  semiconductor
industry in general  experienced  reduced  bookings  and backlog  cancellations,
resulting in slower revenue growth, due to excess inventories at communications,
computer,  and consumer  equipment  manufacturers and a general softening in the
overall  economy.  The  downturn  in sales  may  become  more  severe,  could be
prolonged,  and will have a  disproportionate  effect on Actel's  profitability.
Actel may in the future experience substantial period-to-period  fluctuations in
business  and  results  of  operations  due to  general  semiconductor  industry
conditions, overall economic conditions, or other factors, including legislation
and regulations governing the import or export of semiconductor products.

       Technological Change and Dependence on New Product Development

       The market for Actel's  products  is  characterized  by rapidly  changing
technology,  frequent new product  introductions,  and declining average selling
prices over product life cycles,  each of which makes the timely introduction of
new products a critical  objective of Actel.  Actel's  future  success is highly
dependent  upon the  timely  completion  and  introduction  of new  products  at
competitive price and performance  levels. In evaluating new product  decisions,
Actel must  anticipate well in advance both the future demand and the technology
that will be  available to supply such demand.  Failure to  anticipate  customer
demand,  delays  in  developing  new  products  with  anticipated  technological
advances,  or failure to coordinate  the design and  development  of silicon and
associated  software products could have a materially  adverse effect on Actel's
business, financial condition, or results of operation.

       No assurance can be given that Actel's design and introduction  schedules
for new products or the  supporting  software or hardware  will be met, that any
new products will gain market acceptance, or that Actel will respond effectively
to new technological changes or new product announcements by others. Any failure
of Actel to successfully define, develop, market,  manufacture,  assemble, test,
or program  competitive  new products could have a materially  adverse effect on
its business, financial condition, or results of operations.

       In  addition,  there are  greater  technological  and  operational  risks
associated  with new  products.  The  inability  of Actel's  wafer  suppliers to
produce advanced products;  delays in commencing or maintaining volume shipments
of new products;  the discovery of product,  process,  software,  or programming
failures;  and any related product returns could each have a materially  adverse
effect on Actel's business, financial condition, or results of operation.

       Actel must also continue to make significant  investments in research and
development  to develop new  products  and achieve  market  acceptance  for such
products.  Actel  conducts  most of its research and  development  activities at
facilities operated by its foundries. Although Actel has not to date experienced
any significant difficulty in obtaining access to such facilities,  no assurance
can be given that  access  will not be limited or that such  facilities  will be
adequate to meet Actel's needs in the future.

       Volatility of Stock

       The price of Actel's  Common  Stock can  fluctuate  substantially  on the
basis  of  such  factors  as  announcements  of new  products  by  Actel  or its
competitors,   quarterly  fluctuations  in  Actel's  financial  results  or  the
financial results of other semiconductor companies, or general conditions in the
semiconductor  industry,  financial  markets,  or economy.  In  addition,  stock
markets have  experienced  extreme price and volume  volatility in recent years.
This  volatility  has had a  substantial  effect  on the  market  prices  of the
securities issued by technology companies, at times for reasons unrelated to the
operating performance of the specific companies.

Executive Officers of the Registrant

       The following  table  identifies  each  executive  officer of Actel as of
March 31, 2001:

        Name          Age                       Position
-------------------- ----- -----------------------------------------------------

John C. East........  56   President and Chief Executive Officer
Henry L. Perret.....  55   Vice President of Finance and Chief Financial Officer
Esmat Z. Hamdy......  51   Senior Vice President of Technology & Operations
Anthony Farinaro....  38   Vice President & General Manager of Design Services
Paul V. Indaco......  50   Vice President of Worldwide Sales
Dennis G. Kish......  37   Vice President of Marketing
Fares N. Mubarak....  39   Vice President of Engineering
David L. Van De Hey.  45   Vice President & General Counsel and Secretary

       Mr. East has served as  President  and Chief  Executive  Officer of Actel
since  December 1988.  From April 1979 until joining  Actel,  Mr. East served in
various  positions with Advanced Micro Devices,  a  semiconductor  manufacturer,
including Senior Vice President of Logic Products from November 1986 to November
1988.  From December  1976 to March 1979,  he served as  Operations  Manager for
Raytheon Semiconductor. From September 1968 to December 1976, Mr. East served in
various marketing, manufacturing, and engineering positions for Fairchild Camera
and Instrument Corporation, a semiconductor manufacturer.

       Mr. Perret  joined Actel in January 1996 as Controller  and has been Vice
President of Finance and Chief  Financial  Officer  since June 1997.  From April
1992 until  joining  Actel,  he was the Site  Controller  for the  manufacturing
division of Applied Materials, a maker of semiconductor manufacturing equipment,
in Austin, Texas. From 1978 to 1991, Mr. Perret held various financial positions
with National Semiconductor, a semiconductor manufacturer.

       Dr. Hamdy is a founder of Actel,  was Vice  President of Technology  from
August 1991 to March 1996 and Senior Vice  President  of  Technology  from March
1996 to September  1996,  and has been Senior Vice  President of Technology  and
Operations  since  September  1996.  From  November 1985 to July 1991, he held a
number of management  positions with Actel's  technology and development  group.
From January 1981 to November  1985,  Dr. Hamdy held various  positions at Intel
Corporation, a semiconductor manufacturer, lastly as project manager.

       Mr.  Farinaro  joined  Actel in August  1998 as Vice  President & General
Manager of Design  Services.  From February 1990 until  joining  Actel,  he held
various  engineering  and management  positions with GateField  (formally  Zycad
Corporation until 1997), a semiconductor  company, with the most recent position
of Vice  President of  Application  & Design  Services.  From 1985 to 1990,  Mr.
Farinaro held various  engineering and management  positions at Singer Kearfott,
an aerospace electronics company, and it's spin-off,  Plessey Electronic Systems
Corporation.

       Mr.  Indaco  joined  Actel in March 1999 as Vice  President  of Worldwide
Sales.  From January 1996 until joining  Actel,  he served as Vice  President of
Sales for Chip Express,  a semiconductor  manufacturer.  From January  September
1994 to  January  1996,  Mr.  Indaco  was Vice  President  of Sales for  Redwood
Microsystems,  a  semiconductor  manufacturer.  From  February 1984 to September
1994, he held senior sales management  positions with LSI Logic, a semiconductor
manufacturer.  From June 1978 to February  1984,  Mr.  Indaco held various field
engineering   sales  and  marketing   positions   with  Intel   Corporation,   a
semiconductor  manufacturer.  From  June  1976 to  June  1978,  he held  various
marketing positions with Texas Instruments, a semiconductor manufacturer.

       Mr. Kish joined  Actel in December  1999 as Vice  President  of Strategic
Product  Marketing and became Vice President of Marketing in July 2000. Prior to
joining Actel, he held senior management positions at Synopsys,  an EDA company,
and Atmel, a  semiconductor  manufacturer.  Before that, Mr. Kish held sales and
engineering positions with Texas Instruments, a semiconductor manufacturer.

       Mr.  Mubarak  joined Actel in November  1992, was Director of Product and
Test Engineering  until October 1997, and has been Vice President of Engineering
since October 1997. From 1989 until joining Actel,  he held various  engineering
and  engineering   management  positions  with  Samsung  Semiconductor  Inc.,  a
semiconductor manufacturer,  and its spin-off, IC Works, Inc. From 1984 to 1989,
Mr.  Mubarak  held  various  engineering,   product  planning,  and  engineering
management positions with Advanced Micro Devices, a semiconductor manufacturer.

       Mr. Van De Hey joined  Actel in July 1993 as  Corporate  Counsel,  became
Secretary  in May 1994,  and has been Vice  President  & General  Counsel  since
August 1995.  From  November 1988 to September  1993,  he was an associate  with
Wilson, Sonsini, Goodrich & Rosati, Professional Corporation, a law firm in Palo
Alto,  California,  and Actel's  outside legal  counsel.  From August 1985 until
October  1988,  he was an associate  with the  Cleveland  office of Jones,  Day,
Reavis & Pogue, a law firm.

       Executive officers serve at the discretion of the Board of Directors.

ITEM 2.   PROPERTIES

       Actel's principal  administrative,  marketing,  sales,  customer support,
design,  research  and  development,  and  testing  facilities  are  located  in
Sunnyvale,  California,  in three buildings that comprise  approximately 138,000
square feet.  These  buildings  are leased  through  June 2003,  and Actel has a
renewal option for an additional five-year term. Actel also leases sales offices
in the metropolitan areas of Atlanta,  Basingstoke (England),  Boston,  Chicago,
Dallas,  Denver,  Hong  Kong  (China),  Houston,  Los  Angeles,  Milan  (Italy),
Minneapolis/St.  Paul,  Munich  (Germany),  New York,  Orlando,  Paris (France),
Ottawa  (Ontario),  Philadelphia,  Raleigh,  Seattle,  Seoul (Korea),  Stockholm
(Sweden),  Tokyo (Japan),  and Washington D.C., as well as the facilities of the
Design Services Group in Mt.  Arlington,  New Jersey,  and the facility formerly
occupied by GateField in Fremont, California. Actel believes its facilities will
be adequate for its needs in 2001.

ITEM 3.   LEGAL PROCEEDINGS

       Except as described  below,  there are no pending legal  proceedings of a
material nature to which Actel is a party or of which any of its property is the
subject.  There are no such legal  proceedings known by Actel to be contemplated
by any governmental authority.

       Unisys v. Actel and QuickLogic (CV C-00 01114 WDB)

       On March 29,  2000,  Unisys  brought suit in the United  States  District
Court for the Northern District of California,  San Jose Division, against Actel
seeking monetary damages and injunctive  relief.  The summons and complaint were
served  on Actel on April  10,  2000.  The  complaint  alleges  that  Actel  has
infringed and is currently  infringing four United States patents that belong to
plaintiff:  U.S.  Patent No.  4,442,507,  issued April 10, 1984; U.S. Patent No.
5,296,722,  issued March 22, 1994; U.S. Patent No.  5,407,851,  issued April 18,
1995;  and U.S.  Patent No.  5,496,763,  issued March 5, 1996.  On May 15, 2000,
Unisys served its Initial Disclosure of Asserted Claims,  identifying the SX and
SX-A  family  of  FPGAs  as  the  specific   Actel  products  being  accused  of
infringement, and identifying the specific claims of each of the patents in suit
alleged to be infringed by those  products.  On September 25, 2000,  Actel filed
its First Amended Answer to the  Complaint,  denying that it has infringed or is
infringing  any of the patents in suit, and alleging,  among other things,  that
each of those patents is invalid for failure to meet the statutory  requirements
for  patentability.  With its amended  answer,  Actel also filed a  counterclaim
against Unisys seeking a judicial declaration that each of the Unisys patents in
suit is invalid, unenforceable, and not infringed by Actel. On October 26, 2000,
the Court entered its Order for Pretrial Preparation,  which established various
deadlines in the case and set the case for trial on March 25, 2002.  The case is
in its  early  stages  and,  as of  March  30,  2001,  no  depositions  or other
substantial  discovery  had  yet  been  conducted.  Actel  believes  that it has
meritorious  defenses  to the claims  asserted  by Unisys and  intends to defend
itself  vigorously  in  this  matter.  After  consideration  of the  information
currently  known,  Actel does not believe that the ultimate outcome of case will
have a materially adverse effect on Actel's business,  financial  condition,  or
results of  operations,  although no assurance can be given to that effect.  The
foregoing  is a  forward-looking  statement  subject  to all of  the  risks  and
uncertainties of a legal proceeding,  including the discovery of new information
and unpredictability as to the ultimate outcome.

ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

       No matters were submitted to a vote of security holders during the fourth
quarter of the fiscal year covered by this report.

                                     PART II

ITEM5.   MARKET FOR THE  REGISTRANT'S  COMMON  STOCK AND  RELATED  SHAREHOLDER
         MATTERS

       The  information  appearing  under the  caption  "Stock  Listing"  in the
Registrant's  annual  report to  security  holders  for the  fiscal  year  ended
December  31,  2000  (2000  Annual  Report),  is  incorporated  herein  by  this
reference.

       On March 30, 1998,  Actel and  Crosspoint  Solutions,  Inc.  (Crosspoint)
entered  into a Patent  Sale and  Purchase  Agreement,  pursuant  to which Actel
purchased from Crosspoint its patents and patent  applications in  consideration
of 25,000 shares of Actel's Common Stock. On the same day,  Crosspoint  assigned
its right to receive  such shares to ASCII of America,  Inc.  (AOA).  The shares
issued and  delivered  to AOA,  as  assignee  of  Crosspoint,  were  exempt from
registration  pursuant to Section 4(2) of the Securities Act because such shares
were  sold to an  accredited  investor  who had  access to  financial  and other
relevant data concerning Actel.

       On December  21, 1999,  Actel  acquired  AutoGate  Logic,  Inc.  (AGL) by
merger.  The  purchase  price of $7.2  million  included the issuance of 285,943
shares of Actel Common Stock and the  assumption  of options to purchase  89,057
shares  of  Actel  Common  Stock.   The  shares  issued  and  delivered  to  AGL
shareholders  were exempt  from  registration  pursuant  to Section  4(2) of the
Securities Act and/or  Regulation D promulgated  thereunder  because such shares
were sold to investors  who were  "accredited"  and had access to financial  and
other  relevant  data  concerning  Actel  or  were  represented  by a  qualified
"purchaser representative" under Regulation D.

       On June 2, 2000,  Actel acquired Prosys by merger.  The purchase price of
$24.5 million  included the issuance of 220,518 shares of Actel common stock and
the assumption of options to purchase  294,000 shares of Actel Common Stock. The
shares issued and delivered to Prosys shareholders were exempt from registration
pursuant to Section 4(2) of the  Securities Act because such shares were sold to
accredited  investors  who had  access  to  financial  and other  relevant  data
concerning Actel.

ITEM 6.   SELECTED FINANCIAL DATA

       The  information  appearing  under  the  caption  "Selected  Consolidated
Financial  Data"  in the 2000  Annual  Report  is  incorporated  herein  by this
reference.

ITEM 7.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
          RESULTS OF OPERATIONS

       The information appearing under the caption "Management's  Discussion and
Analysis of Financial  Conditions  and Results of Operations" of the 2000 Annual
Report is incorporated herein by this reference.

ITEM 7A.   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

       The information  appearing under the caption "Market Risk" under the main
caption  "Management's  Discussion  and  Analysis of  Financial  Conditions  and
Results of Operations" in the 2000 Annual Report is incorporated  herein by this
reference.

ITEM 8.   FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

       The  information  appearing  under  the  captions  "Consolidated  Balance
Sheets,"  "Consolidated  Statements  of  Income,"  "Consolidated  Statements  of
Shareholders'  Equity,"  "Consolidated  Statements  of Cash  Flows,"  "Notes  to
Consolidated   Financial   Statements,"  and  "Report  of  Ernst  &  Young  LLP,
Independent  Auditors" in the 2000 Annual Report is incorporated  herein by this
reference.

ITEM 9.   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
          FINANCIAL DISCLOSURE

       None.

                                    PART III

       Except for the  information  specifically  incorporated by reference from
Actel's  definitive Proxy Statement for the Annual Meeting of Shareholders to be
held on May 18, 2001,  as filed on or about April 7, 2001,  with the  Securities
and Exchange Commission (2001 Proxy Statement) in Part III of this Annual Report
on Form 10-K, the 2001 Proxy  Statement  shall not be deemed to be filed as part
of this  Report.  Without  limiting the  foregoing,  the  information  under the
captions "Compensation Committee Report," "Audit Committee Report," and "Company
Stock Performance" under the main caption "OTHER  INFORMATION" in the 2001 Proxy
Statement are not incorporated by reference in this Annual Report on Form 10-K.

ITEM 10.   DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

       The information  regarding the identification and business  experience of
Actel's directors under the caption  "Nominees" under the main caption "PROPOSAL
NO. 1 -- ELECTION OF DIRECTORS" in the 2001 Proxy  Statement and the information
under the main caption "COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE
ACT OF  1934"  in the 2001  Proxy  Statement  are  incorporated  herein  by this
reference.  For information regarding the identification and business experience
of Actel's executive officers, see "Executive Officers of the Registrant" at the
end of Item 1 in Part I of this Annual Report on Form 10-K.

ITEM 11.   EXECUTIVE COMPENSATION

       The information under the caption "Director  Compensation" under the main
caption  "PROPOSAL NO. 1 -- ELECTION OF  DIRECTORS" in the 2001 Proxy  Statement
and the information under the caption  "Executive  Compensation"  under the main
caption "OTHER  INFORMATION" in the 2001 Proxy Statement are incorporated herein
by this reference.

ITEM 12.   SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

       The  information  under  the  caption  "Share  Ownership"  under the main
caption  "INFORMATION  CONCERNING  SOLICITATION  AND  VOTING"  in the 2001 Proxy
Statement  and  the  information  under  the  caption  "Security   Ownership  of
Management"  under  the main  caption  "OTHER  INFORMATION"  in the  2001  Proxy
Statement are incorporated herein by this reference.

ITEM 13.   CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

       The information under the caption "Certain  Transactions"  under the main
caption "OTHER  INFORMATION" in the 2001 Proxy Statement is incorporated  herein
by this reference.

                                     PART IV

ITEM 14.   EXHIBITS, FINANCIAL STATEMENT SCHEDULE AND REPORTS ON FORM 8-K

       (a)    The following documents are filed as part of this Annual Report on
              Form 10-K:

              (1)    Financial Statements.  The following consolidated financial
                     statements of Actel Corporation included in the 2000 Annual
                     Report  are  incorporated  by  reference  in Item 8 of this
                     Annual Report on Form 10-K:

                     Consolidated balance sheets at December 31, 2000 and 1999

                     Consolidated  statements  of  income  for each of the three
                     years in the period ended December 31, 2000

                     Consolidated statements of shareholders' equity for each of
                     the three years in the period ended December 31, 2000

                     Consolidated statements of cash flows for each of the three
                     years in the period ended December 31, 2000

                     Notes to consolidated financial statements

              (2)    Financial  Statement  Schedule.   The  financial  statement
                     schedule  listed  under  14(d)  hereof  is filed  with this
                     Annual Report on Form 10-K.

              (3)    Exhibits.  The exhibits  listed under Item 14(c) hereof are
                     filed with, or  incorporated by reference into, this Annual
                     Report on Form 10-K.

       (b)    Reports on Form 8-K. On November 30,  2000,  Actel filed a Current
              Report on Form 8-K regarding the completion of Actel's acquisition
              of  GateField on November  15,  2000.  On January 29, 2001,  Actel
              filed  Amendment  No. 1 to the Current  Report on Form 8-K,  which
              included  the  required  financial   statements  of  the  business
              acquired and the required pro forma financial information.

       (c)    Exhibits.  The  following  exhibits  are  filed  as  part  of,  or
              incorporated by reference into, this Report on Form 10-K:


  Exhibit Number                        Description
  --------------  -----------------------------------------------------------

         3.1      Restated  Articles of  Incorporation  (filed as Exhibit 3.2 to
                  the Registrant's  Registration Statement on Form S-1 (File No.
                  33-64704), declared effective on August 2, 1993).

         3.2      Restated Bylaws of the Registrant (filed as Exhibit 3.3 to the
                  Registrant's  Registration  Statement  on Form S-1  (File  No.
                  33-64704), declared effective on August 2, 1993).

         10.1(2)  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).

  Exhibit Number                        Description
  --------------  -----------------------------------------------------------

         10.2(2)  1986  Incentive  Stock  Option  Plan,  as amended and restated
                  (filed as Exhibit 10.2 to the  Registrant's  Annual  Report on
                  Form 10-K (File No. 0-21970) for the fiscal year ended January
                  2, 2000).

         10.3(2)  1993  Directors'  Stock Option  Plan,  as amended and restated
                  (filed as Exhibit 10.3 to the  Registrant's  Annual  Report on
                  Form  10-K  (File  No.  0-21970)  for the  fiscal  year  ended
                  December 28, 1997).

         10.4(2)  1993  Employee  Stock  Purchase  Plan, as amended and restated
                  (filed as Exhibit 10.4 to the  Registrant's  Annual  Report on
                  Form  10-K  (File  No.  0-21970)  for the  fiscal  year  ended
                  December 28, 1997).

         10.5(2)  1995  Employee  and  Consultant  Stock  Plan,  as amended  and
                  restated  (filed as Exhibit  10.5 to the  Registrant's  Annual
                  Report on Form 10-K (File No.  0-21970)  for the  fiscal  year
                  ended December 29, 1996).

         10.6(2)  Employee Retention Plan, as amended and restated.

         10.7(2)  Deferred Compensation Plan, as amended and restated.

         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(1)  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    Distribution   Agreement  dated  June  1,  1994,  between  the
                  Registrant and Arrow Electronics, Inc. (filed as Exhibit 10.18
                  to the  Registrant's  Quarterly  Report on Form 10-Q (File No.
                  0-21970) for the quarterly period ended July 3, 1994).

         10.12(1) Product  Development  and Marketing  Agreement dated August 1,
                  1994, between the Registrant and Loral Federal Systems Company
                  (filed as Exhibit 10.19 to the  Registrant's  Quarterly Report
                  on Form 10-Q (File No. 0-21970) for the quarterly period ended
                  October 2, 1994).

         10.13(1) 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 quarterly period ended July 2, 1995).

  Exhibit Number                        Description
  --------------  -----------------------------------------------------------

         10.14    Lease  Agreement  for the  Registrant's  offices in Sunnyvale,
                  California,  dated May 10, 1995 (filed as Exhibit 10.19 to the
                  Registrant's Annual Report on Form 10-K (File No. 0-21970) for
                  the fiscal year ended December 31, 1995).

         10.15(1) License  Agreement  dated  as of March 6,  1995,  between  the
                  Registrant  and  BTR,  Inc.  (filed  as  Exhibit  10.20 to the
                  Registrant's Annual Report on Form 10-K (File No. 0-21970) for
                  the fiscal year ended December 29, 1996).

         10.16    Asset  Purchase  Agreement  dated  August  14,  1998,  between
                  GateField  Corporation and Actel Corporation (filed as Exhibit
                  2.1 to  GateField  Corporation's  Current  Report  on Form 8-K
                  (File No. 0-13244) on August 14, 1998, and incorporated herein
                  by this reference).

         10.17(1) Patent Cross License Agreement dated August 25, 1998,  between
                  Actel  Corporation  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).

         10.18    Amended And Restated Agreement and Plan of Merger by and among
                  Actel  Corporation,  GateField  Acquisition  Corporation,  and
                  GateField Corporation dated as of May 31, 2000 (filed as Annex
                  I to GateField  Corporation's  Definitive  Proxy  Statement on
                  Schedule  14A  (File  No.   0-13244)  on  June  9,  2000,  and
                  incorporated herein by this reference).

         10.19    Agreement  and Plan of  Reorganization  by and  between  Actel
                  Corporation and Prosys  Technology,  Inc.,  Jung-Cheun "Frank"
                  Lien, Sheng "Jason" Feng, Chung Sun, Eddy Huang, and Nan Horng
                  Yeh dated as of June 2, 2000  (filed  as  Exhibit  10.1 to the
                  Registrant's  Current Report on Form 8-K (File No. 0-21970) on
                  June 16, 2000, and incorporated herein by this reference).

         13       Portions of Registrant's Annual Report to Shareholders for the
                  fiscal year ended December 31, 2000, incorporated by reference
                  into this Report on Form 10-K.

         21       Subsidiaries of Registrant (see page 52)

         23       Consent of Ernst & Young LLP,  Independent  Auditors (see page
                  50)

         24       Power of Attorney (see page 49)

------------------------

         (1)      Confidential  treatment  requested  as to a  portion  of  this
                  Exhibit.

         (2)      This Exhibit is a management  contract or compensatory plan or
                  arrangement.

         (d)    Financial Statement Schedule.  The following financial statement
schedule of Actel  Corporation  is filed as part of this Report on Form 10-K and
should be read in  conjunction  with the  Consolidated  Financial  Statements of
Actel  Corporation,  including the notes thereto,  and the Report of Independent
Auditors with respect thereto:

     Schedule                     Description                          Page
     --------     --------------------------------------------------   ----
       II         Valuation and qualifying accounts                     51

         All other  schedules  for  which  provision  is made in the  applicable
accounting  regulations  of the  Securities  and  Exchange  Commission  are  not
required under the related  instructions or are  inapplicable and therefore have
been omitted.


                                   SIGNATURES

         Pursuant to the  requirements  of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

                                                          ACTEL CORPORATION




March 31, 2001                        By:          /s/ John C. East
                                         ---------------------------------------
                                                     John C. East
                                         President and Chief Executive Officer


<PAGE>

                                                                     SCHEDULE II

                                ACTEL CORPORATION

                     --------------------------------------

                        Valuation and Qualifying Accounts
                                 (in thousands)

<TABLE>
<CAPTION>
                                                                Balance at                                Balance at
                                                                beginning                                   end of
                                                                of period     Provisions    Write-Offs      period
                                                               ------------  ------------  ------------  ------------
<S>                                                            <C>           <C>           <C>           <C>
Allowance for doubtful accounts:
   Year ended December 31, 1998...........................     $      1,632  $          5  $         83  $      1,554
   Year ended December 31, 1999...........................            1,554            --           475         1,079
   Year ended December 31, 2000...........................            1,079            91           100         1,070
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