| /x/QUARTERLY                REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE                ACT OF                1934 FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2007.                                |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                 |   |
| 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 - June 30, 2007 and December 31,                2006                                                                                               |
|                          |                                                                                                                                                                                                    |
|                          | Condensed                consolidated statements of operations and comprehensive income (loss)                -                Three and six months ended June 30, 2007 and July 1,                2006 |
|                          |                                                                                                                                                                                                    |
|                          | Condensed                consolidated statements of cash flows - Six months ended June 30,                2007 and                July 1, 2006                                                          |
|                          |                                                                                                                                                                                                    |
|                          | Notes                to condensed consolidated financial statements - June 30,                2007                                                                                                      |
|                          |                                                                                                                                                                                                    |
| 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                                                                                                                                                                                              |

----

|                                                                                                                                                    |   |   | June                30, 2007  |   |   | December                31, 2006 |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|------------------------------------|--------|--------|----------------------------------|--------|
|                                                                                                                                                    |   |   | (unaudited)                   |   |   | (Note                1)          |   |
| ASSETS                                                                                                                                                  |   |   |                               |   |   |                             |   |
|                                                                                                                                                    |   |   |                               |   |   |                             |   |
| Current                assets:                                                                                                                          |   |   |                               |   |   |                             |   |
| Cash                and cash equivalents                                                                                                                |   | $      | 43,575                             |   | $      | 13,706                           |   |
| Marketable                securities                                                                                                                    |   |   | 128,755                            |   |   | 60,892                           |   |
| Accounts                receivable, net                                                                                                                 |   |   | 33,561                             |   |   | 26,707                           |   |
| Inventories                                                                                                                                             |   |   | 18,967                             |   |   | 19,701                           |   |
| Prepaid                expenses and other current assets                                                                                                |   |   | 5,683                              |   |   | 2,632                            |   |
| Assets                of discontinued operations                                                                                                        |   |   | 21                                 |   |   | 1,429                            |   |
| Total                current assets                                                                                                                     |   |   | 230,562                            |   |   | 125,067                          |   |
|                                                                                                                                                    |   |   |                               |   |   |                             |   |
| Marketable                securities                                                                                                                    |   |   | 8,811                              |   |   | 8,884                            |   |
| Plant                and equipment:                                                                                                                     |   |   |                               |   |   |                             |   |
| Equipment                and furniture                                                                                                                  |   |   | 150,378                            |   |   | 138,652                          |   |
| Leasehold                improvements                                                                                                                   |   |   | 38,322                             |   |   | 38,310                           |   |
| Projects                in process                                                                                                                      |   |   | 10,089                             |   |   | 4,975                            |   |
|                                                                                                                                                    |   |   | 198,789                            |   |   | 181,937                          |   |
| Less                accumulated depreciation and amortization                                                                                           |   |   | (144,988                           | )      |   | (140,678                         | )      |
|                                                                                                                                                    |   |   | 53,801                             |   |   | 41,259                           |   |
| Goodwill                and other intangibles, net of amortization                                                                                      |   |   | 5,918                              |   |   | 5,929                            |   |
| Other                assets                                                                                                                             |   |   | 1,231                              |   |   | 1,463                            |   |
|                                                                                                                                                    |   |   |                               |   |   |                             |   |
| Total                assets                                                                                                                             |   | $      | 300,323                            |   | $      | 182,602                          |   |
|                                                                                                                                                    |   |   |                               |   |   |                             |   |
| LIABILITIES                AND STOCKHOLDERS’ EQUITY                                                                                               |   |   |                               |   |   |                             |   |
|                                                                                                                                                    |   |   |                               |   |   |                             |   |
| Current                liabilities:                                                                                                                     |   |   |                               |   |   |                             |   |
| Accounts                payable                                                                                                                         |   | $      | 22,794                             |   | $      | 17,879                           |   |
| Accrued                liabilities                                                                                                                      |   |   | 6,526                              |   |   | 5,588                            |   |
| Current                maturities of capital lease obligations                                                                                          |   |   | -                                  |   |   | 312                              |   |
| Liabilities                of discontinued operations                                                                                                   |   |   | 152                                |   |   | 252                              |   |
| Total                current liabilities                                                                                                                |   |   | 29,472                             |   |   | 24,031                           |   |
|                                                                                                                                                    |   |   |                               |   |   |                             |   |
| Other                long-term liabilities                                                                                                              |   |   | 3,298                              |   |   | 3,348                            |   |
| Long-term                debt, less current portion                                                                                                     |   |   | 38,000                             |   |   | 38,000                           |   |
| Capital                lease obligations, less current portion                                                                                          |   |   | -                                  |   |   | 1,463                            |   |
|                                                                                                                                                    |   |   |                               |   |   |                             |   |
| Commitments                and contingencies                                                                                                            |   |   |                               |   |   |                             |   |
| Stockholders’                equity:                                                                                                              |   |   |                               |   |   |                             |   |
| Common                stock, $0.01 par value, 144,000 shares authorized, 59,756 and 49,200                issued at June 30, 2007 and December 31, 2006 |   |   | 598                                |   |   | 492                              |   |
| Additional                paid-in capital                                                                                                               |   |   | 538,401                            |   |   | 413,672                          |   |
| Accumulated                deficit                                                                                                                      |   |   | (309,044                           | )      |   | (298,046                         | )      |
| Accumulated                other comprehensive loss                                                                                                     |   |   | (144                               | )      |   | (100                             | )      |
| Treasury                stock at cost: 114 shares                                                                                                       |   |   | (258                               | )      |   | (258                             | )      |
| Total                stockholders’ equity                                                                                                         |   |   | 229,553                            |   |   | 115,760                          |   |
|                                                                                                                                                    |   |   |                               |   |   |                             |   |
| Total                liabilities and stockholders’ equity                                                                                         |   | $      | 300,323                            |   | $      | 182,602                          |   |

----

|                                                                                                                                |   | Three                months ended  | Six                months ended    |
|-------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------|------------------------------------|
|                                                                                                                                |   |                                    | June                30, 2007  |   |   | July                1, 2006 |   |   | June                30, 2007 |   |   | July                1, 2006 |   |
|                                                                                                                                |   |                                    | (unaudited)                   |   |   | (unaudited) |   |   | (unaudited) |   |   | (unaudited) |   |
|                                                                                                                                |   |                                    |                               |   |   |   |   |   |   |   |   |   |   |
| Net                sales                                                                                                            |   | $                                       | 53,869                             |   | $ | 39,348 |   | $ | 103,442 |   | $ | 74,043 |   |
| Cost                of sales                                                                                                        |   |                                    | 34,963                             |   |   | 28,237 |   |   | 68,250 |   |   | 53,526 |   |
| Gross                profit                                                                                                         |   |                                    | 18,906                             |   |   | 11,111 |   |   | 35,192 |   |   | 20,517 |   |
| Research                and development expenses                                                                                    |   |                                    | 11,080                             |   |   | 8,358 |   |   | 20,818 |   |   | 16,364 |   |
| Selling                and administrative expenses                                                                                  |   |                                    | 7,482                              |   |   | 5,678 |   |   | 14,841 |   |   | 10,942 |   |
|                                                                                                                                |   |                                    |                               |   |   |   |   |   |   |   |   |   |   |
| Operating                income (loss)                                                                                              |   |                                    | 344                                |   |   | (2,925 | ) |   | (467 | ) |   | (6,789 | ) |
| Interest                income                                                                                                      |   |                                    | 2,198                              |   |   | 1,567 |   |   | 3,438 |   |   | 2,430 |   |
| Interest                expense                                                                                                     |   |                                    | (655                               | ) |   | (1,287 | ) |   | (1,280 | ) |   | (2,575 | ) |
| Other                income                                                                                                         |   |                                    | -                                  |   |   | 21 |   |   | - |   |   | 21 |   |
|                                                                                                                                |   |                                    |                               |   |   |   |   |   |   |   |   |   |   |
| Income                (loss) from continuing operations                                                                             |   |                                    | 1,887                              |   |   | (2,624 | ) |   | 1,691 |   |   | (6,913 | ) |
| Loss                from discontinued operations                                                                                    |   |                                    | -                                  |   |   | (163 | ) |   | (965 | ) |   | (511 | ) |
|                                                                                                                                |   |                                    |                               |   |   |   |   |   |   |   |   |   |   |
| Net                income (loss)                                                                                                    |   | $                                       | 1,887                              |   | $ | (2,787 | ) | $ | 726 |   | $ | (7,424 | ) |
|                                                                                                                                |   |                                    |                               |   |   |   |   |   |   |   |   |   |   |
| Basic                earnings (loss) per share                                                                                      |   |                                    |                               |   |   |   |   |   |   |   |   |   |   |
| Income                (loss) from continuing operations                                                                             |   | $                                       | 0.03                               |   | $ | (0.06 | ) | $ | 0.03 |   | $ | (0.17 | ) |
| Loss                from discontinued operations                                                                                    |   |                                    | -                                  |   |   | - |   | $ | (0.02 | ) | $ | (0.01 | ) |
| Net                income (loss)                                                                                                    |   | $                                       | 0.03                               |   | $ | (0.06 | ) | $ | 0.01 |   | $ | (0.18 | ) |
|                                                                                                                                |   |                                    |                               |   |   |   |   |   |   |   |   |   |   |
| Diluted                earnings (loss) per share                                                                                    |   |                                    |                               |   |   |   |   |   |   |   |   |   |   |
| Income                (loss) from continuing operations                                                                             |   | $                                       | 0.03                               |   | $ | (0.06 | ) | $ | 0.03 |   | $ | (0.17 | ) |
| Loss                from discontinued operations                                                                                    |   |                                    | -                                  |   |   | - |   | $ | (0.02 | ) | $ | (0.01 | ) |
| Net                income (loss)                                                                                                    |   | $                                       | 0.03                               |   | $ | (0.06 | ) | $ | 0.01 |   | $ | (0.18 | ) |
|                                                                                                                                |   |                                    |                               |   |   |   |   |   |   |   |   |   |   |
| Weighted                average common shares outstanding used in computing earnings (loss)                per                share |   |                                    |                               |   |   |   |   |   |   |   |   |   |   |
| Basic                                                                                                                               |   |                                    | 56,523                             |   |   | 47,198 |   |   | 52,419 |   |   | 42,184 |   |
| Diluted                                                                                                                             |   |                                    | 59,604                             |   |   | 47,198 |   |   | 55,774 |   |   | 42,184 |   |

|                                                                                                |   | Three                months ended  | Six                months ended    |
|-----------------------------------------------------------------------------------------------------|--------|-----------------------------------------|------------------------------------|
|                                                                                                |   |                                    | June                30, 2007  |   |   | July                1, 2006 |   |   | June                30, 2007 |   |   | July                1, 2006 |   |
|                                                                                                |   |                                    | (unaudited)                   |   |   | (unaudited) |   |   | (unaudited) |   |   | (unaudited) |   |
|                                                                                                |   |                                    |                               |   |   |   |   |   |   |   |   |   |   |
| Net                income (loss)                                                                    |   | $                                       | 1,887                              |   | $ | (2,787 | ) | $ | 726 |   | $ | (7,424 | ) |
| Unrealized                (loss) gain on marketable securities                                      |   |                                    | (52                                | ) |   | 62 |   |   | (42 | ) |   | 167 |   |
| Foreign                currency translation adjustment                                              |   |                                    | 2                                  |   |   | (4 | ) |   | (2 | ) |   | 2 |   |
|                                                                                                |   |                                    |                               |   |   |   |   |   |   |   |   |   |   |
| Reclassification                adjustment:                                                         |   |                                    |                               |   |   |   |   |   |   |   |   |   |   |
| Net                realized loss previously recognized in other comprehensive                income |   |                                    | 9                                  |   |   | - |   |   | 9 |   |   | - |   |
| Comprehensive                income (loss)                                                          |   | $                                       | 1,846                              |   | $ | (2,729 | ) | $ | 691 |   | $ | (7,255 | ) |

----

|                                                                                                                                            |   | Six                months ended  |
|-------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------|
|                                                                                                                                            |   |                                  | June                30, 2007  |   |   | July                1, 2006 |   |
|                                                                                                                                            |   |                                  | (unaudited)  |   |   | (unaudited) |   |
| CASH                FLOWS FROM OPERATING ACTIVITIES                                                                                             |   |                                  |   |   |   |   |   |
| Net                income (loss)                                                                                                                |   | $                                     | 726 |   | $ | (7,424 | ) |
| Adjustments                to reconcile net income (loss) to net cash provided by (used in)                operating                activities: |   |                                  |   |   |   |   |   |
| Loss                from discontinued operations                                                                                                |   |                                  | 965 |   |   | 511 |   |
| Depreciation                                                                                                                                    |   |                                  | 4,137 |   |   | 4,062 |   |
| Amortization                                                                                                                                    |   |                                  | 417 |   |   | 960 |   |
| Stock                based compensation                                                                                                         |   |                                  | 7,716 |   |   | 3,143 |   |
| Amortization                of (discount) premium on marketable securities                                                                      |   |                                  | (171 | ) |   | 168 |   |
| Realized                loss on sales of marketable securities                                                                                  |   |                                  | 9 |   |   | - |   |
| Gain                on disposal of equipment                                                                                                    |   |                                  | - |   |   | (19 | ) |
| Changes                in operating assets and liabilities:                                                                                     |   |                                  |   |   |   |   |   |
| Accounts                receivable                                                                                                              |   |                                  | (6,854 | ) |   | (4,303 | ) |
| Inventories                                                                                                                                     |   |                                  | 734 |   |   | (4,247 | ) |
| Prepaid                expenses and other assets                                                                                                |   |                                  | (3,052 | ) |   | (1,423 | ) |
| Accounts                payable                                                                                                                 |   |                                  | 4,915 |   |   | 1,518 |   |
| Accrued                liabilities and other liabilities                                                                                        |   |                                  | 1,273 |   |   | 284 |   |
|                                                                                                                                            |   |                                  |   |   |   |   |   |
| Net                cash provided by (used in) operating activities                                                                              |   |                                  | 10,815 |   |   | (6,770 | ) |
|                                                                                                                                            |   |                                  |   |   |   |   |   |
| CASH                FLOWS FROM INVESTING ACTIVITIES                                                                                             |   |                                  |   |   |   |   |   |
| Purchases                of plant and equipment                                                                                                 |   |                                  | (16,851 | ) |   | (5,529 | ) |
| Proceeds                from sale of equipment                                                                                                  |   |                                  | - |   |   | 28 |   |
| Purchases                of marketable securities                                                                                               |   |                                  | (141,157 | ) |   | (134,457 | ) |
| Proceeds                from sale of marketable securities                                                                                      |   |                                  | 73,487 |   |   | 95,254 |   |
|                                                                                                                                            |   |                                  |   |   |   |   |   |
| Net                cash used in investing activities                                                                                            |   |                                  | (84,521 | ) |   | (44,704 | ) |
|                                                                                                                                            |   |                                  |   |   |   |   |   |
| CASH                FLOWS FROM FINANCING ACTIVITIES                                                                                             |   |                                  |   |   |   |   |   |
| Payment                of capital lease obligations                                                                                             |   |                                  | (1,775 | ) |   | (115 | ) |
| Issuance                of common stock                                                                                                         |   |                                  | 105,350 |   |   | 54,881 |   |
|                                                                                                                                            |   |                                  |   |   |   |   |   |
| Net                cash provided by financing activities                                                                                        |   |                                  | 103,575 |   |   | 54,766 |   |
|                                                                                                                                            |   |                                  |   |   |   |   |   |
| Net                increase in cash and cash equivalents                                                                                        |   |                                  | 29,869 |   |   | 3,292 |   |
| Cash                and cash equivalents at beginning of period                                                                                 |   |                                  | 13,706 |   |   | 11,891 |   |
|                                                                                                                                            |   |                                  |   |   |   |   |   |
| Cash                and cash equivalents at end of period                                                                                       |   | $                                     | 43,575 |   | $ | 15,183 |   |

----

|                                                   |   | Three                months ended |   | Six                months ended |   |
|--------------------------------------------------------|--------|-----------------------------------|--------|---------------------------------|--------|
|                                                   |   | July                1, 2006       |   | June                30, 2007    |   | July                1, 2006 |   |
| Revenue                                                |   | $                                 | 867    |                            | $      | 559 |   | $ | 1,893 |   |
|                                                   |   |                              |   |                            |   |   |   |   |   |   |
| Operating                loss                          |   |                              | (167   | )                               |   | (479 | ) |   | (518 | ) |
| Interest                income                         |   |                              | 4      |                            |   | 4 |   |   | 7 |   |
| Loss                on sale of discontinued operations |   |                              | -      |                            |   | (490 | ) |   | - |   |
|                                                   |   |                              |   |                            |   |   |   |   |   |   |
| Loss                from discontinued operations       |   | $                                 | (163   | )                               | $      | (965 | ) | $ | (511 | ) |

|                                                  |   |   | June                30, 2007  |   |   | December                31, 2006 |   |
|-------------------------------------------------------|--------|--------|------------------------------------|--------|--------|----------------------------------|--------|
| Assets                of discontinued operations      |   |   |                               |   |   |                             |   |
| Accounts                receivable                    |   | $      | 21                                 |   | $      | 604                              |   |
| Inventory                                             |   |   | -                                  |   |   | 654                              |   |
| Other                current and non-current assets   |   |   | -                                  |   |   | 62                               |   |
| Fixed                assets, net                      |   |   | -                                  |   |   | 109                              |   |
|     Total                         |   | $      | 21                                 |   | $      | 1,429                            |   |
|                                                  |   |   |                               |   |   |                             |   |
| Liabilities                of discontinued operations |   | $      | 152                                |   | $      | 252                              |   |

|                           |   |   | June                30, 2007  |   |   | December                31, 2006 |   |
|--------------------------------|--------|--------|------------------------------------|--------|--------|----------------------------------|--------|
|                           |   |   |                               |   |   |                             |   |
| Raw                materials   |   | $      | 5,013                              |   | $      | 5,370                            |   |
| Work                in process |   |   | 12,248                             |   |   | 11,571                           |   |
| Finished                goods  |   |   | 5,764                              |   |   | 6,297                            |   |
|                           |   |   | 23,025                             |   |   | 23,238                           |   |
| Reserves                       |   |   | (4,058                             | )      |   | (3,537                           | )      |
|                           |   |   |                               |   |   |                             |   |
| Total                          |   | $      | 18,967                             |   | $      | 19,701                           |   |

|                                                                                                                                      |   | Three                months ended  | Six                months ended    |
|-------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------|------------------------------------|
|                                                                                                                                      |   |                                    | June                30, 2007  |   |   | July                1, 2006 |   |   | June                30, 2007 |   |   | July                1, 2006 |   |
| Weighted                average common shares outstanding used to calculate basic earnings                (loss)                per share |   |                                    | 56,523                             |   |   | 47,198 |   |   | 52,419 |   |   | 42,184 |   |
| Net                effect of dilutive securities                                                                                          |   |                                    | 3,081                              |   |   | - |   |   | 3,355 |   |   | - |   |
| Weighted                average securities outstanding used to calculate diluted earnings                (loss)                per share  |   |                                    | 59,604                             |   |   | 47,198 |   |   | 55,774 |   |   | 42,184 |   |

|                                      |   | Three                months ended  | Six                months ended    |
|-------------------------------------------|--------|-----------------------------------------|------------------------------------|
|                                      |   |                                    | June                30, 2007  |   |   | July                1, 2006 |   |   | June                30, 2007 |   |   | July                1, 2006 |   |
|                                      |   |                                    |                               |   |   |   |   |   |   |   |   |   |   |
| Convertible                notes          |   |                                    | 7,600                              |   |   | 9,824 |   |   | 7,600 |   |   | 9,824 |   |
| Stock                options              |   |                                    | 1,881                              |   |   | 5,160 |   |   | 1,881 |   |   | 5,246 |   |
| Unvested                restricted shares |   |                                    | -                                  |   |   | 2,205 |   |   | - |   |   | 2,200 |   |

|      |   | Three                months ended  | Six                months ended    |
|-----------|--------|-----------------------------------------|------------------------------------|
|      |   |                                    | June                30, 2007  |   |   | July                1, 2006 |   |   | June                30, 2007 |   |   | July                1, 2006 |   |
|      |   |                                    |                               |   |   |   |   |   |   |   |   |   |   |
| Broadband |   | $                                       | 26,109                             |   | $ | 16,938 |   | $ | 50,663 |   | $ | 32,415 |   |
| Wireless  |   |                                    | 27,760                             |   |   | 22,410 |   |   | 52,779 |   |   | 41,628 |   |
|      |   |                                    |                               |   |   |   |   |   |   |   |   |   |   |
| Total     |   | $                                       | 53,869                             |   | $ | 39,348 |   | $ | 103,442 |   | $ | 74,043 |   |

|                          |   | Three                months ended  | Six                months ended    |
|-------------------------------|--------|-----------------------------------------|------------------------------------|
|                          |   |                                    | June                30, 2007  |   |   | July                1, 2006 |   |   | June                30, 2007 |   |   | July                1, 2006 |   |
|                          |   |                                    |                               |   |   |   |   |   |   |   |   |   |   |
| Asia                          |   | $                                       | 36,616                             |   | $ | 22,771 |   | $ | 69,602 |   | $ | 41,691 |   |
| USA                and Canada |   |                                    | 14,742                             |   |   | 13,406 |   |   | 29,097 |   |   | 26,286 |   |
| Other                         |   |                                    | 2,511                              |   |   | 3,171 |   |   | 4,743 |   |   | 6,066 |   |
|                          |   |                                    |                               |   |   |   |   |   |   |   |   |   |   |
| Total                         |   | $                                       | 53,869                             |   | $ | 39,348 |   | $ | 103,442 |   | $ | 74,043 |   |

| §   | 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”);                and |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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

|                                                   |   | Three                months ended  | Six                months ended    |
|--------------------------------------------------------|--------|-----------------------------------------|------------------------------------|
|                                                   |   |                                    | June                30, 2007  |   |   | July                1, 2006 |   |   | June                30, 2007 |   |   | July                1, 2006 |   |
|                                                   |   |                                    |                               |   |   |   |   |   |   |   |   |   |   |
| Amortization                of restricted stock awards |   | $                                       | 3,159                              |   | $ | 1,644 |   | $ | 6,308 |   | $ | 2,960 |   |
| Amortization                of ESP Plan                |   |                                    | 200                                |   |   | 100 |   |   | 400 |   |   | 200 |   |
| Amortization                of stock option awards     |   |                                    | 481                                |   |   | 35 |   |   | 1,053 |   |   | 68 |   |
| Total                stock based compensation          |   | $                                       | 3,840                              |   | $ | 1,779 |   | $ | 7,761 |   | $ | 3,228 |   |
|                                                   |   |                                    |                               |   |   |   |   |   |   |   |   |   |   |
| By                Financial Statement line item        |   |                                    |                               |   |   |   |   |   |   |   |   |   |   |
| Cost                of sales                           |   | $                                       | 851                                |   | $ | 375 |   | $ | 1,751 |   | $ | 674 |   |
| Research                and development expenses       |   |                                    | 1,392                              |   |   | 697 |   |   | 2,892 |   |   | 1,265 |   |
| Selling                and administrative expenses     |   |                                    | 1,597                              |   |   | 660 |   |   | 3,073 |   |   | 1,205 |   |
| Loss                from discontinued operations       |   |                                    | -                                  |   |   | 47 |   |   | 45 |   |   | 84 |   |

|                                                 | Restricted                Shares | Stock                Options                    |
|------------------------------------------------------|----------------------------------|-------------------------------------------------|
|                                                 | Shares                           | Weighted                average price per share | Issuable                upon exercise | Weighted                average exercise price |
|                                                 |                             |                                            |   |   |
| Grants                outstanding at January 1, 2006 | 1,214                            | $2.72                                           | 5,944 | $7.67 |
| Granted                                              | 2,685                            | 6.90                                            | 994 | 8.80 |
| Shares                vested/options exercised       | (675)                            | 2.68                                            | (983) | 3.85 |
| Forfeited/expired                                    | (86)                             | 5.46                                            | (286) | 11.16 |
| Balance                at December 31, 2006          | 3,138                            | 6.23                                            | 5,669 | 8.36 |
| Granted                                              | 707                              | 9.65                                            | 137 | 9.92 |
| Shares                vested/options exercised       | (1,120)                          | 5.72                                            | (1,248) | 5.12 |
| Forfeited                                            | (165)                            | 6.93                                            | (199) | 15.83 |
| Balance                at June 30, 2007              | 2,560                            | $7.33                                           | 4,359 | $8.99 |

|                                                         |   |   | Information                as of June 30, 2007  |   |
|--------------------------------------------------------------|--------|--------|------------------------------------------------------|--------|
| Unrecognized                stock based compensation cost    |   |   |                                                 |   |
|     Option                plans          |   | $      | 4,942                                                |   |
|     Restricted                stock      |   | $      | 11,724                                               |   |
| Weighted                average remaining recognition period |   |   |                                                 |   |
|     Option                plans          |   |   | 2.4                years                             |   |
|     Restricted                stock      |   |   | 1.2                years                             |   |

| Range                of exercise prices |   |   | Outstanding                Options at June 30, 2007 |   |   | Weighted                average remaining contractual life |   |   | Weighted                average exercise price |   |   | Exercisable                at June 30, 2007 |   |   | Weighted                average exercise price |   |
|-----------------------------------------|--------|--------|-----------------------------------------------------|--------|--------|------------------------------------------------------------|--------|--------|------------------------------------------------|--------|--------|---------------------------------------------|--------|--------|------------------------------------------------|--------|
|                                    |   |   |                                                |   |   |                                                       |   |   |                                           |   |   |                                        |   |   |                                           |   |
| $1.39                - $6.21            |   |   | 1,143                                               |   |   | 3.68                                                       |   | $      | 3.80                                           |   |   | 1,121                                       |   | $      | 3.81                                           |   |
| $6.25                - $8.79            |   |   | 1,119                                               |   |   | 6.31                                                       |   | $      | 7.34                                           |   |   | 1,059                                       |   | $      | 7.27                                           |   |
| $8.84                - 10.90            |   |   | 1,187                                               |   |   | 7.92                                                       |   | $      | 9.24                                           |   |   | 215                                         |   | $      | 10.72                                          |   |
| $11.13                - $53.48          |   |   | 910                                                 |   |   | 3.72                                                       |   | $      | 17.23                                          |   |   | 884                                         |   | $      | 17.38                                          |   |

|                                                          |   | Six                months ended  |
|---------------------------------------------------------------|--------|---------------------------------------|
|                                                          |   |                                  | June                30, 2007  |   |   | July                1, 2006 |   |
|                                                          |   |                                  |   |   |   |   |   |
| Stock                option awards:                           |   |                                  |   |   |   |   |   |
| Risk-free                interest rate                        |   |                                  | 4.70 | % |   | 4.31 | % |
| Expected                volatility                            |   |                                  | 0.72 |   |   | 0.94 |   |
| Average                expected term (in years)               |   |                                  | 4.75 |   |   | 3.00 |   |
| Expected                dividend yield                        |   |                                  | 0.0 | % |   | 0.0 | % |
| Weighted                average fair value of options granted |   | $                                     | 6.07 |   | $ | 3.91 |   |
|                                                          |   |                                  |   |   |   |   |   |
| ESP                Plan:                                      |   |                                  |   |   |   |   |   |
| Risk-free                interest rate                        |   |                                  | 4.91 | % |   | 5.26 | % |
| Expected                volatility                            |   |                                  | 0.58 |   |   | 0.70 |   |
| Average                expected term (in years)               |   |                                  | 1.00 |   |   | 1.00 |   |
| Expected                dividend yield                        |   |                                  | 0.0 | % |   | 0.0 | % |
| Weighted                average fair value of purchase option |   | $                                     | 3.02 |   | $ | 2.31 |   |

----

*plus*
*plus*

|                                                    |   | Three                months ended  | Six                months ended    |
|---------------------------------------------------------|--------|-----------------------------------------|------------------------------------|
|                                                    |   |                                    | June                30, 2007  |   |   | July                1, 2006 |   |   | June                30, 2007 |   |   | July                1, 2006 |   |
|                                                    |   |                                    |                               |   |   |   |   |   |   |   |   |   |   |
| Net                sales                                |   |                                    | 100.0                              | % |   | 100.0 | % |   | 100.0 | % |   | 100.0 | % |
| Cost                of sales                            |   |                                    | 64.9                               | % |   | 71.8 | % |   | 66.0 | % |   | 72.3 | % |
|                                                    |   |                                    |                               |   |   |   |   |   |   |   |   |   |   |
| Gross                margin                             |   |                                    | 35.1                               | % |   | 28.2 | % |   | 34.0 | % |   | 27.7 | % |
| Research                and development expenses        |   |                                    | 20.6                               | % |   | 21.2 | % |   | 20.1 | % |   | 22.1 | % |
| Selling                and administrative expenses      |   |                                    | 13.9                               | % |   | 14.4 | % |   | 14.4 | % |   | 14.8 | % |
|                                                    |   |                                    |                               |   |   |   |   |   |   |   |   |   |   |
| Operating                income (loss)                  |   |                                    | 0.6                                | % |   | (7.4 | %) |   | (0.5 | %) |   | (9.2 | %) |
| Interest                income                          |   |                                    | 4.1                                | % |   | 4.0 | % |   | 3.3 | % |   | 3.4 | % |
| Interest                expense                         |   |                                    | (1.2                               | %) |   | (3.3 | %) |   | (1.2 | %) |   | (3.5 | %) |
| Other                income                             |   |                                    | -                                  |   |   | - |   |   | - |   |   | - |   |
|                                                    |   |                                    |                               |   |   |   |   |   |   |   |   |   |   |
| Income                (loss) from continuing operations |   |                                    | 3.5                                | % |   | (6.7 | %) |   | 1.6 | % |   | (9.3 | %) |
| Loss                from discontinued operations        |   |                                    | -                                  |   |   | (0.4 | %) |   | (0.9 | %) |   | (0.7 | %) |
|                                                    |   |                                    |                               |   |   |   |   |   |   |   |   |   |   |
| Net                income (loss)                        |   |                                    | 3.5                                | % |   | (7.1 | %) |   | 0.7 | % |   | (10.0 | %) |

*** ***

*** ***

** **

----

| §   | The                election of three Class III Directors of the Company to hold office                until                2010. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------|

| §   | The                amendment of the 2005 Long Term Incentive and Share Award Plan to                increase                the number of shares issuable thereunder by 5,450,000 to                6,450,000. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | The                election of David Fellows as Class III Director was approved by holders                of                51,492,342 shares of the Company’s outstanding capital stock.                 Holders of 1,425,464 shares withheld from voting on such election.                 The election of Ronald Rosenzweig as Class III Director was approved                by                holders of 51,199,120 shares of the Company’s outstanding capital                stock.  Holders of 1,718,686 shares withheld from voting on such                election. The election of Lewis Solomon as Class III Director was                approved                by holders of 50,498,943 shares of the Company’s outstanding capital                stock.  Holders of 2,418,863 shares withheld from voting on such                election. Messrs. Fellows, Rosenzweig and Solomon join the continuing                Directors of the Company Messrs. Bachow, Bastani, Rein and                Strigl. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | The                amendment of the 2005 Long Term Incentive and Share Award Plan increased                the number of shares issuable.  The amendment was approved by holders                of 25,021,573 shares of the Company’s outstanding capital stock. Holders                of 6,093,558 shares voted against the ratification.  Holders of                225,380 shares abstained from voting on such ratification and broker                non-votes totaled 21,577,295. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

ITEM 6. EXHIBITS

----

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