UNITED STATES SECURITIES AND EXCHANGE COMMISSION
    Washington, D.C. 20549
 Form 10-K
    þ

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended December 31,
    2010o

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the transition period
    from          to   Commission file number 0-18277
 VICOR CORPORATION
 (Exact name of registrant as
    specified in its charter)
  Delaware

04-2742817(State or other jurisdiction of
    incorporation or organization)

(IRS employer
    identification no.)25 Frontage Road, Andover, 
    Massachusetts(Address of principal executive offices)

01810(Zip code)   Registrants telephone number, including area code:
 (978) 470-2900
  Securities registered pursuant to Section 12(b) of the
    Act:
  Common Stock, $.01 par Value

The NASDAQ Stock Market, LLC(Title of Class)


(Name of Each Exchange on Which Registered
)   Securities registered pursuant to Section 12(g) of the
    Act:
 None
  o þ
  o þ
  þ o
  Regulation S-K Form 10-K Form 10-K. þ
  Rule 12b-2
  Large Accelerated Filer o

Accelerated Filer þ

Non-accelerated Filero

Smaller Reporting Company o(Do not check if a smaller reporting company)   Rule 12b-2 o þ
      DOCUMENTS
    INCORPORATED BY REFERENCE




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##### 





PART I
  Form 10-K,
  Form 10-K Form 10-K, Forms 10-Q 8-K, Form 10-K.
  ITEM 1.
    BUSINESS  Overview
  and/or
 2




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##### 



and/or
  tm
      
    Our Brick Business Unit (BBU) segment designs,
    develops, manufactures and markets modular power converters in
    two formats: our well-established encapsulated modules , known
    as bricks, and our newer line of modular power converters that
    incorporate our V*I Chip technology into innovative packaging,
    which we market as VI
    Bricktm

    modules. The BBU also designs, develops, manufactures and
    markets a line of configurable products, which are
    complete power supplies assembled using our modular power
    components. The BBU includes the operations of our
    Westcortm

    division, which is focused only on AC-input configurable
    products, the operations of Vicor Custom
    Powertm

    (previously known as Vicor Integration
    Architectstm),

    which is our turnkey custom power solutions business, and Vicor
    Japan Company, Ltd. (VJCL), our Japanese subsidiary.
    Our V*I Chip Business Unit (V*I Chip) consists of
    V*I Chip Corporation, a wholly-owned subsidiary that designs,
    develops, manufactures and markets a range of advanced power
    conversion components, including those that enable our
    Factorized Power
    Architecturetm

    (FPA). In 2003, we introduced FPA, a new power
    system architecture based on an array of proprietary power
    conversion innovations building upon our long-standing
    leadership in the design of power conversion technologies. We
    believe FPA provides power system designers enhanced performance
    at a lower cost than can be attained with conventional power
    architectures. In 2010, we introduced two new power converter
    products, the
    PFMtmand the
    DCMtm,

    which exploit proprietary V*I Chip power conversion innovations.
    The PFM and DCM can be used either as components of FPA or other
    power system distribution architectures. As V*I Chip converters
    and FPA represent innovative alternatives to such conventional
    products and architectures, we established a separate business
    unit to enable the organizational focus necessary to support
    early adopters of these disruptive technologies.
    Our Picor Business Unit (Picor) consists of Picor
    Corporation, a majority-owned subsidiary of Vicor. Picor is a
    fabless (i.e., it utilizes third parties to manufacture its
    products) designer, developer, 3




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##### 



and marketer of high performance integrated circuits and related
    products for use in a variety of power system applications.
    Picor develops these products to be incorporated into
    Vicors products, to be sold as a complement to our
    products, or for sale to third parties for separate
    applications. Much of the differentiation of our BBU and V*I
    Chip products has been a result of implementation of our power
    conversion innovations in proprietary semiconductor circuitry.
    Because of the considerable design expertise embodied in this
    captive organization and the potential for success as a merchant
    vendor of an expanding portfolio of proprietary products, we
    established Picor as a separate business unit to enable
    organizational focus and to facilitate a distinct
    go-to-market
    strategy.          Form 10-K, Form 10-Q, Form 8-K, Form 10-K
  Market
    Background, Product Trends and Vicor Strategy
       4




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##### 



go-to-market go-to-market
       5




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##### 



Our
    Products
  Form 10-K
    Bricks:
    Modular Power Converters
  component-level DC-DC tm tm tm tm
    tm tm
  tm
  Accessory
    Power System Components
   6




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##### 



and/or
  tm tm
  Configurable
    Products
    tm tm tm
  tm tm
  tm tm
  hold-up
    Customer
    Specific Power System Products
  and/or off-the-shelf
 7




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##### 



V*I
    Chip Products
    tm tm tm
  point-of-load
      Picor
    Products
    tm tm tm System-in-Package
  MIL-COTS
    Products
   8




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Sales and
    Marketing
            tm
  Applications
    and Customers
    Backlog
    Research
    and Development
   9




---



##### 



Manufacturing
    and Quality Assurance
    and/or
        Competition
         10




---



##### 



Patents
    and Intellectual Property
      Licensing
    Employees
       11




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##### 



ITEM 1A.
    RISK
    FACTORS  Form 10-K
  Our
    future operating results are difficult to predict and are
    subject to fluctuations.
    
    the effects of adverse economic conditions in the United States
    and international markets, especially in light of the continued
    challenges in global credit and financial markets;
    changes in customer demand for our products and for end products
    that incorporate our products;
    the timing of our new product announcements or introductions, as
    well as those by our competitors;
    our ability to effectively coordinate changes in the mix of
    products we manufacture and sell, while managing our ongoing
    transition in organizational focus from traditional brick power
    components to our new V*I Chip, VI Brick and Picor products;
    the level of demand and purchase orders from our customers, and
    our ability to adjust to changes in demand and purchase order
    patterns;
    changes in order lead times and our turns volumes
    (i.e., the volumes of purchase orders received and shipped
    within an individual quarter);
    the timing, delay or cancellation of significant customer orders
    and our ability to manage inventory;
    the ability of our third party suppliers, subcontractors and
    manufactures to supply us with sufficient quantities of high
    quality products or components, on a timely basis;
    the effectiveness of our efforts to reduce product costs and
    manage operating expenses;
    our ability to utilize our manufacturing facilities at efficient
    levels, maintaining production capacity and manufacturing yields;
    the ability to hire, retain and motivate qualified employees to
    meet the demands of our customers;
    intellectual property disputes;
    potential significant litigation-related costs;
    costs related to compliance with increasing worldwide
    environmental and other regulations; and
    the effects of public health emergencies, natural disasters,
    security risk, terrorist activities, international conflicts and
    other events beyond our control.    Our
    stock price has been volatile and may fluctuate in the
    future.
    
    the recent unprecedented volatility of the financial markets;
    uncertainty regarding the prospects of domestic and foreign
    economies; 12




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##### 




    uncertainty regarding domestic and international political
    conditions, including tax policies;
    our performance and prospects;
    the performance and prospects of our major customers;
    investor perception of our company and the industry in which we
    operate;
    the absence of earnings estimates and supporting research by
    investment analysts;
    the liquidity of the market for our common stock;
    the uncertainty of the declaration and payment of future cash
    dividends on our common stock; and
    the concentration of ownership of our common stock by
    Dr. Vinciarelli, our Chairman of the Board, Chief Executive
    Officer, and President.    one-for-one
        The
    ongoing disruptions in the global economy, as well as continued
    uncertainty in global financial markets, could materially and
    adversely affect our business and results of
    operations.
   13




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##### 



We
    compete with many companies possessing far greater
    resources.
    Our
    future success increasingly depends upon our ability to develop
    and market differentiated,
    leading-edge
    power conversion products for larger customers, potentially
    contributing to lengthy product development and sales cycles
    that may result in significant expenditures before revenues are
    generated.
      Our
    future operating results are dependent on the growth in our
    customers businesses and on our ability to identify and
    enter new markets.
   14




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##### 



and/or and/or quarter-to-quarter
  We
    rely on third-party vendors and subcontractors for supply of
    components and assemblies and, therefore, cannot control their
    availability or quality.
    We may
    not be able to procure necessary key components for our
    products, or we may purchase excess raw material inventory or
    unusable inventory, possibly impacting our results of
    operations.
    Our
    revenues and profits may not increase enough to offset the
    expense of additional production capacity.
   15




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##### 



If we
    were unable to use our manufacturing facility in Andover,
    Massachusetts, we would not be able to manufacture for an
    extended period of time.
    We are
    exposed to foreign economic, political and other
    risks.
    We may
    be unable to adequately protect our proprietary rights, which
    may limit our ability to compete effectively.
    We may
    face intellectual property infringement claims that could be
    costly to resolve.
  Item 3-
  We may
    face legal claims and litigation from product warranty or other
    claims that could be costly to resolve.
   16




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##### 



Our
    ability to successfully implement our business strategy may be
    limited if we do not retain our key personnel and attract and
    retain skilled and experienced personnel.
    Funds
    associated with our investments in auction rate securities may
    not be accessible at par value in the short term, and given this
    illiquidity, we may be required to make additional adjustments
    to their carrying value.
    available-for-sale,
    
    the default of an issuer or a specific security of that issuer;
    the significant deterioration of the credit rating of a security
    or its issuer;
    a tender offer for a specific security from the issuer valuing
    the security at less than par that is accepted by the number of
    holders necessary to require all holders to tender their
    securities; and 17




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##### 




    development of a robust secondary market for auction rate
    securities, establishing an active market value for our
    securities or similar securities that represents a substantial
    discount to par.    Changes
    in our effective tax rate may impact our results of
    operations.
    If we
    fail to maintain an effective system of internal controls or
    discover material weaknesses in our internal controls over
    financial reporting, we may not be able to report our financial
    results accurately or timely or detect fraud, which could have a
    material adverse effect on our business.
      ITEM 1B.
    UNRESOLVED
    STAFF COMMENTS    ITEM 2.
    PROPERTIES       18




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##### 



ITEM 3.
    LEGAL
    PROCEEDINGS           19




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##### 



and/or
    ITEM 4.
    (REMOVED
    AND RESERVED)  PART II
  ITEM 5.
    MARKET
    FOR REGISTRANTS COMMON EQUITY AND RELATED STOCKHOLDER
    MATTERS      2010

High


LowFirst Quarter

$
14.31


$
7.98Second Quarter


16.24



10.87Third Quarter


16.35



11.98Fourth Quarter


19.50



14.652009

High


LowFirst Quarter

$
6.75


$
3.86Second Quarter


7.30



4.63Third Quarter


7.97



6.42Fourth Quarter


9.68



6.50     Dividend
    Policy
     20




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##### 



Issuer
    Purchases of Equity Securities
 MaximumNumber (ofApproximateTotal Number of


Dollar Value) ofShares (or Units)


Shares (or Units)Total Number





Purchased as


that May Yet Beof Shares





Part of Publicly


Purchased Under(or Units)


Average Price Paid


Announced Plans


the Plans orPeriod

Purchased


per Share (or Unit)


or Programs


ProgramsOctober 1  31, 2010


-


$
-



-


$
8,541,000November 1  30, 2010


-


$
-



-


$
8,541,000December 1  31, 2010


-


$
-



-


$
8,541,000Total


-


$
-



-


$
8,541,000    21




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##### 



Stockholder
    Return Performance Graph
      Comparison
    of Five Year Cumulative Return
    Among Vicor Corporation, S&P 500 Index
    and S&P SmallCap 600 Index
  
  2005


2006


2007


2008


2009


2010Vicor Corporation


$
100.00



$
71.62



$
103.31



$
45.02



$
63.34



$
113.84S&P 500 Index


$
100.00



$
115.79



$
122.16



$
76.97



$
97.32



$
111.99S&P SmallCap 600 Index


$
100.00



$
115.11



$
114.77



$
79.12



$
99.35



$
125.48
  22




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##### 



ITEM 6.
    SELECTED
    FINANCIAL DATA    Year Ended December 31,Statement of Operations
    Data

2010


2009


2008


2007


2006(In thousands, except per share data)Net revenues

$
250,733


$
197,959


$
205,368


$
195,827


$
192,047Income (loss) from operations


29,122



4,773



(1,142
)


1,071



(33,182
)Consolidated net income (loss)


33,539



4,093



(1,778
)


5,874



(28,497
)Net income attributable to noncontrolling interest


214



1,295



1,817



539



562Net income (loss) attributable to Vicor Corporation


33,325



2,798



(3,595
)


5,335



(29,059
)Net income (loss) per share  basic and diluted
    attributable to Vicor Corporation


0.80



0.07



(0.09
)


0.13



(0.69
)Weighted average shares  basic


41,700



41,665



41,651



41,597



41,839Weighted average shares  diluted


41,772



41,671



41,651



41,687



41,839Cash dividends per share

$
0.30


$
-


$
0.30


$
0.30


$
0.27As of December 31,Balance Sheet Data

2010


2009


2008


2007


2006(In thousands)Working capital

$
105,454


$
74,791


$
65,297


$
114,924


$
123,467Total assets


204,912



180,577



171,922



192,458



247,461Total liabilities


25,900



24,511



20,496



23,978



73,696Total equity


179,012



156,066



151,426



168,480



173,765   ITEM 7.
    MANAGEMENTS
    DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
    OPERATIONS  Overview
     23




---



##### 



set-up
           24




---



##### 



Year Ended December 31,2010


2009


2008Net revenues


100.0
%


100.0
%


100.0
%Gross margin


45.7
%


44.2
%


42.0
%Selling, general and administrative expenses


19.7
%


24.2
%


27.4
%Research and development expenses


14.4
%


16.0
%


15.3
%Income before income taxes


11.8
%


2.8
%


0.4
%   Critical
    Accounting Policies and Estimates
    Allowance
    for Doubtful Accounts
    Inventories
    Fair
    Value Measurements
   25




---



##### 



Short-Term
    and Long-Term Investments
  available-for-sale Available-for-sale
        Long-Lived
    Assets
   26




---



##### 



Stock-Based
    Compensation
        Product
    Warranties
    Income
    Taxes
  12-quarter
   27




---



##### 



Contingencies
    Year
    ended December 31, 2010 compared to Year ended
    December 31, 2009
      Increase2010


2009


$


%BBU

$
217,018


$
186,980


$
30,038



16.1
%V*I Chip(1)


28,972



8,960



20,012



223.3
%Picor


4,743



2,019



2,724



134.9
%Total

$
250,733


$
197,959


$
52,774



26.7
%     (1)
    
    V*I Chip products sold by VJCL are
    included in the V*I Chip amounts in both years. The 2009 amounts
    were previously included in BBU.  book-to-bill
   28




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##### 



Increase (decrease)Commissions expense

$
543



8.6
%

(1)Advertising expenses


465



19.0
%

(2)Outside services


237



23.1
%

(3)Travel expenses


185



10.8
%

(4)Employment advertising and recruiting


136



111.4
%

(5)Facilities expense


114



8.6
%Telephone


98



9.9
%Audit and tax fees


64



5.1
%Legal fees


(302
)


(28.5
)%

(6)Depreciation and amortization


(167
)


(4.9
)%

(7)Other, net


112



0.4
%$
1,485



3.1
%     (1)
    
    Increase primarily attributed to the increase in net revenues,
    subject to changes in the mix of revenues subject to commissions.(2)
    
    Increase primarily attributed to the increase trade publication
    advertising and increased participation in trade shows,
    primarily by V*I Chip.(3)
    
    Increase primarily attributed to the outsourcing of certain
    information technology functions that were performed in-house in
    prior periods.(4)
    
    Represents an overall increase in travel across all business
    units.(5)
    
    Increase due to increase in recruiting costs for newly hired
    personnel.(6)
    
    Decrease primarily attributed to a decrease in activity
    associated with the Companys litigation brought against
    certain of its insurance carriers with respect to the Ericsson,
    Inc. settlement of product liability litigation in 2010 compared
    to 2009.(7)
    
    Decrease due to certain fixed assets becoming fully depreciated
    during 2010.      IncreaseCompensation

$
2,101



8.8
%

(1)Outside services/subcontract labor


787



98.1
%

(2)Deferred costs


454



53.6
%

(3)Project materials


328



11.3
%

(4)Facilities expenses


152



8.8
%Employment recruiting


117



132.3
%

(5)Depreciation and amortization


110



7.6
%Set-up and
    tooling charges


100



47.1
%Other, net


196



13.2
%$
4,345



13.7
%  29




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##### 



(1)
    
    Increase primarily attributed to an increase in research and
    development personnel for the BBU and V*I Chip business units,
    annual compensation adjustments in May 2010, and an increase in
    fringe expense due to increase in premiums for employee health
    benefits.(2)
    
    Increase primarily attributed to increased use of outside
    services and subcontract labor due to increased activity at
    Vicor Custom subsidiaries, in lieu of hiring permanent employees.(3)
    
    Increase primarily attributed to a decrease as compared to the
    prior year, in the deferral of costs capitalized for certain
    non-recurring engineering projects for which the related
    revenues have been deferred.(4)
    
    Increase primarily attributed to an increase in project
    materials associated with the development of V*I Chip and Picor
    products.(5)
    
    Increase primarily attributed to relocation costs for newly
    hired research and development personnel for the V*I Chip
    business unit.        Increase2010


2009


(decrease)Interest income

$
438


$
717


$
(279
)Unrealized gain on trading securities


970



1,268



(298
)Unrealized loss on auction rate securities rights


(962
)


(964
)


2Credit losses on available for sale securities


(146
)


(464
)


318Foreign currency (losses) gains, net


(158
)


35



(193
)Gain on disposal of equipment


248



30



218Other


107



60



47$
497


$
682


$
(185
)      30




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##### 



2010

2009(Benefit) provision for income taxes

$
(3,920)


$
1,362Effective income tax rate


(13.2%)



25.0%         Year
    ended December 31, 2009 compared to Year ended
    December 31, 2008
      Increase (decrease)2009


2008


$


%BBU

$
186,980


$
189,360


$
(2,380
)


(1.3
)%V*I Chip (1)


8,960



14,991



(6,031
)


(40.2
)%Picor


2,019



1,017



1,002



98.5
%Total

$
197,959


$
205,368


$
(7,409
)


(3.6
)%    (1)
    
    V*I Chip products sold by VJCL are
    included in the V*I Chip amounts in 2009. The 2009 amounts were
    previously included in BBU. Sales of V*I Chip products by VJCL
    in 2008 were not material.  book-to-bill
     31




---



##### 



Increase (decrease)Compensation

$
(3,000
)


(10.6
)%

(1)Legal fees


(1,672
)


(61.7
)%

(2)Audit and tax fees


(923
)


(42.6
)%

(3)Advertising expenses


(886
)


(27.9
)%

(4)Travel expenses


(657
)


(29.2
)%

(5)Training expenses


(245
)


(17.0
)%Depreciation and amortization


(197
)


(5.8
)%International office expenses


(104
)


(28.5
)%Employment advertising and recruiting


(97
)


(87.0
)%Facilities expense


(53
)


(3.3
)%Stockholder reporting


(82
)


(32.7
)%Commissions expense


75



1.2
%Other, net


(433
)


(10.9
)%$
(8,274
)


(14.7
)%     (1)
    
    Decrease primarily attributable to the workforce reductions
    completed in 2009.(2)
    
    Decrease primarily attributed to a decrease in activity
    associated with our lawsuit brought against certain of its
    insurance carriers with respect to the Ericsson, Inc. settlement
    of product liability litigation in 2009 compared to 2008.(3)
    
    Decrease primarily attributed to the late filings of our 2007
    Forms 10-Q
    and additional work related to accounting for our investment in
    GWS in the first quarter of 2008.(4)
    
    Decrease primarily attributed to decreased advertising in trade
    publications.(5)
    
    Represents an overall reduction in travel across all business
    units and functional groups.      Increase (decrease)Project materials

$
710



19.5
%


(1
)Picor non-recurring engineering charges


371



(79.2
)%


(2
)Set-up and
    tooling expenses


55



38.0
%Travel expenses


(83
)


(30.2
)%Compensation


(380
)


(1.6
)%


(3
)Deferred costs


(666
)


(368.5
)%


(4
)Other, net


231



4.5
%$
238



0.8
%     (1)
    
    Increase primarily attributed to an increase in materials
    associated with the development of V*I Chip and Picor products.(2)
    
    The Picor business unit provides engineering services to BBU and
    V*I Chip to support certain manufacturing processes and research
    and development activities. A decline in services related to
    manufacturing processes resulted in an increase in the amount of
    charges allocated to research and development expense.(3)
    
    Decrease primarily attributable to the workforce reduction
    completed in the first quarter of 2009. 32




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##### 



(4)
    
    Decrease primarily attributed to an increase in deferred costs
    capitalized for certain non-recurring engineering projects for
    which the related revenues have been deferred.        Increase2009


2008


(decrease)Interest income

$
717


$
2,138


$
(1,421
)Unrealized gain (loss) on trading securities


1,268



(2,238
)


3,506Unrealized (loss) gain on auction rate securities rights


(964
)


1,926



(2,890
)Credit losses on available for sale securities


(464
)


-



(464
)Foreign currency gains, net


35



82



(47
)Gain on disposal of equipment


30



19



11Other


60



101



(41
)$
682


$
2,028


$
(1,346
)         2009

2008Provision for income taxes

$
1,362


$
976Effective income tax rate


25.0%



110.2%      33




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##### 



LIQUIDITY
    AND CAPITAL RESOURCES
              Payments Due by PeriodLess than








More ThanContractual
    Obligations

Total


1 Year


Years 2 & 3


Years 4 & 5


5 YearsOperating lease obligations

$
2,607


$
1,264


$
1,059


$
284


$
-Purchase obligations


1,332



305



625



402



-$
3,939


$
1,569


$
1,684


$
686


$
-    34




---



##### 



ITEM 7A.
    QUANTITATIVE
    AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK  other-than-temporary
   35




---



##### 



ITEM 8.
    FINANCIAL
    STATEMENTS AND SUPPLEMENTARY DATA  INDEX
  PageFINANCIAL STATEMENTSReport of Independent Registered Public
    Accounting Firm


37Consolidated Balance Sheets as of
    December 31, 2010 and December 31, 2009


38Consolidated Statements of Operations For The
    Years Ended December 31, 2010, 2009, and 2008


39Consolidated Statements of Cash Flows For The
    Years Ended December 31, 2010, 2009, and 2008


40Consolidated Statements of Equity For The Years
    Ended December 31, 2010, 2009, and 2008


41Notes to the Consolidated Financial Statements


42Schedule (Refer to Item 15)


77   36




---



##### 



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM           Internal Control-Integrated Framework
      37




---



##### 



VICOR
    CORPORATIONCONSOLIDATED BALANCE SHEETSDecember 31, 2010 and 2009
    (In thousands, except per share data)
  2010


2009ASSETSCurrent assets:Cash and cash equivalents

$
49,279


$
40,224Restricted cash equivalents


-



192Short-term investments


-



2,583Accounts receivable, less allowance of $309 in 2010 and $260 in
    2009


38,825



26,565Inventories, net


35,489



21,357Deferred tax assets


2,164



181Other current assets


2,397



4,345Total current assets


128,154



95,447Restricted cash and cash equivalents


-



223Long-term investments, net


18,417



29,995Auction rate securities rights


-



962Property, plant and equipment, net


50,848



49,009Long-term deferred tax assets


2,805



-Other assets


4,688



4,941$
204,912


$
180,577LIABILITIES AND EQUITYCurrent liabilities:Accounts payable

$
11,999


$
9,458Accrued compensation and benefits


6,772



5,740Accrued expenses


3,138



2,618Accrued severance charges


-



259Income taxes payable


102



60Deferred revenue


689



2,521Total current liabilities


22,700



20,656Long-term deferred revenue


2,178



2,196Long-term income taxes payable


1,022



384Deferred income taxes


-



1,275Commitments and contingencies (Note 15)


-



-Equity:Vicor Corporation stockholders equity:Preferred Stock, $.01 par value, 1,000,000 shares
    authorized; no shares issuedClass B Common Stock: 10 votes per share, $.01 par
    value, 14,000,000 shares authorized, 11,767,052 shares
    issued and outstanding


118



118Common Stock: 1 vote per share, $.01 par value,
    62,000,000 shares authorized 38,400,897 shares issued
    and 30,002,499 shares outstanding (38,296,408 shares
    issued and 29,898,010 shares outstanding in 2009)


385



384Additional paid-in capital


163,933



161,746Retained earnings


133,791



112,972Accumulated other comprehensive loss


(1,369
)


(1,608
)Treasury stock at cost: 8,398,398 shares in 2010 and 2009


(121,827
)


(121,827
)Total Vicor Corporation stockholders equity


175,031



151,785Noncontrolling interest


3,981



4,281Total equity


179,012



156,066$
204,912


$
180,577    38




---



##### 



VICOR
    CORPORATIONCONSOLIDATED STATEMENTS OF
    OPERATIONSYears Ended December 31, 2010, 2009 and
    2008
    (In thousands, except per share amounts)
  2010


2009


2008Net revenues

$
250,733


$
197,959


$
205,368Cost of revenues


136,213



110,365



119,083Gross margin


114,520



87,594



86,285Operating expenses:Selling, general and administrative


49,417



47,932



56,206Research and development


35,981



31,636



31,398Severance charges


-



4,099



-Gain from litigation-related and other settlements, net


-



(846
)


(177
)Total operating expenses


85,398



82,821



87,427Income (loss) from operations


29,122



4,773



(1,142
)Other income, net:Total other than temporary impairment (losses) gains on
    available-for-sale
    securities


(271
)


759



-Portion of gains (losses) recognized in other comprehensive
    income


125



(1,223
)


-Net impairment losses recognized in earnings


(146
)


(464
)


-Other income, net


643



1,146



2,028Total other income, net


497



682



2,028Income before income taxes


29,619



5,455



886(Benefit) provision for income taxes


(3,920
)


1,362



976Loss from equity method investment (net of tax)


-



-



1,688Consolidated net income (loss)


33,539



4,093



(1,778
)Less: Net income attributable to noncontrolling interest


214



1,295



1,817Net income (loss) attributable to Vicor Corporation

$
33,325


$
2,798


$
(3,595
)Net income (loss) per common share attributable to Vicor
    Corporation:Basic

$
0.80


$
0.07


$
(0.09
)Diluted

$
0.80


$
0.07


$
(0.09
)Shares used to compute net income (loss) per common share
    attributable to Vicor Corporation:Basic


41,700



41,665



41,651Diluted


41,772



41,671



41,651Cash dividends declared per share

$
0.30


$
-


$
0.30    39




---



##### 



VICOR
    CORPORATIONCONSOLIDATED STATEMENTS OF CASH
    FLOWSYears Ended December 31, 2010, 2009 and
    2008
    (In thousands)
  2010


2009


2008Operating activities:Consolidated net income (loss)

$
33,539


$
4,093


$
(1,778
)Adjustments to reconcile consolidated net income (loss)to net cash provided by operating activities:Depreciation and amortization


10,222



10,198



10,515Deferred income taxes


(6,274
)


(74
)


127Unrealized (gain) loss on trading securities


(970
)


(1,268
)


2,238Unrealized loss on auction rate security rights


962



964



-Stock compensation expense


871



657



1,121Gain on disposal of equipment


(249
)


(30
)


(22
)Excess tax benefit of share-based compensation


(213
)


-



-Credit loss on available for sale securities


146



464



-(Decrease) increase in long-term deferred revenue


(18
)


1,078



1,076Severance charges


-



4,099



-Unrealized gain on acquisition of auction rate security rights


-



-



(1,926
)Loss from equity method investee (net of tax)


-



-



1,688Change in current assets and liabilities, net


(21,122
)


4,617



(3,976
)Net cash provided by operating activities


16,894



24,798



9,063Investing activities:Purchases of investments


(908
)


(1,695
)


(11,574
)Sales and maturities of investments


15,768



6,650



28,004Additions to property, plant and equipment


(12,103
)


(10,643
)


(8,265
)Purchase of equity method investment


-



-



(1,000
)Proceeds from sale of equipment


421



32



25Change in restricted cash


415



322



215Decrease (increase) in other assets


172



(572
)


(229
)Net cash provided by (used in) investing activities


3,765



(5,906
)


7,176Financing activities:Proceeds from issuance of Common Stock


1,104



-



202Common stock dividends paid


(12,506
)


-



(12,494
)Noncontrolling interest dividends paid


(552
)


(1,269
)


(1,168
)Excess tax benefit of share-based compensation


213



-



-Net cash used in financing activities


(11,741
)


(1,269
)


(13,460
)Effect of foreign exchange rates on cash


137



(38
)


(157
)Net increase in cash and cash equivalents


9,055



17,585



2,622Cash and cash equivalents at beginning of period


40,224



22,639



20,017Cash and cash equivalents at end of period

$
49,279


$
40,224


$
22,639Change in assets and liabilities:Accounts receivable


(11,926
)


2,148



3,684Inventories, net


(13,928
)


5,291



(3,311
)Other current assets


2,050



(2,065
)


559Accounts payable and accrued liabilities


3,881



2,550



(4,410
)Accrued severance


(259
)


(3,840
)


-Accrual for litigation settlement


-



(162
)


(78
)Income taxes payable


892



(1,164
)


(141
)Deferred revenue


(1,832
)


1,859



(279
)$
(21,122
)

$
4,617


$
(3,976
)Supplemental disclosures:Cash paid during the year for income taxes, net of refunds

$
1,113


$
3,122


$
602    40




---



##### 



VICOR
    CORPORATIONCONSOLIDATED STATEMENTS OF
    EQUITYYears Ended December 31, 2010, 2009 and
    2008
    (In thousands)
  TotalAccumulated





VicorClass B





Additional





Other





CorporationCommon


Common


Paid-In


Retained


Comprehensive


Treasury


Stockholders


Noncontrolling


TotalStock


Stock


Capital


Earnings


Income (Loss)


Stock


Equity


Interest


EquityBalance on December 31, 2007

$
118


$
384


$
159,332


$
126,263


$
170


$
(121,827
)

$
164,440


$
4,040


$
168,480Sales of Common Stock










202















202







202Common stock dividends paid














(12,494
)










(12,494
)






(12,494
)Noncontrolling interest dividends paid






























(1,168
)


(1,168
)Stock-based compensation expense










1,121















1,121







1,121Noncontrolling interest adjustment (1)










434















434



(434
)


-Net loss














(3,595
)










(3,595
)


1,817



(1,778
)Unrealized loss on investments


















(3,314
)






(3,314
)






(3,314
)Currency translation adjustments, net of tax of $226


















377







377







377Comprehensive loss


























(6,532
)






(4,715
)Balance on December 31, 2008


118



384



161,089



110,174



(2,767
)


(121,827
)


147,171



4,255



151,426Noncontrolling interest dividends paid






























(1,269
)


(1,269
)Stock-based compensation expense










657















657







657Net income














2,798











2,798



1,295



4,093Unrealized gain on investments


















1,223







1,223







1,223Currency translation adjustments, net of tax of $30


















(64
)






(64
)






(64
)Comprehensive income


























3,957







5,252Balance on December 31, 2009


118



384



161,746



112,972



(1,608
)


(121,827
)


151,785



4,281



156,066Sales of Common Stock






1



1,103















1,104







1,104Common stock dividends paid














(12,506
)










(12,506
)






(12,506
)Noncontrolling interest dividend paid






























(552
)


(552
)Excess tax benefit of share-based compensation










213















213







213Stock-based compensation expense










871















871







871Net income














33,325











33,325



214



33,539Unrealized gain on investments


















(123
)






(123
)


(2
)


(125
)Currency translation adjustments, net of tax of $169


















362







362



40



402Comprehensive income


























33,564



252



33,816Balance on December 31, 2010

$
118


$
385


$
163,933


$
133,791


$
(1,369
)

$
(121,827
)

$
175,031


$
3,981


$
179,012    (1)
    
    A noncontrolling interest had a
    redemption of preferred stock that resulted in a $434,000
    adjustment to Additional
    Paid-In-Capital.   41




---



##### 



VICOR
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
  1.
    DESCRIPTION
    OF BUSINESS    2.
    SIGNIFICANT
    ACCOUNTING POLICIES  Principles
    of consolidation
    Revenue
    recognition
       42




---



##### 



VICOR
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS (Continued)
  Foreign
    currency translation
      Cash
    and cash equivalents
    Restricted
    cash and short-term investments
    Short-term
    and long-term investments
    available-for-sale Available-for-sale
   43




---



##### 



VICOR
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS (Continued)
  Fair
    value measurements
    Level 1
    Inputs used to measure fair value are unadjusted quoted prices
    available in active markets for the identical assets or
    liabilities as of the reporting date.Level 2
    Inputs used to measure fair value, other than quoted prices
    included in Level 1, are either directly or indirectly
    observable as of the reporting date through correlation with
    market data, including quoted prices for similar assets and
    liabilities in active markets and quoted prices in inactive
    markets. Level 2 also includes assets and liabilities
    valued using models or other pricing methodologies that do not
    require significant judgment since the input assumptions used in
    the models, such as interest rates and volatility factors, are
    corroborated by readily observable data from actively quoted
    markets for substantially the full term of the financial
    instrument.Level 3
    Inputs used to measure fair value are unobservable inputs
    supported by little or no market activity and reflect the use of
    significant management judgment. These values are generally
    determined using pricing models for which the assumptions
    utilize managements estimates of market participant
    assumptions.  case-by-case
  Allowance
    for doubtful accounts
    Inventories
  first-in, and/or
  Concentrations
    of credit risk
   44




---



##### 



VICOR
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS (Continued)
  other-than-temporary
  Goodwill,
    other intangible assets, and long-lived assets
      Other
    investments
    Advertising
    expense
    Product
    warranties
    Net
    income (loss) per common share
   45




---



##### 



VICOR
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS (Continued)
    2010


2009


2008Numerator:Net income (loss) attributable to Vicor Corporation

$
33,325


$
2,798


$
(3,595
)Denominator:Denominator for basic income (loss) per share-weighted average
    shares (1)


41,700



41,665



41,651Effect of dilutive securities:Employee stock options(2)


72



6



-Denominator for diluted income (loss) per share 
    adjusted weighted-average shares and assumed conversions(3)


41,772



41,671



41,651Basic income (loss) per share

$
0.80


$
0.07


$
(0.09
)Diluted income (loss) per share

$
0.80


$
0.07


$
(0.09
)     (1)
    
    Denominator represents weighted average number of Common Shares
    and Class B Common Shares outstanding.(2)
    
    Options to purchase 345,998 and 720,823 shares of Common
    Stock were outstanding in 2010 and 2009, respectively, but were
    not included in the computation of diluted income per share
    because the options exercise prices were greater than the
    average market price of the Common Stock and, therefore, the
    effect would have been antidilutive. Options to purchase
    1,084,175 shares of Common Stock in 2008 were not included
    in the calculation of net loss per share as the effect would
    have been antidilutive.(3)
    
    Denominator represents weighted average number of Common Shares
    and Class B Common Shares outstanding for the year,
    adjusted to include the dilutive effect, if any, of outstanding
    options.  Income
    taxes
     46




---



##### 



VICOR
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS (Continued)
  Stock-based
    compensation
    Use of
    estimates
    Comprehensive
    (loss) income
    Impact
    of recently issued accounting standards
     47




---



##### 



VICOR
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS (Continued)
  3.
    STOCK-BASED
    COMPENSATION AND EMPLOYEE BENEFIT PLANS    Amended and Restated 2000 Stock Option and Incentive Plan
    (the Vicor 2000 Plan)
  1998 Stock Option and Incentive Plan (the Vicor 1998
    Plan)
  1993 Stock Option Plan (the Vicor 1993
    Plan)
    2001 Stock Option and Incentive Plan, as amended (the
    2001 Picor Plan)
    2007 Stock Option and Incentive Plan, as amended (the
    2007 V*I Chip Plan)
     48




---



##### 



VICOR
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS (Continued)
        2010


2009


2008Cost of revenues

$
19


$
20


$
52Selling, general and administrative


618



456



818Research and development


234



181



251Total stock based compensation

$
871


$
657


$
1,121     Non Performance-based Stock

Performance-based StockOptions

Options(1)Vicor:

2010

2009

2008

2010Risk-free interest rate


2.3
%


1.1
%


2.8
%


2.0-2.7
%Expected dividend yield


1.6
%


1.0
%


2.6
%


2.5
%Expected volatility


54
%


67
%


47
%


55
%Expected lives (years)


3.9



2.7



3.1



6.5-9.5   V*I Chip:

2010

2009(2)

2008

2010Risk-free interest rate


2.7
%


-



3.7
%


2.7
%Expected dividend yield


-



-



-



-Expected volatility


49
%


-



61
%


49
%Expected lives (years)


6.5



-



6.5



6.5   Picor:

2010

2009(2)

2008Risk-free interest rate


2.0
%


-



3.7
%Expected dividend yield


-



-



-Expected volatility


52
%


-



56
%Expected lives (years)


6.5



-



6.5     (1)
    
    There were no Vicor or V*I Chip performance-based options
    granted prior to 2010.(2)
    
    There were no Picor or V*I Chip options granted during 2009. 49




---



##### 



VICOR
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS (Continued)
   Risk-free
    interest rate:
  Vicor
  Picor
  V*I Chip 
  Expected
    dividend yield:
  Vicor
  Picor
  V*I Chip
  Expected
    volatility:
  Vicor
  Picor
  V*I Chip
  Expected
    term:
  Vicor
  Picor and V*I Chip
 50




---



##### 



VICOR
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS (Continued)
  Forfeiture
    rate
    Vicor
  Picor
  V*I Chip
  Vicor
    Stock Options
    Weighted-Weighted-


AverageAverage


Remaining


AggregateOptions


Exercise


Contractual


IntrinsicOutstanding


Price


Life in Years


ValueOutstanding on December 31, 2009


765,563



17.11Granted


1,336,242



13.66Forfeited and expired


(198,989
)


25.93Exercised


(104,489
)


10.55Outstanding on December 31, 2010


1,798,327



13.95



7.76


$
5,204Exercisable on December 31, 2010


359,264



15.89



2.10


$
939Vested or expected to vest as of December 31, 2010 (1)


884,670



14.25



5.98


$
2,678   (1)
    
    In addition to the vested options, the Company expects a portion
    of the unvested options to vest at some point in the future.
    Options expected to vest is calculated by applying an estimated
    forfeiture rate to the unvested options.   51




---



##### 



VICOR
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS (Continued)
        Picor
    Stock Options
      Weighted-Weighted-


AverageAverage


Remaining


AggregateOptions


Exercise


Contractual


IntrinsicOutstanding


Price


Life in Years


ValueOutstanding on December 31, 2009


5,021,040



0.62Granted


5,412,123



0.57Forfeited and expired


(431,400
)


0.74Exercised


-



-Outstanding on December 31, 2010


10,001,763



0.59



6.80


$
610Exercisable on December 31, 2010


4,213,640



0.56



3.04


$
610Vested or expected to vest as of December 31, 2010 (1)


9,700,333



0.59



6.72


$
610   (1)
    
    In addition to the vested options, the Company expects a portion
    of the unvested options to vest at some point in the future.
    Options expected to vest is calculated by applying an estimated
    forfeiture rate to the unvested options. 52




---



##### 



VICOR
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS (Continued)
           V*I
    Chip Stock Options
      Weighted-Weighted-


AverageAverage


Remaining


AggregateOptions


Exercise


Contractual


IntrinsicOutstanding


Price


Life in Years


ValueOutstanding on December 31, 2009


7,617,500



1.00Granted


3,322,750



1.00Forfeited and expired


(150,000
)


1.00Exercised


-



-Outstanding on December 31, 2010(2)


10,790,250



1.00



8.14


$
-Exercisable on December 31, 2010


4,436,200



1.00



6.41


$
-Vested or expected to vest as of December 31, 2010 (1)


10,202,748



1.00



8.06


$
-   (1)
    
    In addition to the vested options, the Company expects a portion
    of the unvested options to vest at some point in the future.
    Options expected to vest is calculated by applying an estimated
    forfeiture rate to the unvested options.(2)
    
    Of the total V*I Chip options outstanding on December 31,
    2010, 5,500,000 options have been granted to the Companys
    Chief Executive Officer. 53




---



##### 



VICOR
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS (Continued)
         401(k)
    Plan
    Stock
    Bonus Plan
    4.
    SHORT-TERM
    AND LONG-TERM INVESTMENTS       54




---



##### 



VICOR
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS (Continued)
    available-for-sale
  Gross


Gross


EstimatedUnrealized


Unrealized


FairDecember 31,
    2010

Cost


Gains


Losses


ValueFailed Auction Securities

$
19,075


$
-


$
2,856


$
16,219Certificates of deposit


448



-



-



448Brokered certificates of deposit


1,720



30



-



1,750$
21,243


$
30


$
2,856


$
18,417   Gross


Gross


EstimatedUnrealized


Unrealized


FairDecember 31,
    2009

Cost


Gains


Losses


ValueFailed Auction Securities

$
19,700


$
-


$
2,590


$
17,110Certificates of deposit


434



-



-



434Brokered certificates of deposit


2,070



34



-



2,104$
22,204


$
34


$
2,590


$
19,648     available-for-sale
  EstimatedCost


Fair ValueDue in one year or less

$
1,078


$
1,089Due in two to ten years


1,090



1,109Due in ten to twenty years


-



-Due in twenty to forty years


19,075



16,219$
21,243


$
18,417  55




---



##### 



VICOR
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS (Continued)
  Trading
    Securities
    Gross


Gross


EstimatedUnrealized


Unrealized


FairDecember 31,
    2010

Cost


Gains


Losses


ValueFailed Auction Securities

$
-


$
-


$
-


$
-December 31, 2009Failed Auction Securities

$
13,900


$
-


$
970


$
12,930       available-for-sale
  Balance at the beginning of the period

$
464Reductions for securities sold during the period


(18
)Additions for the amount related to credit loss for which
    other-than-temporary
    impairment was not previously recognized


164Balance at the end of the period

$
610      56




---



##### 



VICOR
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS (Continued)
  5.
    FAIR
    VALUE MEASUREMENTS    UsingSignificantQuoted Prices


Other


Significantin Active


Observable


Unobservable


Total FairMarkets


Inputs


Inputs


Value as of(Level 1)


(Level 2)


(Level 3)


December 31,
    2010Cash Equivalents:Money market funds

$
16,629


$
-


$
-


$
16,629Long term investments:Auction rate securities


-



-



16,219



16,219Certificates of deposit


448



-



-



448Brokered certificates of deposit


-



1,750



-



1,750    57




---



##### 



VICOR
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS (Continued)
    Balance at the beginning of the period

$
28,852Redemptions


(12,375
)Unrealized loss on trading securities included in Other income,
    net


8Credit losses on available for sales securities included in
    Other income, net


(146
)Unrealized gain included in Other comprehensive (loss) income


(120
)Balance at the end of the period

$
16,219    6.
    INVENTORIES    2010


2009Raw materials

$
31,750


$
18,675Work-in-process


4,182



3,434Finished goods


5,001



5,19140,933



27,300Inventory reserves


(5,444
)


(5,943
)Net balance

$
35,489


$
21,357    7.
    PROPERTY,
    PLANT AND EQUIPMENT      2010


2009Land

$
2,089


$
2,089Buildings and improvements


41,791



41,569Machinery and equipment


203,744



192,805Furniture and fixtures


5,847



5,808Construction in-progress and deposits


4,499



5,810257,970



248,081Accumulated depreciation and amortization


(207,122
)


(199,072
)Net balance

$
50,848


$
49,009    58




---



##### 



VICOR
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS (Continued)
  8.
    OTHER
    INVESTMENTS        2010


2009


2008Allocation of losses from equity method investment (net of tax)

$
-


$
-


$
321Amortization of intangible assets and other (net of tax)


-



-



106Other than temporary decline in investment


-



-



1,261$
-


$
-


$
1,688     9.
    GOODWILL
    AND OTHER INTANGIBLE ASSETS   59




---



##### 



VICOR
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS (Continued)
    2010


2009Patent costs

$
3,459


$
3,456Accumulated amortization


(1,827
)


(1,683
)$
1,632


$
1,773         2010


2009GWS intangibles

$
500


$
500Accumulated amortization


(187
)


(62
)$
313


$
438     10.
    SEVERANCE
    CHARGES      BBU


V*I Chip


TotalBalance as of December 31, 2009

$
255


$
4


$
259Payments


(255
)


(4
)


(259
)Balance as of December 31, 2010

$
-


$
-


$
-   60




---



##### 



VICOR
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS (Continued)
  11.
    PRODUCT
    WARRANTIES    2010


2009


2008Balance at the beginning of the period

$
772


$
896


$
679Accruals for warranties for products sold in the period


573



205



595Fulfillment of warranty obligations


(548
)


(101
)


(385
)Revisions of estimated obligations


(148
)


(228
)


7Balance at the end of the period

$
649


$
772


$
896    12.
    STOCKHOLDERS
    EQUITY    Common
    Stock
      one-for-one
           61




---



##### 



VICOR
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS (Continued)
        13.
    OTHER
    INCOME, NET    2010


2009


2008Interest income

$
438


$
717


$
2,138Unrealized gain (loss) on trading securities


970



1,268



(2,238
)Unrealized (loss) gain on auction rate securities rights


(962
)


(964
)


1,926Credit losses on available for sale securities


(146
)


(464
)


-Foreign currency (losses) gains, net


(158
)


35



82Gain on disposal of equipment


248



30



19Other


107



60



101$
497


$
682


$
2,028  62




---



##### 



VICOR
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS (Continued)
  14.
    INCOME
    TAXES    2010


2009Deferred tax assetsResearch and development tax credit carryforwards

$
7,772


$
9,122Inventory reserves


1,905



2,229Vacation accrual


1,500



1,228Investment tax credit carryforwards


1,249



978Stock-based compensation


1,224



974Net operating loss carryforwards


1,075



8,130Alternative minimum tax credit carryforward


1,045



590Unrealized loss on investments


1,023



993Capital loss carryforward


700



700Deferred revenue


395



407Warranty reserves


189



253Bad debt reserves


103



87Other


588



138Total deferred tax assets


18,768



25,829Less: Valuation allowance for deferred tax assets


(10,259
)


(24,803
)Net deferred tax assets


8,509



1,026Deferred tax liabilitiesDepreciation


(1,564
)


(380
)Patent amortization


(594
)


(646
)Goodwill


(549
)


(478
)Unremitted Vicor Custom earnings


(320
)


(314
)Other


(513
)


(303
)Total deferred tax liabilities


(3,540
)


(2,121
)Net deferred tax assets (liabilities)

$
4,969


$
(1,095
)   12-quarter
 63




---



##### 



VICOR
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS (Continued)
          2010


2009


2008Domestic

$
28,973


$
5,236


$
654Foreign


646



219



232$
29,619


$
5,455


$
886     2010


2009


2008Current:Federal

$
1,187


$
939


$
1,355State


958



422



(533
)Foreign


209



75



272,354



1,436



849Deferred:Federal


(6,274
)


(74
)


127$
(3,920
)

$
1,362


$
976  64




---



##### 



VICOR
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS (Continued)
      2010



2009



2008Statutory federal tax rate


34.0
%




35.0
%




35.0
%State income taxes, net of federal income tax benefit


2.7





9.2





37.0Increase (reduction) in tax reserves


2.3





(2.1
)




(104.3
)Permanent items


0.2





4.0





31.8Foreign rate differential and deferred items


(1.0
)




(0.9
)




(5.4
)Tax credits


-





2.3





(30.9
)Book income attributable to noncontrolling interest


(0.3
)




(8.3
)




(71.8
)(Decrease) increase in valuation allowance


(49.7
)




(14.2
)




218.8Other


(1.4
)




-





-(13.2
)%




25.0
%




110.2
%       Balance on January 1, 2010

$
712Additions based on tax provisions related to the current year


746Reductions based on tax provisions related to prior years


(356
)Balance on December 31, 2010

$
1,102    65




---



##### 



VICOR
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS (Continued)
    15.
    COMMITMENTS
    AND CONTINGENCIES    Year2011

$
1,2642012


7222013


3372014


1732015 and thereafter


111            66




---



##### 



VICOR
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS (Continued)
        and/or
 67




---



##### 



VICOR
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS (Continued)
    16.
    SEGMENT
    INFORMATION       68




---



##### 



VICOR
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS (Continued)
    BBU

V*I Chip

Picor

Corporate

Eliminations

Total(1)

(1)





(1)(2)2010:Net revenues

$
217,018


$
33,842


$
11,061


$
-


$
(11,188
)

$
250,733Income (loss) from operations


55,619



(24,565
)


(1,282
)


(640
)


(10
)


29,122Total assets


78,014



31,278



7,463



103,486



(15,329
)


204,912Depreciation and amortization


4,788



3,500



470



1,464



-



10,2222009:Net revenues

$
186,975



14,599


$
6,143


$
-


$
(9,758
)

$
197,959Income (loss) from operations


29,173



(22,642
)


(4,265
)


(716
)


3,223



4,773Total assets


204,611



19,124



9,352



98,209



(150,719
)


180,577Depreciation and amortization


5,283



2,968



403



1,544



-



10,1982008:Net revenues

$
189,362


$
16,766


$
5,096


$
-


$
(5,856
)

$
205,368Income (loss) from operations


26,317



(25,123
)


(2,817
)


(441
)


922



(1,142
)Total assets


177,331



14,850



9,011



87,072



(116,342
)


171,922Depreciation and amortization


5,920



2,645



384



1,566



-



10,515     (1)
    
    During the fourth quarter of 2010, the Company completed a
    recapitalization of V*I Chip. The impact of the recapitalization
    on V*I Chip was to eliminate its intercompany payable to BBU of
    approximately $172,100,000 and institute capital accounts
    totaling $50,000,000 as of December 31, 2010. The impact on
    segment reporting was to reduce Total assets for BBU and
    increase Eliminations by $172,100,000 as of December 31,
    2010. There was no impact on the consolidated financial
    statements as a result of this recapitalization.(2)
    
    The elimination for net revenues is principally related to
    inter-segment revenues of Picor to BBU and V*I Chip and for
    inter-segment revenues of V*I Chip to BBU. The elimination for
    total assets is principally related to inter-segment receivables
    due to BBU for the funding of V*I Chip operations and for the
    purchase of equipment for both V*I Chip and Picor.   69




---



##### 



VICOR
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS (Continued)
  17.
    QUARTERLY
    RESULTS OF OPERATIONS  (Unaudited)    First

Second

Third

Fourth

Total2010:Net revenues

$
51,709


$
57,377


$
68,672


$
72,975


$
250,733Gross margin


23,324



25,739



32,473



32,984



114,520Consolidated net income


2,005



4,747



15,869



10,918



33,539Net income attributable to noncontrolling interest


53



-



50



111



214Net income attributable to Vicor Corporation


1,952



4,747



15,819



10,807



33,325Net income per share attributable to Vicor Corporation:Basic and diluted


0.05



0.11



0.38



0.26



0.80   First

Second

Third

Fourth

Total2009:Net revenues

$
50,448


$
50,627


$
47,746


$
49,138


$
197,959Gross margin


21,831



22,598



20,668



22,497



87,594Consolidated net income (loss)


(2,151
)


1,758



1,990



2,496



4,093Net income attributable to noncontrolling interest


392



417



299



187



1,295Net income (loss) attributable to Vicor Corporation


(2,543
)


1,341



1,691



2,309



2,798Net income (loss) per share attributable to Vicor Corporation:Basic and diluted


(0.06
)


0.03



0.04



0.06



0.07     
    Recognition of deferred revenue of $4,729,000 and $4,524,000 in
    deferred costs in connection with the accounting for a
    multiple-element revenue arrangement.    
    Reversal to defer $1,476,000 in Net revenues and $1,045,000 in
    Cost of revenues in connection with the accounting for a
    multiple-element revenue arrangement. The impact on prior
    quarters in 2009 was not material.
    An unrealized gain of $476,000 in connection with the fair value
    measurements for its UBS ARS, which are classified as trading
    securities, in Other income, net in the Consolidated
    Statements of Operations.
    An unrealized loss of $466,000 in connection with the fair value
    measurements for its ARS Right, in Other income, net
    in the Consolidated Statements of Operations.
    An increase of $290,000 to inventory reserves for potential
    excess and obsolete inventory charged against Cost of revenues. 70




---



##### 



ITEM 9.
    CHANGES
    IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
    FINANCIAL DISCLOSURE    ITEM 9A.
    CONTROLS
    AND PROCEDURES  Form 10-K Rule 13a-14
  (a)
    Evaluation
    of disclosure controls and procedures  Rule 13a-15
  (b)
    Managements
    Report on Internal Control Over Financial Reporting         71




---



##### 



Internal Control  Integrated Framework
        Internal Control-Integrated Framework
    
    72




---



##### 



(c)
    Inherent
    Limitations on Effectiveness of Controls    (d)
    Changes
    in Internal Control Over Financial Reporting   73




---



##### 



ITEM 9B.
    OTHER
    INFORMATION    PART III
  ITEM 10.
    DIRECTORS
    AND EXECUTIVE OFFICERS OF THE REGISTRANT    ITEM 11.
    EXECUTIVE
    COMPENSATION    ITEM 12.
    SECURITY
    OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
    RELATED STOCKHOLDER MATTERS    ITEM 13.
    CERTAIN
    RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR
    INDEPENDENCE    ITEM 14.
    PRINCIPAL
    ACCOUNTANT FEES AND SERVICES    PART IV
  ITEM 15.
    EXHIBITS AND
    FINANCIAL STATEMENTS  Financial Statements
    Schedules
      74




---



##### 



Exhibits
  Exhibits



Description of
    Document3
.1





Restated Certificate of Incorporation, dated February 28,
    1990(1)3
.2





Certificate of Ownership and Merger Merging Westcor Corporation,
    a Delaware Corporation, into Vicor Corporation, a Delaware
    Corporation, dated December 3, 1990(1)3
.3





Certificate of Amendment of Restated Certificate of
    Incorporation, dated May 10, 1991(1)3
.4





Certificate of Amendment of Restated Certificate of
    Incorporation, dated June 23, 1992(1)3
.5





Bylaws, as amended(9)4
.1





Specimen Common Stock Certificate(2)10
.1





1984 Stock Option Plan of the Company, as amended(2)10
.2





1993 Stock Option Plan(3)10
.3





1998 Stock Option and Incentive Plan(4)10
.4





Amended and Restated 2000 Stock Option and Incentive Plan(5)10
.5





Form of Non-Qualified Stock Option under the Vicor Corporation
    Amended and Restated 2000 Stock Option and Incentive Plan(6)10
.6





Sales Incentive Plan(7)10
.7





Picor Corporation 2001 Stock Option and Incentive Plan(8)10
.8





Form of Non-Qualified Stock Option under the Picor Corporation
    2001 Stock Option and Incentive Plan(8)10
.9





V*I Chip Corporation Amended 2007 Stock Option and Incentive
    Plan(11)10
.10





Form of Non-Qualified Stock Option Agreement under the V*I Chip
    Corporation Amended 2007 Stock Option and Incentive Plan(10)10
.11





Form of Incentive Stock Option Agreement under the V*I Chip
    Corporation Amended 2007 Stock Option and Incentive Plan(11)10
.12





Form of Stock Restriction Agreement under the V*I Chip
    Corporation Amended 2007 Stock Option and Incentive Plan(11)21
.1





Subsidiaries of the Company(12)23
.1





Consent of Grant Thornton LLP(12)31
.1





Certification of Chief Executive Officer pursuant to
    Rule 13a-14(a)
    of the Securities Exchange Act of 1934(12)31
.2





Certification of Chief Financial Officer pursuant to
    Rule 13a-14(a)
    of the Securities Exchange Act of 1934(12)32
.1





Certification of Chief Executive Officer pursuant to
    18 U.S.C. Section 1350, as adopted pursuant to
    Section 906 of the Sarbanes-Oxley Act of 2002(12)32
.2





Certification of Chief Financial Officer pursuant to
    18 U.S.C. Section 1350, as adopted pursuant to
    Section 906 of the Sarbanes-Oxley Act of 2002(12)   (1)
    
    Filed as an exhibit to the Companys Annual Report on
    Form 10-K
    filed on March 29, 2001 and incorporated herein by
    reference.(2)
    
    Filed as an exhibit to the Companys Registration Statement
    on Form 10, as amended, under the Securities Exchange Act
    of 1934 (File
    No. 0-18277),
    and incorporated herein by reference.(3)
    
    Filed as an exhibit to the Companys Registration Statement
    on
    Form S-8,
    as amended, under the Securities Act of 1933
    (No. 33-65154),
    and incorporated herein by reference.(4)
    
    Filed as an exhibit to the Companys Registration Statement
    on
    Form S-8,
    as amended, under the Securities Act of 1933
    (No. 333-61177),
    and incorporated herein by reference. 75




---



##### 



(5)
    
    Filed as an exhibit to the Companys Proxy Statement for
    use in connection with its 2002 Annual Meeting of Stockholders,
    which was filed on April 29, 2002, and incorporated herein
    by reference.(6)
    
    Filed as an exhibit to the Companys Quarterly Report on
    Form 10-Q
    filed on November 4, 2004 and incorporated herein by
    reference.(7)
    
    Filed as an exhibit to the Companys Annual Report on
    Form 10-K
    filed on March 16, 2005 and incorporated herein by
    reference.(8)
    
    Filed as an exhibit to the Companys Annual Report on
    Form 10-K
    filed on March 14, 2006 and incorporated herein by
    reference.(9)
    
    Filed as an exhibit to the Companys Quarterly Report on
    Form 10-Q
    filed on November 8, 2006 and incorporated herein by
    reference.(10)
    
    Filed as an exhibit to the Companys Current Report on
    Form 8-K,
    dated June 6, 2007 and incorporated herein by reference.(11)
    
    Filed as an exhibit to the Companys Current Report and
    Form 8-K,
    dated March 6, 2008 incorporated herein by reference.(12)
    
    Filed herewith. 76




---



##### 



VICOR
    CORPORATIONSCHEDULE IIVALUATION AND QUALIFYING ACCOUNTS
    Years ended December 31, 2010, 2009 and 2008
  (Credit)ChargeBalance at

to Costs and

Other Charges,

Balance atDescription

Beginning of Period

Expenses

Deductions(1)

End of PeriodAllowance for doubtful accounts:Year ended:December 31, 2010

$
260,000


$
57,000


$
(8,000
)

$
309,000December 31, 2009


300,000



3,000



(43,000
)


260,000December 31, 2008


398,000



39,000



(137,000
)


300,000     (1)
    
    Reflects uncollectible accounts written off, net of recoveries.  (Credit)ChargeBalance at

to Costs and

Other Charges,

Balance atDescription

Beginning of Period

Expenses

Deductions(2)

End of PeriodInventory Reserves:Year ended:December 31, 2010

$
5,943,000


$
1,721,000


$
(2,220,000
)

$
5,444,000December 31, 2009


6,358,000



1,010,000



(1,425,000
)


5,943,000December 31, 2008


7,646,000



923,000



(2,211,000
)


6,358,000     (2)
    
    Reflects amounts associated with inventory that have been
    discarded or sold. 77




---



##### 



SIGNATURES
      By:
    /s/  James
    A. Simms         Signature

Title

Date/s/  Patrizio
    VinciarelliPatrizio
    Vinciarelli

President, Chief Executive Officer and
    Chairman of the Board (Principal
    Executive Officer)

March 3, 2011/s/  James
    A. SimmsJames
    A. Simms

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

March 3, 2011/s/  Estia
    J. EichtenEstia
    J. Eichten

Director

March 3, 2011/s/  David
    T. RiddifordDavid
    T. Riddiford

Director

March 3, 2011/s/  Barry
    KelleherBarry
    Kelleher

Director

March 3, 2011/s/  Samuel
    AndersonSamuel
    Anderson

Director

March 3, 2011/s/  Claudio
    TuozzoloClaudio
    Tuozzolo

Director

March 3, 2011/s/  Jason
    L. CarlsonJason
    L. Carlson

Director

March 3, 2011/s/  Liam
    K. GriffinLiam
    K. Griffin

Director

March 3, 2011  78