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 30, 2006.Or/
                /TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
                EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM ____________
                TO
                ____________.Commission
                File No. 0-25662**ANADIGICS,
                Inc.**(Exact
                name of registrant as specified in its charter)Delaware
            22-2582106(State
                or other jurisdiction of incorporation or organization)
            (I.R.S.
                Employer Identification No.)141
                Mt. Bethel Road, Warren, New Jersey
            07059(Address
                of principal executive offices)
            (Zip
                Code)(908)
                668-5000(Registrant's
                telephone number, including area
                code)








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
      30, 2006 was 48,038,354 (excluding 113,761 shares held in
      treasury).











INDEX





ANADIGICS,
      Inc.







PART
                I
            Financial
                InformationItem
                1.
            Financial
                Statements (unaudited)Condensed
                consolidated balance sheets - September 30, 2006 and December 31,
                2005Condensed
                consolidated statements of operations and comprehensive loss - Three
                and
                nine months ended September 30, 2006 and October 1,
                2005Condensed
                consolidated statements of cash flows - Nine months ended September
                30,
                2006 and October 1, 2005Notes
                to condensed consolidated financial statements - September 30,
                2006Item
                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)





See
      accompanying notes.


September
                  30, 2006
              
              
              December
                  31, 2005(unaudited)
              
              
              (Note
                  1)ASSETSCurrent
                  assets:Cash
                  and cash equivalents
              
              $
              16,052
              
              $
              11,891Marketable
                  securities
              
              
              108,264
              
              
              70,364Accounts
                  receivable, net
              
              
              25,162
              
              
              18,755Inventories
              
              
              19,858
              
              
              16,009Prepaid
                  expenses and other current assets
              
              
              3,667
              
              
              2,188Total
                  current assets
              
              
              173,003
              
              
              119,207Marketable
                  securities
              
              
              6,171
              
              
              4,102Plant
                  and equipment:Equipment
                  and furniture
              
              
              138,344
              
              
              133,262Leasehold
                  improvements
              
              
              38,748
              
              
              38,748Projects
                  in process
              
              
              3,842
              
              
              1,617180,934
              
              
              173,627Less
                  accumulated depreciation and amortization
              
              
              (143,573
              )
              
              (137,320
              )37,361
              
              
              36,307Goodwill
                  and other intangibles, net of amortization
              
              
              5,943
              
              
              6,044Other
                  assets
              
              
              1,612
              
              
              2,613Total
                  assets
              
              $
              224,090
              
              $
              168,273LIABILITIES
                  AND STOCKHOLDERS’ EQUITYCurrent
                  liabilities:Accounts
                  payable
              
              $
              19,321
              
              $
              15,519Accrued
                  liabilities
              
              
              4,556
              
              
              4,672Accrued
                  restructuring costs
              
              
              -
              
              
              40Current
                  maturities of long-term debt
              
              
              46,700
              
              
              46,700Current
                  maturities of capital lease obligations
              
              
              307
              
              
              269Total
                  current liabilities
              
              
              70,884
              
              
              67,200Other
                  long-term liabilities
              
              
              3,305
              
              
              3,175Long-term
                  debt, less current portion
              
              
              38,000
              
              
              38,000Capital
                  lease obligations, less current portion
              
              
              1,540
              
              
              1,763Commitments
                  and contingenciesStockholders’
                  equity:Common
                  stock, $0.01 par value, 144,000 shares authorized, 48,108 and 35,007
                  issued at September 30, 2006 and December 31, 2005
              
              
              481
              
              
              350Additional
                  paid-in capital
              
              
              408,181
              
              
              347,555Accumulated
                  deficit
              
              
              (297,932
              )
              
              (289,196
              )Accumulated
                  other comprehensive loss
              
              
              (111
              )
              
              (316
              )Treasury
                  stock at cost: 114 shares
              
              
              (258
              )
              
              (258
              )Total
                  stockholders’ equity
              
              
              110,361
              
              
              58,135Total
                  liabilities and stockholders’ equity
              
              $
              224,090
              
              $
              168,273








ANADIGICS,
      Inc.





CONDENSED
      CONSOLIDATED STATEMENTS OF OPERATIONS





(AMOUNTS
      IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)








Three
                months ended
            Nine
                months endedSeptember
                30, 2006
            
            
            October
                1, 2005
            
            
            September
                30, 2006
            
            
            October
                1, 2005(unaudited)
            
            
            (unaudited)
            
            
            (unaudited)
            
            
            (unaudited)Net
                sales
            $
            44,825
            
            $
            29,264
            
            $
            120,761
            
            $
            74,980Cost
                of sales
            
            31,035
            
            
            22,691
            
            
            86,259
            
            
            61,454Gross
                profit
            
            13,790
            
            
            6,573
            
            
            34,502
            
            
            13,526Research
                and development expenses
            
            9,137
            
            
            7,491
            
            
            25,794
            
            
            22,727Selling
                and administrative expenses
            
            6,328
            
            
            5,234
            
            
            17,690
            
            
            16,292Restructuring
                and other charges
            
            -
            
            
            -
            
            
            -
            
            
            (120
            )Operating
                loss
            
            (1,675
            )
            
            (6,152
            )
            
            (8,982
            )
            
            (25,373
            )Interest
                income
            
            1,648
            
            
            607
            
            
            4,085
            
            
            1,783Interest
                expense
            
            (1,285
            )
            
            (1,250
            )
            
            (3,860
            )
            
            (3,748
            )Other
                income
            
            -
            
            
            15
            
            
            21
            
            
            18Net
                loss
            $
            (1,312
            )
            $
            (6,780
            )
            $
            (8,736
            )
            $
            (27,320
            )Basic
                and diluted loss per share
            $
            (0.03
            )
            $
            (0.20
            )
            $
            (0.20
            )
            $
            (0.81
            )Weighted
                average basic and diluted common shares outstanding
            
            45,237
            
            
            34,067
            
            
            43,202
            
            
            33,872














CONDENSED
      CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS





(AMOUNTS
      IN THOUSANDS)








Three
                months ended
            Nine
                months endedSeptember
                30, 2006
            
            
            October
                1, 2005
            
            
            September
                30, 2006
            
            
            October
                1, 2005(unaudited)
            
            
            (unaudited)
            
            
            (unaudited)
            
            
            (unaudited)Net
                loss
            
            $
            (1,312
            )
            $
            (6,780
            )
            $
            (8,736
            )
            $
            (27,320
            )Unrealized
                gain on marketable securities
            
            
            32
            
            
            66
            
            
            199
            
            
            152Foreign
                currency translation adjustment
            
            
            4
            
            
            (4
            )
            
            6
            
            
            (64
            )Comprehensive
                loss
            
            $
            (1,276
            )
            $
            (6,718
            )
            $
            (8,531
            )
            $
            (27,232
            )
























































See
      accompanying notes.





ANADIGICS,
      Inc.





CONDENSED
      CONSOLIDATED STATEMENTS OF CASH FLOWS





(AMOUNTS
      IN THOUSANDS)


Nine
                  months endedSeptember
                  30, 2006
              
              
              October
                  1, 2005(unaudited)
              
              
              (unaudited)CASH
                  FLOWS FROM OPERATING ACTIVITIESNet
                  loss
              
              $
              (8,736
              )
              $
              (27,320
              )Adjustments
                  to reconcile net loss to net cash used in operating
                  activities:Depreciation
              
              
              6,006
              
              
              8,332Amortization
              
              
              1,441
              
              
              1,308Stock
                  based compensation
              
              
              5,456
              
              
              2,053Amortization
                  of premium on marketable securities
              
              
              155
              
              
              999Gain
                  on disposal of equipment
              
              
              (19
              )
              
              (1
              )Changes
                  in operating assets and liabilities:Accounts
                  receivable
              
              
              (6,407
              )
              
              (7,046
              )Inventories
              
              
              (3,849
              )
              
              1,363Prepaid
                  expenses and other assets
              
              
              (1,557
              )
              
              389Accounts
                  payable
              
              
              3,802
              
              
              6,149Accrued
                  liabilities and other liabilities
              
              
              (20
              )
              
              (1,715
              )Net
                  cash used in operating activities
              
              
              (3,728
              )
              
              (15,489
              )CASH
                  FLOWS FROM INVESTING ACTIVITIESPurchases
                  of plant and equipment
              
              
              (7,330
              )
              
              (420
              )Proceeds
                  from sale of equipment
              
              
              28
              
              
              53Purchases
                  of marketable securities
              
              
              (180,254
              )
              
              (43,291
              )Proceeds
                  from sale of marketable securities
              
              
              140,329
              
              
              58,880Net
                  cash (used in) provided by investing activities
              
              
              (47,227
              )
              
              15,222CASH
                  FLOWS FROM FINANCING ACTIVITIESPayment
                  of capital lease obligations
              
              
              (185
              )
              
              (18
              )Issuance
                  of common stock
              
              
              55,301
              
              
              99Repurchase
                  of common stock into treasury
              
              
              -
              
              
              (258
              )Net
                  cash provided by (used in) financing activities
              
              
              55,116
              
              
              (177
              )Net
                  increase(decrease) in cash and cash equivalents
              
              
              4,161
              
              
              (444
              )Cash
                  and cash equivalents at beginning of period
              
              
              11,891
              
              
              11,171Cash
                  and cash equivalents at end of period
              
              $
              16,052
              
              $
              10,727




































































See
      accompanying notes.











ANADIGICS,
      Inc.





NOTES
      TO
      CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - SEPTEMBER 30,
      2006





(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 accounting principles generally accepted in the
      United States 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 accounting principles generally
      accepted in the United States 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 30,
      2006
      are not necessarily indicative of the results that may be expected for the
      year
      ending December 31, 2006.




The
      condensed
      consolidated balance sheet at December 31, 2005 has been derived from the
      audited financial statements at that date but does not include all the
      information and footnotes required by accounting principles generally accepted
      in the United States 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,
      2005.




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.




INCOME
      TAXES




The
      Company
      maintains a full valuation allowance on its deferred tax assets. Accordingly,
      the Company has not recorded a benefit for income taxes.





IMPACT
      OF
      RECENTLY ISSUED ACCOUNTING STANDARDS




Effective
      January 1, 2006, the Company adopted Financial Accounting Standards Board
      Statement No. 151 (FAS 151), Inventory Costs, an amendment of Accounting
      Research Bulletin No. 43 (ARB No. 43), Chapter 4. FAS 151 clarifies that
      abnormal amounts of idle facility expense, freight, handling costs and wasted
      materials should be recognized as current period charges. In addition, FAS
      151
      requires that allocation of fixed production overhead to inventory be based
      on
      the normal capacity of the production facilities. The adoption of FAS 151 did
      not have a material impact on the condensed consolidated financial
      statements.




Effective
      January 1, 2006 the Company adopted Financial Accounting Standards Board (FASB)
      Statement No. 123(R) (FAS 123R), Share-Based Payment, on a modified prospective
      basis. FAS 123R amended FASB Statement No. 123, Accounting for Stock Based
      Compensation (FAS 123) and requires that all share based payments to employees
      be recognized in the financial statements. Generally, the approach to accounting
      for share based payments in FAS 123R is similar to the approach described in
      FAS
      123, however, pro forma footnote disclosure is no longer an alternative to
      financial statement recognition. The Company now recognizes compensation expense
      over the remaining vesting period for all awards that remained unvested as
      of
      January 1, 2006. As permitted by FAS 123, prior to January 1, 2006, the Company
      accounted for share based payments to employees using Accounting Principle
      Board
      Opinion No. 25, Accounting for Stock Issued to Employees (APB 25) and related
      interpretations in accounting for its employee stock option and other stock
      based compensation plans. Under APB 25’s intrinsic value method, no compensation
      expense was recognized at the time of option grant when the exercise price
      of
      the Company’s employee stock options  equaled
      the fair market value of the underlying common stock on the date of grant.
      As
      such, the Company generally recognized no compensation cost for employee stock
      options or the Employee Stock Purchase Plan (ESP Plan).




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 30, 2006 included $503
      in
      actual charges and $407 in provisions resulting in the balance of $300 at
      September 30, 2006. Warranty reserve movements in the nine months ended October
      1, 2005 included $278 in actual charges and $455 increase in the
      provision.






2.  INVENTORIES




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




September
                  30, 2006
              
              
              December
                  31, 2005Raw
                  materials
              
              $
              4,985
              
              $
              2,870Work
                  in process
              
              
              12,244
              
              
              10,973Finished
                  goods
              
              
              6,177
              
              
              5,06823,406
              
              
              18,911Reserves
              
              
              (3,548
              )
              
              (2,902
              )Total
              
              $
              19,858
              
              $
              16,009





3.  LOSS
      PER
      SHARE




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


Three
                    months ended
                Nine
                    months endedSeptember
                    30, 2006
                
                October
                    1, 2005
                
                September
                    30, 2006
                
                October
                    1, 2005Weighted
                    average common shares outstanding used to calculate basic loss
                    per
                    share
                
                45,237
                
                34,067
                
                43,202
                
                33,872Net
                    effect of dilutive securities based upon the treasury stock method
                    using
                    an average market price
                
                -*
                
                -*
                
                -*
                
                -*Weighted
                    average common and dilutive securities outstanding used to calculate
                    diluted loss per share
                
                45,237
                
                34,067
                
                43,202
                
                33,872


*
      Any
      dilution arising from the Company's outstanding stock options or shares
      potentially issuable upon conversion of the Convertible notes are not included
      as their effect is anti-dilutive. The calculation of basic shares outstanding
      for the three month period ended September 30, 2006, excludes unvested
      restricted shares.





4.  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
                  30, 2006
              October
                  1, 2005
              September
                  30, 2006
              October
                  1, 2005Broadband
              $21,389
              $14,846
              $55,697
              $40,087Wireless
              23,436
              14,418
              65,064
              34,893Total
              $44,825
              $29,264
              $120,761
              $74,980


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
                  30, 2006
              
              October
                  1, 2005
              
              September
                  30, 2006
              
              October
                  1, 2005Asia
              $
              24,697
              $
              14,960
              $
              66,780
              $
              40,317USA
                  and Canada
              
              16,856
              
              11,559
              
              44,243
              
              28,550Other
              
              3,272
              
              2,745
              
              9,738
              
              6,113Total
              $
              44,825
              $
              29,264
              $
              120,761
              $
              74,980




5.
      RESTRUCTURING AND OTHER CHARGES




During
      the
      fourth quarter of 2003, the Company recorded restructuring and other charges
      of
      $300 associated with obligations for certain redundant leasehold premises.
      Those
      obligations were settled during the first quarter of 2005 resulting in a savings
      to the Company of $120. During the first nine months of 2006, the Company
      recognized costs of $40 for lease-related restructuring costs. As of September
      30, 2006, the accrued restructuring balance is zero.





6.
      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.




On
      November
      27, 2001, the Company issued $100,000 aggregate principal amount of 5%
      Convertible Senior Notes ("2006 Notes") due November 15, 2006. During the third
      quarter of 2002, the Company repurchased and retired $33,300 principal amount
      of
      the 2006 Notes. In addition, in the third quarter of 2004 and concurrent with
      the issuance of the 2009 Notes, the Company repurchased and retired $20,000
      aggregate principal amount of the 2006 Notes for $19,758 in cash, inclusive
      of
      accrued interest of $358. The Company recognized a gain of $327 on the
      repurchase after adjusting for the write-off of a proportionate share of
      unamortized offering costs.  The
      $46,700 balance of 2006 Notes outstanding are convertible into shares of common
      stock at any time prior to their maturity or prior redemption by the Company.
      The 2006 Notes are 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 is equivalent to a conversion price of $21.00 per share
      (2,224 shares contingently issuable). Interest is payable semi-annually on
      May
      15 and November 15.




7.
      STOCK
      BASED COMPENSATION




Effective
      January 1,
      2006, the Company adopted the provisions of FAS 123R in accounting for share
      based payments to employees, having previously followed the provisions of APB
      25, as permitted by FAS 123. The Company has 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
      remain 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
                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 5,450 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. Pursuant to the terms of the ESP Plan, shares
      purchased and the applicable per share price were 328 and $3.13, respectively
      for the year ended December 31, 2005.




Net
      loss for
      the three and nine month periods ended September 30, 2006 included stock based
      compensation costs of $2,228 and $5,456, respectively, and for the three and
      nine month periods ended October 1, 2005 costs of $622 and $2,053, respectively.
      Under FAS 123R, stock based compensation expense arises from the amortization
      of
      restricted stock grants, unamortized stock option grants and from the ESP Plan
      whereas in 2005, only amortization of restricted stock grants was required.
      The
      Company is using the straight-line basis in calculating stock based compensation
      expense.




The
      table
      below summarizes stock based compensation by source and by financial statement
      line item for the three and nine month periods, inclusive of comparative Pro
      forma disclosure for 2005 (1):


For
                  the three month periods ended
              
              For
                  the nine month periods endedSeptember
                  30, 2006
              
              
              October
                  1, 2005
              
              
              October
                  1, 2005
              
              
              September
                  30, 2006
              
              
              October
                  1, 2005
              
              
              October
                  1, 2005US
                  GAAP
              
              
              US
                  GAAP
              
              
              Pro
                  Forma (1)
              
              
              US
                  GAAP
              
              
              US
                  GAAP
              
              
              Pro
                  Forma (1)(as
                  reported)
              
              
              (as
                  reported)
              
              
              (comparison
                  only)
              
              
              (as
                  reported)
              
              
              (as
                  reported)
              
              
              (comparison
                  only)Amortization
                  of restricted stock awards
              $
              (2,110
              )
              $
              (618
              )
              $
              (618
              )
              $
              (5,070
              )
              $
              (2,036
              )
              $
              (2,036
              )Amortization
                  of ESP Plan
              
              (100
              )
              
              -
              
              
              (304
              )
              
              (300
              )
              
              -
              
              
              (497
              )Amortization
                  of stock option awards
              
              (18
              )
              
              (4
              )
              
              (127
              )
              
              (86
              )
              
              (17
              )
              
              (425
              )Total
                  stock based compensation
              $
              (2,228
              )
              $
              (622
              )
              $
              (1,049
              )
              $
              (5,456
              )
              $
              (2,053
              )
              $
              (2,958
              )Net
                  loss
              $
              (1,312
              )
              $
              (6,780
              )
              $
              (7,207
              )
              $
              (8,736
              )
              $
              (27,320
              )
              $
              (28,225
              )Basic
                  and diluted loss per share
              $
              (0.03
              )
              $
              (0.20
              )
              $
              (0.21
              )
              $
              (0.20
              )
              $
              (0.81
              )
              $
              (0.83
              )By
                  Financial Statement line itemCost
                  of sales
              $
              478
              
              $
              146
              
              $
              234
              
              $
              1,174
              
              $
              455
              
              $
              620Research
                  and development expenses
              
              881
              
              
              281
              
              
              457
              
              
              2,153
              
              
              923
              
              
              1,244Selling
                  and administrative expenses
              
              869
              
              
              195
              
              
              358
              
              
              2,129
              
              
              675
              
              
              1,094


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





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 (WA)
      price per share for restricted stock and for stock options during the period
      from January 1, 2005 to September 30, 2006 is presented in tabular form
      below:




Restricted
                Shares
            Stock
                OptionsShares
            
            
            WA
                price per share
            
            
            Issuable
                upon exercise
            
            
            WA
                exercise priceGrants
                outstanding at January 1, 2005
            
            
            381
            
            $
            4.01
            
            
            6,792
            
            $
            7.47Granted
            
            
            1,303
            
            
            2.71
            
            
            159
            
            
            3.12Vested/exercised
            
            
            (357
            )*
            
            4.01
            
            
            (416
            )
            
            2.80Forfeited
            
            
            (113
            )
            
            2.95
            
            
            (591
            )
            
            7.57Balance
                at December 31, 2005
            
            
            1,214
            
            
            2.72
            
            
            5,944
            
            
            7.67Granted
            
            
            2,096
            
            
            6.37
            
            
            17
            
            
            6.49Vested/exercised
            
            
            (675
            )
            
            2.68
            
            
            (639
            )
            
            3.41Forfeited
            
            
            (35
            )
            
            4.85
            
            
            (278
            )
            
            11.23Balance
                at September 30, 2006
            
            
            2,600
            
            $
            5.64
            
            
            5,044
            
            $
            8.01


*
      114
      shares were repurchased by the Company to fund withholding tax obligations.









Weighted
                average information as of September 30, 2006Options
                currently exercisableShares
                issuable upon exercise
            4,983WA
                exercise price
            $8.06WA
                remaining life
            5.1
                yearsIntrinsic
                value of exercised options
            $2,292Remaining
                life for outstanding options
            5.1
                yearsIntrinsic
                value of exercisable options
            $7,343Intrinsic
                value of outstanding options
            $7,535Unrecognized
                stock based compensation costOption
                plans
            $86Restricted
                stock
            $9,214WA
                remaining vest period for restricted stock
            0.9
                year





Stock
      options outstanding at September 30, 2006 are summarized as
      follows:





Range
                of exercise prices
            
            
            Outstanding
                Options at September 30, 2006
            
            
            Weighted
                average remaining contractual life
            
            
            Weighted
                average exercise price
            
            
            Exercisable
                at September 30, 2006
            
            
            Weighted
                average exercise price$1.39
                - $3.72
            
            
            1,101
            
            
            6.55
            
            $
            2.74
            
            
            1,069
            
            $
            2.75$4.17
                - $7.02
            
            
            1,122
            
            
            2.86
            
            $
            4.78
            
            
            1,093
            
            $
            4.76$7.27
            
            
            1,485
            
            
            7.36
            
            $
            7.27
            
            
            1,485
            
            $
            7.27$7.65
                - $53.48
            
            
            1,336
            
            
            3.41
            
            $
            15.89
            
            
            1,336
            
            $
            15.89





Valuation
      Method for ESP Plan and Stock Option Awards





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 three and nine month periods ended
      September 30, 2006 and October 1, 2005 were:





Three
                months ended
            Nine
                months endedSeptember
                30, 2006
            
            
            October
                1, 2005
            
            
            September
                30, 2006
            
            
            October
                1, 2005Risk-free
                interest rate
            
            
            4.91
            %
            
            4.37
            %
            
            4.84
            %
            
            3.98
            %Expected
                volatility (*)
            
            
            0.69
            
            
            0.80
            
            
            0.72
            
            
            0.86Expected
                option life
            
            One
                year post-vest
            One
                year post-vestExpected
                dividend yield
            
            
            0.0
            %
            
            0.0
            %
            
            0.0
            %
            
            0.0
            %Weighted
                average fair value of options granted
            
            
            N/A
            
            $
            1.53
            
            $
            3.91
            
            $
            1.66


* 
      Determined using the Company’s historical volatility.





8.
      STOCKHOLDERS’ EQUITY





In
      March
      2006, the Company completed an underwritten public offering of 10,446 shares
      of
      common stock, generating net proceeds to the Company of
      $53,123.





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 radio frequency integrated
      circuits (RFIC) and radio frequency (RF) front end solutions in the rapidly
      growing wireless handset and broadband communications markets. Our products
      include power amplifiers (PAs), tuner integrated circuits, active splitters
      and
      other components, which can be sold individually or packaged as integrated
      RF
      modules. In the wireless handset market, we focus on RFIC and RF front end
      solutions for wireless handsets operating over various air interface standards.
      In the broadband market, our focus is on applications for Wireless Local Area
      Networking (WLAN) systems, cable set-top boxes, cable television infrastructure
      systems, worldwide interoperability for microwave access (WiMAX) systems and
      fiber-to-the-premises (FTTP) communications systems. Our integrated solutions
      enable our customers to improve RF performance, power efficiency, reliability
      and time-to-market, while reducing the size, weight and cost of their products.
      We have longstanding customer relationships with several of the industry leaders
      in their respective markets, including LG Electronics Inc. (LG Electronics),
      Samsung Electronics Co., Ltd. (Samsung), KYOCERA Corporation (Kyocera) and
      Research in Motion Limited (RIM) in the wireless handset market; INTEL
      Corporation (Intel) in the WLAN market; and Scientific-Atlanta, Inc. (Scientific
      Atlanta) and Motorola, Inc. (Motorola) in the cable set-top box and cable
      infrastructure markets. Additionally, in the wireless arena, we have been
      included in reference designs of industry leaders such as Qualcomm Incorporated
      (Qualcomm), Texas Instruments Incorporated (Texas Instruments), Broadcom
      Corporation (Broadcom) and Atheros Communications, Inc. (Atheros). 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.




We
      continue
      to focus on leveraging our technological and manufacturing advantages to remain
      a leading supplier of RFICs and RF front end solutions. 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 proprietary technology, which
      utilizes InGaP- *plus* TM ,
      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.
      Our
      primary fab, a state-of-the-art six-inch diameter GaAs fab located at our
      corporate headquarters in Warren, New Jersey, has been operational since 1999.
      Unlike traditional CMOS silicon fabs that have short technology lifecycles
      and
      require frequent capital investments, GaAs fabs are more similar to analog
      fabs
      that have long lifecycles and do not become quickly outdated. We anticipate
      that
      this facility will enable us to capitalize on the growing demand for RFICs.
      Our
      six-inch wafer fab allows us to produce more than twice the RF die per wafer
      compared with the four-inch wafer fabs still used by some of our competitors.
      We
      believe our strong fabrication capability and available capacity, combined
      with
      integrated product design and logistics expertise, allow us to quickly develop
      and manufacture products to meet market and customer requirements.




We
      believe
      that the technical nature of our products and markets demands an extraordinary
      commitment to building and maintaining close relationships with our customers.
      Our design and applications engineering staff actively communicate with
      customers during all phases of design and production. We have highly specialized
      field application engineering teams near our customers in Korea, Taiwan and
      China, as well as a system application team in Denmark, which is located near
      Texas Instruments’ reference design team in Denmark. These contacts are vital to
      the development of close, long-term working relationships with our customers,
      and in obtaining regular forecasts, market updates and information regarding
      technical and market trends. We believe that reference-design manufacturers
      in
      the wireless and broadband markets will continue to play an ever-increasing
      role
      in the future of these markets. As such, it is essential that we maintain strong
      relationships in partnering with these companies to penetrate these market
      opportunities.




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
                30, 2006
            
            
            October
                1, 2005
            
            
            September
                30, 2006
            
            
            October
                1, 2005Net
                sales
            
            
            100.0
            %
            
            100.0
            %
            
            100.0
            %
            
            100.0
            %Cost
                of sales
            
            
            69.2
            %
            
            77.5
            %
            
            71.4
            %
            
            82.0
            %Gross
                margin
            
            
            30.8
            %
            
            22.5
            %
            
            28.6
            %
            
            18.0
            %Research
                and development expenses
            
            
            20.4
            %
            
            25.6
            %
            
            21.4
            %
            
            30.3
            %Selling
                and administrative expenses
            
            
            14.1
            %
            
            17.9
            %
            
            14.6
            %
            
            21.7
            %Restructuring
                and other charges
            
            
            -
            
            
            -
            
            
            -
            
            
            (0.2
            %)Operating
                loss
            
            
            (3.7
            %)
            
            (21.0
            %)
            
            (7.4
            %)
            
            (33.8
            %)Interest
                income
            
            
            3.7
            %
            
            2.0
            %
            
            3.4
            %
            
            2.4
            %Interest
                expense
            
            
            (2.9
            %)
            
            (4.3
            %)
            
            (3.2
            %)
            
            (5.0
            %)Other
                income
            
            
            -
            
            
            0.1
            %
            
            -
            
            
            -Net
                loss
            
            
            (2.9
            %)
            
            (23.2
            %)
            
            (7.2
            %)
            
            (36.4
            %)





THIRD
      QUARTER 2006 (ENDED SEPTEMBER 30, 2006) COMPARED TO THIRD QUARTER 2005 (ENDED
      OCTOBER 1, 2005)




NET
      SALES. ****** Net
      sales
      increased 53.2% during the third quarter of 2006 to $44.8 million from $29.3
      million in the third quarter of 2005. For the nine months ended September 30,
      2006, net sales were $120.8 million, a 61.1% increase from net sales of $75.0
      million for the nine months ended October 1, 2005.




Sales
      of
      integrated circuits for broadband applications increased 44.1% during the third
      quarter of 2006 to $21.4 million from $14.8 million in the third quarter of
      2005. For the nine months ended September 30, 2006, net sales of integrated
      circuits for broadband applications increased 38.9% to $55.7 million from $40.1
      million in the nine month period ended October 1, 2005. The increase in sales
      in
      the three and nine month periods was primarily due to an increase in demand
      for
      infrastructure products and increased average selling prices for WLAN products
      accounting for $5.9 million and $15.2 million, respectively. Sales of WLAN
      PAs
      benefited from the market transition from 802.11b/g PAs to 802.11a/b/g PAs
      that
      have a higher selling price for the increased functionality.




Sales
      of
      integrated circuits for wireless applications increased 62.5% during the third
      quarter of 2006 to $23.4 million from $14.4 million in the third quarter of
      2005. For the nine months ended September 30, 2006, net sales of integrated
      circuits for wireless applications increased 86.5% to $65.1 million from $34.9
      million in the nine months ended October 1, 2005. The increase in sales of
      integrated circuits for wireless applications in the third quarter of 2006
      compared with the comparable period of 2005 was primarily due to increased
      demand for our 3G (EDGE, WEDGE & WCDMA) PAs amounting to $7.5 million.
      Similarly, the increase in sales of integrated circuits for wireless
      applications for the nine months ended September 30, 2006 compared with the
      comparable period of 2005 was due to increased demand for our 3G (EDGE, WEDGE
      & WCDMA), CDMA and GSM PAs amounting to $15.9 million, $8.9 million and $5.9
      million, respectively.




GROSS
      MARGIN. Gross
      margin during the third quarter of 2006 increased to 30.8% of net sales from
      22.5% of net sales in the third quarter of 2005. For the nine months ended
      September 30, 2006, gross margin increased to 28.6% from 18.0% for the nine
      months ended October 1, 2005. The increase in gross margin in the three and
      nine
      month periods ended September 30, 2006 was 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 22.0% during the third
      quarter of 2006 to $9.1 million from $7.5 million during the third quarter
      of
      2005. Company sponsored research and development expenses for the nine months
      ended September 30, 2006 increased 13.5% to $25.8 million from $22.7 million
      during the nine months ended October 1, 2005. The increase in the three months
      ended September 30, 2006 includes increased stock based compensation of $0.6
      million, and was further driven by accelerated customer demand for new product
      development, which led to increased staffing and costs. The increase in the
      nine
      months ended September 30, 2006 was primarily due to the aforementioned
      acceleration of new product development spending in addition to increased stock
      based compensation of $1.2 million.




SELLING
      AND
      ADMINISTRATIVE. Selling
      and administrative expenses increased 20.9% to $6.3 million during the third
      quarter of 2006 from $5.2 million during the third quarter of 2005. Selling
      and
      administrative expenses increased 8.6% for the nine month period ended September
      30, 2006 to $17.7 million from $16.3 million in the nine month period ended
      October 1, 2005. Stock based compensation increased $0.7 and $1.5 million in
      the
      three and nine month periods ended September 30, 2006 compared with the
      comparable periods ended October 1, 2005, and for the three month period
      included certain sales-related costs associated with our increased
      sales.




RESTRUCTURING
      AND OTHER CHARGES. The Company incurred no restructuring or other charges in
      2006. During the first quarter of 2005, the Company settled an exit obligation
      for certain redundant leasehold premises resulting in a savings of $0.1 million
      against a previously recorded restructuring charge.




INTEREST
      INCOME. ****** Interest
      income increased 171.5% to $1.6 million during the third quarter of 2006 from
      $0.6 million during the third quarter of 2005. For the nine months ended
      September 30, 2006, interest income increased 129.1% to $4.1 million from $1.8
      million in the nine month period ended October 1, 2005. The increases in the
      three and nine month periods ended September 30, 2006 were primarily due to
      higher average funds invested as a result of our underwritten public offering
      of
      10.4 million shares of common stock in March of 2006 (the “March 2006 Offering”)
      and higher interest rates.




INTEREST
      EXPENSE. Interest expense increased 2.8% to $1.3 million during the third
      quarter of 2006 as compared to the third quarter of 2005. For the nine months
      ended September 30, 2006, interest expense increased 3.0% to $3.9 million from
      $3.7 million in the nine month period ended October 1, 2005. The increase
      related to interest on our capital lease obligation. The remainder of interest
      expense was flat and relates to our $46.7 million outstanding balance of our
      5%
      Convertible Senior Notes due in November of 2006 (the “2006 Notes”) and the
      $38.0 million outstanding balance of our 5% Convertible Senior Notes due in
      2009
      (the “2009 Notes”).





LIQUIDITY
      AND CAPITAL RESOURCES




As
      of
      September 30, 2006, we had $16.1 million in cash and cash equivalents and $114.4
      million in marketable securities. Included in these amounts are proceeds we
      received from completion of an underwritten public offering of an aggregate
      of
      10.4 million shares of common stock in March 2006, which raised $53.1 million,
      net of underwriting discounts and commissions and related offering expenses.
      As
      of September 30, 2006, we had outstanding $46.7 million aggregate principal
      amount of our 2006 Notes and $38.0 million aggregate principal amount of our
      2009 Notes.




Operating
      activities used $3.7 million in cash during the nine month period ended
      September 30, 2006, primarily as a result of increases in working capital
      requirements. Investing activities, consisting principally of net purchases
      of
      marketable securities of $39.9 million and purchases of fixed assets of $7.3
      million, used $47.2 million of cash during the nine month period ended September
      30, 2006. Financing activities provided $55.1 million, and consisted primarily
      of proceeds received from the March 2006 Offering.




As
      of
      September 30, 2006, we had unconditional purchase obligations of approximately
      $7.8 million of which $6.4 million relates to capital equipment purchase
      requirements primarily over the next six 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.




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 including the repayment of our 2006 Notes due in November
      2006. 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




Effective
      January 1, 2006, we adopted Financial Accounting Standards Board Statement
      No.
      151 (FAS 151), Inventory Costs, an amendment of Accounting Research Bulletin
      No.
      43 (ARB No. 43), Chapter 4. FAS 151 clarifies that abnormal amounts of idle
      facility expense, freight, handling costs and wasted materials should be
      recognized as current period charges. In addition, FAS 151 requires that
      allocation of fixed production overhead to inventory be based on the normal
      capacity of the production facilities. The adoption of FAS 151 did not have
      a
      material impact on our condensed consolidated financial statements.




Effective
      January 1, 2006 we adopted Financial Accounting Standards Board (FASB) Statement
      No. 123(R) (FAS 123R), Share-Based Payment, on a modified prospective basis.
      FAS
      123R amended FASB Statement No. 123, Accounting for Stock Based Compensation
      (FAS 123) and requires that all share based payments to employees be recognized
      in the financial statements. Generally, the approach to accounting for share
      based payments in FAS 123R is similar to the approach described in FAS 123,
      however, pro forma footnote disclosure is no longer an alternative to financial
      statement recognition. We will now recognize compensation expense over the
      remaining vesting period for all awards that remained unvested as of January
      1,
      2006. As permitted by FAS 123, prior to January 1, 2006, we accounted for share
      based payments to employees using Accounting Principle Board Opinion No. 25,
      Accounting for Stock Issued to Employees (APB 25) and related interpretations
      in
      accounting for our employee stock option and other stock based compensation
      plans. Under APB 25’s intrinsic value method, no compensation expense was
      recognized at the time of option grant when the exercise price of our employee
      stock options  equaled
      the fair market value of the underlying common stock on the date of grant.
      As
      such, we generally recognized no compensation cost for employee stock options
      or
      the Employee Stock Purchase Plan (ESP Plan).




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 continue to incur losses; (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 dependence on
      a
      small number of customers; (vii) the short life cycles of some of our products
      may leave us with obsolete or excess inventories; (viii) we may face
      interruptions in our manufacturing processes; (ix) the variability of our
      manufacturing yields may affect our gross margins; (x) our dependence on foreign
      semiconductor assembly and test operations contractors could lead to delays
      in
      product shipments; (xi) our results of operations can vary significantly due
      to
      the cyclical nature of the semiconductor industry and our end markets; (xii)
      declines in our revenues and the underutilization of our manufacturing capacity
      have in the past and may continue to adversely affect our gross margins and
      profitability; (xiii) our products have experienced rapidly declining unit
      prices; (xiv) capital required for our business may not be available when we
      need it; (xv) our success depends on our ability to attract and retain qualified
      personnel; (xvi) risks due to our international customer base and our
      subcontracting operations; (xvii) stringent environmental laws and regulations
      both domestically and abroad; (xviii) any failure to protect our intellectual
      property rights or avoid claims that we have infringed on the intellectual
      property rights of others; (ixx) 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; (xx) 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, 2005. 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,
      2005.





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 30, 2006. 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.





ITEM6.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 President and
                Chief Financial Officer








Dated:
      November 8, 2006