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UNITED STATES SECURITIES AND
    EXCHANGE COMMISSION
 Washington, D.C.
    20549
    Form 10-K
  ANNUAL
    REPORT PURSUANT TO SECTION 13 OR 15(d)
    OF THE SECURITIES EXCHANGE ACT OF 1934
  For the
    fiscal year ended October 3, 2008
  Commission file number:
    000-50499
 MINDSPEED TECHNOLOGIES,
    INC.
 (Exact name of registrant as
    specified in its charter)
  Delaware

01-0616769(State of
    incorporation)

(I.R.S. Employer
    Identification No.)4000 MacArthur Boulevard, East Tower

92660-3095Newport Beach, California

(Zip code)(Address of principal executive
    offices)   Registrants telephone number, including area code:
 (949) 579-3000
  Securities registered pursuant to Section 12(b) of the
    Act:
  (Title of Each Class)

(Name of Each Exchange on Which Registered)Common Stock $0.01 par value per share

The NASDAQ Stock Market LLC(including associated Preferred Share Purchase Rights)   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. o
  12b-2
  Large
    accelerated
    filer o
    Accelerated
    filer þ
    Non-accelerated
    filer o
    Smaller
    reporting
    company þ   o þ
      Documents
    Incorporated by Reference
  Form 10-K.




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TABLE OF CONTENTS  FORWARD-LOOKING STATEMENTSPART IItem 1. BusinessItem 1A. Risk FactorsItem 1B. Unresolved Staff CommentsItem 2. PropertiesItem 3. Legal ProceedingsItem 4. Submission of Matters to a Vote of Security HoldersPART IIItem 5. Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of Equity SecuritiesItem 6. Selected Financial DataItem 7. Managements Discussion and Analysis of Financial Condition and Results of OperationsItem 7A. Quantitative and Qualitative Disclosures About Market RiskItem 8. Financial Statements and Supplementary DataCONSOLIDATED BALANCE SHEETSCONSOLIDATED STATEMENTS OF OPERATIONSCONSOLIDATED STATEMENTS OF CASH FLOWSCONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY AND COMPREHENSIVE LOSSNOTES TO CONSOLIDATED FINANCIAL STATEMENTSREPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMItem 9. Changes in and Disagreements with Accountants on Accounting and Financial DisclosureItem 9A. Controls and ProceduresREPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMItem 9B. Other InformationPART IIIItem 10. Directors, Executive Officers and Corporate GovernanceItem 11. Executive CompensationItem 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder MattersItem 13. Certain Relationships and Related Transactions, and Director IndependenceItem 14. Principal Accounting Fees and ServicesPART IVItem 15. Exhibits and Financial Statement SchedulesSIGNATURESVALUATION AND QUALIFYING ACCOUNTSEXHIBIT INDEXEXHIBIT 10.9EX-10.10EXHIBIT 10.20EXHIBIT 10.21EXHIBIT 10.30EXHIBIT 10.32EX-10.33EXHIBIT 10.37EX-12.1EXHIBIT 21EX-23EX-24EX-31.1EX-31.2EX-32.1EX-32.2    Table of Contents  
  FORWARD-LOOKING
    STATEMENTS
  Form 10-K Form 10-K, Form 10-K
  
    the ability of our relationships with network infrastructure
    original equipment manufacturers to facilitate early adoption of
    our products, enhance our ability to obtain design wins and
    encourage adoption of our technology in the industry;
    the growth prospects for the network infrastructure equipment
    and communications semiconductors markets, including increased
    demand for network capacity, the upgrade and expansion of legacy
    networks, and the build-out of networks in developing countries;
    our plans to make substantial investments in research and
    development and participate in the formulation of industry
    standards;
    our ability to achieve design wins and convert wins into revenue;
    the continuation of intense price and product competition, and
    the resulting declining average selling prices for our products;
    the value of our intellectual property and our strategy
    regarding sales and licensing of non-core intellectual property;
    the impact of changes in customer purchasing activities,
    inventory levels and inventory management practices;
    the importance of attracting and retaining highly skilled,
    dedicated personnel;
    the challenges of shifting any operations or labor offshore,
    including the likelihood of competition in offshore markets for
    qualified personnel;
    our ability to achieve revenue growth and sustain profitability
    or to sustain positive cash flows from operations;
    our plans to reduce operating expenses, the amount and timing of
    any such expense reductions, and its effects on cash flow;
    our anticipation that we will not pay a dividend in the
    foreseeable future;
    the dependence of our operating results on our ability to
    develop and introduce new products and enhancements to existing
    products on a timely basis;
    the continuation of a trend toward industry consolidation and
    the effect it could have on our operating results;
    our belief that we are benefiting from the increased deployment
    of internet protocol-based networks both in new network
    buildouts worldwide and the replacement of circuit-switched
    networks;
    the sufficiency of our existing sources of liquidity and
    expected sources of cash to fund our operations, research and
    development efforts, anticipated capital expenditures, working
    capital and other financing requirements for the next
    12 months;
    the circumstances under which we may need to seek additional
    financing, our ability to obtain any such financing and any
    consideration of acquisition opportunities; 2




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
    our expectation that our provision for income taxes for fiscal
    2009 will principally consist of income taxes related to our
    foreign operations;
    our expectations with respect to our recognition of income tax
    benefits in the future;
    our restructuring plans, including expected workforce
    reductions, the expected cost savings under our restructuring
    plans and the uses of those savings, the timing and amount of
    payments to complete the actions, the source of funds for such
    payments, the impact on our liquidity and the resulting
    decreases in our research and development and selling, general
    and administrative expenses, and the amounts of future charges
    to complete our restructuring plans;
    our beliefs regarding the effect of the disposition of pending
    or asserted legal matters;
    our acquisition strategy, the means of financing such a
    strategy, and the impact of any past or future acquisitions,
    including the impact on revenue, margin and profitability;
    our intentions to market, sell and support acquired Ethernet
    aggregation products and to develop and further extend the
    Ethernet MAC product line;
    our plans relating to our use of stock-based compensation, the
    effectiveness of our incentive compensation programs and the
    expected amounts of stock-based compensation expense in future
    periods;
    our belief that the financial stability of suppliers is an
    important consideration in our customers purchasing
    decisions;
    the amount and timing of future payments under contractual
    obligations;
    the effects of a downturn in the semiconductor industry and the
    general economy at large, including the impact of slower
    economic activity, concerns about inflation and deflation,
    increased energy costs, decreased consumer confidence, reduced
    corporate profits and capital spending, adverse business
    conditions and liquidity concerns in the wired and wireless
    communications markets, recent international conflicts and
    terrorist and military activity and the impact of natural
    disasters and public health emergencies on our revenue and
    results of operation;
    the impact of reductions, delays and cancellation of orders from
    key customers given our dependence on a relatively small number
    of end customers and distributors for a significant portion of
    our revenue and our lack of long term purchase commitments;
    the impact of volatility in the stock market on the market price
    of our common stock;
    the impact on our business if we fail to comply with the minimum
    listing requirements for continued quotation on the Nasdaq
    Global Market;
    the effect of changes in the amount of research coverage of our
    common stock, changes in earnings estimates or buy/sell
    recommendations by analysts and changes in investor perception
    of us and the industry in which we operate;
    the effect of shifts in our product mix and the effect of
    maturing products;
    the continued availability and costs of products from our
    suppliers;
    the effect of exchange rates on our ability to be competitive
    internationally;
    our ability to continue recognizing patent related revenues from
    the sale of non-core patents;
    market demand for our new and existing products and our ability
    to increase our revenues;
    our intentions with respect to inventories that were previously
    written down;
    the growth rate for products in the enterprise, network access
    and metro service areas and our position to increase market
    share;
    our competitive advantages; 3




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
    competition and the principal competitive factors for
    semiconductor suppliers, including time to market, product
    quality, reliability and performance, customer support, price
    and total system cost, new product innovation and compliance
    with industry standards; and
    the impact of recent accounting pronouncements and the adoption
    of new accounting standards.    
    future operating losses;
    cash requirements and terms and availability of financing;
    worldwide political and economic uncertainties and specific
    conditions in the markets we address;
    fluctuations in the price of our common stock and our operating
    results;
    loss of or diminished demand from one or more key customers or
    distributors;
    our ability to attract and retain qualified personnel;
    constraints in the supply of wafers and other product components
    from our third-party manufacturers;
    doing business internationally;
    pricing pressures and other competitive factors;
    successful development and introduction of new products;
    our ability to successfully and cost effectively establish and
    manage operations in foreign jurisdictions;
    industry consolidation;
    order and shipment uncertainty;
    our ability to obtain design wins and develop revenues from them;
    lengthy sales cycles;
    the expense of and our ability to defend our intellectual
    property against infringement claims by others;
    product defects and bugs; and
    business acquisitions and investments.  ® ® ®
 4




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PART I
 
  Item 1.
    Business      Spin-off
    from Conexant Systems, Inc.
      Industry
    Overview
   5




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Addressed
    Markets
    Enterprise
  Broadband Access
  Metropolitan and Wide Area Networks
   6




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The
    Mindspeed Approach
        
    semiconductor device architectures, including digital signal
    processors, mixed signal devices and programmable protocol
    engines, as well as analog signal processing capabilities;
    highly optimized signal processing algorithms and communications
    protocols, which we implement in semiconductor devices; and
    critical software drivers and application software to perform
    signal, packet and transmission processing tasks.    Increasing
    Demand for Communications Semiconductors
    
    We anticipate that demand for network capacity will continue to
    increase, driven by:  
    Internet user growth;
    higher network utilization rates; and
    the popularity of VoIP and other bandwidth-intensive
    applications, such as wireless data transfer and
    video/multimedia applications.  
    We believe that incumbent telecommunications carriers,
    integrated communication service providers and cable multiple
    service operators worldwide will continue to upgrade and expand
    legacy portions of their networks to accommodate new service
    offerings and to reduce operating costs.
    In developing countries, we expect that service providers will
    continue the build-out of telecommunication networks, many of
    which were previously government owned.   7




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Strategy
    Focus
    on Increasing Share in High-Growth, High-Margin
    Applications
  and/or
  Expand
    Strategic Relationships with Industry-Leading Global Network
    Infrastructure OEMs and Maximize Design Win Share
      Capitalize
    on the Breadth of Our Product Portfolio
     8




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Provide
    Outstanding Technical Support and Customer Service
    Products
    High-Performance
    Analog Products
    
    converting incoming optical signals from fiber optic cables to
    electrical signals for processing and transport over a wireline
    medium and vice-versa;
    conditioning the signal to remove unwanted noise or errors;
    combining lower speed signals from multiple parallel paths into
    higher speed serial paths, and vice-versa, for bandwidth
    economy; and
    amplifying and equalizing weaker signals as they pass through a
    particular systems equipment, media or network.   9




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Multiservice
    Access Processor Products
    system-on-a-chip
  PBX-on-a-chip office-in-a-box
    WAN
    Communications Products
  ATM/multi-protocol
     10




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Customers
        Sales,
    Marketing and Technical Support
     11




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Operations
    and Manufacturing
        Competition
        
    time-to-market;
    product quality, reliability and performance;
    customer support;
    price and total system cost;
    new product innovation; and
    compliance with industry standards.    
    stronger financial position and liquidity;
    longer presence in key markets;
    greater name recognition;
    more secure supply chain;
    access to larger customer bases; and
    significantly greater sales and marketing, manufacturing,
    distribution, technical and other resources. 12




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Backlog
    Research
    and Development
      Intellectual
    Property
    Employees
   13




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Cyclicality
      Available
    Information
  http://www.mindspeed.com. Form 10-K, Form 10-Q, Form 8-K Form 10-K.
 
  Item 1A.
    Risk
    Factors    We
    have incurred operating losses in the past and we may incur
    losses in future periods.
    and/or
 14




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We
    have substantial cash requirements to fund our operations,
    research and development efforts and capital expenditures. Our
    capital resources are limited and capital needed for our
    business may not be available when we need it.
    Our
    operating results may be adversely impacted by worldwide
    political and economic uncertainties and specific conditions in
    the markets we address, including the cyclical nature of and
    volatility in the semiconductor industry. As a result, the
    market price of our common stock may decline.
     15




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The
    price of our common stock may fluctuate
    significantly.
    
    our operating and financial performance and prospects, including
    our ability to sustain the profitability we achieved in the
    fourth quarter of fiscal 2008;
    the depth and liquidity of the market for our common stock which
    can impact, among other things, the volatility of our stock
    price and the availability of market participants to borrow
    shares;
    investor perception of us and the industry in which we operate;
    the level of research coverage of our common stock;
    changes in earnings estimates or buy/sell recommendations by
    analysts;
    general financial and other market conditions; and
    domestic and international economic conditions.      Our
    operating results are subject to substantial quarterly and
    annual fluctuations.
    
    changes in end-user demand for the products manufactured and
    sold by our customers;
    the effects of competitive pricing pressures, including
    decreases in average selling prices of our products;
    the gain or loss of significant customers;
    market acceptance of our products and our customers
    products;
    our ability to develop, introduce, market and support new
    products and technologies on a timely basis;
    intellectual property disputes;
    the timing of receipt, reduction or cancellation of significant
    orders by customers;
    fluctuations in the levels of component inventories held by our
    customers and changes in our customers inventory
    management practices;
    shifts in our product mix and the effect of maturing products;
    availability and cost of products from our suppliers; 16




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
    the timing and extent of product development costs;
    new product and technology introductions by us or our
    competitors;
    fluctuations in manufacturing yields; and
    significant warranty claims, including those not covered by our
    suppliers.    The
    loss of one or more key customers or distributors, or the
    diminished demand for our products from a key customer could
    significantly reduce our revenues and profits.
    Our
    operating results are subject to substantial quarterly and
    annual fluctuations.
    
    changes in end-user demand for the products manufactured and
    sold by our customers;
    the effects of competitive pricing pressures, including
    decreases in average selling prices of our products;
    the gain or loss of significant customers;
    market acceptance of our products and our customers
    products;
    our ability to develop, introduce, market and support new
    products and technologies on a timely basis;
    intellectual property disputes;
    the timing of receipt, reduction or cancellation of significant
    orders by customers;
    fluctuations in the levels of component inventories held by our
    customers and changes in our customers inventory
    management practices;
    shifts in our product mix and the effect of maturing products;
    availability and cost of products from our suppliers;
    the timing and extent of product development costs;
    new product and technology introductions by us or our
    competitors;
    fluctuations in manufacturing yields; and
    significant warranty claims, including those not covered by our
    suppliers.    We may
    not be able to attract and retain qualified personnel necessary
    for the design, development, sale and support of our products.
    Our success could be negatively affected if key personnel
    leave.
   17




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We are
    entirely dependent upon third parties for the manufacture of our
    products and are vulnerable to their capacity constraints during
    times of increasing demand for semiconductor
    products.
      
    the lack of assured supply, potential shortages and higher
    prices;
    increased lead times;
    limited control over delivery schedules, manufacturing yields,
    production costs and product quality; and
    the unavailability of, or delays in obtaining, products or
    access to key process technologies.       18




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start-up
  We are
    subject to the risks of doing business
    internationally.
    
    currency exchange rate fluctuations;
    local economic and political conditions;
    disruptions of capital and trading markets;
    accounts receivable collection and longer payment cycles;
    difficulties in staffing and managing foreign operations;
    potential hostilities and changes in diplomatic and trade
    relationships;
    restrictive governmental actions (such as restrictions on the
    transfer or repatriation of funds and trade protection measures,
    including export duties and quotas and customs duties and
    tariffs);
    changes in legal or regulatory requirements;
    difficulty in obtaining distribution and support;
    the laws and policies of the United States and other countries
    affecting trade, foreign investment and loans and import or
    export licensing requirements;
    environmental laws and regulations governing, among other
    things, air emissions, wastewater discharges, the use, handling
    and disposal of hazardous substances and wastes, soil and
    groundwater contamination and employee health and safety; 19




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
    tax laws;
    limitations on our ability under local laws to protect our
    intellectual property;
    cultural differences in the conduct of business; and
    natural disasters, acts of terrorism and war.      We are
    subject to intense competition.
      
    stronger financial position and liquidity;
    longer presence in key markets;
    greater name recognition;
    more secure supply chain;
    access to larger customer bases; and
    significantly greater sales and marketing, manufacturing,
    distribution, technical and other resources.      Our
    success depends on our ability to develop competitive new
    products in a timely manner and keep abreast of the rapid
    technological changes in our market.
   20




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
    our ability to anticipate customer and market requirements and
    changes in technology and industry standards;
    our ability to accurately define new products;
    our ability to complete development of new products, and bring
    our products to market, on a timely basis;
    our ability to differentiate our products from offerings of our
    competitors; and
    overall market acceptance of our products.      The
    increasing significance of our foreign operations exposes us to
    risks that are beyond our control and could affect our ability
    to operate successfully.
  set-up,
     21




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
    political uncertainties;
    wage inflation;
    exposure to foreign currency fluctuations;
    tariffs and other trade barriers; and
    foreign regulatory restrictions and unexpected changes in
    regulatory environments.    Industry
    consolidation may harm our operating results.
    Uncertainties
    involving the ordering and shipment of our products could
    adversely affect our business.
      If
    network infrastructure OEMs do not design our products into
    their equipment, we will be unable to sell those products.
    Moreover, a design win from a customer does not guarantee future
    sales to that customer.
   22




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Because
    of the lengthy sales cycles of many of our products, we may
    incur significant expenses before we generate any revenues
    related to those products.
    We may
    be subject to claims, or we may be required to defend and
    indemnify customers against claims, of infringement of
    third-party intellectual property rights or demands that we, or
    our customers, license third-party technology, which could
    result in significant expense.
      
    pay substantial damages for past, present and future use of the
    infringing technology;
    cease the manufacture, use or sale of infringing products;
    discontinue the use of infringing technology;
    expend significant resources to develop non-infringing
    technology;
    pay substantial damages to our customers or end users to
    discontinue use or replace infringing technology with
    non-infringing technology;
    license technology from the third party claiming infringement,
    which license may not be available on commercially reasonable
    terms, or at all; or
    relinquish intellectual property rights associated with one or
    more of our patent claims, if such claims are held invalid or
    otherwise unenforceable.    If we
    are not successful in protecting our intellectual property
    rights, it may harm our ability to compete.
   23




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
    the steps we take to prevent misappropriation or infringement of
    our intellectual property may not be successful;
    any existing or future patents may be challenged, invalidated or
    circumvented; or
    the measures described above may not provide meaningful
    protection.    The
    complexity of our products may lead to errors, defects and bugs,
    which could subject us to significant costs or damages and
    adversely affect market acceptance of our
    products.
      We may
    make business acquisitions or investments, which involve
    significant risk.
    
    issuances of equity securities dilutive to our existing
    stockholders;
    substantial cash payments;
    the incurrence of substantial debt and assumption of unknown
    liabilities;
    large one-time write-offs;
    amortization expenses related to intangible assets;
    the diversion of managements attention from other business
    concerns; and
    the potential loss of key employees, customers and suppliers of
    the acquired business. 24




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Our
    results of operations could vary as a result of the methods,
    estimates and judgments we use in applying our accounting
    policies.
  Form 10-K).
  Substantial
    sales of the shares of our common stock issuable upon conversion
    of our convertible senior notes or exercise of the warrant
    issued to Conexant could adversely affect our stock price or our
    ability to raise additional financing in the public capital
    markets.
    Antidilution
    and other provisions in the warrant issued to Conexant may also
    adversely affect our stock price or our ability to raise
    additional financing.
     25




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Some
    of our directors and executive officers may have potential
    conflicts of interest because of their positions with Conexant
    or their ownership of Conexant common stock.
        Provisions
    in our organizational documents and rights plan and Delaware law
    will make it more difficult for someone to acquire control of
    us.
    
    the division of our board of directors into three classes to be
    elected on a staggered basis, one class each year;
    the ability of our board of directors to issue shares of our
    preferred stock in one or more series without further
    authorization of our stockholders;
    a prohibition on stockholder action by written consent;
    a requirement that stockholders provide advance notice of any
    stockholder nominations of directors or any proposal of new
    business to be considered at any meeting of stockholders;
    a requirement that a supermajority vote be obtained to remove a
    director for cause or to amend or repeal certain provisions of
    our restated certificate of incorporation or amended and
    restated bylaws;
    elimination of the right of stockholders to call a special
    meeting of stockholders; and
    a fair price provision.     26




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Item 1B.
    Unresolved
    Staff Comments   
  Item 2.
    Properties     
  Item 3.
    Legal
    Proceedings   
  Item 4.
    Submission
    of Matters to a Vote of Security Holders   
  PART II
 
  Item 5.
    Market
    for Registrants Common Equity, Related Stockholder Matters
    and Issuer Purchases of Equity Securities  Market
    Information
    High


LowFiscal 2007Quarter ended December 29, 2006

$
10.25


$
8.10Quarter ended March 30, 2007

$
12.65


$
8.75Quarter ended June 29, 2007

$
11.90


$
9.75Quarter ended September 28, 2007

$
11.25


$
7.95Fiscal 2008Quarter ended December 28, 2007

$
9.20


$
5.65Quarter ended March 28, 2008

$
6.10


$
2.40Quarter ended June 27, 2008

$
4.75


$
2.35Quarter ended October 3, 2008

$
4.40


$
2.08   Recent
    Share Prices and Holders
   27




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Dividend
    Policy
   
  Item 6.
    Selected
    Financial Data  Form 10-K.
  Oct. 3,


Sept. 28,


Sept. 29,


Sept. 30,


Oct. 1,2008


2007


2006


2005


2004(In thousands, except per share amounts)Statement of Operations DataNet revenues:Products

$
144,349


$
125,805


$
135,919


$
111,777


$
119,435Intellectual Property


16,350



2,000











Total net revenues


160,699



127,805



135,919



111,777



119,435Cost of goods sold


47,625



42,334



43,592



33,704



35,149Gross margin


113,074



85,471



92,327



78,073



84,286Operating expenses:Research and development


56,217



57,447



64,104



71,355



79,582Selling, general and administrative


46,984



43,385



46,970



41,871



46,845Amortization of intangible assets














20,481



50,318Special charges(1)


211



4,724



2,550



5,999



387Total operating expenses


103,412



105,556



113,624



139,706



177,132Operating income/(loss)


9,662



(20,085
)


(21,297
)


(61,633
)


(92,846
)Interest expense


(2,360
)


(2,240
)


(2,231
)


(1,788
)


Other income, net


544



522



863



1,162



320Income/(loss) before income taxes


7,846



(21,803
)


(22,665
)


(62,259
)


(92,526
)Provision for income taxes


611



111



1,849



370



721Net income/(loss)

$
7,235


$
(21,914
)

$
(24,514
)

$
(62,629
)

$
(93,247
)Income/(loss) per share:Income/(loss) per share, basic(2)

$
0.31


$
(0.99
)

$
(1.16
)

$
(3.06
)

$
(4.75
)Income/(loss) per share, diluted(2)

$
0.31


$
(0.99
)

$
(1.16
)

$
(3.06
)

$
(4.75
)Shares used in computation of net income/(loss) per share, in
    thousands:Basic(2)


23,046



22,156



21,107



20,438



19,628Diluted(2)


23,202



22,156



21,107



20,438



19,628   28




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##### Table of Contents



Oct. 3,


Sept. 28,


Sept. 29,


Sept. 30,


Oct. 1,2008


2007


2006


2005


2004Balance Sheet DataCash and cash equivalents

$
43,033


$
25,796


$
29,976


$
15,335


$
43,638Marketable securities










11,260



40,094



Working capital


50,277



35,814



50,880



59,332



49,082Total assets


100,604



82,079



96,542



105,504



126,300Long-term debt


45,648



45,037



44,618



44,219



Stockholders equity


27,958



14,246



23,476



33,826



90,927     (1)
    
    Special charges consist of asset impairments, restructuring
    charges, separation costs and gains and losses on the sale of
    certain assets.(2)
    
    Adjusted to reflect our one-for-five reverse stock split which
    was effected on June 30, 2008. 
  Item 7.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations  Overview
    Trends
    and Factors Affecting Our Business
       29




---



##### Table of Contents



and/or
         30




---



##### Table of Contents



Stock-Based
    Compensation Programs
            Critical
    Accounting Policies and Estimates
   31




---



##### Table of Contents



Inventories
  Stock-Based Compensation
  Revenue Recognition No. 97-2,
       32




---



##### Table of Contents



Deferred Income Taxes and/or
  Impairment of Long-Lived Assets
  Recent
    Accounting Pronouncements
  157-1, (FSP 157-1) FSP 157-2, (FSP 157-2). FSP 157-1 FSP 157-2
 33




---



##### Table of Contents



No. 07-3, No. 07-3 EITF 07-3
      14-1,
  Results
    of Operations
  Net
    Revenues
  Fiscal
    2008 Compared to Fiscal 2007; Fiscal 2007 Compared to Fiscal
    2006
    2008


Change


2007


Change


2006(Dollars in millions)Multiservice access DSP products

$
55.8



53
%

$
36.3



(3
)%

$
37.4High-performance analog products


41.9



12
%


37.5



(12
)%


42.7WAN communications products


63.0



17
%


54.0



(3
)%


55.8Net revenues

$
160.7



26
%

$
127.8



(6
)%

$
135.9  34




---



##### Table of Contents



IP-based
    Gross
    Margin
  2008


Change


2007


Change


2006(Dollars in millions)Gross margin

$
113.1



32
%

$
85.5



(7
)%

$
92.3Percent of net revenues


70
%






67
%






68
%      35




---



##### Table of Contents



Research
    and Development
  2008


Change


2007


Change


2006(Dollars in millions)Research and development expenses

$
56.2



(2
)%

$
57.4



(10
)%

$
64.1Percent of net revenues


35
%






45
%






47
%  36




---



##### Table of Contents



Selling,
    General and Administrative
  2008


Change


2007


Change


2006(Dollars in millions)Selling, general and administrative expenses

$
47.0



8
%

$
43.4



(8
)%

$
47.0Percent of net revenues


29
%






34
%






35
%       Special
    Charges
    2008


2007


2006(In millions)Restructuring charges

$
0.2


$
4.7


$
2.6   Mindspeed Restructuring Plans
 37




---



##### Table of Contents



Workforce


FacilityReductions


and Other


TotalRestructuring balance, September 29, 2006

$
953


$
714


$
1,667Charged to costs and expenses


2,191



2,533



4,724Non cash charges


(61
)






(61
)Cash payments


(2,851
)


(1,995
)


(4,846
)Restructuring balance, September 28, 2007


232



1,252



1,484Charged to costs and expenses


(40
)


251



211Non cash charges






(71
)


(71
)Cash payments


(186
)


(1,430
)


(1,616
)Restructuring balance, October 3, 2008

$
6


$
2


$
8     Interest
    Expense
  2008


2007


2006(In millions)Interest expense

$
(2.4
)

$
(2.2
)

$
(2.2
)     Other
    Income, Net
  2008


2007


2006(In millions)Other income, net

$
0.5


$
0.5


$
0.9     Provision
    for Income Taxes
  2008


2007


2006(In millions)Provision for income taxes

$
0.6


$
0.1


$
1.8    38




---



##### Table of Contents



Liquidity
    and Capital Resources
          Revolving
    Credit Facility and Convertible Senior Notes
  Revolving
    Credit Facility
       39




---



##### Table of Contents



3.75% Convertible
    Senior Notes due 2009
             40




---



##### Table of Contents



6.50% Convertible
    Senior Notes due 2013
            Conexant
    Warrant
     41




---



##### Table of Contents



Liquidity
    and/or
   42




---



##### Table of Contents



Contractual
    Obligations
    Payments Due by PeriodContractual Obligations

Total


<1 Year


1-3 Years


3-5 Years


>5 Years(In millions)Long-term debt

$
46.0


$



$
31.0


$
15.0


$
Interest expense on long-term debt


6.6



2.1



2.5



2.0



Operating leases


16.3



7.7



6.7



1.5



0.4Purchase obligations


7.6



3.1



4.5







Employee severance


0.9



0.8



0.1Total

$
77.4


$
13.7


$
44.8


$
18.5


$
0.4             Off-Balance
    Sheet Arrangements
   43




---



##### Table of Contents



Item 7A.
    Quantitative
    and Qualitative Disclosures About Market Risk    Interest
    Rate Risk
      Foreign
    Exchange Risk
   44




---



##### Table of Contents



Item 8.
    Financial
    Statements and Supplementary Data  MINDSPEED
    TECHNOLOGIES, INC.
  CONSOLIDATED BALANCE SHEETS
  October 3,


September 28,2008


2007(In thousands, except share amounts)ASSETSCurrent AssetsCash and cash equivalents

$
43,033


$
25,796Receivables, net of allowances for doubtful accounts of $342
    (2008) and $353 (2007)


14,398



13,584Inventories


16,187



15,023Other current assets


3,138



3,763Total current assets


76,756



58,166Property, plant and equipment, net


12,600



13,147Intangible assets, net


2,480



3,200Goodwill


2,429



2,324License agreements, net


3,347



1,798Other assets


2,992



3,444Total assets

$
100,604


$
82,079LIABILITIES AND STOCKHOLDERS EQUITYCurrent LiabilitiesAccounts payable

$
11,265


$
7,117Deferred income on sales to distributors


4,869



4,226Accrued compensation and benefits


6,778



5,286Accrued income tax


412



752Restructuring


8



1,478Other current liabilities


3,147



3,493Total current liabilities


26,479



22,352Convertible senior notes


45,648



45,037Other liabilities


519



444Total liabilities


72,646



67,833Commitments and contingencies (Notes 6 and 7)






Stockholders EquityPreferred stock, $0.01 par value: 25,000 shares
    authorized; no shares issued or outstanding






Common stock, $0.01 par value, 100,000 shares
    authorized; 23,852 (2008) and 23,152 (2007) issued
    shares(1)


239



232Additional paid-in capital(1)


269,487



263,427Accumulated deficit


(227,043
)


(234,480
)Accumulated other comprehensive loss


(14,725
)


(14,933
)Total stockholders equity


27,958



14,246Total liabilities and stockholders equity

$
100,604


$
82,079     (1)
    
    Common stock and additional paid in capital amounts have been
    retroactively adjusted to reflect the effect of the
    Companys June 30, 2008 one-for-five reverse stock
    split. See Note 1.   45




---



##### Table of Contents



MINDSPEED
    TECHNOLOGIES, INC
  CONSOLIDATED STATEMENTS OF OPERATIONS
  October 3,


Sept. 28,


Sept. 29,2008


2007


2006(In thousands, except per share amounts)Net revenues:Products

$
144,349


$
125,805


$
135,919Intellectual Property


16,350



2,000



Total net revenues


160,699



127,805



135,919Cost of goods sold


47,625



42,334



43,592Gross margin


113,074



85,471



92,327Operating expenses:Research and development


56,217



57,447



64,104Selling, general and administrative


46,984



43,385



46,970Special charges


211



4,724



2,550Total operating expenses


103,412



105,556



113,624Operating gain/(loss)


9,662



(20,085
)


(21,297
)Interest expense


(2,360
)


(2,240
)


(2,231
)Other income, net


544



522



863Income/(loss) before income taxes


7,846



(21,803
)


(22,665
)Provision for income taxes


611



111



1,849Net income/(loss)

$
7,235


$
(21,914
)

$
(24,514
)Income/(loss) per share:Income/(loss) per share, basic(1)

$
0.31


$
(0.99
)

$
(1.16
)Income/(loss) per share, diluted(1)

$
0.31


$
(0.99
)

$
(1.16
)Shares used in computation of net income/(loss) per share, in
    thousands:Basic(1)


23,046



22,156



21,107Diluted(1)


23,202



22,156



21,107     (1)
    
    Share and per share amounts have been adjusted to reflect the
    Companys one-for-five stock split which occurred on
    June 30, 2008. See Note 1.   46




---



##### Table of Contents



MINDSPEED
    TECHNOLOGIES, INC.
  CONSOLIDATED STATEMENTS OF CASH FLOWS
  October 3,


Sept. 28,


Sept. 29,2008


2007


2006(In thousands)Cash Flows From Operating ActivitiesNet income/(loss)

$
7,235


$
(21,914
)

$
(24,514
)Adjustments required to reconcile net income/(loss) to net cash
    provided by/(used in) operating activities:Depreciation and amortization


7,173



5,681



6,977Provision for bad debts


(12
)


(131
)


(15
)Inventory provisions


(900
)


1,790



(586
)Stock compensation


5,506



7,301



7,516Other noncash items, net


79



176



(51
)Changes in assets and liabilities, net of effects of
    acquisitions:Receivables


(741
)


1,361



1,585Inventories


(264
)


2,554



(7,692
)Accounts payable


5,380



(5,096
)


863Deferred income on sales to distributors


646



(177
)


986Accrued expenses and other current liabilities


1,076



(1,398
)


274Other


1,517



(189
)


(1,223
)Net cash provided by/(used in) operating activities


26,695



(10,042
)


(15,880
)Cash Flows From Investing ActivitiesCapital expenditures


(7,514
)


(4,074
)


(4,488
)Acquisition of assets, net of cash acquired


(1,172
)


(4,875
)


Purchases of available-for-sale marketable securities






(15,682
)


(37,597
)Sales of available-for-sale marketable securities






26,100



65,585Maturities of held-to-maturity marketable securities






863



1,725Net cash provided by/(used in) investing activities


(8,686
)


2,332



25,225Cash Flows From Financing ActivitiesExercise of stock options and warrants


111



3,412



5,296Deferred financing costs


(805
)






Net cash provided by/(used in) financing activities


(694
)


3,412



5,296Effect of foreign currency exchange rates on cash


(78
)


118



Net increase/(decrease) in cash and cash equivalents


17,237



(4,180
)


14,641Cash and cash equivalents at beginning of period


25,796



29,976



15,335Cash and cash equivalents at end of period

$
43,033


$
25,796


$
29,976    47




---



##### Table of Contents



MINDSPEED
    TECHNOLOGIES, INC.
  CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY AND
 COMPREHENSIVE
    LOSS
  AccumulatedAdditional





Other


TotalCommon Stock(1)


Paid-in


Accumulated


Comprehensive


StockholdersShares


Amount


Capital(1)


Deficit


Loss


Equity(In thousands)Balance at September 30, 2005


20,770


$
208


$
237,834


$
(188,052
)

$
(16,164
)

$
33,826Net loss














(24,514
)






(24,514
)Currency translation adjustments


















497



497Comprehensive loss






















(24,017
)Common stock repurchased and retired


(23
)






(259
)










(259
)Issuance of common stock


1,370



14



6,396











6,410Compensation expense related to employee stock plans


23







7,516











7,516Balance at September 29, 2006


22,140



222



251,487



(212,566
)


(15,667
)


23,476Net loss














(21,914
)






(21,914
)Currency translation adjustments


















734



734Comprehensive loss






















(21,180
)Issuance of common stock


1,018



10



4,702











4,712Common stock repurchased and retired


(6
)






(63
)










(63
)Compensation expense related to employee stock plans










7,301











7,301Balance at September 28, 2007


23,152



232



263,427



(234,480
)


(14,933
)


14,246Cumulative effect of adopting FIN 48














202







202Balance at September 28, 2007


23,152



232



263,427



(234,278
)


(14,933
)


14,448Net income














7,235







7,235Currency translation adjustments


















208



208Comprehensive income






















7,443Issuance of common stock


700



7



558











565Common stock repurchased and retired










(4
)










(4
)Compensation expense related to employee stock plans










5,506











5,506Balance at October 3, 2008


23,852


$
239


$
269,487


$
(227,043
)

$
(14,725
)

$
27,958     (1)
    
    Common stock and additional paid in capital amounts have been
    retroactively adjusted to reflect the effect of the
    Companys June 30, 2008 one-for-five reverse stock
    split. See Note 1.   48




---



##### Table of Contents



MINDSPEED
    TECHNOLOGIES, INC.
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  1.
    Description
    of Business      Basis
    of Presentation
    Reverse
    Stock Split
    Liquidity
  and/or
 49




---



##### Table of Contents



MINDSPEED
    TECHNOLOGIES, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    2.
    Summary
    of Significant Accounting Policies  Fiscal Periods
  Use of Estimates
  Revenue Recognition No. 97-2,
     50




---



##### Table of Contents



MINDSPEED
    TECHNOLOGIES, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
        Cash and Cash Equivalents
  Inventories
  Property, Plant and Equipment
 51




---



##### Table of Contents



MINDSPEED
    TECHNOLOGIES, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Goodwill
  Intangible Assets, net
  License Agreements
  Impairment of Long-Lived Assets
  Foreign Currency Translation and
    Remeasurement
  Research and Development 
  Product Warranties
  Stock-Based Compensation
 52




---



##### Table of Contents



MINDSPEED
    TECHNOLOGIES, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Other Income, net
  Income Taxes
    Per Share Information
      Reclassifications
  Concentrations
 53




---



##### Table of Contents



MINDSPEED
    TECHNOLOGIES, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      2008


2007


2006Customer A


16
%


15
%


11
%Customer B


11
%


16
%


17
%Customer C


3
%


7
%


11
%     2008


2007Customer B


9
%


24
%Customer C


1
%


16
%Customer D


20
%


0
%Customer E


11
%


4
%Customer F


0
%


13
%   Supplemental Cash Flow Information
  Comprehensive Income/(Loss)
  Recent Accounting Standards 157-1, (FSP 157-1) FSP 157-2, (FSP 157-2). FSP 157-1 FSP 157-2
 54




---



##### Table of Contents



MINDSPEED
    TECHNOLOGIES, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    No. 07-3, No. 07-3 EITF 07-3
      14-1,
  3.
    Supplemental
    Financial Statement Data  Inventories
    2008


2007Work-in-process

$
8,620


$
7,497Finished goods


7,567



7,526$
16,187


$
15,023  55




---



##### Table of Contents



MINDSPEED
    TECHNOLOGIES, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
          Deferred
    Income on Shipments to Distributors
    October 3,


September 28,2008


2007Deferred revenue on shipments to distributors

$
5,387


$
4,953Deferred cost of inventory on shipments to distributors


(576
)


(808
)Reserves


58



81Deferred income on sales to distributors

$
4,869


$
4,226   Property,
    Plant and Equipment
    2008


2007Machinery and equipment

$
73,229


$
74,072Leasehold improvements


3,702



3,54176,931



77,613Accumulated depreciation and amortization


(64,331
)


(64,466
)$
12,600


$
13,147  56




---



##### Table of Contents



MINDSPEED
    TECHNOLOGIES, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Intangible
    Assets and Goodwill
    4.
    Income
    Taxes    2008


2007


2006Current:United States

$



$



$
Foreign


99



566



2,137State and local


10



10



10Total current


109



576



2,147Deferred:United States










Foreign


502



(465
)


(298
)State and local










Total deferred


502



(465
)


(298
)$
611


$
111


$
1,849     2008


2007


2006U.S. federal statutory tax at 35%

$
2,733


$
(7,642
)

$
(7,933
)State taxes, net of federal effect


739



(1,481
)


(3,612
)Foreign income taxes in excess of U.S.


420



(293
)


(524
)Research and development credits






(2,592
)


(3,443
)Valuation allowance


(33,837
)


13,992



17,187Reversal of research and development credits, federal and state


29,041







Other


1,515



(1,873
)


174Provision for income taxes

$
611


$
111


$
1,849     2008


2007


2006United States

$
7,328


$
(22,926
)

$
(29,418
)Foreign


518



1,123



6,753$
7,846


$
(21,803
)

$
(22,665
)  57




---



##### Table of Contents



MINDSPEED
    TECHNOLOGIES, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    2008


2007Deferred tax assets:Inventories

$
12,118


$
14,083Deferred revenue


1,999



1,831Accrued compensation and benefits


1,292



1,256Product returns and allowances


745



801Net operating losses


232,890



233,909Research and development and investment credits






36,021Foreign deferred taxes


1,113



1,615Property, plant and equipment






673Other


5,244



6,547Valuation allowance


(248,299
)


(282,136
)Total deferred tax assets


7,102



14,600Deferred tax liabilities:Intangible assets






Property, plant and equipment


379



Deferred state taxes


5,610



12,985Other






Total deferred tax liabilities


5,989



12,985Net deferred tax assets

$
1,113


$
1,615        58




---



##### Table of Contents



MINDSPEED
    TECHNOLOGIES, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
                  2008Balance as of September 29, 2007

$
28,917Increases in tax positions for prior years


7,589Increases in tax positions for current year


Balance at October 3, 2008

$
36,506    59




---



##### Table of Contents



MINDSPEED
    TECHNOLOGIES, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    5.
    Revolving
    Credit Facility and Convertible Senior Notes  Revolving
    Credit Facility
        3.75% Convertible
    Senior Notes due 2009
       60




---



##### Table of Contents



MINDSPEED
    TECHNOLOGIES, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Form S-3
      6.50% Convertible
    Senior Notes due 2013
           61




---



##### Table of Contents



MINDSPEED
    TECHNOLOGIES, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
        6.
    Commitments        Fiscal Year2009

$
7,5772010


5,7702011


9442012


7262013


753Thereafter


373Total minimum future lease payments

$
16,143  62




---



##### Table of Contents



MINDSPEED
    TECHNOLOGIES, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  7.
    Contingencies      8.
    Guarantees    9.
    Capital
    Stock     63




---



##### Table of Contents



MINDSPEED
    TECHNOLOGIES, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Warrants
      10.
    Stock-Based
    Compensation  FAS 123R-3
        2008


2007


2006Weighted-average fair value of options granted

$
1.84


$
5.80


$
7.65Weighted-average assumptions:Expected volatility


64
%


74
%


77
%Dividend yield










Expected option life


3.2 years



3.3 years



3.4 yearsRisk-free interest rate


2.8
%


4.7
%


4.7
%  64




---



##### Table of Contents



MINDSPEED
    TECHNOLOGIES, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      2008


2007Cost of goods sold

$
173


$
385Research and development


2,267



2,587Selling, general and administrative


3,066



4,260Special charges






69Total stock-based compensation expense

$
5,506


$
7,301   Stock
    Compensation Plans
       65




---



##### Table of Contents



MINDSPEED
    TECHNOLOGIES, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Stock
    Option Awards
    WeightedWeighted


Average


AggregateNumber of


Average


Remaining


IntrinsicShares


Exercise Price


Contractual Term


ValueOutstanding at September 30, 2005


5,216


$
11.50Exercisable at September 30, 2005


3,821


$
11.05Granted


205



13.55Exercised


(602
)


8.80






$
4.4 millionForfeited or expired


(380
)


15.90Outstanding at September 29, 2006


4,439


$
11.60



4.3 years


$
1.9 millionExercisable at September 29, 2006


3,734


$
11.30



3.9 years


$
1.4 millionGranted


491



10.85Exercised


(422
)


8.05






$
1.2 millionForfeited or expired


(526
)


13.25Outstanding at September 28, 2007


3,982


$
11.65



4.0 years


$
1.4 millionExercisable at September 28, 2007


3,308


$
11.55



3.3 years


$
1.3 millionGranted


495



4.20Exercised


(18
)


5.97






$
33,000Forfeited or expired


(931
)


12.15Outstanding at October 3, 2008


3,528


$
10.50



3.7 years


$
Exercisable at October 3, 2008


2,704


$
11.59



2.6 years


$
Vested and expected to vest


3,433


$
10.65



3.6 years


$
    66




---



##### Table of Contents



MINDSPEED
    TECHNOLOGIES, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Outstanding


ExercisableAverage


Weighted-





Weighted-Remaining


Average





AverageNumber of


Contractual


Exercise


Number of


ExerciseRange of Exercise Prices

Shares


Life (Years)


Price


Shares


Price$ 2.08 - $ 4.85


640



2.0


$
4.01



172


$
4.635.02 -  9.90


971



0.9



8.60



912



8.6410.00 - 19.90


1,803



2.6



12.69



1,506



12.9020.05 - 29.96


76



0.2



22.37



76



22.3730.27 - 49.45


38



2.8



40.10



38



40.102.08 - 49.45


3,528



1.8



10.50



2,704



11.59   Restricted
    Stock Awards
  and/or
      Weighted-AverageNumber of


Grant DateShares


Fair ValueNonvested shares at September 29, 2006


735


$
12.70Granted


556



9.55Vested


(531
)


11.55Forfeited


(122
)


12.20Nonvested shares at September 28, 2007


638


$
10.85Granted


772



4.49Vested


(594
)


7.64Forfeited


(134
)


8.87Nonvested shares at October 3, 2008


682


$
6.69  67




---



##### Table of Contents



MINDSPEED
    TECHNOLOGIES, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    11.
    Employee
    Benefit Plans    12.
    Special
    Charges    2008

2007

2006Restructuring charges

$
211


$
4,724


$
2,550   Mindspeed Restructuring Plans
    Workforce


FacilityReductions


and Other


TotalRestructuring balance, September 29, 2006

$
953


$
714


$
1,667Charged to costs and expenses


2,191



2,533



4,724Non cash charges


(61
)






(61
)Cash payments


(2,851
)


(1,995
)


(4,846
)Restructuring balance, September 28, 2007


232



1,252



1,484Charged to costs and expenses


(40
)


251



211Non cash charges






(71
)


(71
)Cash payments


(186
)


(1,430
)


(1,616
)Restructuring balance, October 3, 2008

$
6


$
2


$
8   13.
    Related
    Party Transactions     68




---



##### Table of Contents



MINDSPEED
    TECHNOLOGIES, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  14.
    Segment
    and Other Information    2008


2007


2006Multiservice access DSP products

$
55,752


$
36,340


$
37,404High-performance analog products


41,900



37,482



42,742WAN communications products


63,047



53,983



55,773$
160,699


$
127,805


$
135,919     2008


2007


2006United States

$
51,775


$
39,036


$
41,151Other Americas


6,317



7,197



4,510Total Americas


58,092



46,233



45,661Malaysia


7,097



8,841



16,999Taiwan


5,803



6,937



7,088China


49,574



35,343



35,501Japan


8,040



7,411



7,376Other Asia-Pacific


11,999



8,576



6,754Total Asia-Pacific


82,513



67,108



73,718Europe, Middle East and Africa


20,094



14,464



16,540$
160,699


$
127,805


$
135,919       2008


2007United States

$
18,912


$
19,074Europe, Middle East and Africa


1,237



1,262Asia-Pacific


2,175



2,233$
22,324


$
22,569   15.
    Asset
    Acquisition   69




---



##### Table of Contents



MINDSPEED
    TECHNOLOGIES, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Total cash consideration

$
5,401Acquisition related transaction costs


667Less cash acquired


20Total preliminary purchase price

$
6,048       Inventories, net

$
359Accounts receivable


5Certain identified fixed assets


160Intangible assets


3,200Goodwill


2,324Total assets acquired

$
6,048     September 28,

Purchase Price

October 3,2007

Adjustments

2008Goodwill

$
2,324


$
105


$
2,429     EstimatedAverageEstimated


RemainingFair Value


Useful LifeBacklog

$
100



3 monthsDeveloped technology


3,100



5 yearsTotal intangible assets

$
3,200   16.
    Subsequent
    Events     70




---



##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
  
        Accounting for Uncertainty in Income Taxes  an
    interpretation of FASB Statement No. 109,
  Internal Control  Integrated Framework
  Deloitte &
    Touche LLP
    71




---



##### Table of Contents



Item 9.
    Changes
    in and Disagreements with Accountants on Accounting and
    Financial Disclosure   
  Item 9A.
    Controls
    and Procedures  Disclosure
    Controls and Procedures
    Managements
    Report on Internal Control over Financial Reporting
      Internal Control  Integrated Framework
 72




---



##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
  
  Internal Control 
    Integrated Framework
        Internal Control  Integrated Framework
  Accounting for Uncertainty in
    Income Taxes  an interpretation of FASB Statement
    No. 109
  Deloitte &
    Touche LLP
    73




---



##### Table of Contents



Item 9B.
    Other
    Information  Form 8-K
   
  PART III
   
  Item 10.
    Directors,
    Executive Officers and Corporate Governance    (www.mindspeed.com)
 
  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
    Accounting Fees and Services   74




---



##### Table of Contents



PART IV
 
  Item 15.
    Exhibits
    and Financial Statement Schedules  Financial Statements
      Supplemental Schedules
  Schedule II 
    Valuation and Qualifying Accounts
    Exhibits
  2
.1

Asset Purchase Agreement, dated as of September 4, 2007, by
    and between Silicon Valley Bank, as agent for itself and Gold
    Hill Lending Group 03, LP and Mindspeed Development Sub, Inc.,
    filed as Exhibit 2.1 to the Registrants Current
    Report on
    Form 8-K
    dated September 25, 2007, is incorporated herein by
    reference.3
.1

Restated Certificate of Incorporation of the Registrant, filed
    as Exhibit 4.1 to the Registrants Registration
    Statement on
    Form S-3
    (Registration Statement
    No. 333-106146),
    is incorporated herein by reference.3
.2

Certificate of Amendment to the Restated Certificate of
    Incorporation of the Registrant, filed as Exhibit 3.1 to
    the Registrants Current Report on
    Form 8-K
    dated July 1, 2008, is incorporated herein by reference.3
.3

Amended and Restated Bylaws of the Registrant, filed as
    Exhibit 3.2 to the Registrants Annual Report on
    Form 10-K
    for the fiscal year ended September 30, 2005, is
    incorporated herein by reference.4
.1

Specimen certificate for the Registrants Common Stock, par
    value $.01 per share, filed as Exhibit 4.1 to the
    Registrants Quarterly Report on
    Form 10-Q
    for the fiscal quarter ended June 27, 2008, is incorporated
    herein by reference.4
.2

Rights Agreement dated as of June 26, 2003, by and between
    the Registrant and Mellon Investor Services LLC, as Rights
    Agent, filed as Exhibit 4.1 to the Registrants
    Current Report on
    Form 8-K
    dated July 1, 2003, is incorporated herein by reference.4
.3

First Amendment to Rights Agreement, dated as of
    December 6, 2004, by and between the Registrant and Mellon
    Investor Services LLC, filed as Exhibit 4.4 to the
    Registrants Current Report on
    Form 8-K
    dated December 2, 2004, is incorporated herein by reference.4
.4

Second Amendment to Rights Agreement, dated as of June 16,
    2008, by and between the Registrant and Mellon Investor Services
    LLC, filed as Exhibit 4.1 to the Registrants Current
    Report on
    Form 8-K
    dated June 11, 2008, is incorporated herein by reference.4
.5

Common Stock Purchase Warrant dated June 27, 2003, filed as
    Exhibit 4.5 to the Registrants Registration Statement
    on
    Form S-3
    (Registration Statement
    No. 333-109523),
    is incorporated herein by reference.4
.6

Registration Rights Agreement dated as of June 27, 2003, by
    and between the Registrant and Conexant Systems, Inc., filed as
    Exhibit 4.6 to the Registrants Registration Statement
    on
    Form S-3
    (Registration Statement
    No. 333-109523),
    is incorporated herein by reference.4
.7

Indenture, dated as of December 8, 2004, between the
    Registrant and Wells Fargo Bank, N.A., filed as Exhibit 4.1
    to the Registrants Current Report on
    Form 8-K
    dated December 2, 2004, is incorporated herein by reference.4
.8

Form of 3.75% Convertible Senior Notes due 2009, attached
    as Exhibit A to the Indenture (Exhibit 4.7 hereto), is
    incorporated herein by reference. 75




---



##### Table of Contents



4
.9

Indenture, dated as of August 1, 2008, between the
    Registrant and Wells Fargo Bank, N.A., filed as Exhibit 4.1
    to the Registrants Current Report on
    Form 8-K
    dated August 4, 2008, is incorporated herein by reference.4
.10

Form of 6.50% Convertible Senior Notes due 2013, attached
    as Exhibit A to the Indenture (Exhibit 4.9 hereto), is
    incorporated herein by reference.10
.1

Distribution Agreement dated as of June 27, 2003, by and
    between Conexant Systems, Inc. and the Registrant, filed as
    Exhibit 2.1 to the Registrants Current Report on
    Form 8-K
    dated July 1, 2003, is incorporated herein by reference.10
.2

Employee Matters Agreement dated as of June 27, 2003, by
    and between Conexant Systems, Inc. and the Registrant, filed as
    Exhibit 2.2 to the Registrants Current Report on
    Form 8-K
    dated July 1, 2003, is incorporated herein by reference.10
.3

Amendment No. 1 to Employee Matters Agreement dated as of
    June 27, 2003, by and between Conexant Systems, Inc. and
    the Registrant, dated January 13, 2005, filed as
    Exhibit 3.2 to the Registrants Annual Report on
    Form 10-K
    for the fiscal year ended September 30, 2005, is
    incorporated herein by reference.10
.4

Amendment No. 2 to Employee Matters Agreement dated as of
    June 27, 2003, by and between Conexant Systems, Inc. and
    the Registrant, dated July 1, 2005, filed as
    Exhibit 3.2 to the Registrants Annual Report on
    Form 10-K
    for the fiscal year ended September 30, 2005, is
    incorporated herein by reference.10
.5

Amendment No. 3 to Employee Matters Agreement dated as of
    June 27, 2003, by and between Conexant Systems, Inc. and
    the Registrant, dated January 9, 2006, filed as
    Exhibit 10.2 to the Registrants Quarterly Report on
    Form 10-Q
    for the fiscal quarter ended December 30, 2005, is
    incorporated herein by reference.10
.6

Tax Allocation Agreement dated as of June 27, 2003, by and
    between Conexant Systems, Inc. and the Registrant, filed as
    Exhibit 2.3 to the Registrants Current Report on
    Form 8-K
    dated July 1, 2003, is incorporated herein by reference.10
.7

Amended and Restated Sublease, dated March 24, 2005, by and
    between Conexant Systems, Inc. and the Registrant, filed as
    Exhibit 10.1 to the Registrants Quarterly Report on
    Form 10-Q
    for the fiscal quarter ended April 1, 2005, is incorporated
    herein by reference.10
.8

Form of Exchange Agreement, dated as of July 30, 2008, by
    and between the Company and the holders of the Registrants
    6.50% Convertible Senior Notes due 2013, filed as
    Exhibit 10.2 to the Registrants Current Report on
    Form 8-K
    dated August 4, 2008, is incorporated herein by reference.*10
.9

Form of Employment Agreement of the Registrant.*10
.10

Schedule identifying parties to and terms of agreements with the
    Registrant substantially identical to the form of Employment
    Agreement filed as Exhibit 10.9 hereto.*10
.11

Form of Indemnification Agreement entered into between the
    Registrant and the Chief Executive Officer, Chief Financial
    Officer and each of the directors of the Registrant, filed as
    Exhibit 10.2 to the Registrants Quarterly Report on
    Form 10-Q
    for the fiscal quarter ended April 1, 2005, is incorporated
    herein by reference.*10
.12

Mindspeed Technologies, Inc. 2003 Employee Stock Purchase Plan,
    filed as Exhibit 10.1 to the Registrants Quarterly
    Report on
    Form 10-Q
    for the fiscal quarter ended July 1, 2005, is incorporated
    herein by reference.*10
.13

Mindspeed Technologies, Inc. 2003 Non-Qualified Employee Stock
    Purchase Plan, filed as Exhibit 10.2 to the
    Registrants Quarterly Report on
    Form 10-Q
    for the fiscal quarter ended July 1, 2005, is incorporated
    herein by reference.*10
.14

Mindspeed Technologies, Inc. 2003 Stock Option Plan, as amended
    and restated, filed as Exhibit 10.7 to the
    Registrants Quarterly Report on
    Form 10-Q
    for the fiscal quarter ended June 27, 2008, is incorporated
    herein by reference.*10
.15

Mindspeed Technologies, Inc. 2003 Long-Term Incentives Plan, as
    amended and restated, filed as Exhibit 10.6 to the
    Registrants Quarterly Report on
    Form 10-Q
    for the fiscal quarter ended June 27, 2008, is incorporated
    herein by reference.*10
.16

Form of Stock Option Award under the Mindspeed Technologies,
    Inc. 2003 Long-Term Incentives Plan, filed as Exhibit 10.4
    to the Registrants Quarterly Report on
    Form 10-Q
    for the fiscal quarter ended July 1, 2005, is incorporated
    herein by reference. 76




---



##### Table of Contents



*10
.17

Stock Option Terms and Conditions under the Mindspeed
    Technologies, Inc. 2003 Long-Term Incentives Plan, filed as
    Exhibit 10.5 to the Registrants Quarterly Report on
    Form 10-Q
    for the fiscal quarter ended July 1, 2005, is incorporated
    herein by reference.*10
.18

Form of Restricted Stock Award under the Mindspeed Technologies,
    Inc. 2003 Long-Term Incentives Plan, filed as Exhibit 10.6
    to the Registrants Quarterly Report on
    Form 10-Q
    for the fiscal quarter ended July 1, 2005, is incorporated
    herein by reference.*10
.19

Restricted Stock Terms and Conditions under the Mindspeed
    Technologies, Inc. 2003 Long-Term Incentives Plan, filed as
    Exhibit 10.19 to the Registrants Annual Report on
    Form 10-K
    for the fiscal year ended October 1, 2004, is incorporated
    herein by reference.*10
.20

Form of Restricted Stock Unit Award under the Mindspeed
    Technologies, Inc. 2003 Long-Term Incentives Plan.*10
.21

Restricted Stock Unit Terms and Conditions under the Mindspeed
    Technologies, Inc. 2003 Long-Term Incentives Plan.*10
.22

Mindspeed Technologies, Inc. Directors Stock Plan, as amended
    and restated, filed as Exhibit 10.8 to the
    Registrants Quarterly Report on
    Form 10-Q
    for the fiscal quarter ended June 27, 2008, is incorporated
    herein by reference.*10
.23

Form of Stock Option Award under the Mindspeed Technologies,
    Inc. Directors Stock Plan, filed as Exhibit 10.7 to the
    Registrants Quarterly Report on
    Form 10-Q
    for the fiscal quarter ended July 1, 2005, is incorporated
    herein by reference.*10
.24

Stock Option Terms and Conditions under the Mindspeed
    Technologies, Inc. Directors Stock Plan, filed as
    Exhibit 10.8 to the Registrants Quarterly Report on
    Form 10-Q
    for the fiscal quarter ended July 1, 2005, is incorporated
    herein by reference.*10
.25

Form of Restricted Shares Award under the Mindspeed
    Technologies, Inc. Directors Stock Plan, filed as
    Exhibit 10.1 to the Registrants Quarterly Report on
    Form 10-Q
    for the fiscal quarter ended March 31, 2006, is
    incorporated herein by reference.*10
.26

Restricted Shares Terms and Conditions under the Mindspeed
    Technologies, Inc. Directors Stock Plan, filed as
    Exhibit 10.2 to the Registrants Quarterly Report on
    Form 10-Q
    for the fiscal quarter ended March 31, 2006, is
    incorporated herein by reference.*10
.27

Form of Restricted Stock Unit Award under the Mindspeed
    Technologies, Inc. Directors Stock Plan, filed as
    Exhibit 10.2 to the Registrants Current Report on
    Form 8-K
    dated April 11, 2008, is incorporated herein by reference.*10
.28

Restricted Stock Unit Terms and Conditions under the Mindspeed
    Technologies, Inc. Directors Stock Plan, filed as
    Exhibit 10.1 to the Registrants Current Report on
    Form 8-K
    dated April 11, 2008, is incorporated herein by reference.*10
.29

Mindspeed Technologies, Inc. Retirement Savings Plan, filed as
    Exhibit 10.9 to the Registrants Quarterly Report on
    Form 10-Q
    for the fiscal quarter ended July 1, 2005, is incorporated
    herein by reference.*10
.30

Mindspeed Technologies, Inc. Deferred Compensation Plan, as
    amended and restated.*10
.31

Agreement, dated January 31, 2007, by and between Bradley
    W. Yates and the Registrant, filed as Exhibit 10.1 to the
    Registrants Quarterly Report on
    Form 10-Q
    for the fiscal quarter ended December 29, 2006, is
    incorporated herein by reference.*10
.32

Confidential Severance and General Release Agreement, effective
    as of October 10, 2008, by and between Thomas Stites and
    the Registrant.*10
.33

Summary of Director Compensation Arrangements.*10
.34

Non-Qualified Stock Option Award Agreement, dated July 25,
    2008 by and between the Registrant and Bret W. Johnsen, filed as
    Exhibit 10.5 to the Registrants Quarterly Report on
    Form 10-Q
    for the fiscal quarter ended June 27, 2008, is incorporated
    herein by reference.*10
.35

Summary of Cash Bonus Arrangement, filed as Exhibit 10.11
    to the Registrants Quarterly Report on
    Form 10-Q
    for the fiscal quarter ended June 27, 2008, is incorporated
    herein by reference.*10
.36

Letter Agreement, dated as of November 27, 2008, entered
    into between the Registrant and the Chief Executive Officer of
    the Registrant, filed as Exhibit 10.1 to the
    Registrants Current Report on
    Form 8-K
    dated November 29, 2007, is incorporated herein by
    reference. 77




---



##### Table of Contents



*10
.37

Letter Agreement, dated as of December 11, 2008, entered
    into between the Registrant and the Chief Executive Officer of
    the Registrant.*10
.38

Letter Agreement, dated as of November 23, 2007, entered
    into between the Registrant and Simon Biddiscombe, filed as
    Exhibit 10.2 to the Registrants Current Report on
    Form 8-K
    dated November 29, 2007, is incorporated herein by
    reference.*10
.39

Amendment to Letter Agreement, dated as of April 15, 2008,
    entered into between the Registrant and Simon Biddiscombe, filed
    as Exhibit 10.2 to the Registrants Quarterly Report
    on
    Form 10-Q
    for the fiscal quarter ended March 28, 2008, is
    incorporated herein by reference.10
.40

Loan and Security Agreement, dated as of September 30,
    2008, by and between the Registrant and Silicon Valley Bank,
    filed as Exhibit 10.1 to the Registrants Current
    Report on
    Form 8-K
    dated October 6, 2008, is incorporated herein by reference.12
.1

Statement re: Computation of Ratios.21


List of subsidiaries of the Registrant.23


Consent of independent registered public accounting firm.24


Power of attorney, authorizing certain persons to sign this
    Annual Report on
    Form 10-K
    on behalf of certain directors and officers of the Registrant.31
.1

Certification of Chief Executive Officer Pursuant to
    Section 302 of the Sarbanes-Oxley Act of 2002.31
.2

Certification of Chief Financial Officer Pursuant to
    Section 302 of the Sarbanes-Oxley Act of 2002.32
.1

Certification of Chief Executive Officer Pursuant to
    Section 906 of the Sarbanes-Oxley Act of 2002.32
.2

Certification of Chief Financial Officer Pursuant to
    Section 906 of the Sarbanes-Oxley Act of 2002.     *
    
    Management contract or compensatory plan or arrangement.+
    
    Certain confidential portions of this exhibit have been omitted
    pursuant to a grant of confidential treatment. Omitted portions
    have been filed separately with the SEC.  Exhibits
    Financial Statement Schedules
   78




---



##### Table of Contents



SIGNATURES
  Form 10-K
    By: /s/  Raouf
    Y. Halim       Signature

Title/s/  Raouf
    Y. HalimRaouf
    Y. Halim

Chief Executive Officer and Director
    (Principal Executive Officer)/s/  Bret
    W. JohnsenBret
    W. Johnsen

Senior Vice President, Chief Financial Officer and Treasurer
    (Principal Financial and Accounting Officer)/s/  Dwight W. Decker*Dwight
    W. Decker

Chairman of the Board of Directors/s/  Donald H. Gips*Donald
    H. Gips

Director/s/  Michael T. Hayashi*Michael
    T. Hayashi*

Director/s/  Ming Louie*Ming
    Louie

Director/s/  Thomas A. Madden*Thomas
    A. Madden

Director/s/  Jerre L. Stead*Jerre
    L. Stead*

Director*By:

/s/  Raouf
    Y. HalimRaouf
    Y. Halim, Attorney-in-Fact**     **
    
    By authority of the power of attorney filed as Exhibit 24
    hereto. 79




---



##### Table of Contents



SCHEDULE II
 
  VALUATION
    AND QUALIFYING ACCOUNTS
  AdditionsBalance at


Charged to





Balance atBeginning of


Costs and





End ofDescription

Year


Expenses


Deductions(1)


Year(In thousands)Year ended October 3, 2008:Allowance for doubtful accounts

$
353


$
(11
)

$



$
342Reserve for sales returns and allowances


1,589



460



(494
)


1,555Year ended September 28, 2007:Allowance for doubtful accounts

$
447


$
(94
)

$



$
353Reserve for sales returns and allowances


1,165



780



(356
)


1,589Year ended September 29, 2006:Allowance for doubtful accounts

$
462


$
(15
)

$



$
447Reserve for sales returns and allowances


1,356



149



(340
)


1,165     (1)
    
    Deductions in the allowance for doubtful accounts reflect
    amounts written off. 80




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##### Table of Contents



EXHIBIT INDEX
  10
.9

Form of Employment Agreement of the Registrant.10
.10

Schedule identifying parties to and terms of agreements with the
    Registrant substantially identical to the form of Employment
    Agreement filed as Exhibit 10.9 hereto.10
.20

Form of Restricted Stock Unit Award under the Mindspeed
    Technologies, Inc. 2003 Long-Term Incentives Plan.10
.21

Restricted Stock Unit Terms and Conditions under the Mindspeed
    Technologies, Inc. 2003 Long-Term Incentives Plan.10
.30

Mindspeed Technologies, Inc. Deferred Compensation Plan, as
    amended and restated.10
.32

Confidential Severance and General Release Agreement, effective
    as of October 10, 2008, by and between Thomas Stites and
    the Registrant.10
.33

Summary of Director Compensation Arrangements.10
.37

Letter Agreement, dated as of December 11, 2008, entered
    into between the Registrant and the Chief Executive Officer of
    the Registrant.12
.1

Statement re: Computation of Ratios.21


List of subsidiaries of the Registrant.23


Consent of independent registered public accounting firm.24


Power of attorney, authorizing certain persons to sign this
    Annual Report on
    Form 10-K
    on behalf of certain directors and officers of the Registrant.31
.1

Certification of Chief Executive Officer Pursuant to
    Section 302 of the Sarbanes-Oxley Act of 2002.31
.2

Certification of Chief Financial Officer Pursuant to
    Section 302 of the Sarbanes-Oxley Act of 2002.32
.1

Certification of Chief Executive Officer Pursuant to
    Section 906 of the Sarbanes-Oxley Act of 2002.32
.2

Certification of Chief Financial Officer Pursuant to
    Section 906 of the Sarbanes-Oxley Act of 2002.  81