UNITED
      STATES





SECURITIES
      AND EXCHANGE COMMISSION





WASHINGTON,
      D.C. 20549





FORM
      10-Q





/x/QUARTERLY
                REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
                ACT OF
                1934 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 29, 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)








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





Indicate
      by check mark whether the registrant is a large accelerated filer, an
      accelerated filer, or a non-accelerated filer. See definition of “accelerated
      filer and large accelerated filer” in Rule 12b-2 of the Exchange Act (check
      one):


Large
      accelerated filer [ ] Accelerated filer [X] Non-accelerated filer [
      ]





Indicate
      by check mark whether the Registrant is a shell company (as defined in Rule
      12b-2 of the Act).  Yes [ ]  No [X]





The
      number of shares outstanding of the Registrant’s common stock as of September
      29, 2007 was 60,434,324 (excluding 113,761 shares held in
      treasury).











INDEX





ANADIGICS,
      Inc.








PART
                I
            Financial
                InformationItem
                1.
            Financial
                Statements (unaudited)Condensed
                consolidated balance sheets – September 29, 2007 and December 31,
                2006Condensed
                consolidated statements of operations and comprehensive income (loss)
–
                Three and nine months ended September 29, 2007 and September 30,
                2006Condensed
                consolidated statements of cash flows – Nine months ended September 29,
                2007 and September 30, 2006Notes
                to condensed consolidated financial statements – September 29,
                2007Item
                2.
            Management’s
                Discussion and Analysis of Financial Condition and Results of
                OperationsItem
                3.
            Quantitative
                and Qualitative Disclosures About Market RiskItem
                4.
            Controls
                and ProceduresPART
                II.
            Other
                InformationItem
                1.
            Legal
                ProceedingsItem
                6.
            ExhibitsSignatures













































































PART
      I -
      FINANCIAL INFORMATION





ITEM
      1.                      FINANCIAL
      STATEMENTS (UNAUDITED)





ANADIGICS,
      Inc.





CONDENSED
      CONSOLIDATED BALANCE SHEETS





(AMOUNTS
      IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)





September
                29, 2007
            
            
            December
                31, 2006(unaudited)
            
            
            (Note
                1)ASSETSCurrent
                assets:Cash
                and cash equivalents
            
            $
            43,594
            
            
            $
            13,706Marketable
                securities
            
            
            126,008
            
            
            
            60,892Accounts
                receivable, net
            
            
            40,074
            
            
            
            26,707Inventories
            
            
            20,076
            
            
            
            19,701Prepaid
                expenses and other current assets
            
            
            6,468
            
            
            
            2,632Assets
                of discontinued operations
            
            
            -
            
            
            
            1,429Total
                current assets
            
            
            236,220
            
            
            
            125,067Marketable
                securities
            
            
            6,780
            
            
            
            8,884Plant
                and equipment:Equipment
                and furniture
            
            
            156,999
            
            
            
            138,652Leasehold
                improvements
            
            
            38,539
            
            
            
            38,310Projects
                in process
            
            
            13,018
            
            
            
            4,975208,556
            
            
            
            181,937Less
                accumulated depreciation and amortization
            
            
            (148,313
            )
            
            
            (140,678
            )60,243
            
            
            
            41,259Goodwill
                and other intangibles, net of amortization
            
            
            6,588
            
            
            
            5,929Other
                assets
            
            
            1,122
            
            
            
            1,463Total
                assets
            
            $
            310,953
            
            
            $
            182,602LIABILITIES
                AND STOCKHOLDERS’ EQUITYCurrent
                liabilities:Accounts
                payable
            
            $
            23,695
            
            
            $
            17,879Accrued
                liabilities
            
            
            6,138
            
            
            
            5,588Current
                maturities of capital lease obligations
            
            
            -
            
            
            
            312Liabilities
                of discontinued operations
            
            
            -
            
            
            
            252Total
                current liabilities
            
            
            29,833
            
            
            
            24,031Other
                long-term liabilities
            
            
            3,271
            
            
            
            3,348Long-term
                debt, less current portion
            
            
            38,000
            
            
            
            38,000Capital
                lease obligations, less current portion
            
            
            -
            
            
            
            1,463Commitments
                and contingenciesStockholders’
                equity:Common
                stock, $0.01 par value, 144,000 shares authorized, 60,616 and 49,200
                issued at September 29, 2007 and December 31, 2006
            
            
            606
            
            
            
            492Additional
                paid-in capital
            
            
            534,473
            
            
            
            413,672Accumulated
                deficit
            
            
            (294,955
            )
            
            
            (298,046
            )Accumulated
                other comprehensive loss
            
            
            (17
            )
            
            
            (100
            )Treasury
                stock at cost: 114 shares
            
            
            (258
            )
            
            
            (258
            )Total
                stockholders’ equity
            
            
            239,849
            
            
            
            115,760Total
                liabilities and stockholders’ equity
            
            $
            310,953
            
            
            $
            182,602











See
                accompanying notes.











ANADIGICS,
      Inc.





CONDENSED
      CONSOLIDATED STATEMENTS OF OPERATIONS





(AMOUNTS
      IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)





Three
                months ended
            
            
            Nine
                months endedSeptember
                29, 2007
            
            
            September
                30, 2006
            
            
            September
                29, 2007
            
            
            September
                30, 2006(unaudited)
            
            
            (unaudited)
            
            
            (unaudited)
            
            
            (unaudited)Net
                sales
            
            $
            59,545
            
            
            $
            43,943
            
            
            $
            162,987
            
            
            $
            117,986Cost
                of sales
            
            
            39,387
            
            
            
            30,278
            
            
            
            107,637
            
            
            
            83,804Gross
                profit
            
            
            20,158
            
            
            
            13,665
            
            
            
            55,350
            
            
            
            34,182Research
                and development expenses
            
            
            12,491
            
            
            
            8,976
            
            
            
            33,309
            
            
            
            25,340Selling
                and administrative expenses
            
            
            7,221
            
            
            
            6,139
            
            
            
            22,062
            
            
            
            17,081Operating
                income (loss)
            
            
            446
            
            
            
            (1,450
            )
            
            
            (21
            )
            
            
            (8,239
            )Interest
                income
            
            
            2,338
            
            
            
            1,643
            
            
            
            5,776
            
            
            
            4,073Interest
                expense
            
            
            (592
            )
            
            
            (1,285
            )
            
            
            (1,872
            )
            
            
            (3,860
            )Other
                income
            
            
            173
            
            
            
            -
            
            
            
            173
            
            
            
            21Income
                (loss) from continuing operations
            
            
            2,365
            
            
            
            (1,092
            )
            
            
            4,056
            
            
            
            (8,005
            )Loss
                from discontinued operations
            
            
            -
            
            
            
            (220
            )
            
            
            (965
            )
            
            
            (731
            )Net
                income (loss)
            
            $
            2,365
            
            
            $
            (1,312
            )
            
            $
            3,091
            
            
            $
            (8,736
            )Basic
                earnings (loss) per shareIncome
                (loss) from continuing operations
            
            $
            0.04
            
            
            $
            (0.02
            )
            
            $
            0.08
            
            
            $
            (0.18
            )Loss
                from discontinued operations
            
            
            -
            
            
            $
            (0.01
            )
            
            $
            (0.02
            )
            
            $
            (0.02
            )Net
                income (loss)
            
            $
            0.04
            
            
            $
            (0.03
            )
            
            $
            0.06
            
            
            $
            (0.20
            )Diluted
                earnings (loss) per shareIncome
                (loss) from continuing operations
            
            $
            0.04
            
            
            $
            (0.02
            )
            
            $
            0.07
            
            
            $
            (0.18
            )Loss
                from discontinued operations
            
            
            -
            
            
            $
            (0.01
            )
            
            $
            (0.02
            )
            
            $
            (0.02
            )Net
                income (loss)
            
            $
            0.04
            
            
            $
            (0.03
            )
            
            $
            0.05
            
            
            $
            (0.20
            )Weighted
                average common shares outstanding used in computing earnings (loss)
                per
                shareBasic
            
            
            57,505
            
            
            
            45,237
            
            
            
            54,114
            
            
            
            43,202Diluted
            
            
            60,648
            
            
            
            45,237
            
            
            
            57,403
            
            
            
            43,202














CONDENSED
      CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)





(AMOUNTS
      IN THOUSANDS)








Three
                months ended
            
            
            Nine
                months endedSeptember
                29, 2007
            
            
            September
                30, 2006
            
            
            September
                29, 2007
            
            
            September
                30, 2006(unaudited)
            
            
            (unaudited)
            
            
            (unaudited)
            
            
            (unaudited)Net
                income (loss)
            
            $
            2,365
            
            
            $
            (1,312
            )
            
            $
            3,091
            
            
            $
            (8,736
            )Unrealized gain
                on marketable securities
            
            
            93
            
            
            
            32
            
            
            
            51
            
            
            
            199Foreign
                currency translation adjustment
            
            
            25
            
            
            
            4
            
            
            
            23
            
            
            
            6Reclassification
                adjustment:Net
                realized loss previously recognized in other comprehensive
                income
            
            
            -
            
            
            
            -
            
            
            
            9
            
            
            
            -Comprehensive
                income (loss)
            
            $
            2,483
            
            
            $
            (1,276
            )
            
            $
            3,174
            
            
            $
            (8,531
            )








See
                accompanying notes.





ANADIGICS,
                Inc.





CONDENSED
      CONSOLIDATED STATEMENTS OF CASH FLOWS





(AMOUNTS
      IN THOUSANDS)





Nine
                months endedSeptember
                29, 2007
            
            
            September
                30, 2006(unaudited)
            
            
            (unaudited)CASH
                FLOWS FROM OPERATING ACTIVITIESNet
                income (loss)
            
            $
            3,091
            
            
            $
            (8,736
            )Adjustments
                to reconcile net income (loss) to net cash provided by (used in)
                operating
                activities:Loss
                from discontinued operations
            
            
            965
            
            
            
            731Depreciation
            
            
            6,655
            
            
            
            5,818Amortization
            
            
            555
            
            
            
            1,441Stock
                based compensation
            
            
            11,273
            
            
            
            5,325Amortization
                of (discount) premium on marketable securities
            
            
            (365
            )
            
            
            155Realized
                loss on sales of marketable securities
            
            
            9
            
            
            
            -Gain
                on disposal of equipment
            
            
            -
            
            
            
            (19
            )Changes
                in operating assets and liabilities:Accounts
                receivable
            
            
            (13,367
            )
            
            
            (6,636
            )Inventories
            
            
            (375
            )
            
            
            (3,823
            )Prepaid
                expenses and other assets
            
            
            (3,843
            )
            
            
            (1,543
            )Accounts
                payable
            
            
            5,816
            
            
            
            3,780Accrued
                liabilities and other liabilities
            
            
            752
            
            
            
            (221
            )Net
                cash provided by (used in) operating activities
            
            
            11,166
            
            
            
            (3,728
            )CASH
                FLOWS FROM INVESTING ACTIVITIESPurchases
                of plant and equipment
            
            
            (24,089
            )
            
            
            (7,330
            )Proceeds
                from sale of equipment
            
            
            -
            
            
            
            28Purchase
                of RF group assets
            
            
            (2,415
            )
            
            
            -Purchases
                of marketable securities
            
            
            (196,358
            )
            
            
            (180,254
            )Proceeds
                from sale of marketable securities
            
            
            133,762
            
            
            
            140,329Net
                cash used in investing activities
            
            
            (89,100
            )
            
            
            (47,227
            )CASH
                FLOWS FROM FINANCING ACTIVITIESPayment
                of capital lease obligations
            
            
            (1,775
            )
            
            
            (185
            )Issuance
                of common stock
            
            
            109,597
            
            
            
            55,301Net
                cash provided by financing activities
            
            
            107,822
            
            
            
            55,116Net
                increase in cash and cash equivalents
            
            
            29,888
            
            
            
            4,161Cash
                and cash equivalents at beginning of period
            
            
            13,706
            
            
            
            11,891Cash
                and cash equivalents at end of period
            
            $
            43,594
            
            
            $
            16,052

































































See
                accompanying notes.








ANADIGICS,
      Inc.





NOTES
      TO
      CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) – SEPTEMBER 29,
      2007





(AMOUNTS
      IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)








1.         SUMMARY
      OF SIGNIFICANT ACCOUNTING POLICIES




BASIS
      OF
      PRESENTATION




The
      accompanying unaudited condensed consolidated financial statements have been
      prepared in accordance with U.S. generally accepted accounting principles for
      interim financial information and with the instructions to Form 10-Q and Article
      10 of Regulation S-X.  Accordingly, they do not include all of the
      information and footnotes required by U.S. generally accepted accounting
      principles for complete financial statements.  In the opinion of
      management, all adjustments (consisting of normal recurring accruals and
      adjustments) considered necessary for a fair presentation have been
      included.  Operating results for the three and nine month periods
      ended September 29, 2007 are not necessarily indicative of the results that
      may
      be expected for the year ending December 31, 2007.




The
      condensed
      consolidated balance sheet at December 31, 2006 has been derived from the
      audited financial statements at that date but does not include all the
      information and footnotes required by U.S. generally accepted accounting
      principles for complete financial statements. For further information, refer
      to
      the consolidated financial statements and footnotes thereto included in the
      Company’s Annual Report on Form 10-K for the year ended December 31,
      2006.




The
      condensed
      consolidated financial statements include the accounts of the Company and its
      wholly-owned subsidiaries. All significant intercompany accounts and
      transactions have been eliminated in consolidation.




As
      more fully
      discussed in footnote 3 below, the Company sold the majority of the operating
      assets of Telcom Devices Inc. (“Telcom”, a wholly-owned subsidiary of the
      Company) on April 2, 2007 and effectively ceased Telcom’s operations.
      Accordingly, the financial results, position and cashflow of Telcom have been
      classified as discontinued operations in the accompanying financial statements
      for the periods presented.




IMPACT
      OF
      RECENTLY ISSUED ACCOUNTING STANDARDS




In
      February,
      2007, the FASB issued FASB Statement No. 159 “The Fair Value Option for
      Financial Assets and Financial Liabilities” (“FAS 159”), which permits entities
      to choose to measure many financial assets and financial liabilities at fair
      value. Unrealized gains and losses on items for which the fair value option
      has
      been elected are reported in earnings. FAS 159 is effective for fiscal years
      beginning after November 15, 2007. The Company has not yet determined the impact
      FAS 159 may have on its results of operations or financial
      position.




In
      September
      2006, the FASB issued FASB Statement No. 157, “Fair Value Measurements” (“FAS
      157”) which defines fair value, establishes a framework for measuring fair value
      in generally accepted accounting principles and expands disclosures about fair
      value measurements. FAS 157 is effective for financial statements issued for
      fiscal years beginning after November 15, 2007 and interim periods within those
      fiscal years. The Company has not yet determined the impact FAS 157 may have
      on
      its results of operations or financial position.




In
      June 2006,
      the Financial Accounting Standards Board (“FASB”) issued Interpretation No. 48,
“Accounting for Uncertainty in Income Taxes—an interpretation of FASB Statement
      No. 109” (“FIN 48”), which clarifies the accounting and disclosure for
      uncertainty in tax positions, as defined. FIN 48 seeks to reduce the diversity
      in practice associated with certain aspects of the recognition and measurement
      related to accounting for income taxes. As of January 1, 2007, the Company
      adopted FIN 48 which did not have a material impact on its consolidated
      financial statements.




INCOME
      TAXES




The
      Company
      maintains a full valuation allowance on its deferred tax
      assets.  Accordingly, the Company has not recorded a benefit or
      provision for income taxes. The Company recognizes interest and penalties
      related to the underpayment of income taxes in income tax expense. Upon adoption
      of FIN 48, the Company had no unrecognized tax benefits. No unrecognized tax
      benefits, interest or penalties were accrued at September 29, 2007. The
      Company’s U.S. federal net operating losses have occurred since 1998 and as
      such, tax years subject to potential tax examination could apply from that
      date
      because carrying-back net operating loss opens the relevant year to
      audit.




WARRANTY




Based
      on the
      examination of historical returns and other information it deems critical,
      the
      Company estimates that a current charge to income will need to be provided
      in
      order to cover future warranty obligations for products sold during the year.
      The accrued liability for warranty costs is included in Accrued liabilities
      in
      the condensed consolidated balance sheets.Warranty
      reserve movements in the nine months ended September 29, 2007 included $412
      in
      actual charges and $382 in provisions resulting in the balance of $317 at
      September 29, 2007.  Warranty reserve movements in the nine months
      ended September 30, 2006 included $503 in actual charges and a $407 increase
      in
      the provision.




DEPRECIATION




During
      2007,
      the Company began depreciating certain new wafer fabrication equipment over
      a
      seven year useful life.





2.
      PURCHASE OF ASSETS OF RF GROUP




On
      September
      5, 2007, the Company purchased certain assets and assumed certain related
      obligations of the radio frequency group of Fairchild Semiconductor (“RF group”)
      in exchange for cash of $2,415, inclusive of transaction costs of $115. The
      assets acquired were principally equipment used in researching and developing
      radio frequency semiconductor products for the broadband wireless communications
      markets. No products or manufacturing processes were included as part of the
      purchase. The RF group staff of 23 accepted employment with the
      Company.




Included
      in
      the purchase were fixed assets with an estimated fair market value of $1,723,
      non-exclusive rights to certain intellectual property and assembled workforce
      valued at approximately $168 and $524, respectively. The fixed assets,
      intellectual property and assembled workforce costs will be amortized over
      their
      estimated useful lives of 3, 2 and 3 years, respectively.





3.  DISCONTINUED
      OPERATIONS




On
      April 2,
      2007, the Company sold the majority of Telcom’s operating assets to GTRAN
      Camarillo, Inc. in exchange for a $500 non-interest-bearing note due December
      31, 2007 and effectively ceased Telcom’s operations. The transaction is subject
      to certain post-closing adjustments. As a consequence of the sale, the financial
      results, position and cashflow of Telcom have been classified as discontinued
      operations in the accompanying financial statements for the periods
      presented.




Summarized
      operating results and loss on sale of discontinued operations in the three
      and
      nine months ended September 30, 2006 and through March 31, 2007 included with
      the nine months ended September 29, 2007 were as follows:





Three
                months ended
            
            
            Nine
                months endedSeptember
                30, 2006
            
            
            September
                29, 2007
            
            
            September
                30, 2006Revenue
            
            $
            882
            
            
            $
            559
            
            
            $
            2,775Operating
                loss
            
            
            (225
            )
            
            
            (479
            )
            
            
            (743
            )Interest
                income
            
            
            5
            
            
            
            4
            
            
            
            12Loss
                on sale of discontinued operations
            
            
            -
            
            
            
            (490
            )
            
            
            -Loss
                from discontinued operations
            
            $
            (220
            )
            
            $
            (965
            )
            
            $
            (731
            )




The
      assets
      and liabilities of Telcom as of September 29, 2007 are zero. Such amounts as
      of
      December 31, 2006 are reflected as discontinued operations and
      were:





December
                31, 2006Assets
                of discontinued operationsAccounts
                receivable
            
            $
            604Inventory
            
            
            654Other
                current and non-current assets
            
            
            62Fixed
                assets, net
            
            
            109Total
            
            $
            1,429Liabilities
                of discontinued operations
            
            $
            252





4.         INVENTORIES




Inventories
      are stated at the lower of cost (first-in, first-out method) or
      market.  Inventories consist of the following:





September
                29, 2007
            
            
            December
                31, 2006Raw
                materials
            
            $
            5,296
            
            
            $
            5,370Work
                in process
            
            
            14,697
            
            
            
            11,571Finished
                goods
            
            
            4,391
            
            
            
            6,29724,384
            
            
            
            23,238Reserves
            
            
            (4,308
            )
            
            
            (3,537
            )Total
            
            $
            20,076
            
            
            $
            19,701





5.      EARNINGS
      (LOSS) PER SHARE




The
      reconciliation of shares used to calculate basic and diluted earnings (loss)
      per
      share consists of the following:





Three
                months ended
            
            
            Nine
                months endedSeptember
                29, 2007
            
            
            September
                30, 2006
            
            
            September
                29, 2007
            
            
            September
                30, 2006Weighted
                average common shares outstanding used to calculate basic earnings
                (loss)
                per share
            
            
            57,505
            
            
            
            45,237
            
            
            
            54,114
            
            
            
            43,202Net
                effect of dilutive securities
            
            
            3,143
            
            
            
            -
            
            
            
            3,289
            
            
            
            -Weighted
                average securities outstanding used to calculate diluted earnings
                (loss)
                per share
            
            
            60,648
            
            
            
            45,237
            
            
            
            57,403
            
            
            
            43,202




Potential
      dilution arising from the remainder of the Company's outstanding stock options,
      unvested restricted shares or shares potentially issuable upon conversion of
      the
      Convertible notes are detailed below. Such potential dilution was excluded
      as
      their effect was anti-dilutive.





Three
                months ended
            
            
            Nine
                months endedSeptember
                29, 2007
            
            
            September
                30, 2006
            
            
            September
                29, 2007
            
            
            September
                30, 2006Convertible
                notes
            
            
            7,600
            
            
            
            9,824
            
            
            
            7,600
            
            
            
            9,824Stock
                options
            
            
            434
            
            
            
            5,044
            
            
            
            1,732
            
            
            
            5,044Unvested
                restricted shares
            
            
            -
            
            
            
            2,600
            
            
            
            10
            
            
            
            2,600





6. REVENUE
      SOURCES


The
      Company
      classifies its revenues based upon the end application of the product in which
      its integrated circuits are used.  Net sales by end application are
      regularly reviewed by the chief operating decision maker and are as
      follows:





Three
                months ended
            
            
            Nine
                months endedSeptember
                29, 2007
            
            
            September
                30, 2006
            
            
            September
                29, 2007
            
            
            September
                30, 2006Broadband
            
            $
            25,570
            
            
            $
            20,507
            
            
            $
            76,233
            
            
            $
            52,922Wireless
            
            
            33,975
            
            
            
            23,436
            
            
            
            86,754
            
            
            
            65,064Total
            
            $
            59,545
            
            
            $
            43,943
            
            
            $
            162,987
            
            
            $
            117,986




The
      Company
      primarily sells to three geographic regions: Asia, USA and Canada, and Other.
      The geographic region is determined by the destination of the shipped product.
      Net sales to each of the three geographic regions are as follows:





Three
                months ended
            
            
            Nine
                months endedSeptember
                29, 2007
            
            
            September
                30, 2006
            
            
            September
                29, 2007
            
            
            September
                30, 2006Asia
            
            $
            40,946
            
            
            $
            24,392
            
            
            $
            110,549
            
            
            $
            66,084USA
                and Canada
            
            
            16,213
            
            
            
            16,467
            
            
            
            45,310
            
            
            
            42,753Other
            
            
            2,386
            
            
            
            3,084
            
            
            
            7,128
            
            
            
            9,149Total
            
            $
            59,545
            
            
            $
            43,943
            
            
            $
            162,987
            
            
            $
            117,986





7.  LONG-TERM
      DEBT




On
      September
      24, 2004, the Company issued $38,000 aggregate principal amount of 5%
      Convertible Senior Notes (“2009 Notes”) due October 15, 2009. The 2009 Notes are
      convertible into shares of the Company’s common stock at any time prior to their
      maturity, at an initial conversion rate, subject to adjustment, of 200 shares
      for each $1,000 principal amount, which is equivalent to a conversion price
      of
      $5.00 per share (7,600 shares contingently issuable). Interest on the 2009
      Notes
      is payable semi-annually in arrears on April 15 and October 15 of each
      year.




During
      2006
      the Company had $46.7 million principal amount outstanding of its 5% Convertible
      Senior Notes (“2006 Notes”) which were repaid upon maturity in November 2006.
      The 2006 Notes were convertible into shares of the Company’s common stock at an
      initial conversion rate, subject to adjustment, of 47.619 shares for each $1,000
      principal amount, which was equivalent to a conversion price of $21.00 per
      share
      (2,224 shares were contingently issuable).





8.  STOCK
      BASED COMPENSATION




Effective
      January 1, 2006, the Company adopted the provisions of FASB Statement 123R
      “Share Based Payment” (“FAS 123R”) in accounting for share based payments to
      employees, having previously followed the provisions of Accounting Principles
      Board Number 25 “Accounting for Stock Issued to Employees”, as permitted by FAS
      123 “Accounting for Stock Based Compensation”.  The Company adopted
      FAS 123R using the modified-prospective transition method, which requires the
      recognition of compensation expense over the remaining vesting period for all
      awards that remained unvested as of January 1, 2006.





Equity
      Compensation Plans




The
      Company
      had 4 equity compensation plans under which equity securities are authorized
      for
      issuance to employees and/or directors:




§
            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”).




Employees
      and
      outside directors have been granted restricted stock and options to purchase
      shares of common stock under stock option plans adopted in 1995, 1997 and 2005.
      An aggregate of 4,913, 5,100 and 6,450 shares of common stock were reserved
      for
      issuance under the 1995 Plan, the 1997 Plan and the 2005 Plan, respectively.
      The
      Plans provide for the granting of stock options, stock appreciation rights,
      restricted shares and other share based awards to eligible employees and
      directors, as defined in the Plans. Option grants have terms of ten years and
      become exercisable in varying amounts over periods of up to three years. To
      date, no stock appreciation rights have been granted under the
      Plans.




In
      1995, the
      Company adopted the ESP Plan under Section 423 of the Internal Revenue Code.
      All
      full-time employees of ANADIGICS, Inc. and part-time employees, as defined
      in
      the ESP Plan, are eligible to participate in the ESP Plan. An aggregate of
      2,694
      shares of common stock were reserved for offering under the ESP Plan. Offerings
      are made at the commencement of each calendar year and must be purchased by
      the
      end of that calendar year.




The
      table
      below summarizes stock based compensation by source and by financial statement
      line item for the three and nine month periods:




Three
                months ended
            
            
            Nine
                months endedSeptember
                29, 2007
            
            
            September
                30, 2006
            
            
            September
                29, 2007
            
            
            September
                30, 2006Amortization
                of restricted stock awards
            
            $
            2,742
            
            
            $
            2,110
            
            
            $
            9,050
            
            
            $
            5,070Amortization
                of ESP Plan
            
            
            200
            
            
            
            100
            
            
            
            600
            
            
            
            300Amortization
                of stock option awards
            
            
            615
            
            
            
            18
            
            
            
            1,668
            
            
            
            86Total
                stock based compensation
            
            $
            3,557
            
            
            $
            2,228
            
            
            $
            11,318
            
            
            $
            5,456By
                Financial Statement line itemCost
                of sales
            
            $
            736
            
            
            $
            466
            
            
            $
            2,487
            
            
            $
            1,140Research
                and development expenses
            
            
            1,446
            
            
            
            877
            
            
            
            4,338
            
            
            
            2,142Selling
                and administrative expenses
            
            
            1,375
            
            
            
            838
            
            
            
            4,448
            
            
            
            2,043Loss
                from discontinued operations
            
            
            -
            
            
            
            47
            
            
            
            45
            
            
            
            131




No
      tax
      benefits have been recorded due to the Company’s full valuation allowance
      position.





Restricted
      Stock Awards




Commencing
      in
      August 2004, the Company began granting restricted shares under the Plans.
      The
      value of the restricted stock awards are fixed upon the date of grant and
      amortized over the related vesting period of one to three
      years.  Restricted stock awards are subject to forfeiture if
      employment terminates prior to vesting.  The Company estimates that
      approximately 2.5% of its restricted stock awards are forfeited
      annually.  The restricted stock awards carry voting and dividend
      rights commencing upon grant but may not be traded or transferred prior to
      vesting.  Grant, vest and forfeit activity and related weighted
      average price per share for restricted stock and for stock options during the
      period from January 1, 2006 to September 29, 2007 is presented in tabular form
      below:





Restricted
                Shares
            
            
            Stock
                OptionsShares
            
            
            Weighted
                average price per share
            
            
            Issuable
                upon exercise
            
            
            Weighted
                average exercise priceGrants
                outstanding at January 1, 2006
            
            
            1,214
            
            
            $
            2.72
            
            
            
            5,944
            
            
            $
            7.67Granted
            
            
            2,685
            
            
            
            6.90
            
            
            
            994
            
            
            
            8.80Shares
                vested/options exercised
            
            
            (675
            )
            
            
            2.68
            
            
            
            (983
            )
            
            
            3.85Forfeited/expired
            
            
            (86
            )
            
            
            5.46
            
            
            
            (286
            )
            
            
            11.16Balance
                at December 31, 2006
            
            
            3,138
            
            
            
            6.23
            
            
            
            5,669
            
            
            
            8.36Granted
            
            
            971
            
            
            
            11.15
            
            
            
            161
            
            
            
            10.65Shares
                vested/options exercised
            
            
            (1,714
            )
            
            
            5.76
            
            
            
            (1,898
            )
            
            
            5.62Forfeited/expired
            
            
            (168
            )
            
            
            6.94
            
            
            
            (204
            )
            
            
            15.76Balance
                at September 29, 2007
            
            
            2,227
            
            
            $
            8.71
            
            
            
            3,728
            
            
            $
            9.44







As
                of September 29, 2007Unrecognized
                stock based compensation costOption
                plans
            
            $
            4,529Restricted
                stock
            
            $
            12,635Weighted
                average remaining recognition periodOption
                plans
            
            2.1
                yearsRestricted
                stock
            
            1.0
                years





Stock
      options outstanding at September 29, 2007 are summarized as
      follows:





Range
                of exercise prices
            
            
            Outstanding
                Options at September 29, 2007
            
            
            Weighted
                average remaining contractual life
            
            
            Weighted
                average exercise price
            
            
            Exercisable
                at September 29, 2007
            
            
            Weighted
                average exercise price$
            1.39
                - $7.27
            
            
            
            1,664
            
            
            
            5.11
            
            
            $
            5.55
            
            
            
            1,643
            
            
            $
            5.57$
            7.65
                - $8.84
            
            
            
            989
            
            
            
            9.08
            
            
            $
            8.82
            
            
            
            18
            
            
            $
            7.66$
            9.00
                – 17.64
            
            
            
            940
            
            
            
            3.70
            
            
            $
            13.70
            
            
            
            837
            
            
            $
            13.95$
            17.75
                - $53.48
            
            
            
            135
            
            
            
            1.82
            
            
            $
            32.30
            
            
            
            135
            
            
            $
            32.30





Valuation
      Method for Stock Option Awards and ESP Plan





The
      fair
      value of these equity awards was estimated at the date of grant using a
      Black-Scholes option pricing model. The weighted average assumptions for stock
      based compensation grants used for the nine month periods ended September 29,
      2007 and September 30, 2006 were:





Nine
                months endedSeptember
                29, 2007
            
            
            September
                30, 2006Stock
                option awards:Risk-free
                interest rate
            
            
            4.74
            %
            
            
            4.31
            %Expected
                volatility
            
            
            0.71
            
            
            
            0.94Average
                expected term (in years)
            
            
            4.75
            
            
            
            3.00Expected
                dividend yield
            
            
            0.0
            %
            
            
            0.0
            %Weighted
                average fair value of options granted
            
            $
            6.44
            
            
            $
            3.91ESP
                Plan:Risk-free
                interest rate
            
            
            4.05
            %
            
            
            4.91
            %Expected
                volatility
            
            
            0.54
            
            
            
            0.69Average
                expected term (in years)
            
            
            1.00
            
            
            
            1.00Expected
                dividend yield
            
            
            0.0
            %
            
            
            0.0
            %Weighted
                average fair value of purchase option
            
            $
            2.85
            
            
            $
            2.29





9.
      STOCKHOLDERS’ EQUITY




In
      March,
      2007, The Company completed an underwritten public offering of 8,625 shares
      of
      common stock, generating net proceeds to the Company of $98,955.In March 2006,
      the Company completed an underwritten public offering of 10,446 shares of common
      stock, generating net proceeds to the Company of $53,110.





ANADIGICS,
      Inc.





ITEM
      2.
      MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
      OPERATIONS





OVERVIEW




ANADIGICS,
      Inc. (“we” or the “Company”) is a leading provider of semiconductor solutions in
      the rapidly growing broadband wireless and wireline communications
      markets.  Our products include power amplifiers (PAs), tuner
      integrated circuits, active splitters, line amplifiers and other components,
      which can be sold individually or packaged as integrated radio frequency (RF)
      and front end modules.  We believe that we are uniquely positioned to
      capitalize on the rapidly-growing voice, data and video segments of the
      broadband wireless and wireline communications markets.  We offer
      third generation (3G) products that use the Wideband Code-Division Multiple
      Access (W-CDMA) and Enhanced Data Rates for Global System for Mobile
      Communication (GSM) Evolution (EDGE) standards, beyond third generation (3.5G)
      products that use the High Speed Down Line Packet Access (HSDPA) and High Speed
      Uplink Line Packet Access (HSUPA) standards, fourth generation (4G) products
      for
      Worldwide Interoperability for Microwave Access (WiMAX) and Wireless Broadband
      (WiBRO) systems, Wireless Fidelity (WiFi) products that use the 802.11 a/b/g
      and
      802.11 n (draft-n, Multiple Input Multiple Output (MIMO)) standards, cable
      television (CATV) set-top box products, CATV infrastructure products and
      Fiber-To-The-Premises (FTTP) products.




Our
      business
      strategy focuses on developing RF front end solutions and partnering with
      industry-leading wireless chipset providers to incorporate our solutions into
      their reference designs.  Our integrated solutions enable our
      customers to improve RF performance, power efficiency, reliability,
      time-to-market and the integration of chip components into single packages,
      while reducing the size, weight and cost of their products.  We have
      established longstanding relationships with several of the industry-leading
      chipset suppliers and tier-one customers.  For example, our
      relationships with Cisco Systems, Inc. (Cisco), Intel Corporation (Intel),
      Motorola, Inc. (Motorola) and Qualcomm Incorporated (Qualcomm) have enabled
      us
      to develop RF products used in 3G, 3.5G, 4G WiMAX, WiFi and CATV products and
      to
      be the primary supplier with respect to such partners and
      customers.  Other leading chipset suppliers and tier-one customers
      with whom we have longstanding relationships include Atheros Communications,
      Inc. (Atheros), High Tech Computer Corp. (HTC), Huawei Technologies Co., Ltd.
      (Huawei), Kyocera Corporation (Kyocera), Lenovo Group Limited (Lenovo), LG
      Electronics Inc. (LG Electronics), Marvell Technology Group Ltd. (Marvell),
      MediaTek AEI, Inc. (MediaTek), Murata Manufacturing Co., Ltd. (Murata), Novatel
      Wireless, Inc. (Novatel), Palm, Inc. (Palm), Research In Motion Limited (RIM),
      Samsung Electronics Co., Ltd. (Samsung), Sierra Wireless, Inc. (Sierra
      Wireless), TCL Mobile Communication Co., Ltd. (TCL), TDK Electronics Corporation
      (TDK), Texas Instruments Incorporated (Texas Instruments) and ZTE Corporation
      (ZTE).




We
      continue
      to focus on leveraging our technological and manufacturing advantages to remain
      a leading supplier of semiconductor solutions for broadband wireless and
      wireline communications. We design, develop and manufacture RFICs primarily
      using GaAs compound semiconductor substrates with various process technologies,
      Metal Semiconductor Field Effect Transistors (MESFET), Pseudomorphic High
      Electron Mobility Transistors (pHEMT), and Heterojunction Bipolar Transistors
      (HBT).  Our patented technology, which utilizes InGaP-*plus*,
      combines InGaP HBT and pHEMT processes on a single substrate, enabling us to
      integrate the PA function and the RF active switch function on the same die.
      Additionally, we believe our InGaP-*plus* process and design technologies
      such as High Efficiency at Low Power (HELP) provide a competitive advantage
      by
      enabling us to provide PAs that consume less battery power and extend talk
      time
      for products in the 3G, 3.5G and 4G markets.




On
      April 2,
      2007, we sold the majority of the operating assets of Telcom Devices Inc.
      (“Telcom”) to GTRAN Camarillo, Inc. in exchange for a $0.5 million
      non-interest-bearing note due December 31, 2007 and effectively ceased Telcom’s
      operations. As a consequence of the sale, the financial results, position and
      cashflow of Telcom have been classified as discontinued operations in the
      accompanying financial statements for all periods presented.




On
      September
      5, 2007, we purchased certain assets and assumed certain related obligations
      of
      the radio frequency group of Fairchild Semiconductor (“RF group”) in exchange
      for approximately $2.4 million. The assets acquired were principally equipment
      used in researching and developing radio frequency semiconductor products for
      the broadband wireless communications markets. No products or manufacturing
      processes were included as part of the purchase. The RF group staff of 23
      accepted employment with the Company.




We
      were
      incorporated in Delaware in 1984. Our corporate headquarters are located at
      141
      Mt. Bethel Road, Warren, New Jersey 07059, and our telephone number at that
      address is 908-668-5000.




RESULTS
      OF
      OPERATIONS




The
      following
      table sets forth unaudited consolidated statements of operations data as a
      percent of net sales for the periods presented:





Three
                months ended
            
            
            Nine
                months endedSeptember
                29, 2007
            
            
            September
                30, 2006
            
            
            September
                29, 2007
            
            
            September
                30, 2006Net
                sales
            
            
            100.0
            %
            
            
            100.0
            %
            
            
            100.0
            %
            
            
            100.0
            %Cost
                of sales
            
            
            66.1
            %
            
            
            68.9
            %
            
            
            66.0
            %
            
            
            71.0
            %Gross
                margin
            
            
            33.9
            %
            
            
            31.1
            %
            
            
            34.0
            %
            
            
            29.0
            %Research
                and development expenses
            
            
            21.0
            %
            
            
            20.4
            %
            
            
            20.5
            %
            
            
            21.5
            %Selling
                and administrative expenses
            
            
            12.1
            %
            
            
            14.0
            %
            
            
            13.5
            %
            
            
            14.5
            %Operating
                income (loss)
            
            
            0.8
            %
            
            
            (3.3
            %)
            
            
            -
            
            
            
            (7.0
            %)Interest
                income
            
            
            3.9
            %
            
            
            3.7
            %
            
            
            3.5
            %
            
            
            3.5
            %Interest
                expense
            
            
            (1.0
            %)
            
            
            (2.9
            %)
            
            
            (1.1
            %)
            
            
            (3.3
            %)Other
                income
            
            
            0.3
            %
            
            
            -
            
            
            
            0.1
            %
            
            
            -Income
                (loss) from continuing operations
            
            
            4.0
            %
            
            
            (2.5
            %)
            
            
            2.5
            %
            
            
            (6.8
            %)Loss
                from discontinued operations
            
            
            -
            
            
            
            (0.5
            %)
            
            
            (0.6
            %)
            
            
            (0.6
            %)Net
                income (loss)
            
            
            4.0
            %
            
            
            (3.0
            %)
            
            
            1.9
            %
            
            
            (7.4
            %)





NET
      SALES.******Net sales increased 35.5% during the third
      quarter of 2007 to $59.5 million from $43.9 million in the third quarter of
      2006. For the nine months ended September 29, 2007, net sales were $163.0
      million, a 38.1% increase from net sales of $118.0 million for the nine months
      ended September 30, 2006.




Sales
      of
      integrated circuits for broadband applications increased 24.7% during the third
      quarter of 2007 to $25.6 million from $20.5 million in the third quarter of
      2006. For the nine months ended September 29, 2007, net sales of integrated
      circuits for broadband applications increased 44.0% to $76.2 million from $52.9
      million for the nine months ended September 30, 2006. The increase in sales
      in
      the third quarter of 2007 was primarily due to an increased demand for WLAN
      products, approximating $4.1 million. The increase in sales in the nine
      months ended September 29, 2007 was primarily due to increased demand for both
      WLAN and infrastructure products, representing a combined revenue increase
      of
      $22.1 million.




Sales
      of
      integrated circuits for wireless applications increased 45.0% during the third
      quarter of 2007 to $33.9 million from $23.4 million in the third quarter of
      2006. For the nine months ended September 29, 2007, net sales of integrated
      circuits for wireless applications increased 33.3% to $86.8 million from $65.1
      million for the nine months ended September 30, 2006. The increase in sales
      of
      integrated circuits for wireless applications in the third quarter of 2007
      was
      primarily due to increased demand for our 3G (EDGE, WEDGE, CDMA2000 1X
      applications and WCDMA) PAs where revenue rose by $9.9 million. The increase
      in
      sales for wireless applications in the nine months ended September 29, 2007
      was
      primarily due to increased demand for our 3G (EDGE, WEDGE, CDMA2000 1X
      applications and WCDMA) PAs where revenue rose by $30.9 million, which was
      partly offset by a decrease of $9.2 million in GSM revenues due principally
      to
      decreased volumes.




Geographically,
      net
      sales in Asia increased 67.9% during the third quarter of 2007 to $40.9 million
      from $24.4 million in the third quarter of 2006. For the nine months ended
      September 29, 2007, net sales in Asia increased 67.3% to $110.5 million from
      $66.1 million for the nine months ended September 30, 2006.  The
      increases in the three and nine month periods were primarily driven by the
      increased demand for WLAN and 3G products.




GROSS
      MARGIN.
      Gross margin during the third quarter of 2007 increased to 33.9% of net sales
      from 31.1% of net sales in the third quarter of 2006. For the nine months ended
      September 29, 2007, gross margin increased to 34.0% from 29.0% for the nine
      months ended September 30, 2006.  The increases in gross margin in the
      three and nine months were primarily due to increased sales and production
      volumes with the consequent absorption of fixed costs.




RESEARCH
      AND
      DEVELOPMENT. Company sponsored research and development expenses increased
      39.2%
      during the third quarter of 2007 to $12.5 million from $9.0 million during
      the
      third quarter of 2006. Company sponsored research and development expenses
      for
      the nine month period ended September 29, 2007 increased 31.4% to $33.3 million
      from $25.3 million during the nine month period ended September 30, 2006. The
      increases in the three and nine month periods ended September 29, 2007 were
      primarily due to increased staff costs supporting new product development,
      inclusive of increased stock based compensation of $0.6 million and $2.2
      million, respectively. Both the three and nine month periods ended September
      29,
      2007 included costs of $0.6 million associated with the new RF group purchased
      in September 2007.




SELLING
      AND
      ADMINISTRATIVE. Selling and administrative expenses increased 17.6% to $7.2
      million during the third quarter of 2007 from $6.1 million during the third
      quarter of 2006. Selling and administrative expenses increased 29.2% to $22.1
      million from $17.1 million during the nine month period ended September 30,
      2006. The increases in the three and nine month periods ended September 29,
      2007
      were primarily driven by increased staff costs, inclusive of increases in stock
      based compensation of $0.5 million and $2.4 million, respectively.




INTEREST
      INCOME.******Interest income increased 42.3% to $2.3
      million during the third quarter of 2007 from $1.6 million during the third
      quarter of 2006. For the nine months ended September 29, 2007, interest income
      increased 41.8% from to $5.8 million from $4.1 million in the nine month period
      ended September 30, 2006. The increases were primarily due to higher average
      funds invested as a result of our underwritten public offering of 8.6 million
      shares of common stock in March of 2007 (the “March 2007 Offering”) and higher
      interest rates.




INTEREST
      EXPENSE.  Interest expense decreased 53.9% to $0.6 million during the
      third quarter of 2007 as compared to $1.3 million during the third quarter
      of
      2006. For the nine months ended September 29, 2007, interest expense decreased
      51.5% to $1.9 million from $3.9 million in the nine month period ended September
      30, 2006. The decreases related to the repayment of the $46.7 million
      outstanding balance of our 5% Convertible Senior Notes in November of
      2006.




LOSS
      FROM
      DISCONTINUED OPERATIONS. Loss on discontinued operations in the third quarter
      of
      2007 was zero compared to $0.2 million in the third quarter of 2006. For the
      nine months ended September 29, 2007 the loss on discontinued operations
      increased 32.0% to $1.0 million as compared to $0.7 million during the nine
      months ended September 30, 2006. The loss on discontinued operations in 2007
      included a $0.5 million loss on the sale of Telcom recognized in the first
      quarter of 2007 in addition to the operating loss for the business.





LIQUIDITY
      AND CAPITAL RESOURCES




As
      of
      September 29, 2007, we had $43.6 million in cash and cash equivalents and $132.8
      million in marketable securities.  Included in these amounts are
      proceeds we received from completion of an underwritten public offering of
      an
      aggregate of 8.6 million shares of common stock in our March 2007 Offering,
      which raised $99.0 million, net of underwriting discounts and commissions and
      related offering expenses. As of September 29, 2007, we had outstanding $38.0
      million aggregate principal amount of our 2009 Notes.




Operating
      activities provided $11.2 million in cash during the nine month period ended
      September 29, 2007, primarily as a result of our improved operating results
      and
      non-cash expenses.  Investing activities, consisting principally of
      net purchases of marketable securities of $62.6 million, purchases of fixed
      assets of $24.1 million, and the purchase of the assets of the RF group of
      $2.4
      million, used $89.1 million of cash during the nine month period ended September
      29, 2007.  Financing activities provided $107.8 million, and consisted
      primarily of proceeds received from the March 2007 Offering and stock
      option exercises.




As
      of
      September 29, 2007, we had unconditional purchase obligations of approximately
      $24.0 million of which $22.6 million relates to capital equipment purchase
      requirements primarily over the next six to nine months to increase the
      installed equipment capacity of the Company's manufacturing operations in
      response to anticipated increases in customer demand for the Company's products.
      The Company has an Investment Contract with the Kunshan (China) New and Hi-Tech
      Industrial Development Zone to jointly construct a wafer fabrication facility,
      and anticipates capital expenditures of approximately $10 – 15 million during
      the next 15 months.




We
      believe
      that our existing sources of capital, including our existing cash and marketable
      securities, will be adequate to satisfy both operational and capital needs
      for
      the next twelve months. We may elect to finance all or part of our anticipated
      operational and capital needs, which may include acquisitions of complimentary
      businesses or technologies, or investments in other companies or repurchases
      of
      our outstanding debt or equity, through additional equity or debt financing.
      Our
      ability to pay principal and interest on our outstanding 2009 Notes due in
      October 2009, our other debt and to fund our planned capital expenditures
      depends on our future operating performance.





IMPACT
      OF
      RECENTLY ISSUED ACCOUNTING STANDARDS




In
      February
      2007, the FASB issued FASB Statement No. 159 “The Fair Value Option for
      Financial Assets and Financial Liabilities” (“FAS 159”), which permits entities
      to choose to measure many financial assets and financial liabilities at fair
      value. Unrealized gains and losses on items for which the fair value option
      has
      been elected are reported in earnings. FAS 159 is effective for fiscal years
      beginning after November 15, 2007. We have not yet determined the impact FAS
      159
      may have on our results of operations or financial position.




In
      September
      2006, the FASB issued FASB Statement No. 157, “Fair Value Measurements” (“FAS
      157”) which defines fair value, establishes a framework for measuring fair value
      in generally accepted accounting principles and expands disclosures about fair
      value measurements. FAS 157 is effective for financial statements issued for
      fiscal years beginning after November 15, 2007 and interim periods within those
      fiscal years. We have not yet determined the impact FAS 157 may have on our
      results of operations or financial position.




In
      June 2006,
      the Financial Accounting Standards Board (“FASB”) issued Interpretation No. 48,
“Accounting for Uncertainty in Income Taxes—an interpretation of FASB Statement
      No. 109” (“FIN 48”), which clarifies the accounting and disclosure for
      uncertainty in tax positions, as defined. FIN 48 seeks to reduce the diversity
      in practice associated with certain aspects of the recognition and measurement
      related to accounting for income taxes. As of January 1, 2007, we adopted FIN
      48, which did not have a material impact on our consolidated financial
      statements. Upon adoption of FIN 48, we had no unrecognized tax benefits. No
      unrecognized tax benefits, interest or penalties were accrued at September
      29,
      2007. Our U.S. federal net operating losses have occurred since 1998 and as
      such, tax years subject to potential tax examination could apply from that
      date
      because carrying-back net operating loss opens the relevant year to
      audit.





FORWARD-LOOKING
      STATEMENTS




This
      quarterly report on Form 10-Q contains projections and other forward-looking
      statements (as that term is defined in the Securities Exchange Act of 1934,
      as
      amended).  These projections and forward-looking statements reflect
      the Company’s current views with respect to future events and financial
      performance and can generally be identified as such because the context of
      the
      statement will include words such as “believe”, “anticipate”, “expect”, or words
      of similar import. Similarly, statements that describe our future plans,
      objectives, estimates or goals are forward-looking statements.  No
      assurances can be given, however, that these events will occur or that these
      projections will be achieved and actual results and developments could differ
      materially from those projected as a result of certain
      factors.  Important factors that could cause actual results and
      developments to be materially different from those expressed or implied by
      such
      projections and forward-looking statements include, but are not limited to,
      the
      following risks which are described in greater detail in the Company’s Annual
      Report on Form 10-K referred to below: (i) our history of recent losses and
      the
      possibility that we may incur losses in the future; (ii) the existence of
      intense competition in the markets for our products, which could result in
      a
      decrease in our products’ prices and sales; (iii) our need to keep pace with
      rapid product and process development and technological changes as well as
      product cost reductions to be competitive; (iv) our gallium arsenide
      semiconductors may cease to be competitive with silicon alternatives; (v)
      sources for certain components, materials and equipment are limited, which
      could
      result in delays or reductions in product shipments; (vi) our ability to respond
      to a significant increase in demand from our customers; (vii) our dependence
      on
      a small number of customers; (viii) our operating results may be harmed if
      we
      fail to sell a high volume of products; (ix) the short life cycles of some
      of
      our products may leave us with obsolete or excess inventories; (x) we may face
      interruptions in our manufacturing processes; (xi) the variability of our
      manufacturing yields may affect our gross margins; (xii) our dependence on
      foreign semiconductor assembly and test operations contractors could lead to
      delays in product shipments; (xiii) our results of operations can vary
      significantly due to the cyclical nature of the semiconductor industry and
      our
      end markets; (xiv) our products have experienced rapidly declining unit prices;
      (xv) capital required for our business may not be available when we need it;
      (xvi) our success depends on our ability to attract and retain qualified
      personnel; (xvii) risks due to our international customer base and our
      subcontracting operations; (xviii) stringent environmental laws and regulations
      both domestically and abroad; (ixx) any failure to protect our intellectual
      property rights or avoid claims that we have infringed on the intellectual
      property rights of others; (xx) any pursuit of selective acquisitions and
      alliances which dilute the ownership of our current shareholders and the
      management and integration of additional operations which may be expensive
      and
      divert management time; and (xxi) certain provisions in our governing documents,
      our shareholders’ rights agreement and of Delaware law could deter, delay or
      prevent a third party from acquiring us and prevent shareholders from realizing
      a takeover premium. The foregoing review of important factors should not be
      construed as exhaustive and should be read in conjunction with the other
      cautionary statements that are included herein or detailed from time to time
      in
      our reports filed with the Securities and Exchange Commission, including the
      Company’s Annual Report on Form 10-K for the year ended December 31, 2006. The
      Company undertakes no obligation to update publicly or revise any
      forward-looking statement, whether as a result of new information, future
      developments or otherwise.





ITEM
      3.
      QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK




The
      Company's
      market risk has not changed significantly for the risks disclosed in Item 7A
      of
      the Company's Annual Report on Form 10-K for the fiscal year ended December
      31,
      2006.





ITEM
      4. CONTROLS AND
      PROCEDURES




Under
      the
      supervision and with the participation of our management, including our Chief
      Executive Officer (“CEO”), and Chief Financial Officer (“CFO”), we conducted an
      evaluation of the effectiveness of our disclosure controls and procedures as
      of
      September 29, 2007. Based on that evaluation, our management, including our
      CEO
      and CFO, concluded that our disclosure controls and procedures were effective
      to
      ensure that information required to be disclosed by us in reports that we file
      or submit under the Exchange Act is recorded, processed, summarized and reported
      as specified within the SEC’s rules and forms.




There
      was no
      change in the Company’s internal control over financial reporting during the
      Company’s last fiscal quarter that has materially affected, or is reasonably
      likely to materially affect, the Company’s internal control over financial
      reporting.




Because
      of
      their inherent limitations, disclosure controls and procedures and internal
      control over financial reporting may not prevent or detect misstatements. Also,
      projections of any evaluation of effectiveness to future periods are subject
      to
      the risk that controls may become inadequate because of changes in conditions,
      or that the degree of compliance with the policies or procedures may
      deteriorate.








ANADIGICS,
      Inc.





PART
      II -
      OTHER INFORMATION





ITEM          1.      LEGAL
      PROCEEDINGS




We
      are a
      party to litigation arising in the ordinary course out of the operation of
      our
      business.  We believe that the ultimate resolution of such litigation
      should not have a material adverse effect on our financial condition, results
      of
      operations or liquidity.





ITEM          6.      EXHIBITS





31.1
                Rule 13a-14(a)/15d-14(a) Certification of Bami Bastani, President
                and
                Chief Executive Officer of ANADIGICS,
                Inc.





31.2
                Rule 13a-14(a)/15d-14(a) Certification of Thomas C. Shields, Executive
                Vice President and Chief Financial Officer of ANADIGICS,
                Inc.





32.1
                Section 1350 Certification of Bami Bastani, President and Chief Executive
                Officer of ANADIGICS, Inc.





32.2
                Section 1350 Certification of Thomas C. Shields, Executive Vice President
                and Chief Financial Officer of ANADIGICS,
                Inc.





SIGNATURES








Pursuant
      to the requirements of the
      Securities Exchange Act of 1934, the registrant has duly caused this report
      to
      be signed on its behalf by the undersigned thereunto duly
      authorized.








ANADIGICS,
      INC.




By:
            /s/
                Thomas C. ShieldsThomas
                C. ShieldsExecutive
                Vice Presidentand
                Chief Financial Officer








Dated:
      November 8, 2007