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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



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FORM 10-Q



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|x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ---------------------------------------------------------------------------------------

For the quarterly period ended September 28, 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 Number: 000-29617



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INTERSIL
CORPORATION

(Exact name of registrant as specified in its charter)



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|                                                               |  |                                  
|-------------------------------------------------------------- |  | ---------------------------------
|Delaware                                                       |  | 59-3590018                       
|(State or Other Jurisdiction of Incorporation or Organization) |  | (IRS Employer Identification No.)

1001 Murphy Ranch Road

Milpitas, California 95035

(Address of principal executive offices, including
zip code)

(408) 432-8888

(Registrants telephone number, including area code)



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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 if the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer (as defined in Rule 12b-2 of
the Act).

Large accelerated filer  x    Accelerated
filer ̈Non-accelerated filer ̈

Indicate by check mark whether the registrant is a shell company (as
defined in Rule 12b-2 of the Exchange Act).    Yes ̈No  x



The number of shares outstanding
of the issuers classes of common stock at the close of business on October 26, 2007:



|                                              |  |                 
|--------------------------------------------- |  | ----------------
|Title of Each Class                           |  | Number of Shares
|Class A common stock par value $.01 per share |  | 130,920,699     



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##### Table of Contents

INTERSIL CORPORATION

INDEX



|               |  |                                                                                                                                                                                           |  |     
|-------------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----
|               |  |                                                                                                                                                                                           |  | Page
|               |  | PART I. FINANCIAL INFORMATION                                                                                                                                                             |  |     
|               |  |                                                                                                                                                                                          
|Item 1.        |  | Financial Statements                                                                                                                                                                      |  | 3   
|               |  |                                                                                                                                                                                          
|               |  | Consolidated Statements of Operations for the Quarters Ended September 28, 2007 and September 29, 2006 and the Three Quarters Ended September 28, 2007 and September 29, 2006 (unaudited) |  | 3   
|               |  |                                                                                                                                                                                          
|               |  | Consolidated Balance Sheets at September 28, 2007 and December 29, 2006 (unaudited)                                                                                                       |  | 4   
|               |  |                                                                                                                                                                                          
|               |  | Consolidated Statements of Cash Flows for the Three Quarters Ended September 28, 2007 and September 29, 2006 (unaudited)                                                                  |  | 5   
|               |  |                                                                                                                                                                                          
|               |  | Notes to Consolidated Financial Statements (unaudited)                                                                                                                                    |  | 6   
|               |  |                                                                                                                                                                                          
|Item 2.        |  | Managements Discussion and Analysis of Financial Condition and Results of Operations                                                                                                     |  | 16  
|               |  |                                                                                                                                                                                          
|Item 3.        |  | Quantitative and Qualitative Disclosures about Market Risk                                                                                                                                |  | 24  
|               |  |                                                                                                                                                                                          
|Item 4.        |  | Controls and Procedures                                                                                                                                                                   |  | 24  
|               |  |                                                                                                                                                                                          
|               |  | PART II. OTHER INFORMATION                                                                                                                                                                |  |     
|               |  |                                                                                                                                                                                          
|Item 1.        |  | Legal Proceedings                                                                                                                                                                         |  | 25  
|               |  |                                                                                                                                                                                          
|Item 2.        |  | Unregistered Sales of Equity Securities and Use of Proceeds                                                                                                                               |  | 25  
|               |  |                                                                                                                                                                                          
|Item 6.        |  | Exhibits                                                                                                                                                                                  |  | 25  
|               | 
|SIGNATURE      |  | 25                                                                                                                                                                                       
|               | 
|EXHIBIT INDEX  |  | 26                                                                                                                                                                                       
|               | 
|CERTIFICATIONS |  |                                                                                                                                                                                          



2



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##### Table of Contents

PART I. FINANCIAL INFORMATION



|Item 1. | Financial Statements
|------- | --------------------

INTERSIL CORPORATION

UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS



|                                                          |  |                                                                |         |                      |                    |   |                    |  |   |                    |   |  |   |         |  
|--------------------------------------------------------- |  | -------------------------------------------------------------- | ------- | -------------------- | ------------------ | - | ------------------ |  | - | ------------------ | - |  | - | ------- | -
|                                                          |  | Quarter Ended                                                  |         | Three Quarters Ended |                   
|                                                          |  | September 28, 2007                                             |         |                      | September 29, 2006 |   | September 28, 2007 |  |   | September 29, 2006 |  
|                                                          |  | (Unaudited) (in thousands, except per share and share amounts) |        
|Revenue                                                   |  | $                                                              | 198,285 |                      |                    | $ | 192,937            |  | $ | 544,341            |   |  | $ | 559,502 |  
|Cost of revenue                                           |  |                                                                | 86,522  |                      |                    |   | 81,957             |  |   | 234,384            |   |  |   | 239,235 |  
|                                                          |  |                                                                |         |                      |                    |   |                    |  |   |                    |   |  |   |         |  
|Gross profit                                              |  |                                                                | 111,763 |                      |                    |   | 110,980            |  |   | 309,957            |   |  |   | 320,267 |  
|                                                          |  |                                                                |         |                     
|Operating cost and, expenses:                             |  |                                                                |         |                      |                    |   |                    |  |   |                    |   |  |   |         |  
|Research and development                                  |  |                                                                | 34,052  |                      |                    |   | 33,458             |  |   | 98,886             |   |  |   | 95,222  |  
|Selling, general and administrative                       |  |                                                                | 33,571  |                      |                    |   | 32,327             |  |   | 96,932             |   |  |   | 103,094 |  
|Amortization of purchased intangibles                     |  |                                                                | 2,486   |                      |                    |   | 2,367              |  |   | 7,221              |   |  |   | 7,101   |  
|In-process research and development                       |  |                                                                | 2,975   |                      |                    |   |                   |  |   | 2,975              |   |  |   |        |  
|                                                          |  |                                                                |         |                      |                    |   |                    |  |   |                    |   |  |   |         |  
|Operating income                                          |  |                                                                | 38,679  |                      |                    |   | 42,828             |  |   | 103,943            |   |  |   | 114,850 |  
|Gain (loss) on certain investments, net                   |  |                                                                | 243     |                      |                    |   |                   |  |   | 987                |   |  |   | (1,892  | )
|Interest income                                           |  |                                                                | 8,104   |                      |                    |   | 7,546              |  |   | 24,187             |   |  |   | 21,485  |  
|                                                          |  |                                                                |         |                      |                    |   |                    |  |   |                    |   |  |   |         |  
|Income from continuing operations before income taxes     |  |                                                                | 47,026  |                      |                    |   | 50,374             |  |   | 129,117            |   |  |   | 134,443 |  
|Income tax expense from continuing operations             |  |                                                                | 11,003  |                      |                    |   | 12,706             |  |   | 28,817             |   |  |   | 21,410  |  
|                                                          |  |                                                                |         |                      |                    |   |                    |  |   |                    |   |  |   |         |  
|Income from continuing operations                         |  |                                                                | 36,023  |                      |                    |   | 37,668             |  |   | 100,300            |   |  |   | 113,033 |  
|Discontinued operations:                                  |  |                                                                |         |                      |                    |   |                    |  |   |                    |   |  |   |         |  
|Loss from discontinued operations before income taxes     |  |                                                                | (198    | )                    |                    |   |                   |  |   | (198               | ) |  |   |        |  
|Income tax benefit from discontinued operations           |  |                                                                | (75     | )                    |                    |   |                   |  |   | (75                | ) |  |   |        |  
|                                                          |  |                                                                |         |                      |                    |   |                    |  |   |                    |   |  |   |         |  
|Loss from discontinued operations                         |  |                                                                | (123    | )                    |                    |   |                   |  |   | (123               | ) |  |   |        |  
|                                                          |  |                                                                |         |                      |                    |   |                    |  |   |                    |   |  |   |         |  
|Net income                                                |  | $                                                              | 35,900  |                      |                    | $ | 37,668             |  | $ | 100,177            |   |  | $ | 113,033 |  
|                                                          |  |                                                                |         |                      |                    |   |                    |  |   |                    |   |  |   |         |  
|Basic earnings per share:                                 |  |                                                                |         |                      |                    |   |                    |  |   |                    |   |  |   |         |  
|Income from continuing operations                         |  | $                                                              | 0.27    |                      |                    | $ | 0.27               |  | $ | 0.75               |   |  | $ | 0.80    |  
|Loss from discontinued operations                         |  |                                                                |        |                      |                    |   |                   |  |   |                   |   |  |   |        |  
|                                                          |  |                                                                |         |                      |                    |   |                    |  |   |                    |   |  |   |         |  
|Net income                                                |  | $                                                              | 0.27    |                      |                    | $ | 0.27               |  | $ | 0.75               |   |  | $ | 0.80    |  
|                                                          |  |                                                                |         |                      |                    |   |                    |  |   |                    |   |  |   |         |  
|Diluted earnings per share:                               |  |                                                                |         |                      |                    |   |                    |  |   |                    |   |  |   |         |  
|Income from continuing operations                         |  | $                                                              | 0.27    |                      |                    | $ | 0.27               |  | $ | 0.74               |   |  | $ | 0.79    |  
|Loss from discontinued operations                         |  |                                                                |        |                      |                    |   |                   |  |   |                   |   |  |   |        |  
|                                                          |  |                                                                |         |                      |                    |   |                    |  |   |                    |   |  |   |         |  
|Net income                                                |  | $                                                              | 0.27    |                      |                    | $ | 0.27               |  | $ | 0.74               |   |  | $ | 0.79    |  
|                                                          |  |                                                                |         |                      |                    |   |                    |  |   |                    |   |  |   |         |  
|Weighted average common shares outstanding (in millions): |  |                                                                |         |                      |                    |   |                    |  |   |                    |   |  |   |         |  
|Basic                                                     |  |                                                                | 132.1   |                      |                    |   | 139.1              |  |   | 133.6              |   |  |   | 140.6   |  
|                                                          |  |                                                                |         |                      |                    |   |                    |  |   |                    |   |  |   |         |  
|Diluted                                                   |  |                                                                | 134.0   |                      |                    |   | 141.0              |  |   | 135.1              |   |  |   | 143.4   |  
|                                                          |  |                                                                |         |                      |                    |   |                    |  |   |                    |   |  |   |         |  

See notes to consolidated financial statements.



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INTERSIL CORPORATION

UNAUDITED CONSOLIDATED BALANCE SHEETS



|                                                                                                                                                                                          |  |                                      |           |                   |   |          
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------------------------ | --------- | ----------------- | - | ---------
|                                                                                                                                                                                          |  | September 28, 2007                   |           | December 29, 2006
|                                                                                                                                                                                          |  | (Unaudited)                         
|                                                                                                                                                                                          |  | (in thousands, except share amounts)
|ASSETS                                                                                                                                                                                    |  |                                      |           |                   |   |          
|Current assets:                                                                                                                                                                           |  |                                      |           |                   |   |          
|Cash and cash equivalents                                                                                                                                                                 |  | $                                    | 232,237   |                   | $ | 158,938  
|Short-term investments                                                                                                                                                                    |  |                                      | 281,733   |                   |   | 465,096  
|Trade receivables, net of allowances ($7,301 at September 28, 2007 and $6,018 at December 29, 2006)                                                                                       |  |                                      | 109,843   |                   |   | 98,048   
|Inventories, net                                                                                                                                                                          |  |                                      | 95,132    |                   |   | 92,413   
|Prepaid expenses and other current assets                                                                                                                                                 |  |                                      | 11,873    |                   |   | 16,589   
|Deferred income taxes                                                                                                                                                                     |  |                                      | 26,593    |                   |   | 18,523   
|                                                                                                                                                                                          |  |                                      |           |                   |   |          
|Total current assets                                                                                                                                                                      |  |                                      | 757,411   |                   |   | 849,607  
|                                                                                                                                                                                          |  |                                      |           |                   |   |          
|Non-current assets:                                                                                                                                                                       |  |                                      |           |                   |   |          
|Property, plant & equipment, net of accumulated depreciation ($160,246 at September 28, 2007 and $150,133 at December 29,
2006)                                                           |  |                                      | 106,206   |                   |   | 101,121  
|Purchased intangibles, net of accumulated amortization ($37,098 at September 28, 2007 and $29,128 at December 29,
2006)                                                                   |  |                                      | 31,943    |                   |   | 29,863   
|Goodwill                                                                                                                                                                                  |  |                                      | 1,447,318 |                   |   | 1,419,781
|Long-term investments                                                                                                                                                                     |  |                                      | 63,832    |                   |   | 78,585   
|Deferred income taxes                                                                                                                                                                     |  |                                      | 57,014    |                   |   | 67,065   
|Other                                                                                                                                                                                     |  |                                      | 14,557    |                   |   | 13,105   
|                                                                                                                                                                                          |  |                                      |           |                   |   |          
|Total non-current assets                                                                                                                                                                  |  |                                      | 1,720,870 |                   |   | 1,709,520
|                                                                                                                                                                                          |  |                                      |           |                   |   |          
|Total assets                                                                                                                                                                              |  | $                                    | 2,478,281 |                   | $ | 2,559,127
|                                                                                                                                                                                          |  |                                      |           |                   |   |          
|LIABILITIES AND SHAREHOLDERS EQUITY                                                                                                                                                      |  |                                      |           |                   |   |          
|Current liabilities:                                                                                                                                                                      |  |                                      |           |                   |   |          
|Trade payables                                                                                                                                                                            |  | $                                    | 33,365    |                   | $ | 24,229   
|Accrued compensation                                                                                                                                                                      |  |                                      | 36,686    |                   |   | 33,433   
|Deferred net revenue                                                                                                                                                                      |  |                                      | 11,785    |                   |   | 12,813   
|Other accrued liabilities                                                                                                                                                                 |  |                                      | 17,636    |                   |   | 22,329   
|Income taxes payable                                                                                                                                                                      |  |                                      | 65,288    |                   |   | 44,810   
|                                                                                                                                                                                          |  |                                      |           |                   |   |          
|Total current liabilities                                                                                                                                                                 |  |                                      | 164,760   |                   |   | 137,614  
|                                                                                                                                                                                          |  |                                      |           |                   |   |          
|Shareholders equity:                                                                                                                                                                     |  |                                      |           |                   |   |          
|Preferred stock, $.01 par value, 2 million shares authorized; no shares issued or outstanding                                                                                             |  |                                      |          |                   |   |         
|Class A common stock, $.01 par value, voting; 600 million shares authorized; 130,834,007 shares outstanding at September 28,
2007 and 135,920,530 shares outstanding at December 29, 2006 |  |                                      | 1,308     |                   |   | 1,359    
|Additional paid-in capital                                                                                                                                                                |  |                                      | 2,004,052 |                   |   | 2,171,642
|Retained earnings                                                                                                                                                                         |  |                                      | 306,438   |                   |   | 247,217  
|Accumulated other comprehensive income                                                                                                                                                    |  |                                      | 1,723     |                   |   | 1,295    
|                                                                                                                                                                                          |  |                                      |           |                   |   |          
|Total shareholders equity                                                                                                                                                                |  |                                      | 2,313,521 |                   |   | 2,421,513
|                                                                                                                                                                                          |  |                                      |           |                   |   |          
|Total liabilities and shareholders equity                                                                                                                                                |  | $                                    | 2,478,281 |                   | $ | 2,559,127
|                                                                                                                                                                                          |  |                                      |           |                   |   |          

See notes to consolidated financial statements.



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INTERSIL CORPORATION

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS



|                                                                                  |  |                           |          |   |                    |   |          |  
|--------------------------------------------------------------------------------- |  | ------------------------- | -------- | - | ------------------ | - | -------- | -
|                                                                                  |  | Three Quarters Ended      |         
|                                                                                  |  | September 28, 2007        |          |   | September 29, 2006 |  
|                                                                                  |  | (Unaudited, in thousands) |         
|Operating activities:                                                             |  |                           |          |   |                    |   |          |  
|Net income                                                                        |  | $                         | 100,177  |   |                    | $ | 113,033  |  
|Adjustments to reconcile net income to net cash provided by operating activities: |  |                           |          |   |                    |   |          |  
|Depreciation and amortization                                                     |  |                           | 22,418   |   |                    |   | 24,255   |  
|Provision for inventory obsolescence                                              |  |                           | 4,175    |   |                    |   | 3,150    |  
|Stock-based compensation                                                          |  |                           | 33,900   |   |                    |   | 36,646   |  
|Tax benefit on stock options and awards exercised                                 |  |                           | 19,976   |   |                    |   | 14,947   |  
|Excess tax benefit received on exercise of stock-based awards                     |  |                           | (7,860   | ) |                    |   | (5,109   | )
|In-process research and development                                               |  |                           | 2,975    |   |                    |   |         |  
|Loss on certain investments, net                                                  |  |                           |         |   |                    |   | 1,892    |  
|Gain on sale of equipment                                                         |  |                           | (1,539   | ) |                    |   | (412     | )
|Deferred income taxes                                                             |  |                           | (4,428   | ) |                    |   | (12,018  | )
|Changes in operating assets and liabilities:                                      |  |                           |          |   |                    |   |          |  
|Trade receivables                                                                 |  |                           | (11,129  | ) |                    |   | (16,443  | )
|Inventories                                                                       |  |                           | (6,156   | ) |                    |   | (6,742   | )
|Prepaid expenses and other current assets                                         |  |                           | 634      |   |                    |   | 2,279    |  
|Trade payables and accrued liabilities                                            |  |                           | 266      |   |                    |   | 1,086    |  
|Income taxes                                                                      |  |                           | 20,499   |   |                    |   | 8,892    |  
|Other, net                                                                        |  |                           | (401     | ) |                    |   | 2,980    |  
|                                                                                  |  |                           |          |   |                    |   |          |  
|Net cash provided by operating activities                                         |  |                           | 173,507  |   |                    |   | 168,436  |  
|                                                                                  |  |                           |          |   |                    |   |          |  
|Investing activities:                                                             |  |                           |          |   |                    |   |          |  
|Proceeds from sales of auction rate securities                                    |  |                           | 504,785  |   |                    |   | 512,200  |  
|Purchases of auction rate securities                                              |  |                           | (396,300 | ) |                    |   | (571,347 | )
|Proceeds from sales or maturities of short-term investments                       |  |                           | 86,936   |   |                    |   | 76,055   |  
|Purchases of short-term investments                                               |  |                           |         |   |                    |   | (11,275  | )
|Proceeds from issuer calls of long-term investments                               |  |                           | 42,221   |   |                    |   |         |  
|Purchases of long-term investments                                                |  |                           | (36,171  | ) |                    |   | (25,955  | )
|Purchase of Planet ATE, net of cash received                                      |  |                           | (45,420  | ) |                    |   |         |  
|Purchase of Hyderabad Design                                                      |  |                           | (2,084   | ) |                    |   |         |  
|Other cash flows resulting from business combinations                             |  |                           |         |   |                    |   | (415     | )
|Proceeds from sale of property, plant and equipment                               |  |                           | 5,355    |   |                    |   | 1,138    |  
|Purchases of property, plant and equipment                                        |  |                           | (17,422  | ) |                    |   | (27,443  | )
|                                                                                  |  |                           |          |   |                    |   |          |  
|Net cash provided by (used in) investing activities                               |  |                           | 141,900  |   |                    |   | (47,042  | )
|                                                                                  |  |                           |          |   |                    |   |          |  
|Financing activities:                                                             |  |                           |          |   |                    |   |          |  
|Proceeds from exercise of stock-based awards                                      |  |                           | 109,528  |   |                    |   | 72,934   |  
|Excess tax benefit received on exercise of stock-based awards                     |  |                           | 7,860    |   |                    |   | 5,109    |  
|Dividends paid                                                                    |  |                           | (40,366  | ) |                    |   | (21,168  | )
|Repurchase of outstanding common shares                                           |  |                           | (319,990 | ) |                    |   | (195,000 | )
|                                                                                  |  |                           |          |   |                    |   |          |  
|Net cash used in financing activities                                             |  |                           | (242,968 | ) |                    |   | (138,125 | )
|                                                                                  |  |                           |          |   |                    |   |          |  
|Effect of exchange rates on cash and cash equivalents                             |  |                           | 860      |   |                    |   | 456      |  
|                                                                                  |  |                           |          |   |                    |   |          |  
|Net increase (decrease) in cash and cash equivalents                              |  |                           | 73,298   |   |                    |   | (16,275  | )
|Cash and cash equivalents at the beginning of the period                          |  |                           | 158,938  |   |                    |   | 137,697  |  
|                                                                                  |  |                           |          |   |                    |   |          |  
|Cash and cash equivalents at the end of the period                                |  | $                         | 232,237  |   |                    | $ | 121,422  |  
|                                                                                  |  |                           |          |   |                    |   |          |  

See notes to consolidated financial statements.



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INTERSIL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

Note 1Basis of Presentation

The accompanying unaudited interim
consolidated financial statements of Intersil Corporation (Intersil or the Company) have been prepared by the Company, without audit, and such preparation requires the use of management estimates. In the opinion of
management, all adjustments necessary to fairly present the financial position, results of operations and cash flows for all periods presented, have been made. All such adjustments were of a normal recurring nature. The consolidated balance sheet at
December 29, 2006, has been derived from the Companys audited consolidated financial statements at that date.

The accompanying unaudited
interim consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by United States generally
accepted accounting principles for complete financial statements. This report should be read in conjunction with the consolidated financial statements and notes thereto included in the Companys Annual Report on Form 10-K for the fiscal year
ended December 29, 2006.

The results of operations for the quarter and for the three quarters ended September 28, 2007 are not necessarily
indicative of results that may be expected for any other interim period or for the full fiscal year.

The Company utilizes a 52/53 week fiscal year. Our
current 52 week fiscal year will end on December 28, 2007. References to past or future quarterly or annual periods in these financial statements are to those respective fiscal periods which vary from exact calendar quarters or years. Our next
53 week fiscal year will be 2008, which will end on January 2, 2009.

The Company is a global designer and manufacturer of high performance analog
integrated circuits. Our products address applications within four primary end-markets: high-end consumer, industrial, communications and computing.

1.1) Reclassifications

Certain amounts in prior periods presented have been reclassified to conform to the current year presentation.

1.2) Revenue Recognition

Revenue is recognized upon
shipment to all customers, except North American distributors. The Company generally recognizes revenue to North American distributors upon shipment to the end customer. However, certain products nearing or at the end of their lifecycle are sold on
non-cancelable and non-returnable terms to North American distributors, in which case, revenue is recognized at the point of shipment. Sales to some international distributors are made under agreements, which provide limited price protection and
rights to periodically exchange a percentage of their unsold inventory. Accordingly, these sales are reduced by the estimated future price protection allowances and returns. When placing orders for products with the Company, its customers typically
provide the Company with a customer request date (CRD), which indicates their preferred date for receipt of the ordered products. Based on estimated transit time and other logistics, the Company may deliver products to the carrier in
advance of the CRD, and recognize revenue from the sale of such products at the time of such shipment. It is the Companys intent that such shipments be made not more than ten days in advance of CRD.

1.3) Seasonality

The Companys sales into the high-end consumer
and computing markets have historically been seasonal in that the Company generally experiences weaker demand in the first half of the year and stronger demand in the second half of the year.

Note 2Comprehensive Income

Other comprehensive income consists
of currency translation adjustments as follows:



|                                 |  |               |        |                      |   |              |  |              |         |  |   |        
|-------------------------------- |  | ------------- | ------ | -------------------- | - | ------------ |  | ------------ | ------- |  | - | -------
|                                 |  | Quarter Ended |        | Three Quarters Ended
|                                 |  | Sep 28, 2007  |        | Sep 29, 2006         |   | Sep 28, 2007 |  | Sep 29, 2006
|                                 |  | (thousands)  
|Net income                       |  | $             | 35,900 |                      | $ | 37,668       |  | $            | 100,177 |  | $ | 113,033
|Other comprehensive income:      |  |               |        |                      |   |              |  |              |         |  |   |        
|Currency translation adjustments |  |               | 615    |                      |   | 255          |  |              | 429     |  |   | 856    
|                                 |  |               |        |                      |   |              |  |              |         |  |   |        
|Comprehensive income             |  | $             | 36,515 |                      | $ | 37,923       |  | $            | 100,606 |  | $ | 113,889
|                                 |  |               |        |                      |   |              |  |              |         |  |   |        



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Note 3Earnings Per Share

The following table sets forth the computation of basic and diluted earnings per share (in thousands, except per share amounts):



|                                                                                       |  |                    |         |                      |   |                    |  |                    |         |  |   |        
|-------------------------------------------------------------------------------------- |  | ------------------ | ------- | -------------------- | - | ------------------ |  | ------------------ | ------- |  | - | -------
|                                                                                       |  | Quarter Ended      |         | Three Quarters Ended
|                                                                                       |  | September 28, 2007 |         | September 29, 2006   |   | September 28, 2007 |  | September 29, 2006
|Numerator:                                                                             |  |                    |         |                      |   |                    |  |                    |         |  |   |        
|Net income to common shareholders (numerator for basic and diluted earnings per share) |  | $                  | 35,900  |                      | $ | 37,668             |  | $                  | 100,177 |  | $ | 113,033
|                                                                                       |  |                    |         |                      |   |                    |  |                    |         |  |   |        
|Denominator:                                                                           |  |                    |         |                      |   |                    |  |                    |         |  |   |        
|Denominator for basic earnings per shareweighted average common shares                |  |                    | 132,066 |                      |   | 139,134            |  |                    | 133,557 |  |   | 140,625
|Effect of dilutive securities:                                                         |  |                    |         |                      |   |                    |  |                    |         |  |   |        
|Stock options and awards                                                               |  |                    | 1,962   |                      |   | 1,752              |  |                    | 1,521   |  |   | 2,577  
|Warrants                                                                               |  |                    |        |                      |   | 134                |  |                    |        |  |   | 170    
|                                                                                       |  |                    |         |                      |   |                    |  |                    |         |  |   |        
|Denominator for diluted earnings per shareadjusted weighted average common shares     |  |                    | 134,028 |                      |   | 141,020            |  |                    | 135,078 |  |   | 143,372
|                                                                                       |  |                    |         |                      |   |                    |  |                    |         |  |   |        
|Basic earnings per share                                                               |  | $                  | 0.27    |                      | $ | 0.27               |  | $                  | 0.75    |  | $ | 0.80   
|                                                                                       |  |                    |         |                      |   |                    |  |                    |         |  |   |        
|Diluted earnings per share                                                             |  | $                  | 0.27    |                      | $ | 0.27               |  | $                  | 0.74    |  | $ | 0.79   
|                                                                                       |  |                    |         |                      |   |                    |  |                    |         |  |   |        

Note 4Stock-Based Compensation

4.1) OverviewThe Company follows the provisions of Statement of Financial Accounting Standards (SFAS) No. 123R, Share-Based Payment (SFAS 123R). SFAS 123R establishes generally accepted
accounting principles for stock-based awards exchanged for employee services. Under SFAS 123R, stock-based compensation cost is measured at grant date, based on the fair value of the award, and is recognized as an expense over the employee or
directors requisite service period.

4.2) Share-based Payment ArrangementsAt September 28, 2007, the Companys 1999 Equity
Compensation Plan (1999 Plan) includes several available forms of stock compensation of which only stock options (Options) and both deferred and restricted stock units (Awards) have been granted to date. Additionally, the Company has issued its
stock options in exchange for outstanding stock options under various plans of acquired companies. The Company also has its 2000 Employee Stock Purchase Plan (ESPP) whereby eligible employees can purchase shares of Intersils common stock.
Shares issued upon exercise, release or sale under these arrangements are made from newly-issued stock.

4.3) Grant Date Fair Values and Underlying
Assumptions; Contractual TermsThe Company estimates the fair value of each Option at the date of grant. The Company used the Black-Scholes pricing model for the first three quarters of fiscal year 2004 and prior years and then began using
a Lattice model at the start of the last quarter of fiscal year 2004. Some amounts of compensation calculated using the Black-Scholes pricing model are still being amortized in fiscal 2007. The Company believes that a Lattice model is a more
accurate model for valuing employee Options as it uses historical exercise patterns to predict the expected life of Options and uses input assumptions to better predict future volatility of the underlying stock price. The expected volatility is
estimated from a blend of estimated price movement activity implied by the traded options and the actual historic volatility of the stock price. The fair value of Awards at the date of grant is the fair market value of the Companys common
stock at that date. The fair value of the shares issued under the ESPP is the amount of the discount the employee obtains at the date of the purchase transaction since it does not employ a look-back option provision.



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For stock options granted in the three quarters ended September 28, 2007 and September 29, 2006, the Company
estimated the fair value of each Option at the date of grant using a Lattice model with the following assumptions:



|                                  |  |                                         |  |                                         |  |                   
|--------------------------------- |  | --------------------------------------- |  | --------------------------------------- |  | ------------------
|                                  |  | Three Quarters Ended September 29, 2006 |  | Three Quarters Ended September 28, 2007
|                                  |  | Service Conditions                      |  | Performance and Service Conditions      |  | Service Conditions
|Range of expected volatilities    |  | 32.5% - 35.9%                           |  | 34.4% - 34.5%                           |  | 32.7% - 36.1%     
|Weighted average volatility       |  | 34.2%                                   |  | 34.4%                                   |  | 33.0%             
|Range of dividend yields          |  | 0.69 - 0.88%                            |  | 0.73%                                   |  | 0.99 - 1.53%      
|Weighted average dividend yield   |  | 0.73%                                   |  | 0.73%                                   |  | 1.43%             
|Range of risk-free interest rates |  | 4.3 - 5.1%                              |  | 4.7%                                    |  | 4.2 - 4.9%        
|Range of expected lives, in years |  | 3.4 - 5.3                               |  | 1.8 - 2.2                               |  | 3.3 - 4.3         

Most Options granted under the Companys 1999 Plan vest ratably over four years and generally have seven year
contract lives. For Awards the expected life for amortization of the grant date fair value, which is the stock price at the date of grant, is the vesting term: three years for deferred stock units and four years for restricted stock units. See Note
4.6 for further information with regard to grants with both performance and service conditions.

4.4) Information Regarding Current Share-based Payment
AwardsA summary of the activity for share-based payment awards in the three quarters ended September 28, 2007 is presented below:



|                                                                                                  |  |                       |   |        |                                             |       |                                                  |     |                       |   |       |                                         |  |                                                        |       |  |   |     
|------------------------------------------------------------------------------------------------- |  | --------------------- | - | ------ | ------------------------------------------- | ----- | ------------------------------------------------ | --- | --------------------- | - | ----- | --------------------------------------- |  | ------------------------------------------------------ | ----- |  | - | ----
|                                                                                                  |  | Options               |   | Awards |                                             |       | Aggregate Information                           
|                                                                                                  |  | Shares (in thousands) |   |        | Weighted Average Exercise Price (per share) |       | Weighted Average Remaining Contract Lives (Yrs.) |     | Shares (in thousands) |   |       | Aggregate Intrinsic Value (in
millions) |  | Aggregate Unrecognized Compensation Cost (in millions)
|Outstanding at Dec. 29, 2006                                                                      |  | 22,079                |   |        | $                                           | 23.06 |                                                  | 5.3 |                       |   | 749   |                                         |  |                                                        |       |  |   |     
|Granted                                                                                           |  | 2,365                 |   |        |                                             | 26.76 |                                                  | 6.5 |                       |   | 759   |                                         |  |                                                        |       |  |   |     
|Exercised (1)                                                                                     |  | (5,714                | ) |        |                                             | 18.73 |                                                  | 4.8 |                       |   | (100  | )                                       |  |                                                        |       |  |   |     
|Canceled                                                                                          |  | (1,154                | ) |        |                                             | 25.76 |                                                  | 5.5 |                       |   | (33   | )                                       |  |                                                        |       |  |   |     
|                                                                                                  |  |                       |   |        |                                             |       |                                                  |     |                       |   |       |                                         |  |                                                        |       |  |   |     
|Outstanding at Sep. 28, 2007                                                                      |  | 17,576                |   |        | $                                           | 24.79 |                                                  | 4.9 |                       |   | 1,375 |                                         |  | $                                                      | 207.4 |  | $ | 70.5
|                                                                                                  |  |                       |   |        |                                             |       |                                                  |     |                       |   |       |                                         |  |                                                        |       |  |   |     
|Exercisable/vested at Sep. 28, 2007 (1)                                                           |  | 10,524                |   |        | $                                           | 24.42 |                                                  | 4.4 |                       |   | 98    |                                         |  | $                                                      | 107.6 |  |   |    
|                                                                                                  |  |                       |   |        |                                             |       |                                                  |     |                       |   |       |                                         |  |                                                        |       |  |   |     
|Unexercisable/unvested at Sep. 28, 2007                                                           |  | 7,052                 |   |        | $                                           | 25.33 |                                                  | 5.7 |                       |   | 1,277 |                                         |  | $                                                      | 99.8  |  | $ | 70.5
|                                                                                                  |  |                       |   |        |                                             |       |                                                  |     |                       |   |       |                                         |  |                                                        |       |  |   |     
|Number vested and expected (at Sep. 28, 2007) to ultimately vest                                  |  | 17,105                |   |        | $                                           | 24.77 |                                                  | 4.9 |                       |   | 1,427 |                                         |  | $                                                      | 205.3 |  |   |     
|                                                                                                  |  |                       |   |        |                                             |       |                                                  |     |                       |   |       |                                         |  |                                                        |       |  |   |     
|                                                                                                  |  |                       |   |        |                                             |      
|                                                                                                  |  |                       |   |        | Options                                     |       |                                                  |     | Awards                |   |       | Aggregate                               |  |                                                       
|Weighted average fair value per share of Awards granted in the three quarters ended Sep. 28, 2007 |  |                       |   |        | $                                           | 7.41  |                                                  |     |                       | $ | 27.20 |                                         |  | $                                                      | 12.22 |  |   |     
|                                                                                                  |  |                       |   |        |                                             |       |                                                  |     |                       |   |       |                                         |  |                                                        |       |  |   |     

---

|(1) | Awards exercised are those that have reached full vested status and been delivered to the recipients as a taxable event. In the case of deferred stock units that have an available
elective deferral that is invoked timely, those shares are vested but still outstanding as Awards. Total unissued shares related to deferred stock units at September 28, 2007 was 98,000 shares as shown in the Awards column as
exercisable/vested.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The table above does not include shares under the Companys ESPP, which has purchase settlement dates in the second
and fourth fiscal quarters. The Companys ESPP is not administered with a lookback option provision and, as a result, there is not a population of outstanding purchase rights during the employee contribution period. In the three quarters ended
September 28, 2007 and September 29, 2006, 110,368 and 91,435 shares, respectively, were issued under the ESPP.



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##### Table of Contents

For the three quarters ended September 28, 2007 and September 29, 2006, the aggregate intrinsic value of Option
shares exercised was approximately $60.0 million and $47.1 million, respectively, measured at the date of exercise of each instrument. The Company issues new shares of common stock upon the exercise of Options. The Company does not use the shares
purchased in the stock repurchase program for issuance of shares under our share-based payment arrangements. For the three quarters ended September 28, 2007 and September 29, 2006, the aggregate intrinsic value of Awards that vested in the
period, whether delivered or deferred, was approximately $4.3 million and $3.2 million, respectively, measured at the date of vesting of each instrument.

The cash received by the Company from the exercise of Options and the related tax benefit realized by the Company from the tax deduction thereon was $107.0 and $20.0 million, respectively, in the three quarters ended September 28, 2007
and $72.9 and $14.9 million, respectively in the three quarters ended September 29, 2006.

For the three quarters ended September 29, 2006, the
weighted average grant date fair values of Options and Awards was $8.71 and $27.54 per share, respectively; aggregately, the weighted average fair value was $9.83 per share.

4.5) Financial Statement Effects and PresentationThe following table shows total pre-tax, stock-based compensation expense for the quarter and three quarters ended September 28, 2007 and
September 29, 2006, respectively, included in the Consolidated Statement of Operations:



|                                    |  |                                            |       |                                            |   |                                                   |  |                                                   |        |  |   |       
|----------------------------------- |  | ------------------------------------------ | ----- | ------------------------------------------ | - | ------------------------------------------------- |  | ------------------------------------------------- | ------ |  | - | ------
|                                    |  | Quarter ended Sep. 28, 2007 (in thousands) |       | Quarter ended Sep. 29, 2006 (in thousands) |   | Three Quarters ended Sep. 28, 2007 (in thousands) |  | Three Quarters ended Sep. 29, 2006 (in thousands)
|Cost of revenue                     |  | $                                          | 1,103 |                                            | $ | 916                                               |  | $                                                 | 3,234  |  | $ | 2,529 
|Research and development            |  |                                            | 3,338 |                                            |   | 4,319                                             |  |                                                   | 11,363 |  |   | 12,758
|Selling, general and administrative |  |                                            | 6,954 |                                            |   | 7,288                                             |  |                                                   | 19,303 |  |   | 21,359

At September 28, 2007 and September 29, 2006, the Companys net inventory balance includes $1.4
million and $0.5 million, respectively, of capitalized stock compensation. Of the $33.9 million of pre-tax, stock-based compensation expense in the three quarters ended September 28, 2007, $24.8 million is from Options, $8.4 million is from
Awards and $0.7 million is from the ESPP.

In the Companys Consolidated Statement of Cash Flows, SFAS 123R requires the cash flows resulting from the
tax benefits from tax deductions in excess of the deferred tax asset recorded for stock compensation costs to be classified as financing cash flows (excess tax benefits). In the three quarters ended September 28, 2007 and September 29,
2006, excess tax benefits so classified were $7.9 million and $5.1 million, respectively.

4.6) Performance-based GrantsIn fiscal 2006, the
Company made its initial performance-based grants of share-based compensation. The grants made have the usual service conditions but also have performance conditions relating generally to the Companys Revenue and Operating Income measured
against internal goals or peer groups. During the three quarters ended September 28, 2007, 194,200 performance-based Awards, all performance-based deferred stock units (PDSUs), were granted.

At September 28, 2007, the Companys only performance-based Awards outstanding were 464,200 PDSUs. These are evaluated periodically for the likely number
of shares that might be issued thereunder when fully vested based on the assessed likelihood of meeting the performance measures. The fair value measurement and its effect on compensation expense from this evaluation will be appropriately adjusted
when these evaluations result in changes in the estimate. Under the terms of the PDSUs, assuming the highest level of performance with no cancellations due to forfeitures, the maximum number of shares that could be issued thereunder would be
831,300 shares. At September 28, 2007, the number of these shares expected to vest, which includes a factor for forfeitures and a current assessment of the likelihood of meeting the performance measures, was approximately 562,000.

Note 5Investments

5.1) Available for Sale
(AFS) InvestmentsInvestments designated as AFS include marketable debt and equity securities. Investments that are designated as AFS are reported at fair value, with unrealized gains and losses, net of tax, recorded in
shareholders equity. The cost of securities sold is based on the specific identification method. Realized gains and losses on the sale of debt securities are recorded in interest and other, net. Realized gains or losses on the sale or exchange
of equity securities and declines in value judged to be other than temporary are recorded in gains (losses) on equity securities, net. Marketable equity securities are presumed to be impaired if the fair value is less than the cost basis
continuously for two consecutive quarters, absent evidence to the contrary.



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AFS debt investments consisted exclusively of auction rate securities with a contract maturity of greater than three
months. The Company invests in auction rate securities as an alternative to cash and frequently sells positions to fund its working capital. These investments are reflected in the Short-term Investments line item in the current section
of the Consolidated Balance Sheets. Our auction rate securities are securities issued primarily by state and local governmental agencies that have contractual maturities that extend up to 30 years. They have the effective characteristics of floating
rate investments since the earnings rate is reset at intervals from 7 to 90 days. Due to an active secondary market for such investments, the rate reset for each instrument is an opportunity to accept the reset rate or sell the instrument at its
face value in order to seek an alternative investment. The table below shows the contractual maturity of our auction rate securities; however the instruments are classified as short-term due to the reset feature which serves as an opportunity to
realize proceeds from the investment.

5.2) Held-to-Maturity (HTM) InvestmentsInvestments designated as HTM include marketable
debt with maturities of greater than three months. In accordance with SFAS 115, Accounting for Certain Investments in Debt and Equity Securities, these securities are classified as HTM securities as the Company has the positive intent
and ability to hold until maturity. Securities in the HTM classification are carried at amortized cost. Accordingly, unrealized gains and losses are not reported in the financial statements until realized or until a decline is deemed to be
other-than-temporary. HTM investments with maturities one year or less are contained in the balance sheet line item Short-term Investments within the current section, and those beyond one year are contained in the balance sheet line item
Long-term Investments within the non-current section of the Consolidated Balance Sheets.

5.3) Short-term InvestmentsThe
Companys portfolios of short-term investments consisted of the following at the dates set forth below:



|                                       |  |                                |       |               |   |                                |  |    
|-------------------------------------- |  | ------------------------------ | ----- | ------------- | - | ------------------------------ |  | ---
|                                       |  | Sep. 28, 2007                  |       | Dec. 29, 2006 |   | 2007 Maturity Range (in years)
|Type of Security                       |  | Amortized Cost ($ in millions) |      
|Federal agency debt (HTM)              |  | $                              |      |               | $ | 62.0                           |  |    
|State & municipality issued debt (HTM) |  |                                | 8.5   |               |   | 17.6                           |  | < 1
|Corporate issued debt (HTM)            |  |                                |      |               |   | 5.0                            |  |    
|Certificates of deposit (HTM)          |  |                                | 1.2   |               |   |                               |  | < 1
|Auction rate securities (AFS)          |  |                                | 272.0 |               |   | 380.5                          |  | >10
|                                       |  |                                |       |               |   |                                |  |    
|Total                                  |  | $                              | 281.7 |               | $ | 465.1                          |  |    
|                                       |  |                                |       |               |   |                                |  |    

The fair market value of these securities held at September 28, 2007 was approximately $281.7 million, which
equaled amortized cost (no unrealized gain or loss). The fair market value of these securities held at December 29, 2006 was approximately $464.6 million, which was an unrecognized loss of $0.5 million. None of the unrecognized losses relate to
auction rate securities.

5.4) Long-term InvestmentsThe Companys portfolio of long-term investments included the following at the dates
set forth below:



|                                         |  |                                |      |               |   |                               |  |    
|---------------------------------------- |  | ------------------------------ | ---- | ------------- | - | ----------------------------- |  | ---
|                                         |  | Sep. 28, 2007                  |      | Dec. 29, 2006 |   | 2007Maturity Range (in years)
|Type of Security                         |  | Amortized Cost ($ in millions) |     
|Federal agency debt (HTM)                |  | $                              | 45.2 |               | $ | 78.6                          |  | 1-3
|State and municipality issued debt (HTM) |  |                                | 18.6 |               |   |                              |  | 1-3
|                                         |  |                                |      |               |   |                               |  |    
|Total                                    |  | $                              | 63.8 |               | $ | 78.6                          |  |    
|                                         |  |                                |      |               |   |                               |  |    

The fair market value of these securities held at September 28, 2007 was approximately $63.9 million,
resulting in an unrealized gain of $0.1 million. The fair market value of these securities held at December 29, 2006 was approximately $78.4 million, which was an unrealized loss of $0.2 million.

5.5) Trading investmentsTrading investments are stated at fair value, with unrealized gains or losses resulting from changes in fair value recognized
currently in earnings. The Company elects to classify as trading investments its marketable equity securities which are contained in the line item Other in the non-current section of the Consolidated Balance Sheets. These
investments consist exclusively of a marketable equity portfolio which represents liabilities related to certain deferred compensation arrangements. The Company classifies these mutual fund assets as non-current since it has no plan or intent of
liquidating or otherwise using these securities in its business operations. During the quarter and three quarters ended September 28, 2007, the Company recorded $0.2 and $1.0 million of compensation expense, respectively,



10



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##### Table of Contents

classified as selling, general and administrative, representing the total return of the mutual fund holdings classified as trading investments. The
offsetting investment income to the Company is recorded and classified in the line item Gain (loss) on certain investments, net in the Consolidated Statements of Operations. The Companys portfolios of trading investments relating
to these liabilities for deferred compensation arrangements had fair market values of $11.5 million and $10.1 million at September 28, 2007 and December 29, 2006, respectively.

5.6) Cost Method InvestmentsAll investments that are not accounted for as AFS, HTM or Trading are accounted for under the cost method. Under the cost method, investments are held at historical cost, less
impairments, as there are no readily determinable market values. Cost method investments would be contained in the Other line item in the non-current section of the Consolidated Balance Sheets. The Companys practice is to review
its cost method investments at least quarterly for impairment indicators. At September 28, 2007 and December 29, 2006, the Company did not have any cost method investments.

During the quarter ended June 30, 2006, both of the Companys cost method investments were liquidated. The Companys investment in a privately-held company was sold to an unrelated third party for $2.2
million as compared to its carrying value of $1.6 million, resulting in a gain of $0.6 million. The Companys $2.5 million investment in a second privately-held company was written off at the time that companys Board determined that it
would dissolve and wind down its business affairs. The Company has not received nor expects any cost recovery from this investment. The net pre-tax loss from these two investments is $1.9 million for the three quarters ended September 29, 2006,
which is the balance in the line item Gain (loss) on certain investments, net in the Consolidated Statements of Operations.

Note 6
Property, Plant & Equipment

In 2006, the Company vacated space it occupied in certain buildings on its Florida operations site with a plan to
dispose of the buildings and certain land at that site. Accordingly, in mid-2006, the Company reclassified the net book value of the assets to Held for Sale status in its financial statements, in accordance with SFAS No. 144,
Accounting for the Impairment or Disposal of Long-Lived Assets (SFAS 144). The provisions of SFAS 144 require the Company to cease further depreciation of the subject plant and equipment at the time of such reclassification.

During the quarter ended March 30, 2007, the Company sold most of the land and all of the buildings thereon that had been reclassified to Held for
Sale status. The Companys net proceeds from the sale was $4.0 million and the Company recorded a gain of $0.2 million from the sale after recognition of an $0.8 million accrual for costs that will be incurred by the Company subsequent to
the sale to effect a severance and reintegration of certain utility services between the parcel sold and the Companys remaining property on the site. The gain on the sale is classified in the line item Selling, general and
administrative in the consolidated Statement of Operations for the three quarters ended September 28, 2007.

The Companys remaining
balance in Held for Sale status, non-depreciable land with a carrying value of $0.2 million, was reclassified into Property, Plant and Equipment in the first quarter of 2007 because the Company no longer intends to dispose of that parcel.

Note 7Inventories

Inventories are summarized
below:



|                           |  |                   |      |                  |   |     
|-------------------------- |  | ----------------- | ---- | ---------------- | - | ----
|                           |  | September 28,2007 |      | December 29,2006
|                           |  | (millions)       
|Finished products          |  | $                 | 23.8 |                  | $ | 27.3
|Work in progress           |  |                   | 67.7 |                  |   | 61.1
|Raw materials and supplies |  |                   | 3.6  |                  |   | 4.0 
|                           |  |                   |      |                  |   |     
|Total inventories, net     |  | $                 | 95.1 |                  | $ | 92.4
|                           |  |                   |      |                  |   |     

At September 28, 2007 and December 29, 2006, the Company was committed to purchase $23.8 million and
$20.7 million, respectively, of inventory from suppliers. Management believes the cost of this inventory approximates current market value.

Note
8Acquisitions

During the quarter ended September 28, 2007, the Company made two acquisitions for cash accounted for under the purchase
method. On September 11, 2007, all of the outstanding capital stock of Planet ATE, Inc. (Planet ATE) was acquired for $45.4 million in cash (net of cash and cash equivalents acquired). See below for information about additional
consideration to



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the stockholders of Planet ATE. Planet ATE is a U.S.-based, fabless semiconductor supplier to the automated semiconductor test equipment market which expands
the Companys product offering and served available markets. On September 7, 2007, the Company purchased an analog chip design center in Hyderabad, India (Hyderabad Design) from a U.S.-based company for $2.1 million in cash.
Hyderabad Design complements the Companys existing design operations in India and expands its engineering resources and skills to expand product development and accelerate growth opportunities. The results of operations of both acquirees,
which are immaterial, are included in the Companys consolidated statements of operations from the respective dates of the acquisitions.

The purchase
prices of both acquisitions were the result of negotiations based upon parameters relating to revenues, growth and profitability in the case of Planet ATE, and the costs and time required to open and staff a new design operation in India. Both
transactions have provisions for minor adjustments in the purchase price relating to working capital adjustments. Both acquisitions resulted in recording both definite-lived, amortizable intangible assets and indefinite-lived intangible assets
(including goodwill). The initial allocation of the aggregate purchase price is summarized as follows:



|                                                         |  |                             |     
|-------------------------------------------------------- |  | --------------------------- | ----
|                                                         |  | Allocation ofpurchase price
|                                                         |  | (millions)                 
|Intangible assets:                                       |  |                             |     
|Definite-lived: developed technologies                   |  | $                           | 7.9 
|Definite-lived: other                                    |  |                             | 1.4 
|Indefinite-lived: goodwill                               |  |                             | 31.1
|Tangible net assets, excluding cash and cash equivalents |  |                             | 4.1 
|In-process research and development                      |  |                             | 3.0 
|                                                         |  |                             |     
|Total purchase price, net of cash and cash equivalents   |  | $                           | 47.5
|                                                         |  |                             |     

The definite-lived developed technology in the table above will be amortized over a five-year life. Other
definite-lived intangible assets in the table above include backlog, customer relationships, trademarks and an employment agreement with the former CEO of Planet ATE. These assets have amortization lives ranging from three months to five years with
a weighted average of 1.7 years.

The appraisal of the acquired Planet ATE business identified $3.0 million of purchased in-process research and
development. Management is responsible for the valuations in the appraisal. The value of purchased in-process research and development was determined using a cost-based approach to valuation due to limitations in the market value and income-based
valuation approaches for this item. The cost-based approach related to approximately two years of historical Planet ATE research and development expenditures, net of related tax effect, which relates to the lengthy and risky development life-cycle
of the typical acquired system IC product for the automated test equipment market. The Company expects to continue to invest in these and other development efforts for this new market and believe there is a reasonable chance of
successfully completing the work undertaken at the point of the acquisition. However, there is risk associated with the completion of the projects, and there is no assurance that any will meet either technological or commercial success. Therefore
the purchased research and development was written off at the time of acquisition and is shown as a separate line item in the accompanying consolidated statements of operations.

Pro-forma financial information of the combined entities is not presented due to immateriality of the financial results of the acquired entities.

The Planet ATE agreement contains a provision for additional consideration to the former stockholders of that business. This additional consideration is a multiple of the net revenues of or attributed to Planet ATE
during the period from October 1, 2007 to December 31, 2008 with a maximum additional payment of $12 million. No amount for additional consideration was recorded at the time of the acquisition. The amount of the additional consideration,
when reasonably determinable, will be recorded as an increase in goodwill.

Note 9Intangible Assets

Purchased intangibles are definite lived intangible assets and are amortized over their useful lives, which range from 3 months to 11 years. Amortization of definite
lived intangible assets is shown separately on the face of the Consolidated Statements of Operations.



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Goodwill is an indefinite lived intangible asset. The following table summarizes changes in Intersils
indefinite-lived goodwill balance since December 29, 2006:



|                                                             |  |   |         |  
|------------------------------------------------------------ |  | - | ------- | -
|Goodwill balance at December 29, 2006                        |  | $ | 1,419.8 |  
|Purchase of Planet ATE                                       |  |   | 29.0    |  
|Purchase of Hyderabad Design                                 |  |   | 2.1     |  
|Goodwill adjustment resulting from Elantec exercised options |  |   | (2.3    | )
|Goodwill adjustment resulting from Xicor exercised options   |  |   | (1.3    | )
|                                                             |  |   |         |  
|Goodwill balance at September 28, 2007                       |  | $ | 1,447.3 |  
|                                                             |  |   |         |  

The adjustments to goodwill result from tax benefits received due to the exercise of vested stock options issued
as part of the respective acquisitions.

Note 10Shareholders Equity

10.1) Dividends In July 2007, the Companys Board of Directors declared a quarterly dividend of $0.10 per share of common stock. Payment was made on August 17, 2007, to shareholders of record at
the close of business on August 7, 2007. The total amount paid was $13.3 million. In October 2007, the Companys Board of Directors declared a quarterly dividend of $0.10 per share of common stock. Payment will be made on November 16,
2007, to shareholders of record at the close of business on November 6, 2007.

10.2) Class A Common StockThe table below summarizes
the share activity for the Companys Class A common stock since December 29, 2006 (in thousands of shares):



|                                    |  |                                                 |  
|----------------------------------- |  | ----------------------------------------------- | -
|                                    |  | For the three quarters ended September 28, 2007 |  
|Balance at December 29, 2006        |  | 135,921                                         |  
|Shares issued under stock plans     |  | 5,917                                           |  
|Repurchase and retirement of shares |  | (11,004                                         | )
|                                    |  |                                                 |  
|Balance at September 28, 2007       |  | 130,834                                         |  
|                                    |  |                                                 |  

Note 11 Legal Matters and Indemnifications

11.1) Legal MattersThe Company is currently party to various claims and legal proceedings. If the Company believes that a loss from these matters is probable
and the amount of the loss can be reasonably estimated, the Company will record the amount of the loss. As additional information becomes available, the Company will reassess any potential liability related to these matters and, if necessary, will
revise its estimates. If the Company believes a material loss is less than probable but more than remote, it will disclose the nature of the matter and, if possible, disclose its estimate of the possible loss.

11.2) IndemnificationsThe Company generally provides customers with a limited indemnification against intellectual property infringement claims related to
the Companys products. The Company accrues for known indemnification issues if a loss is probable and can be reasonably estimated, and accrues for estimated incurred but unidentified issues based on historical activity.

In certain instances when we divest a select portion of our product portfolio to a buyer, the Company may retain certain liabilities for known exposures and provide
indemnification to the buyer with respect to future claims arising from events occurring prior to the sale date, including liabilities for taxes, legal matters, intellectual property infringement, environmental exposures and other obligations. The
terms of the indemnifications vary in duration and terms for environmental indemnities typically do not expire. The maximum potential future payments that the Company could be required to make under these indemnifications are either contractually
limited to a specified amount or unlimited. The Company believes that the maximum potential future payments that the Company could be required to make under these indemnifications are not determinable at this time, as any future payments would be
dependent on the type and extent of the related claims, and all available defenses, which are not estimable.



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Note 12 Segment Information

The Company reports its results in one reportable segment. The Company designs, develops, manufacturers and markets high performance integrated circuits. The Chief Operating Officer has been identified as the Chief
Operating Decision Maker as defined by SFAS 131, Disclosures about Segments of an Enterprise and Related Information.

Note 13Income
Taxes and Discontinued Operations

13.1) Income TaxesEffective December 30, 2006 (fiscal 2007), the Company adopted the Financial
Accounting Standards Board Interpretation No. 48, Accounting for Uncertainty in Income Taxes (FIN 48). FIN 48 is an interpretation of FASB Statement No. 109, Accounting for Income Taxes. FIN 48 clarifies the
accounting for uncertainty in income taxes recognized in an enterprises financial statements and prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or
expected to be taken in a tax return. Further, it provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition matters.

Upon adoption and the conclusion of the initial evaluation of our uncertain tax positions (UTPs) under FIN 48, no adjustments were recorded. Consistent with past
practice, the Company classifies accrued interest and penalties on income tax matters in the current liabilities section of the balance sheet as Income Taxes Payable. The Company is subject to filing requirements in the United States
Federal jurisdiction and in many state and foreign jurisdictions for numerous consolidated and separate entity income tax returns. At the date of adoption of FIN 48, the Companys aggregate consolidated unrecognized tax benefit (UTB) was
approximately $60 million, of which substantially all would beneficially impact the effective tax rate if recognized. Included in this UTB is approximately $5 million of interest and penalties at the date of adoption. When the interest and penalty
portions of such UTBs are adjusted, it is classified as Income Tax Expense.

Several matters in the Companys UTB are UTPs
that have a reasonable possibility of significantly changing within the next 12 months. Significant UTPs include U.S. Federal taxes related to transfer pricing and resultant foreign source income of approximately $42 million out of the
aforementioned $60 million and changes up to the amount of this UTP could occur due to statute expirations and results of ongoing examinations by taxing authorities. The Companys remaining significant UTPs primarily include other
international income tax matters. These international income tax matters may also significantly change within the next 12 months for the same reasons. Management cannot estimate a range of reasonably possible changes in these latter UTPs at
this time.

In the major jurisdictions in which the Company operates, which includes the United States, various individual States therein and several
foreign nations, returns for various tax years from 2001 forward are currently under taxing authority examination or remain subject to audit.

13.2)
Discontinued OperationsDuring the quarter ended September 28, 2007, the Company recorded and classified an expense as discontinued operations relating to the cost of an ongoing foreign jurisdiction tax examination relating to the
Companys fiscal 2003 sale of its Wireless Networking Group.

Note 14 Recent Accounting Pronouncements

14.1) Emerging Issues Task Force No. 06-11, Accounting for Income Tax Benefits of Dividends on Shares-Based Payment Awards (EITF 06-11) Issued in June 2007, this EITF clarifies the accounting for a realized income tax benefit (Tax Benefit) from dividends that are charged to retained earnings and paid to employees for nonvested equity share units such as the Companys
Awards. The conclusion is that the Tax Benefits should be recognized as an increase in additional paid-in capital and that any such amount should also be included in the pool of excess tax benefits available to absorb tax deficiencies on share-based
payment awards. EITF 06-11 shall be prospectively applied to the Tax Benefits from dividends on Awards that are declared in fiscal years beginning after September 15, 2007. The Company plans to adopt EITF 06-11 for its 2008 fiscal year. It is
not anticipated that the effect of adoption will be material.

14.2) Emerging Issues Task Force No. 07-3, Accounting for Nonrefundable
Advance Payments for Goods or Services to Be Used in Future Research and Development Activities (EITF 07-3)  Issued in April 2007, this EITF clarifies the accounting for the costs of advance payments for goods or services that are
non-refundable and to be used in future research and development activities (Advance Payments). The conclusion is that the Advance Payments should be deferred and capitalized to be subsequently recognized as an expense as the goods are delivered or
the services performed. EITF 07-3 shall be effective for fiscal years beginning after December 15, 2007 and should be adopted as a change in accounting principle through a cumulative effect adjustment to retained earnings. For the Company, EITF
07-3 shall be adopted effective with its 2008 fiscal year. The Company does not anticipate that the effect of adoption will be material.

14.3) FASB
Staff Position FIN 48-1, Definition of Settlement in FASB Interpretation No. 48 (FSP FIN 48-1)  Issued in May 2007, this FSP amends FIN 48, Accounting for Uncertaintly in Income Taxes to provide guidance on how
to



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determine whether a tax position is effectively settled for the purpose of recognizing previously unrecognized tax benefits since certainty in
certain tax matters can become evident in different ways and through different processes. A series of conditions to determine a state of effective settlement are presented in the FSP. For the Company, since it has not had material
changes in its UTPs since adoption of FIN 48 for fiscal 2007, the adoption requirement is to apply the provisions of FSP FIN 48-1 from the date of initial adoption of FIN 48. Therefore, this FSP is effectively adopted by the Company currently.
The Company did not record any adjustments to its UTPs from this adoption and does not anticipate that the future effect will be material.

Note
15Subsequent Event

On October 31, 2007, the Company announced that its Board of Directors had authorized the repurchase of up to $400
million of our Class A common stock during the twelve months following the announcement. The Company will retire the shares repurchased under this plan.

End of Consolidated Financial Statements



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##### Table of Contents

|Item 2. | Managements Discussion and Analysis of Financial Condition and Results of Operations
|------- | -------------------------------------------------------------------------------------

The following discussion should be read in conjunction with, and is qualified in its entirety by reference to our consolidated financial statements, including the notes thereto. Except for historical information, the
discussions in this section contain forward-looking statements that involve risks and uncertainties. Actual results could differ materially from those discussed below.

Forward Looking Statements

This Quarterly Report contains statements relating to expected future results and
business trends of the Company that are based upon our current estimates, expectations, and projections about our industry, and upon managements beliefs, and certain assumptions we have made, that are forward-looking statements as
defined in the Private Securities Litigation Reform Act of 1995. Words such as anticipates, expects, intends, plans, believes, seeks, estimates, may,
will, and variations of these words or similar expressions are intended to identify forward-looking statements. In addition, any statements that refer to expectations, projections, or other characterizations of future events
or circumstances, including any underlying assumptions, are forward-looking statements. Such statements are not guarantees of future performance and are subject to certain risks, uncertainties, and assumptions that are difficult to
predict. Therefore, our actual results may differ materially and adversely from those expressed in any forward-looking statement as a result of various factors. These factors include, but are not limited to: industry and global economic
and market conditions, such as the cyclical nature of the semiconductor industry and the markets addressed by our and our customers products; demand for, and market acceptance of, new and existing products; successful development of new
products; the timing of new product introductions; new product performance and quality; the successful integration of acquisitions; manufacturing difficulties, such as the availability and extent of utilization of manufacturing capacity and raw
materials; procurement shortages; the failure of our suppliers or outsource providers to perform their obligations in a manner consistent with our expectations; the need for additional capital; pricing pressures and other competitive factors, such
as competitors new products; competitors with significantly greater financial, technical, manufacturing and marketing resources; changes in product mix; fluctuations in manufacturing yields; product obsolescence; the ability to develop and
implement new technologies and to obtain protection of the related intellectual property; legal challenges to our products and technology, such as intellectual property infringement and misappropriation claims; customer service; the extent that
customers use our products and services in their business, such as the timing of the subsequent entry of our customers products containing our components into production, the size and timing of orders from customers, and customer cancellations
or shipment delays; changes in import export regulations; legislative, tax, accounting, or regulatory changes or changes in their interpretation; transportation, communication, demand, information technology or supply disruptions based on factors
outside our control such as natural disasters, wars, and terrorist activities; and exchange rate fluctuations. These forward-looking statements are made only as of the date hereof, and we undertake no obligation to update or revise the
forward-looking statements, whether as a result of new information, future events or otherwise.

Overview

We design, develop, manufacture and market high-performance analog integrated circuits (ICs). We believe our product portfolio addresses some of the fastest growing
applications within four end markets: high-end consumer, industrial, computing and communications. During the quarter ended September 28, 2007, we completed two acquisitions. See Footnote 8 of the accompanying consolidated financial statements
for additional detail.

Critical Accounting Policies

There have been no significant changes to the our critical accounting policies during the three quarters ended September 28, 2007 with the exception of the policy regarding the accounting for income taxes that is associated with the
adoption of FIN 48 as noted below (see Income Tax Expense). Please refer to the disclosures regarding other critical accounting policies in Managements Discussion and Analysis of Financial Condition and Results of Operations
included in our Annual Report on Form 10-K for the fiscal year ended December 29, 2006.



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##### Table of Contents

Results of Operations

The following table sets forth data which are derived from our condensed consolidated statements of operations herein and are expressed as a percentage of revenue for the periods indicated:



|                                                      |  |                      |   |  |                      |   |  |                   |   |  |                   |  
|----------------------------------------------------- |  | -------------------- | - |  | -------------------- | - |  | ----------------- | - |  | ----------------- | -
|                                                      |  | Quarter Ended        |   |  | Three Quarters Ended |  
|                                                      |  | September 28,2007    |   |  | September 29,2006    |   |  | September 28,2007 |   |  | September 29,2006 |  
|                                                      |  | (percent of revenue) |  
|Revenue                                               |  | 100.0                | % |  | 100.0                | % |  | 100.0             | % |  | 100.0             | %
|Cost of revenue                                       |  | 43.6                 |   |  | 42.5                 |   |  | 43.1              |   |  | 42.8              |  
|                                                      |  |                      |   |  |                      |   |  |                   |   |  |                   |  
|Gross profit                                          |  | 56.4                 |   |  | 57.5                 |   |  | 56.9              |   |  | 57.2              |  
|Operating costs and expenses:                         |  |                      |   |  |                      |   |  |                   |   |  |                   |  
|Research and development                              |  | 17.2                 |   |  | 17.3                 |   |  | 18.2              |   |  | 17.0              |  
|Selling, general and administrative                   |  | 16.9                 |   |  | 16.8                 |   |  | 17.8              |   |  | 18.4              |  
|Amortization of purchased intangibles                 |  | 1.3                  |   |  | 1.2                  |   |  | 1.3               |   |  | 1.3               |  
|In-process research and development                   |  | 1.5                  |   |  |                     |   |  | 0.5               |   |  |                  |  
|                                                      |  |                      |   |  |                      |   |  |                   |   |  |                   |  
|Operating income                                      |  | 19.5                 |   |  | 22.2                 |   |  | 19.1              |   |  | 20.5              |  
|Gain (loss) on certain investments, net               |  | 0.1                  |   |  |                     |   |  | 0.2               |   |  | (0.3              | )
|Interest income                                       |  | 4.1                  |   |  | 3.9                  |   |  | 4.4               |   |  | 3.8               |  
|                                                      |  |                      |   |  |                      |   |  |                   |   |  |                   |  
|Income before income taxes from continuing operations |  | 23.7                 |   |  | 26.1                 |   |  | 23.7              |   |  | 24.0              |  
|Income tax expense from continuing operations         |  | 5.5                  |   |  | 6.6                  |   |  | 5.3               |   |  | 3.8               |  
|                                                      |  |                      |   |  |                      |   |  |                   |   |  |                   |  
|Net income from continuing operations                 |  | 18.2                 |   |  | 19.5                 |   |  | 18.4              |   |  | 20.2              |  
|Loss from discontinued operations                     |  | (0.1                 | ) |  |                     |   |  |                  |   |  |                  |  
|Income tax benefit from discontinued operations       |  |                     |   |  |                     |   |  |                  |   |  |                  |  
|                                                      |  |                      |   |  |                      |   |  |                   |   |  |                   |  
|Net loss from discontinued operations                 |  | (0.1                 | ) |  |                     |   |  |                  |   |  |                  |  
|Net income                                            |  | 18.1                 | % |  | 19.5                 | % |  | 18.4              | % |  | 20.2              | %
|                                                      |  |                      |   |  |                      |   |  |                   |   |  |                   |  

---

Note: Totals and percentages may not add or
calculate precisely due to rounding. Certain amounts in the quarter and three quarters ended September 29, 2006 have been reclassified to conform to the presentation in the quarter and three quarters ended September 28, 2007.

Revenue and Gross Profit



|                |  |                   |         |                      |   |                   |  |                   |         |  |   |        
|--------------- |  | ----------------- | ------- | -------------------- | - | ----------------- |  | ----------------- | ------- |  | - | -------
|                |  | Quarter Ended     |         | Three Quarters Ended
|                |  | September 28,2007 |         | September 29,2006    |   | September 28,2007 |  | September 29,2006
|                |  | (in thousands)   
|Revenue         |  | $                 | 198,285 |                      | $ | 192,937           |  | $                 | 544,341 |  | $ | 559,502
|Cost of revenue |  |                   | 86,522  |                      |   | 81,957            |  |                   | 234,384 |  |   | 239,235
|                |  |                   |         |                      |   |                   |  |                   |         |  |   |        
|Gross profit    |  |                   | 111,763 |                      |   | 110,980           |  |                   | 309,957 |  |   | 320,267

Revenue for the quarter ended September 28, 2007 increased $5.4 million or 2.8% to $198.3 million from $192.9
million during the quarter ended September 29, 2006. The increase in revenues was made up of the following changes from each of our end markets as follows: computing, $7 million increase; high-end consumer, $8 million increase; communications,
$8 million decrease and industrial, $2 million decrease. In aggregate, a 15% increase in unit demand increased revenues by $29 million and an 11% decline in average selling prices (ASPs), decreased revenues by $24 million. The trend of
declining unit prices, which must be made up by higher unit volumes for sales growth, is normal for the semiconductor industry and we expect it to continue. These trend characteristics are not currently believed to be a material change in the demand
or financial return characteristics for our products and are expected by us to continue into the future.

Revenue for the three quarters ended
September 28, 2007 decreased $15.3 million or 2.7% to $544.3 million from $559.5 million during the three quarters ended September 29, 2006. The decrease in revenues was made up of the following changes from each of our end markets as
follows: computing, $3 million decrease; high-end consumer, $8 million increase; communications, $11 million decrease and industrial, $9 million decrease. In aggregate, a 5% increase in unit demand increased revenues by $27 million and a 7% decline
in ASPs, decreased net sales by $42 million.



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##### Table of Contents

Geographically, 70%, 20% and 10% of revenues were derived from Asia/Pacific, North America and Europe, respectively,
during the three quarters ended September 28, 2007 as compared to 67%, 22% and 10% during the three quarters ended September 29, 2006. As manufacturing of, particularly, consumer electronic and computing/communication products continues to
migrate to the Asia/Pacific region of the world, we believe our sales will continue to grow proportionately there.

We sell our products to customers in a
variety of countries including, in descending order by revenue dollars for the three quarters ended September 28, 2007 for our top ten countries, China (including Hong Kong), the United States, South Korea, Japan, Germany, Taiwan, Singapore,
Italy, Thailand and France. Sales to customers in China, including Hong Kong, comprised approximately 39% of revenue, followed by the United States with 19% of revenue, and then Korea with 13% of revenue during the three quarters ended
September 28, 2007. Two distributors, one world-wide and the other Asian, accounted for 12% and 11%, respectively, of our revenues in the three quarters ended September 28, 2007. Distributors are not themselves end users of our products,
but rather serve as a channel of sales to many end users of our products. No other customer accounted for more than 10% of our revenues in the three quarters ended September 28, 2007.

Cost of Revenue and Gross Profit

Cost of revenue consists primarily
of purchased materials and services, labor and overhead (including depreciation) associated with product manufacturing. During the quarter ended September 28, 2007, gross profit increased approximately 1% or $0.8 million to $111.8 million from
$111.0 million during the quarter ended September 29, 2006. During the quarter ended September 29, 2007, the Company recorded a manufacturing severance provision in cost of sales of approximately $1.0 million, which increased cost of sales
compared to the comparable prior year quarter. Stock compensation charges were also higher by approximately $0.2 million compared to the prior year quarter. As a percentage of revenues, gross margin was 56.4% during the quarter ended
September 28, 2007 compared to 57.5% during the quarter ended September 29, 2006. In the quarter, we experienced a mix change in our sales relating to more rapid growth in computing products, which are lower margin than many of our other
products.

During the three quarters ended September 28, 2007, gross profit decreased approximately 3% or $10.3 million to $310.0 million from $320.3
million during the three quarters ended September 29, 2006. The aforementioned $1.0 million manufacturing severance provision and an increase in stock compensation of $0.7 both contributed to this decline in gross profit. The balance related
primarily to product mix changes. We continue to strive to improve gross margins from their present levels by emphasizing new and higher-margin products, and continually improving product quality and implementing various cost saving opportunities in
our manufacturing chain.

We anticipate that the addition of Planet ATE product sales, while modest in dollar terms, will contribute to sales mix
favorably.

Operating Costs and Expenses

Research
and Development (R&D)



|                         |  |                   |        |                      |   |                   |  |                   |        |  |   |       
|------------------------ |  | ----------------- | ------ | -------------------- | - | ----------------- |  | ----------------- | ------ |  | - | ------
|                         |  | Quarter Ended     |        | Three Quarters Ended
|                         |  | September 28,2007 |        | September 29,2006    |   | September 28,2007 |  | September 29,2006
|                         |  | (in thousands)   
|Research and development |  | $                 | 34,052 |                      | $ | 33,458            |  | $                 | 98,886 |  | $ | 95,222

R&D expenses consist primarily of salaries and costs of employees engaged in product/process research, design
and development activities, as well as related subcontracting activities, prototype development, cost of design tools and technology license agreement expenses. R&D expenses increased approximately 2%, or $0.6 million, to $34.1 million during
the quarter ended September 28, 2007 from $33.5 million in the quarter ended September 29, 2006. In the three quarters ended September 28, 2007 R&D expenses increased by approximately 4%, or $3.7 million, to $98.9 million from
$95.2 million during the three quarters ended September 29, 2006. Stock-based compensation expense recorded to R&D declined in both comparative periods, which was more than offset by robust hiring of new design engineers and related
materials and supplies costs. Both of our recent acquisitions have significant R&D cost elements which will add to R&D costs to facilitate faster new product offerings and customer service.



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##### Table of Contents

Selling, General and Administrative (SG&A)



|                                    |  |                   |        |                      |   |                   |  |                   |        |  |   |        
|----------------------------------- |  | ----------------- | ------ | -------------------- | - | ----------------- |  | ----------------- | ------ |  | - | -------
|                                    |  | Quarter Ended     |        | Three Quarters Ended
|                                    |  | September 28,2007 |        | September 29,2006    |   | September 28,2007 |  | September 29,2006
|                                    |  | (in thousands)   
|Selling, general and administrative |  | $                 | 33,571 |                      | $ | 32,327            |  | $                 | 96,932 |  | $ | 103,094

SG&A costs include primarily salary and incentive expenses of employees engaged in marketing and selling, as
well as salaries and expenses required to perform our human resource, accounting and finance, information systems, legal and executive functions. SG&A costs increased approximately 4%, or $1.3 million to $33.6 million during the quarter ended
September 28, 2007 from $32.3 million in the quarter ended September 29, 2006. In the three quarters ended September 28, 2007, SG&A costs decreased approximately 6% or $6.2 million to $96.9 million from $103.1 million during the
three quarters ended September 29, 2006. Stock-based compensation expense recorded to SG&A declined in both comparative periods. For the quarter ended September 28, 2007, compared to the prior years quarter, our sales commission
costs increased, our executive incentive program accrual was higher reflecting better business performance, and our accrual for external audit costs rose. Other costs in the comparative quarters were largely even. In the three quarters ended
September 28, 2007, stock compensation costs were lower, our executive incentive program accrual was lower and our outside service costs declined. Despite slightly lower expected equity compensation costs going forward, we expect SG&A costs
to increase modestly in our fourth quarter but at a rate less than anticipated revenue growth.

Amortization of Purchased Intangible Assets



|                                      |  |                   |       |                      |   |                   |  |                   |       |  |   |      
|------------------------------------- |  | ----------------- | ----- | -------------------- | - | ----------------- |  | ----------------- | ----- |  | - | -----
|                                      |  | Quarter Ended     |       | Three Quarters Ended
|                                      |  | September 28,2007 |       | September 29,2006    |   | September 28,2007 |  | September 29,2006
|                                      |  | (in thousands)   
|Amortization of purchased intangibles |  | $                 | 2,486 |                      | $ | 2,367             |  | $                 | 7,221 |  | $ | 7,101

Amortization of purchased intangible assets increased to $2.5 million from $2.4 million in the quarters ended
September 28, 2007 and September 29, 2006, respectively. The increase reflected approximately $0.1 million of amortization of definite-lived intangibles related to the acquisitions of Planet ATE and Hyderabad Design. Such amortization
increased to $7.2 million from $7.1 million in the three quarter periods ended September 28, 2007 and September 29, 2006 as a result of the additional amortization related to the aforementioned acquisitions. In our fourth quarter ending
December 28, 2007, amortization of purchased intangibles is expected to be $3.7 million as a result of the amortization over a three-month life of an element of the Planet ATE acquisition. During our fiscal year 2008, we expect amortization of
purchased intangibles to average approximately $2.8 million per quarter.

SFAS 142, Goodwill and Other Intangible Assets, requires testing
goodwill for impairment at least annually, or more frequently if impairment indicators arise. During the fourth quarter of 2006, we determined that the value of each of our reporting units exceeded its book value. Therefore, no impairments were
recorded. Depending on the future market demand for our products, among other factors, we could experience impairment on our intangible asset balance. We will test these balances for impairment in the fourth quarter of 2007.

In-process research and development

During the quarter ended
September 28, 2007, we recorded a charge to earnings for $3.0 million of purchased in-process research and development related to the acquisition of Planet ATE, Inc. as described more fully in Note 8 to the accompanying consolidated financial
statements. The initial appraisal identified $3.0 million of purchased in-process research and development, which was determined using a cost-based approach to valuation due to limitations in the market value and income-based valuation approaches
for this item. The cost-based approach related to approximately two years of historical Planet ATE research and development expenditures, net of associated tax effects, which relates to the lengthy and risky development life-cycle of the typical
acquired system IC product for the automated test equipment market. The Company expects to continue to invest in these and other development efforts for this new market and believes there is a reasonable chance of successfully completing
the work undertaken at the point of the acquisition. However, there is risk associated with the completion of the projects, and there is no assurance that any will meet either technological or commercial success.



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Gain (loss) on certain investments



|                                        |  |                   |     |                      |   |                   |  |                   |     |  |   |        |  
|--------------------------------------- |  | ----------------- | --- | -------------------- | - | ----------------- |  | ----------------- | --- |  | - | ------ | -
|                                        |  | Quarter Ended     |     | Three Quarters Ended |  
|                                        |  | September 28,2007 |     | September 29,2006    |   | September 28,2007 |  | September 29,2006 |    
|                                        |  | (in thousands)    |    
|Gain (loss) on certain investments, net |  | $                 | 243 |                      | $ |                  |  | $                 | 987 |  | $ | (1,892 | )

We maintain a portfolio of $11.5 million of mutual fund investments under two qualified deferred compensation
plans for certain current and former employees. We have an offsetting liability recorded for the investments such that there is no net effect on our shareholders equity from these plans. The net total return from these investments, which was
$0.2 and $1.0 million in the quarter and three quarters ended September 28, 2007, respectively. This net total return is recorded as an increase (if it is a positive total return) in compensation expense in operating costs  SG&A
 and a gain in non-operating activities. If the total return is negative, the amount is recorded as a reduction in compensation expense in operating costs and a loss in non-operating activities.

During the quarter ended June 30, 2006, we liquidated our only cost method investments. Our investment in one privately-held company was sold to an unrelated third
party for $2.2 million as compared to its carrying value of $1.6 million, resulting in a gain of $0.6 million. Our $2.5 million investment in a second privately-held company was written off at the time that companys Board determined that it
would dissolve and wind down its business affairs. We believe that no cost recovery is to be expected from this investment. The net pre-tax loss from these two investments was $1.9 million for the quarter ended June 30, 2006.

Interest Income



|                |  |                   |       |                      |   |                   |  |                   |        |  |   |       
|--------------- |  | ----------------- | ----- | -------------------- | - | ----------------- |  | ----------------- | ------ |  | - | ------
|                |  | Quarter Ended     |       | Three Quarters Ended
|                |  | September 28,2007 |       | September 29,2006    |   | September 28,2007 |  | September 29,2006
|                |  | (in thousands)   
|Interest income |  | $                 | 8,104 |                      | $ | 7,546             |  | $                 | 24,187 |  | $ | 21,485

Interest income increased to $8.1 million and $24.2 million during the quarter and three quarters ended
September 28, 2007, respectively, from $7.5 million and $21.5 million during the quarter and three quarters ended September 29, 2006. This increase is primarily attributable to the continuing upward movement of available interest rates in
both long and short maturities in the two comparative periods. The increase in short maturities has benefited us as a large part of our short-term investments are auction rate securities with frequent rate resets.

With our decision to increase the magnitude of our stock repurchase program, as announced in December 2006, to a twelve month total of $400 million, our 67% dividend
increase announced in the fourth quarter of 2006 and our use of approximately $45 million for acquisitions, the excess of these uses of cash over our free cash flow from the operation of the business will result in reduced resources available to
invest in interest bearing securities. Therefore, our interest income will likely be reduced in future quarterly periods primarily due to balance declines.

Income Tax Expense from Continuing Operations

During the quarter and three quarters ended September 28, 2007, the Companys
effective tax rate from continuing operations was 23.4% and 22.3%, respectively. During the quarter and three quarters ended September 29, 2006, the Companys effective tax rate was 25.2% and 15.9%, respectively. Discrete tax adjustments
in the three quarters ended September 29, 2006, and recurring items such as international income taxed at lower rates in both years, account for the difference between these effective tax rates and the statutory U.S. income tax rate.

In determining net income, we must make certain estimates and judgments in the calculation of tax expense and tax liabilities and in the recoverability of
deferred tax assets that arise from temporary differences between the tax and financial statement recognition of revenues and expenses.

In the ordinary
course of business, there may be many transactions and calculations where the ultimate tax outcome is uncertain. The calculation of tax liabilities involves uncertainties in the application of complex tax laws. We recognize liabilities for
anticipated tax audit issues in the United States and other tax jurisdictions based on an estimate of the ultimate resolution of whether, and the extent to which, additional taxes will be due. Although we believe the estimates are reasonable, no
assurance can be given that the final outcome of these matters will not be different than amounts reflected in the historical income tax provisions and accruals. Such differences could have a material impact on the income tax provision and operating
results in the period in which such determination is made.



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##### Table of Contents

In addition to the risks to the effective tax rate described above, the effective tax rate reflected in our
forward-looking statements is based on current enacted tax law. Significant changes in enacted tax law could materially affect these estimates.

Stock-based Compensation

Application of SFAS 123R - Fair Value Calculation Methodology: Under SFAS 123R, the fair
value of the grant (compensation cost) is calculated on the date of grant using a Lattice method (except for cost relating to grants made prior to the fourth quarter of 2004 for which we used the Black-Scholes method). The compensation cost is then
amortized straight-line over the period relating to service conditions (vesting period). Generally, a Lattice method will, all other computational inputs being equal, result in a lesser fair value per share than will the Black-Scholes method.
Additionally, however, it is generally believed that a Lattice method is more appropriate for employee stock options that have longer terms and lack of marketability that is not well recognized by the Black-Scholes method. We adopted a Lattice
method when software was acquired that permitted the calculation and when it became clear that it would be acceptable under the pronouncement that later came to be known as SFAS 123R.

Both methods of calculating fair value require us to estimate key assumptions, especially volatility, which determine the fair value of the stock option.
See Note 4.3 to the consolidated financial statements included elsewhere herein for a tabular presentation of the values for certain of these key assumptions. Volatility is one of the most significant determinants of fair value in both models. Our
expected volatility is estimated from a blend of estimated price movement activity implied by our traded options and the actual historic volatility of our stock price. Our risk-free interest rate is estimated by using the zero-coupon U.S. Treasury
rate at the time of the grant related to the expected term of the grant. We periodically re-estimate our forfeiture rates used in calculating fair value using historical cancellation activity that occurs in several bands of employee
classifications.

Performance Based Grants: In fiscal 2006, the Company made its initial performance-based grants of share-based
compensation. The grants made have the usual service conditions but also have performance conditions relating generally to the Companys Revenue and Operating Income measured against internal goals or peer groups. In the three quarters ended
September 28, 2007, performance-based grants for 194,200 shares were issued.

At September 28, 2007, the Companys only
performance-based Awards outstanding were 464,200 deferred stock units (PDSUs ). These are evaluated periodically for the likely number of shares that might be issued thereunder when fully vested based on the assessed likelihood of meeting the
performance measures. The fair value measurement and its effect on compensation expense from this evaluation will be appropriately adjusted when these evaluations result in changes in the estimate. Under the terms of the PDSUs and assuming the
highest level of performance with no cancellations due to forfeitures, the maximum number of shares that could be issued thereunder would be 831,300 shares. At September 28, 2007, the number of these shares expected to vest, which includes a
factor for forfeitures and a current assessment of the likelihood of meeting the performance measures, was approximately 562,000.

If this
assessment of grants with performance conditions changes or if the actual results of the estimates made with regard to other fair value calculation inputs are not consistent with our earlier assumptions and judgments, the Company may be required to
change either compensation expense or income tax expense, or both. Such changes, to be recorded in the quarter the assessment changes, could be material to its results of operations in any such period.

Unrecognized Compensation Cost: We currently have an aggregate future pre-tax charge to be recorded in our financial statements of approximately
$70.5 million. That amount will be recorded over the remaining vesting period of outstanding Options and Awards at September 28, 2007.

Factors affecting future financial statement effect of SFAS 123R: Our use of share-based payment awards has effects on our current and future financial statements. Such effects include:



| |  |  | continued or increased grants of share-based payment awards will add to the unrecognized compensation cost to be recognized
| | - |  | ---------------------------------------------------------------------------------------------------------------------------



| |  |  | cessation or reduction of grants of share-based payment awards would cause the unrecognized compensation cost to be reduced in future periods
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | re-assessments of the input variables to a Lattice method calculation may cause either a higher or lower total fair value to be utilized for those grants so
affected
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | re-assessment of the status of the likelihood of achievement of performance conditions might cause then current recognition of compensation cost to be materially
higher or lower than the original anticipated recognition schedule
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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##### Table of Contents

Backlog

Our product
sales are made pursuant to purchase orders that are generally booked up to six months in advance of delivery. Our standard terms and conditions of sale provide that these orders become non-cancelable thirty days prior to scheduled delivery for
standard products and ninety days prior to scheduled delivery for semi-custom and custom products. Backlog is influenced by several factors, including market demand, pricing and customer order patterns in reaction to product lead times.

Additionally, we believe backlog can fall disproportionately to consumption rates in periods of weak end-market demand since production lead times can be shorter.
Conversely, we believe backlog can grow faster than consumption in periods of strong end-market demand as production and delivery times increase and some customers may increase orders in excess of their current consumption to reduce their own risk
of production disruptions.

Our six-month backlog at September 28, 2007 was $186.9 million compared to December 29, 2006 of $117.7 million.
Although not always the case, as discussed in the foregoing paragraph, backlog can be a leading indicator of revenue performance for approximately the next two quarters.

Business Outlook

On October 17, 2007, we announced our outlook for the fourth quarter of 2007. At that time, we
expected revenue for the fourth quarter to increase between 5% and 7% over the third quarter, due to a strong seasonal quarter for the computing and consumer sectors. On that date we also expected diluted earnings per share of approximately $0.31 to
$0.32 in the fourth quarter of 2007. The full announcement can be referenced in the press release that is an exhibit to a Current Report on Form 8-K filed on October 17, 2007.

Contractual Obligations and Off-Balance Sheet Arrangements

With the exception of our inventory purchase order
commitments and a contractual provision for additional consideration regarding the purchase of Planet ATE, our contractual obligations and off-balance sheet arrangements have not changed significantly from December 29, 2006. At
September 28, 2007, we have committed to purchase $23.8 million of inventory from suppliers.

The Planet ATE agreement contains a provision for
additional consideration to the former stockholders of that business. This additional consideration is a multiple of the net revenues of or attributed to Planet ATE during the period from October 1, 2007 to December 31, 2008 with a maximum
additional payment of $12 million. No amount for additional consideration was recorded at the time of the acquisition.

Liquidity and Capital Resources

Our capital requirements depend on a variety of factors, including but not limited to, the rate of increase or decrease in our existing business base;
the success, timing and amount of investment required to bring new products to market; revenue growth or decline; and potential acquisitions. We believe that we have the financial resources necessary to meet business requirements for the next 12
months, including the requisite capital expenditures for the expansion or upgrading of worldwide manufacturing capacity, working capital requirements, our dividend program, our stock repurchase program and potential future acquisitions or strategic
investments. At September 28, 2007, our total shareholders equity was $2.3 billion. At that date we also had approximately $514 million in cash and short-term investments, as well as $64 million in long-term, marketable investments. We
have no debt outstanding.



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##### Table of Contents

Our primary sources and uses of cash during the comparative quarters presented are shown in this summarized table (in
millions):



|                                                                           |  |                      |      |   |              |   |      |  
|-------------------------------------------------------------------------- |  | -------------------- | ---- | - | ------------ | - | ---- | -
|                                                                           |  | Three Quarters Ended |     
|                                                                           |  | Sep 28, 2007         |      |   | Sep 29, 2006 |  
|Sources of Cash                                                            |  |                      |      |   |              |   |      |  
|Existing business performance and activities                               |  |                      |      |   |              |   |      |  
|Operating activities, including working capital changes                    |  | $                    | 174  |   |              | $ | 168  |  
|Proceeds from exercise of compensatory stock plans, including tax benefits |  |                      | 117  |   |              |   | 78   |  
|                                                                           |  |                      |      |   |              |   |      |  
|                                                                           |  | $                    | 291  |   |              | $ | 246  |  
|                                                                           |  |                      |      |   |              |   |      |  
|Uses of Cash                                                               |  |                      |      |   |              |   |      |  
|Business improvement investments                                           |  |                      |      |   |              |   |      |  
|Business (acquisitions) and divestitures, net                              |  | $                    | (48  | ) |              | $ |     |  
|Capital expenditures, net of sale proceeds                                 |  |                      | (12  | ) |              |   | (26  | )
|                                                                           |  |                      |      |   |              |   |      |  
|                                                                           |  | $                    | (60  | ) |              | $ | (26  | )
|                                                                           |  |                      |      |   |              |   |      |  
|Returned to shareholders                                                   |  |                      |      |   |              |   |      |  
|Stock repurchases                                                          |  | $                    | (320 | ) |              | $ | (195 | )
|Dividends paid                                                             |  |                      | (40  | ) |              |   | (21  | )
|                                                                           |  |                      |      |   |              |   |      |  
|                                                                           |  | $                    | (360 | ) |              | $ | (216 | )
|                                                                           |  |                      |      |   |              |   |      |  
|Cash/Investment Management Activities                                      |  |                      |      |   |              |   |      |  
|Decrease (increase) in investments and foreign exchange effects            |  | $                    | 202  |   |              | $ | (20  | )
|                                                                           |  |                      |      |   |              |   |      |  
|Net increase (decrease) in cash and cash equivalents                       |  | $                    | 73   |   |              | $ | (16  | )
|                                                                           |  |                      |      |   |              |   |      |  

In the three quarters ended September 28, 2007, our sources of cash delivered higher cash flow: $291 million
vs. $246 million in the three quarters ended September 29, 2006, an increase of $45 million. Of this $45 million, $6 million was from improved business performance and $39 million was from higher proceeds from stock option exercises and ESPP
sales. We chose to make business improvement investments (primarily the acquisitions of Planet ATE and Hyderabad Design) with these increased resources and, by decreasing our investments balances, to greatly expand our returns to shareholders in the
form of our stock repurchase and dividend programs ($124 million) compared to the corresponding period of the prior year.

The basic aim is to constantly
improve the cash flows from our existing business activities and use the majority of that cash flow to return to shareholders. We will also continue to seek to maintain and improve our existing business performance with necessary capital
expenditures and, potentially, additional acquisitions that may further improve our base business with prospects of a proper return. If we undertake other acquisitions to improve our business, they might be made for either cash or stock
consideration, or a combination of both.

Our cash, cash equivalents and investments, when combined with lack of any outstanding long or short-term debt
obligations, give us the flexibility to continue to return our free cash flow and, as recently demonstrated, additional amounts to our shareholders while also pursuing business improvement opportunities for our future.

Non-cash Working Capital

Trade accounts receivable, less valuation
allowances, increased by $11.8 million to $109.8 million at September 28, 2007 from $98.0 million at December 29, 2006. Inventories also increased by $2.7 million to $95.1 million at September 28, 2007 from $92.4 million at
December 29, 2006. We believe non-cash working capital ratios such as days sales outstanding and days cost of sales in inventory will remain approximately at their current levels.

Capital Expenditures

Capital expenditures were $17.4 million for the three quarters ended September 28, 2007
and $27.4 million the three quarters ended September 29, 2006. The decrease in capital expenditures was a function of certain 2006 additions to our production equipment and our Florida facilities consolidation. The Florida facilities
consolidation was completed in the second quarter of 2006 and capital expenditures thereon have been reduced. The 2007 capital expenditures were primarily additions to production equipment, including that located at vendors and sub-contractors. We
anticipate capital expenditures for our fourth quarter 2007 to be between $10 and $15 million.



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##### Table of Contents

Proceeds from exercises of Stock Options and our Stock Purchase Plan

During the first three quarters of 2007 we experienced increased cash flow from stock plans (exercises of stock options and sales under our ESPP) as cash collected
directly from such exercises and sales approximated $110 million compared to $73 million in the first three quarters of 2006. For the entire year of 2006, we collected approximately $93 million of cash flow from stock plans. While the level of such
cash inflow to us is subject to certain market forces we dont control, we believe that such proceeds will remain an important secondary source of cash after operating cash flow.

Stock Repurchases and Dividends

We currently have in effect an active stock repurchase program and a $0.10 per
share quarterly dividend program ($0.06 declared in October 2006 for payment in November). Both programs represent our major efforts to return our operating cash flow to our shareholders and we currently intend to continue both programs for the
foreseeable future.

In July 2007, our Board of Directors declared a quarterly dividend of $0.10 per share of common stock. Payment of the dividend was
made on August 17, 2007 to shareholders of record at the close of business on August 7, 2007. In October 2007, our Board of Directors declared a quarterly dividend of $0.10 per share of common stock. Payment of the dividend is to be made
on November 16, 2007 to shareholders of record at the close of business on November 6, 2007.

At September 28, 2007, we had $47.5 million
remaining of the $400.0 million stock repurchase program previously authorized by the Board of Directors in December 2006. We anticipate that the Board will authorize continuing stock repurchases in the future beyond the current program. During the
three quarters ended September 28, 2007 we increased our repurchases and immediately retired 11.0 million shares of our Class A common stock at an approximate cost of $320 million, as compared to 7.4 million shares during the
three quarters ended September 29, 2006 at an approximate cost of $195 million.

On October 31, 2007, the Company announced that its Board of
Directors had authorized the repurchase of up to $400 million of our Class A common stock during the twelve months following the announcement. The Company will retire the shares repurchased under this plan.



|Item 3. | Quantitative and Qualitative Disclosures About Market Risk
|------- | ----------------------------------------------------------

During
the three quarters ended September 28, 2007, we transacted $29.6 million of foreign exchange forward contracts. The derivatives were recognized on the balance sheet at their fair value, which was nominal, at September 28, 2007. Due to
their nominal (immaterial) value, the Company does not believe they are subject to material changes due to market or interest rate risk inherent in forward contracts for foreign currencies.



|Item 4. | Controls and Procedures
|------- | -----------------------

(a) Evaluation of Disclosure Control
and Procedures.Our management, with the participation of our Chief Executive Officer (CEO) and Chief Financial Officer (CFO), evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules
13a-15(e) and 15d-15(e) under the Securities Exchange Act) as of September 28, 2007. In designing and evaluating our disclosure controls and procedures, our management recognized that any controls and procedures, no matter how well designed and
operated, can provide only reasonable assurance of achieving their objectives, and our management necessarily applied its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on this evaluation, our CEO and
CFO concluded that, as of September 28, 2007, our disclosure controls and procedures were (1) designed to ensure that material information relating to us, including our consolidated subsidiaries, is made known to our CEO and CFO by others
within those entities, particularly during the period in which this report was being prepared and (2) effective, in that they provide reasonable assurance that information required to be disclosed by us in the reports that we file or submit
under the Securities Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commissions rules and forms.

(b) Changes in Internal Control over Financial Reporting.No change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act) occurred
during the quarter ended September 28, 2007 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.



24



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##### Table of Contents

PART II. OTHER INFORMATION



|Item 1. | Legal Proceedings
|------- | -----------------

In the matter of
Initial Public Offering Securities Litigation, Master File No. 21 MC 92 (SAS), U.S. District Court, S.D.N.Y., as described on form 10-K filed February 27,
2007, incorporated herein by reference. On July 2, 2007, the District Court formally terminated the motion to approve the proposed settlement because the Second Circuit Court of Appeals reversed the class certification in six focus
cases. The District Court then issued an order on August 30, 2007 declining to apply the decision of the Second Circuit to cases other than the focus cases, including the action against the Company, and further held that the statute
of limitations in such cases continued to be tolled. On August 14, 2007, the Plaintiffs filed an amended master complaint containing allegations purportedly common to all defendants in all actions and filed amended complaints
containing specific allegations against the six issuer defendants in the six focus cases. In addition, on September 27, 2007, the plaintiffs again moved to certify classes in each of the six focus cases. The Court has approved a stipulation
extending the time within which the plaintiffs must file amended pleadings containing specific allegations against the other issuer defendants, including the Company, and the time within which those defendants must move, answer or otherwise respond
to those specific allegations.



|Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds; Issuer Purchases of Equity Securities
|------- | --------------------------------------------------------------------------------------------------

(c) During the quarter ended September 28, 2007, we, as authorized by our Board of Directors, repurchased 3,175,240 shares of our Class A common stock at an
approximate cost of $100 million. Such repurchased shares, made under a plan announced on December 18, 2006 to repurchase up to $400 million of our Class A common stock in the twelve months following the announcement, were retired
immediately upon settlement.



|                  |  |                    |  |                  |  |                        |       |                                            |           |                                               |   |            
|----------------- |  | ------------------ |  | ---------------- |  | ---------------------- | ----- | ------------------------------------------ | --------- | --------------------------------------------- | - | -----------
|Accounting
Period |  |                    |  |                  |  |                        |       |                                           
|Begin             |  | End                |  | Shares Purchased |  | Average Paid Per Share |       | SharesPurchased aspart of anAnnounced Plan |           | Dollars Remaining Under Current Authorization
|                  |  |                    |  |                  |  |                        |       |                                            |           |                                               | $ | 147,515,346
|June 30, 2007     |  | July 27, 2007      |  | 153,500          |  | $                      | 30.58 |                                            | 153,500   |                                               | $ | 142,821,422
|July 28, 2007     |  | August 24, 2007    |  | 1,521,250        |  | $                      | 30.82 |                                            | 1,521,250 |                                               | $ | 95,931,376 
|August 25, 2007   |  | September 28, 2007 |  | 1,500,490        |  | $                      | 32.27 |                                            | 1,500,490 |                                               | $ | 47,515,366 
|                  |  |                    |  |                  |  |                        |       |                                            |           |                                               |   |            
|                  |  | Total              |  | 3,175,240        |  | $                      | 31.49 |                                            | 3,175,240 |                                               | $ | 47,515,366 
|                  |  |                    |  |                  |  |                        |       |                                            |           |                                               |   |            

All of the shares purchased as presented in the foregoing tables were purchased as part of a publicly announced
plan or program.

On October 31, 2007, the Company announced that its Board of Directors had authorized the repurchase of up to $400 million of our
Class A common stock during the twelve months following the announcement. The Company will retire the shares repurchased under this plan.



|Item 6. | Exhibits
|------- | --------

a) The list of
exhibits required by Item 601 of Regulation S-K to be filed as part of this Report is incorporated by reference to the Exhibit Index following the signature herein.

SIGNATURE

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



INTERSIL CORPORATION(Registrant)/s/ David A. ZinsnerDavid A. ZinsnerChief Financial Officer


Date: November 2, 2007



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EXHIBIT INDEX



|            |  |                                                                                                                                                                                                                           
|----------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit No. |  | Description                                                                                                                                                                                                               
|3.01        |  | Amended and Restated Certificate of Incorporation of Intersil Corporation (incorporated by reference to Exhibit 3.01 to the Quarterly Report on Form 10-Q, filed on August 9,
2005).                                      
|            | 
|3.02        |  | Restated Bylaws of Intersil (incorporated by reference to Exhibit 3.02 to the Annual Report on Form 10-K, filed on March 9, 2004).                                                                                        
|            | 
|4.01        |  | Specimen Certificate of Intersil Corporations Class A Common Stock (incorporated by reference to Exhibit 4.01 to the Annual Report on Form 10-K, filed on February 27,
2007).                                            
|            | 
|31.01       |  | Certification of Chief Executive Officer Pursuant to Rule 13a-14(a) of the Securities Exchange Act, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*                                                
|            | 
|31.02       |  | Certification of Chief Financial Officer Pursuant to Rule 13a-14(a) of the Securities Exchange Act, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*                                                
|            | 
|32.01       |  | Certification of the Chief Executive Officer and Chief Financial Officer Pursuant to Rule 13a-14(b) of the Exchange Act and 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.*

---

|* | - filed herewith
|- | ----------------



26