| /x/QUARTERLY                REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE                ACT OF                1934 FOR THE QUARTERLY PERIOD ENDED JULY 1, 2006.                                 |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                 |   |
| Or                                                                                                                                                                                                                   |
|                                                                                                                                                                                                                 |   |
| /                /TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES                EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM ____________                TO                ____________. |
|                                                                                                                                                                                                                 |   |
| Commission                File No. 0-25662                                                                                                                                                                           |
|                                                                                                                                                                                                                 |   |
| **ANADIGICS,                Inc.**                                                                                                                                                                                   |
| (Exact                name of registrant as specified in its charter)                                                                                                                                                |
|                                                                                                                                                                                                                 |   |
| Delaware                                                                                                                                                                                                             | 22-2582106 |
| (State                or other jurisdiction of incorporation or organization)                                                                                                                                        | (I.R.S.                Employer Identification No.) |
|                                                                                                                                                                                                                 |   |
| 141                Mt. Bethel Road, Warren, New Jersey                                                                                                                                                               | 07059 |
| (Address                of principal executive offices)                                                                                                                                                              | (Zip                Code) |
|                                                                                                                                                                                                                 |   |
| (908)                668-5000                                                                                                                                                                                        |
| (Registrant's                telephone number, including area                code)                                                                                                                                   |

----

| PART                I         | Financial                Information                                                                                                                                           |
|-------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                          |                                                                                                                                                                           |
| Item                1.        | Financial                Statements (unaudited)                                                                                                                                |
|                          |                                                                                                                                                                           |
|                          | Condensed                consolidated balance sheets - July 1, 2006 and December 31,                2005                                                                       |
|                          |                                                                                                                                                                           |
|                          | Condensed                consolidated statements of operations and comprehensive loss - Three                and                six months ended July 1, 2006 and July 2, 2005 |
|                          |                                                                                                                                                                           |
|                          | Condensed                consolidated statements of cash flows - Six months ended July 1,                2006 and                July 2, 2005                                  |
|                          |                                                                                                                                                                           |
|                          | Notes                to condensed consolidated financial statements - July 1,                2006                                                                              |
|                          |                                                                                                                                                                           |
| Item                2.   | Management’s                Discussion and Analysis of Financial Condition and Results of                Operations                                                      |
|                          |                                                                                                                                                                           |
| Item                3.        | Quantitative                and Qualitative Disclosures About Market Risk                                                                                                      |
|                          |                                                                                                                                                                           |
| Item                4.        | Controls                and Procedures                                                                                                                                         |
|                          |                                                                                                                                                                           |
| PART                II.  | Other                Information                                                                                                                                               |
|                          |                                                                                                                                                                           |
| Item                1.        | Legal                Proceedings                                                                                                                                               |
|                          |                                                                                                                                                                           |
| Item                4.        | Submission                of Matters to a Vote of Security Holders                                                                                                             |
|                          |                                                                                                                                                                           |
| Item                6.        | Exhibits                                                                                                                                                                       |
|                          |                                                                                                                                                                           |
|                          | Signatures                                                                                                                                                                     |

----

|                                                                                                                                                   |   |   | July                1, 2006  |   |   | December                31, 2005 |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|-----------------------------------|--------|--------|----------------------------------|--------|
|                                                                                                                                                   |   |   | (unaudited)                       |   |   | (Note                1)          |   |
| ASSETS                                                                                                                                                 |   |   |                              |   |   |                             |   |
|                                                                                                                                                   |   |   |                              |   |   |                             |   |
| Current                assets:                                                                                                                         |   |   |                              |   |   |                             |   |
| Cash                and cash equivalents                                                                                                               |   | $      | 15,183                            |   | $      | 11,891                           |   |
| Marketable                securities                                                                                                                   |   |   | 111,685                           |   |   | 70,364                           |   |
| Accounts                receivable, net                                                                                                                |   |   | 22,775                            |   |   | 18,755                           |   |
| Inventories                                                                                                                                            |   |   | 20,272                            |   |   | 16,009                           |   |
| Prepaid                expenses and other current assets                                                                                               |   |   | 3,791                             |   |   | 2,188                            |   |
| Total                current assets                                                                                                                    |   |   | 173,706                           |   |   | 119,207                          |   |
|                                                                                                                                                   |   |   |                              |   |   |                             |   |
| Marketable                securities                                                                                                                   |   |   | 1,983                             |   |   | 4,102                            |   |
| Plant                and equipment:                                                                                                                    |   |   |                              |   |   |                             |   |
| Equipment                and furniture                                                                                                                 |   |   | 134,712                           |   |   | 133,262                          |   |
| Leasehold                improvements                                                                                                                  |   |   | 38,748                            |   |   | 38,748                           |   |
| Projects                in process                                                                                                                     |   |   | 5,673                             |   |   | 1,617                            |   |
|                                                                                                                                                   |   |   | 179,133                           |   |   | 173,627                          |   |
| Less                accumulated depreciation and amortization                                                                                          |   |   | (141,677                          | )      |   | (137,320                         | )      |
|                                                                                                                                                   |   |   | 37,456                            |   |   | 36,307                           |   |
| Goodwill                and other intangibles, net of amortization                                                                                     |   |   | 5,977                             |   |   | 6,044                            |   |
| Other                assets                                                                                                                            |   |   | 1,721                             |   |   | 2,613                            |   |
|                                                                                                                                                   |   |   |                              |   |   |                             |   |
| Total                assets                                                                                                                            |   | $      | 220,843                           |   | $      | 168,273                          |   |
|                                                                                                                                                   |   |   |                              |   |   |                             |   |
| LIABILITIES                AND STOCKHOLDERS’ EQUITY                                                                                              |   |   |                              |   |   |                             |   |
|                                                                                                                                                   |   |   |                              |   |   |                             |   |
| Current                liabilities:                                                                                                                    |   |   |                              |   |   |                             |   |
| Accounts                payable                                                                                                                        |   | $      | 17,049                            |   | $      | 15,519                           |   |
| Accrued                liabilities                                                                                                                     |   |   | 4,918                             |   |   | 4,672                            |   |
| Accrued                restructuring costs                                                                                                             |   |   | 9                                 |   |   | 40                               |   |
| Current                maturities of long-term debt                                                                                                    |   |   | 46,700                            |   |   | 46,700                           |   |
| Current                maturities of capital lease obligations                                                                                         |   |   | 301                               |   |   | 269                              |   |
|                                                                                                                                                   |   |   |                              |   |   |                             |   |
| Total                current liabilities                                                                                                               |   |   | 68,977                            |   |   | 67,200                           |   |
|                                                                                                                                                   |   |   |                              |   |   |                             |   |
| Other                long-term liabilities                                                                                                             |   |   | 3,261                             |   |   | 3,175                            |   |
| Long-term                debt, less current portion                                                                                                    |   |   | 38,000                            |   |   | 38,000                           |   |
| Capital                lease obligations, less current portion                                                                                         |   |   | 1,616                             |   |   | 1,763                            |   |
|                                                                                                                                                   |   |   |                              |   |   |                             |   |
| Commitments                and contingencies                                                                                                           |   |   |                              |   |   |                             |   |
| Stockholders’                equity:                                                                                                             |   |   |                              |   |   |                             |   |
| Common                stock, $0.01 par value, 144,000 shares authorized, 47,354 and 35,007                issued at July 1, 2006 and December 31, 2005 |   |   | 474                               |   |   | 350                              |   |
| Additional                paid-in capital                                                                                                              |   |   | 405,540                           |   |   | 347,555                          |   |
| Accumulated                deficit                                                                                                                     |   |   | (296,620                          | )      |   | (289,196                         | )      |
| Accumulated                other comprehensive loss                                                                                                    |   |   | (147                              | )      |   | (316                             | )      |
| Treasury                stock at cost: 114 shares                                                                                                      |   |   | (258                              | )      |   | (258                             | )      |
| Total                stockholders’ equity                                                                                                        |   |   | 108,989                           |   |   | 58,135                           |   |
|                                                                                                                                                   |   |   |                              |   |   |                             |   |
| Total                liabilities and stockholders’ equity                                                                                        |   | $      | 220,843                           |   | $      | 168,273                          |   |

----

|                                                                             |   | Three                months ended  | Six                months ended   |
|-----------------------------------------------------------------------------|--------|-----------------------------------------|-----------------------------------|
|                                                                        |   |                                    | July                1, 2006  |   |   | July                2, 2005 |   |   | July                1, 2006 |   |   | July                2, 2005 |   |
|                                                                        |   |                                    | (unaudited)                  |   |   | (unaudited) |   |   | (unaudited) |   |   | (unaudited) |   |
|                                                                        |   |                                    |                              |   |   |   |   |   |   |   |   |   |   |
| Net                sales                                                    |   | $                                       | 40,215                            |   | $ | 23,943 |   | $ | 75,936 |   | $ | 45,716 |   |
| Cost                of sales                                                |   |                                    | 28,940                            |   |   | 19,511 |   |   | 55,224 |   |   | 38,763 |   |
| Gross                profit                                                 |   |                                    | 11,275                            |   |   | 4,432 |   |   | 20,712 |   |   | 6,953 |   |
| Research                and development expenses                            |   |                                    | 8,498                             |   |   | 7,374 |   |   | 16,657 |   |   | 15,236 |   |
| Selling                and administrative expenses                          |   |                                    | 5,869                             |   |   | 5,506 |   |   | 11,362 |   |   | 11,058 |   |
| Restructuring                and other charges                              |   |                                    | -                                 |   |   | - |   |   | - |   |   | (120 | ) |
|                                                                        |   |                                    |                              |   |   |   |   |   |   |   |   |   |   |
| Operating                loss                                               |   |                                    | (3,092                            | ) |   | (8,448 | ) |   | (7,307 | ) |   | (19,221 | ) |
| Interest                income                                              |   |                                    | 1,571                             |   |   | 599 |   |   | 2,437 |   |   | 1,176 |   |
| Interest                expense                                             |   |                                    | (1,287                            | ) |   | (1,249 | ) |   | (2,575 | ) |   | (2,498 | ) |
| Other                income                                                 |   |                                    | 21                                |   |   | 9 |   |   | 21 |   |   | 3 |   |
|                                                                        |   |                                    |                              |   |   |   |   |   |   |   |   |   |   |
| Net                loss                                                     |   | $                                       | (2,787                            | ) | $ | (9,089 | ) | $ | (7,424 | ) | $ | (20,540 | ) |
|                                                                        |   |                                    |                              |   |   |   |   |   |   |   |   |   |   |
| Basic                and diluted loss per share                             |   | $                                       | (0.06                             | ) | $ | (0.27 | ) | $ | (0.18 | ) | $ | (0.61 | ) |
|                                                                        |   |                                    |                              |   |   |   |   |   |   |   |   |   |   |
| Weighted                average basic and diluted common shares outstanding |   |                                    | 47,198                            |   |   | 34,057 |   |   | 42,184 |   |   | 33,780 |   |

|                                                    |   | Three                months ended  | Six                months ended   |
|---------------------------------------------------------|--------|-----------------------------------------|-----------------------------------|
|                                                    |   |                                    | July                1, 2006  |   |   | July                2, 2005 |   |   | July                1, 2006 |   |   | July                2, 2005 |   |
|                                                    |   |                                    | (unaudited)                  |   |   | (unaudited) |   |   | (unaudited) |   |   | (unaudited) |   |
|                                                    |   |                                    |                              |   |   |   |   |   |   |   |   |   |   |
| Net                loss                                 |   | $                                       | (2,787                            | ) | $ | (9,089 | ) | $ | (7,424 | ) | $ | (20,540 | ) |
| Unrealized                gain on marketable securities |   |                                    | 62                                |   |   | 213 |   |   | 167 |   |   | 86 |   |
| Foreign                currency translation adjustment  |   |                                    | (4                                | ) |   | (39 | ) |   | 2 |   |   | (60 | ) |
| Comprehensive                loss                       |   | $                                       | (2,729                            | ) | $ | (8,915 | ) | $ | (7,255 | ) | $ | (20,514 | ) |

----

|                                                                                                      |   | Six                months ended  |
|-----------------------------------------------------------------------------------------------------------|--------|---------------------------------------|
|                                                                                                      |   |                                  | July                1, 2006  |   |   | July                2, 2005 |   |
|                                                                                                      |   |                                  | (unaudited)  |   |   | (unaudited) |   |
| CASH                FLOWS FROM OPERATING ACTIVITIES                                                       |   |                                  |   |   |   |   |   |
| Net                loss                                                                                   |   | $                                     | (7,424 | ) | $ | (20,540 | ) |
| Adjustments                to reconcile net loss to net cash used in operating                activities: |   |                                  |   |   |   |   |   |
| Depreciation                                                                                              |   |                                  | 4,198 |   |   | 5,772 |   |
| Amortization                                                                                              |   |                                  | 960 |   |   | 912 |   |
| Stock                based compensation                                                                   |   |                                  | 3,228 |   |   | 1,431 |   |
| Amortization                of premium on marketable securities                                           |   |                                  | 168 |   |   | 732 |   |
| (Gain)                loss on disposal of equipment                                                       |   |                                  | (19 | ) |   | 14 |   |
| Changes                in operating assets and liabilities:                                               |   |                                  |   |   |   |   |   |
| Accounts                receivable                                                                        |   |                                  | (4,020 | ) |   | (2,600 | ) |
| Inventories                                                                                               |   |                                  | (4,263 | ) |   | 1,322 |   |
| Prepaid                expenses and other assets                                                          |   |                                  | (1,431 | ) |   | (622 | ) |
| Accounts                payable                                                                           |   |                                  | 1,530 |   |   | 1,978 |   |
| Accrued                liabilities and other liabilities                                                  |   |                                  | 303 |   |   | (1,525 | ) |
|                                                                                                      |   |                                  |   |   |   |   |   |
| Net                cash used in operating activities                                                      |   |                                  | (6,770 | ) |   | (13,126 | ) |
|                                                                                                      |   |                                  |   |   |   |   |   |
| CASH                FLOWS FROM INVESTING ACTIVITIES                                                       |   |                                  |   |   |   |   |   |
| Purchases                of plant and equipment                                                           |   |                                  | (5,529 | ) |   | (349 | ) |
| Proceeds                from sale of equipment                                                            |   |                                  | 28 |   |   | 38 |   |
| Purchases                of marketable securities                                                         |   |                                  | (134,457 | ) |   | (24,412 | ) |
| Proceeds                from sale of marketable securities                                                |   |                                  | 95,254 |   |   | 35,895 |   |
|                                                                                                      |   |                                  |   |   |   |   |   |
| Net                cash (used in) provided by investing activities                                        |   |                                  | (44,704 | ) |   | 11,172 |   |
|                                                                                                      |   |                                  |   |   |   |   |   |
| CASH                FLOWS FROM FINANCING ACTIVITIES                                                       |   |                                  |   |   |   |   |   |
| Payment                of capital lease obligations                                                       |   |                                  | (115 | ) |   | (18 | ) |
| Issuance                of common stock                                                                   |   |                                  | 54,881 |   |   | 4 |   |
|                                                                                                      |   |                                  |   |   |   |   |   |
| Net                cash provided by (used in) financing activities                                        |   |                                  | 54,766 |   |   | (14 | ) |
|                                                                                                      |   |                                  |   |   |   |   |   |
| Net                increase(decrease) in cash and cash equivalents                                        |   |                                  | 3,292 |   |   | (1,968 | ) |
| Cash                and cash equivalents at beginning of period                                           |   |                                  | 11,891 |   |   | 11,171 |   |
|                                                                                                      |   |                                  |   |   |   |   |   |
| Cash                and cash equivalents at end of period                                                 |   | $                                     | 15,183 |   | $ | 9,203 |   |

----

|                           |   |   | July                1, 2006   |   |   | December                31, 2005 |   |
|--------------------------------|--------|--------|-----------------------------------------|--------|--------|----------------------------------|--------|
|                           |   |   |                                    |   |   |                             |   |
| Raw                materials   |   | $      | 4,638                                   |   | $      | 2,870                            |   |
| Work                in process |   |   | 12,737                                  |   |   | 10,973                           |   |
| Finished                goods  |   |   | 6,277                                   |   |   | 5,068                            |   |
|                           |   |   | 23,652                                  |   |   | 18,911                           |   |
| Reserves                       |   |   | (3,380                                  | )      |   | (2,902                           | )      |
|                           |   |   |                                    |   |   |                             |   |
| Total                          |   | $      | 20,272                                  |   | $      | 16,009                           |   |

|                                                                                                                                              |   | Three                months ended  | Six                months ended   |
|---------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------|-----------------------------------|
|                                                                                                                                              |   |                                    | July                1, 2006  |   |   | July                2, 2005 |   |   | July                1, 2006 |   |   | July                2, 2005 |   |
| Weighted                average common shares outstanding used to calculate basic loss per                share                                   |   |                                    | 47,198                            |   |   | 34,057 |   |   | 42,184 |   |   | 33,780 |   |
| Net                effect of dilutive securities based upon the treasury stock method                using                an average market price |   |                                    | -*                                |   |   | -* |   |   | -* |   |   | -* |   |
| Weighted                average common and dilutive securities outstanding used to calculate                diluted loss per share                |   |                                    | 47,198                            |   |   | 34,057 |   |   | 42,184 |   |   | 33,780 |   |

| *   | Any                dilution arising from the Company's outstanding stock options or                shares                potentially issuable upon conversion of the Convertible notes, as                summarized below, are not included as their effect is anti-dilutive. |
|---------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                               |   | Six                  months ended   |                                                               |
|----------------------------------------------------|--------|-------------------------------------|--------------------------------------------------------------------|
|                                               |   | July                  1, 2006  | July                  2, 2005                                      |
|                                               |   |                                | Shares                  issuable upon exercise or conversion  |   |   | Exercise                  or conversion price |   |   | Shares                  issuable upon exercise or conversion |   |   | Exercise                  or conversion price |   |
|                                               |   |                                |                                                               |   |   |   |   |   |   |   |   |   |   |
| Stock                  options outstanding         |   |                                | 5,160                                                              |   | $ | 7.94 |  * |   | 6,588 |   | $ | 7.41 |  * |
| 5%                  Convertible notes, due in 2006 |   |                                | 2,224                                                              |   |   | 21.00 |   |   | 2,224 |   |   | 21.00 |   |
| 5%                  Convertible notes, due in 2009 |   |                                | 7,600                                                              |   |   | 5.00 |   |   | 7,600 |   |   | 5.00 |   |

|      |   | Three                months ended  | Six                months ended   |
|-----------|--------|-----------------------------------------|-----------------------------------|
|      |   |                                    | July                1, 2006  |   |   | July                2, 2005 |   |   | July                1, 2006 |   |   | July                2, 2005 |   |
|      |   |                                    |                              |   |   |   |   |   |   |   |   |   |   |
| Broadband |   | $                                       | 17,805                            |   | $ | 14,009 |   | $ | 34,308 |   | $ | 25,241 |   |
| Wireless  |   |                                    | 22,410                            |   |   | 9,934 |   |   | 41,628 |   |   | 20,475 |   |
|      |   |                                    |                              |   |   |   |   |   |   |   |   |   |   |
| Total     |   | $                                       | 40,215                            |   | $ | 23,943 |   | $ | 75,936 |   | $ | 45,716 |   |

|                          |   | Three                months ended  | Six                months ended   |
|-------------------------------|--------|-----------------------------------------|-----------------------------------|
|                          |   |                                    | July                1, 2006  |   |   | July                2, 2005 |   |   | July                1, 2006 |   |   | July                2, 2005 |   |
|                          |   |                                    |                              |   |   |   |   |   |   |   |   |   |   |
| Asia                          |   | $                                       | 22,969                            |   | $ | 13,152 |   | $ | 42,083 |   | $ | 25,357 |   |
| USA                and Canada |   |                                    | 13,861                            |   |   | 9,000 |   |   | 27,387 |   |   | 16,991 |   |
| Other                         |   |                                    | 3,385                             |   |   | 1,791 |   |   | 6,466 |   |   | 3,368 |   |
|                          |   |                                    |                              |   |   |   |   |   |   |   |   |   |   |
| Total                         |   | $                                       | 40,215                            |   | $ | 23,943 |   | $ | 75,936 |   | $ | 45,716 |   |

| §   | The                1995 Long-Term Incentive and Share Award Plan for Officers and Directors                (terminated February 28, 2005) (“1995 Plan”) |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | The                1997 Long Term Incentive and Share Award Plan (“1997                Plan”) |
|--------------------|-----------------------------------------------------------------------------------------------------------|

| §   | The                2005 Long Term Incentive and Share Award Plan (“2005 Plan”, collectively                with the 1995 Plan and the 1997 Plan, “the                Plans”) |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | The                Employee Stock Purchase Plan (“ESP                Plan”) |
|--------------------|-----------------------------------------------------------------------------------------|

|                                                   |   | For                the three month periods ended  | For                the six month periods ended |
|--------------------------------------------------------|--------|--------------------------------------------------------|------------------------------------------------|
|                                                   |   |                                                   | July                1, 2006               |   |   | July                2, 2005 |   |   | July                2, 2005 |   |   | July                1, 2006 |   |   | July                2, 2005 |   |   | July                2, 2005 |   |
|                                                   |   |                                                   | US                GAAP                    |   |   | US                GAAP |   |   | Pro                Forma (1) |   |   | US                GAAP |   |   | US                GAAP |   |   | Pro                Forma (1) |   |
|                                                   |   |                                                   | (as                reported)              |   |   | (as                reported) |   |   | (comparison                only) |   |   | (as                reported) |   |   | (as                reported) |   |   | (comparison                only) |   |
|                                                   |   |                                                   |                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Amortization                of restricted stock awards |   | $                                                      | (1,644                                         | ) | $ | (776 | ) | $ | (776 | ) | $ | (2,960 | ) | $ | (1,418 | ) | $ | (1,418 | ) |
| Amortization                of ESPP                    |   |                                                   | (100                                           | ) |   | - |   |   | (79 | ) |   | (200 | ) |   | - |   |   | (193 | ) |
| Amortization                of stock option awards     |   |                                                   | (35                                            | ) |   | (8 | ) |   | (140 | ) |   | (68 | ) |   | (13 | ) |   | (298 | ) |
| Total                stock based compensation          |   | $                                                      | (1,779                                         | ) | $ | (784 | ) | $ | (995 | ) | $ | (3,228 | ) | $ | (1,431 | ) | $ | (1,909 | ) |
|                                                   |   |                                                   |                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                loss                                |   | $                                                      | (2,787                                         | ) | $ | (9,089 | ) | $ | (9,300 | ) | $ | (7,424 | ) | $ | (20,540 | ) | $ | (21,018 | ) |
|                                                   |   |                                                   |                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Basic                and diluted loss per share        |   | $                                                      | (0.06                                          | ) | $ | (0.27 | ) | $ | (0.27 | ) | $ | (0.18 | ) | $ | (0.61 | ) | $  | (0.62 | ) |
|                                                   |   |                                                   |                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| By                Financial Statement line item        |   |                                                   |                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cost                of sales                           |   | $                                                      | 387                                            |   | $ | 174 |   | $ | 205 |   | $ | 696 |   | $ | 309 |   | $ | 386 |   |
| Research                and development expenses       |   |                                                   | 701                                            |   |   | 359 |   |   | 421 |   |   | 1,272 |   |   | 642 |   |   | 787 |   |
| Selling                and administrative expenses     |   |                                                   | 691                                            |   |   | 251 |   |   | 369 |   |   | 1,260 |   |   | 480 |   |   | 736 |   |

| (1)   | Pro                forma disclosure for 2005 presents the full effect of                share based compensation expense as required under FAS 123R, which                was                adopted effective January 1, 2006 using the modified-prospective                method.                As reported historical GAAP results for periods prior to January                1, 2006                reflect only that portion of share based compensation expense required                by                GAAP prior to the adoption of FAS                123R. |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                 |   | Restricted                Shares | Stock                Options |
|------------------------------------------------------|--------|----------------------------------|------------------------------|
|                                                      |   |                             | Shares                       |   |   |   |   | WA                price per share |   |   | Issuable                upon exercise |   |   | WA                exercise price |   |
|                                                 |   |                             |                         |   |   |   |   |   |   |   |   |   |   |   |   |
| Grants                outstanding at January 1, 2005 |   |                             | 381                          |   |   |   | $ | 4.01 |   |   | 6,792 |   | $ | 7.47 |   |
| Granted                                              |   |                             | 1,303                        |   |   |   |   | 2.71 |   |   | 159 |   |   | 3.12 |   |
| Vested/exercised                                     |   |                             | (357                         | ) |  * |   |   | 4.01 |   |   | (416 | ) |   | 2.80 |   |
| Forfeited                                            |   |                             | (113                         | ) |   |   |   | 2.95 |   |   | (591 | ) |   | 7.57 |   |
| Balance                at December 31, 2005          |   |                             | 1,214                        |   |   |   |   | 2.72 |   |   | 5,944 |   |   | 7.67 |   |
| Granted                                              |   |                             | 1,416                        |   |   |   |   | 6.67 |   |   | 17 |   |   | 6.49 |   |
| Vested/exercised                                     |   |                             | (405                         | ) |   |   |   | 2.74 |   |   | (547 | ) |   | 3.21 |   |
| Forfeited                                            |   |                             | (20                          | ) |   |   |   | 4.26 |   |   | (254 | ) |   | 11.72 |   |
| Balance                at July 1, 2006               |   |                             | 2,205                        |   |   |   | $ | 5.24 |   |   | 5,160 |   | $ | 7.94 |   |

|                                                         |   |   | Weighted                average information as of July 1, 2006  |   |
|--------------------------------------------------------------|--------|--------|----------------------------------------------------------------------|--------|
|                                                         |   |   |                                                                 |   |
| Options                currently exercisable                 |   |   |                                                                 |   |
|                  Shares issuable upon exercise          |   |   | 5,091                                                                |   |
|                  WA exercise price                      |   | $      | 8.00                                                                 |   |
|                  WA remaining life                      |   |   | 5.4                years                                             |   |
| Intrinsic                value of exercised options          |   | $      | 2,003                                                                |   |
| Remaining                life for outstanding options        |   |   | 5.4                years                                             |   |
|                                                         |   |   |                                                                 |   |
| Intrinsic                value of exercisable options        |   | $      | 6,641                                                                |   |
| Intrinsic                value of outstanding options        |   | $      | 6,839                                                                |   |
| Unrecognized                stock based compensation cost    |   |   |                                                                 |   |
| Option                plans                                  |   | $      | 103                                                                  |   |
| Restricted                stock                              |   | $      | 7,526                                                                |   |
| WA                remaining vest period for restricted stock |   |   | 1.0                year                                              |   |

| Range                of exercise prices |   |   | Outstanding                Options at July 1, 2006 |   |   | Weighted                average remaining contractual life |   |   | Weighted                average exercise price |   |   | Exercisable                at July 1, 2006 |   |   | Weighted                average exercise price |   |
|-----------------------------------------|--------|--------|----------------------------------------------------|--------|--------|------------------------------------------------------------|--------|--------|------------------------------------------------|--------|--------|--------------------------------------------|--------|--------|------------------------------------------------|--------|
|                                    |   |   |                                               |   |   |                                                       |   |   |                                           |   |   |                                       |   |   |                                           |   |
| $1.39                - $4.17            |   |   | 1,809                                              |   |   | 5.18                                                       |   | $      | 3.24                                           |   |   | 1,770                                      |   | $      | 3.26                                           |   |
| $4.33                - $7.02            |   |   | 489                                                |   |   | 4.20                                                       |   | $      | 5.60                                           |   |   | 458                                        |   | $      | 5.60                                           |   |
| $7.27                                   |   |   | 1,519                                              |   |   | 7.60                                                       |   | $      | 7.27                                           |   |   | 1,520                                      |   | $      | 7.27                                           |   |
| $7.65                - $53.48           |   |   | 1,343                                              |   |   | 3.66                                                       |   | $      | 15.88                                          |   |   | 1,343                                      |   | $      | 15.88                                          |   |

|                                                               |   | Three                months ended  | Six                months ended   |
|---------------------------------------------------------------|--------|-----------------------------------------|-----------------------------------|
|                                                          |   |                                    | July                1, 2006  |   |   | July                2, 2005 |   |   | July                1, 2006 |   |   | July                2, 2005 |   |
|                                                          |   |                                    |                              |   |   |   |   |   |   |   |   |   |   |
| Risk-free                interest rate                        |   |                                    | 5.26                              | % |   | 4.26 | % |   | 5.10 | % |   | 3.87 | % |
| Expected                volatility (*)                        |   |                                    | 0.70                              |   |   | 0.82 |   |   | 0.74 |   |   | 0.87 |   |
| Expected                option life                           |   | One                year post-vest       | One                year post-vest |
| Expected                dividend yield                        |   |                                    | 0.0                               | % |   | 0.0 | % |   | 0.0 | % |   | 0.0 | % |
|                                                          |   |                                    |                              |   |   |   |   |   |   |   |   |   |   |
| Weighted                average fair value of options granted |   |                                    | N/A                               |   | $ | 0.87 |   | $ | 3.91 |   | $ | 1.66 |   |

----

*plus*

|                                               |   | Three                months ended  | Six                months ended   |
|----------------------------------------------------|--------|-----------------------------------------|-----------------------------------|
|                                               |   |                                    | July                1, 2006  |   |   | July                2, 2005 |   |   | July                1, 2006 |   |   | July                2, 2005 |   |
|                                               |   |                                    |                              |   |   |   |   |   |   |   |   |   |   |
| Net                sales                           |   |                                    | 100.0                             | % |   | 100.0 | % |   | 100.0 | % |   | 100.0 | % |
| Cost                of sales                       |   |                                    | 72.0                              | % |   | 81.5 | % |   | 72.7 | % |   | 84.8 | % |
|                                               |   |                                    |                              |   |   |   |   |   |   |   |   |   |   |
| Gross                margin                        |   |                                    | 28.0                              | % |   | 18.5 | % |   | 27.3 | % |   | 15.2 | % |
| Research                and development expenses   |   |                                    | 21.1                              | % |   | 30.8 | % |   | 21.9 | % |   | 33.3 | % |
| Selling                and administrative expenses |   |                                    | 14.6                              | % |   | 23.0 | % |   | 15.0 | % |   | 24.2 | % |
| Restructuring                and other charges     |   |                                    | -                                 |   |   | - |   |   | - |   |   | (0.3 | %) |
|                                               |   |                                    |                              |   |   |   |   |   |   |   |   |   |   |
| Operating                loss                      |   |                                    | (7.7                              | %) |   | (35.3 | %) |   | (9.6 | %) |   | (42.0 | %) |
|                                               |   |                                    |                              |   |   |   |   |   |   |   |   |   |   |
| Interest                income                     |   |                                    | 3.9                               | % |   | 2.5 | % |   | 3.2 | % |   | 2.6 | % |
| Interest                expense                    |   |                                    | (3.2                              | %) |   | (5.2 | %) |   | (3.4 | %) |   | (5.5 | %) |
| Other                income                        |   |                                    | 0.1                               | % |   | - |   |   | - |   |   | - |   |
|                                               |   |                                    |                              |   |   |   |   |   |   |   |   |   |   |
| Net                loss                            |   |                                    | (6.9                              | %) |   | (38.0 | %) |   | (9.8 | %) |   | (44.9 | %) |

*** ***

*** ***

** **

----

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

| ·   | The                election of two Class II Directors of the Company to hold office                until                2009. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------|

| ·   | The                amendment of the 2005 Long Term Incentive and Share Award Plan to                increase                the number of shares issuable thereunder by 2,700,000 to 5,450,000                and to                make other changes to comply with recent regulatory requirements                and                current practices. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | The                ratification of the appointment of J.H. Cohn LLP as the independent                registered public accounting firm of the Company for the fiscal year                ending December 31, 2006. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | The                election of Paul Bachow as Class II Director was approved by holders                of                35,453,254 shares of the Company’s outstanding capital stock. Holders of                1,540,954 shares withheld from voting on such election. The election                of                Bami Bastani as Class II Director was approved by holders of 35,472,948                shares of the Company’s outstanding capital stock. Holders of 1,521,260                shares withheld from voting on such election. Messrs. Bachow and                Bastani                join the continuing Directors of the Company Messrs. Rosenzweig,                Solomon,                McGuire, Rein and Strigl. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | The                amendment of the 2005 Long Term Incentive and Share Award Plan increased                the number of shares issuable in addition to making other changes                to                comply with recent regulatory and current practices. The amendment                was                approved by holders of 13,213,541 shares of the Company’s outstanding                capital stock. Holders of 4,182,820 shares voted against the ratification.                Holders of 1,039,568 shares abstained from voting on such ratification                and                broker non-votes totaled                18,558,279. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | The                ratification of the appointment of J.H. Cohn LLP as the Company’s                independent registered public accounting firm was approved by holders                of                36,872,373 shares of the Company’s outstanding capital stock. Holders of                88,249 shares voted against the ratification, and holders of 33,586                shares                abstained from voting on such                ratification. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| By:    | /s/                Thomas C. Shields       |
|--------|--------------------------------------------|
|   | Thomas                C. Shields           |
|   | Executive                Vice President    |
|   | and                Chief Financial Officer |

**Amendment      - Agreement June 1, 1999 - Revision**

| 1.   | Your                employment is extended for the period from July 2, 2006 through July                2,                2007 at 25% time as ANADIGICS                employee. |
|----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 2.   | Your                base salary compensation shall be unchanged at the annual rate of                $100,000                paid biweekly. |
|----------------|---------------------------------------------------------------------------------------------------------------------------------------------|

| 3.   | All                other terms of your agreement dated June 1, 1999 remain intact as                part of                this extension. |
|----------------|--------------------------------------------------------------------------------------------------------------------------------------------|

| 1.   | I                have reviewed this quarterly report on Form 10-Q of ANADIGICS,                Inc.; |
|----------------|------------------------------------------------------------------------------------------------------|

| 2.   | Based                on my knowledge, this report does not contain any untrue statement                of a                material fact or omit to state a material fact necessary to make                the                statements made, in light of the circumstances under which such statements                were made, not misleading with respect to the period covered by this                report; |
|----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 3.   | Based                on my knowledge, the financial statements, and other financial information                included in this report, fairly present in all material respects                the                financial condition, results of operations and cash flows of the                registrant as of, and for, the periods presented in this                report; |
|----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4.   | The                registrant’s other certifying officer(s) and I are responsible for                establishing and maintaining disclosure controls and procedures (as                defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal                control over financial reporting (as defined in Exchange Act Rules                13a-15(f) and 15d-15(f)) for the registrant and                have: |
|----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| a)   | Designed                such disclosure controls and procedures, or caused such disclosure                controls and procedures to be designed under our supervision, to                ensure                that material information relating to the registrant, including its                consolidated subsidiaries, is made known to us by others within those                entities, particularly during the period in which this report is                being                prepared; |
|----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| b)   | Designed                such internal control over financial reporting, or caused such internal                control over financial reporting to be designed under our supervision,                to                provide reasonable assurance regarding the reliability of financial                reporting and the preparation of financial statements for external                purposes in accordance with generally accepted accounting                principles; |
|----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| c)   | Evaluated                the effectiveness of the registrant's disclosure controls and procedures                and presented in this report our conclusions about the effectiveness                of                the disclosure controls and procedures, as of the end of the period                covered by this report based on such evaluation;                and |
|----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| d)   | Disclosed                in this report any change in the registrant’s internal control over                financial reporting that occurred during the registrant’s most recent                fiscal quarter (the registrant’s fourth fiscal quarter in the case of an                annual report) that has materially affected, or is reasonably likely                to                materially affect, the registrant’s internal control over financial                reporting; and |
|----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 5.   | The                registrant’s other certifying officer(s) and I have disclosed, based on                our most recent evaluation of internal control over financial reporting,                to the registrant’s auditors and the audit committee of registrant’s board                of directors (or persons performing the equivalent                functions): |
|----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| a)   | All                significant deficiencies and material weaknesses in the design or                operation of internal control over financial reporting which are                reasonably likely to adversely affect the registrant’s ability to record,                process, summarize and report financial information;                and |
|----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| b)   | Any                fraud, whether or not material, that involves management or other                employees who have a significant role in the registrant’s internal control                over financial reporting. |
|----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| By:    | /s/                Bami Bastani        |
|--------|----------------------------------------|
|   | Bami                Bastani            |
|   | President                and           |
|   | Chief                Executive Officer |

| 1.   | I                have reviewed this quarterly report on Form 10-Q of ANADIGICS,                Inc.; |
|----------------|------------------------------------------------------------------------------------------------------|

| 2.   | Based                on my knowledge, this report does not contain any untrue statement                of a                material fact or omit to state a material fact necessary to make                the                statements made, in light of the circumstances under which such statements                were made, not misleading with respect to the period covered by this                report; |
|----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 3.   | Based                on my knowledge, the financial statements, and other financial information                included in this report, fairly present in all material respects                the                financial condition, results of operations and cash flows of the                registrant as of, and for, the periods presented in this                report; |
|----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4.   | The                registrant’s other certifying officer(s) and I are responsible for                establishing and maintaining disclosure controls and procedures (as                defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal                control over financial reporting (as defined in Exchange Act Rules                13a-15(f) and 15d-15(f)) for the registrant and                have: |
|----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| a)   | Designed                such disclosure controls and procedures, or caused such disclosure                controls and procedures to be designed under our supervision, to                ensure                that material information relating to the registrant, including its                consolidated subsidiaries, is made known to us by others within those                entities, particularly during the period in which this report is                being                prepared; |
|----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| b)   | Designed                such internal control over financial reporting, or caused such internal                control over financial reporting to be designed under our supervision,                to                provide reasonable assurance regarding the reliability of financial                reporting and the preparation of financial statements for external                purposes in accordance with generally accepted accounting                principles; |
|----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| c)   | Evaluated                the effectiveness of the registrant's disclosure controls and procedures                and presented in this report our conclusions about the effectiveness                of                the disclosure controls and procedures, as of the end of the period                covered by this report based on such evaluation;                and |
|----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| d)   | Disclosed                in this report any change in the registrant’s internal control over                financial reporting that occurred during the registrant’s most recent                fiscal quarter (the registrant’s fourth fiscal quarter in the case of an                annual report) that has materially affected, or is reasonably likely                to                materially affect, the registrant’s internal control over financial                reporting; and |
|----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 5.   | The                registrant’s other certifying officer(s) and I have disclosed, based on                our most recent evaluation of internal control over financial reporting,                to the registrant’s auditors and the audit committee of registrant’s board                of directors (or persons performing the equivalent                functions): |
|----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| a)   | All                significant deficiencies and material weaknesses in the design or                operation of internal control over financial reporting which are                reasonably likely to adversely affect the registrant’s ability to record,                process, summarize and report financial information;                and |
|----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| b)   | Any                fraud, whether or not material, that involves management or other                employees who have a significant role in the registrant’s internal control                over financial reporting. |
|----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| By:    | /s/                Thomas C. Shields       |
|--------|--------------------------------------------|
|   | Thomas                C. Shields           |
|   | Executive                Vice President    |
|   | and                Chief Financial Officer |

| By:    | /s/                Bami Bastani        |
|--------|----------------------------------------|
|   | Bami                Bastani            |
|   | President                and           |
|   | Chief                Executive Officer |

| By:    | /s/                Thomas C. Shields       |
|--------|--------------------------------------------|
|   | Thomas                C. Shields           |
|   | Executive                Vice President    |
|   | and                Chief Financial Officer |