##### Table of Contents





UNITED
    STATES SECURITIES AND EXCHANGE COMMISSIONWashington, D.C.
    20549
    Form 10-K
  ANNUAL REPORT PURSUANT TO
    SECTION 13 OR 15(d) OF THE
 SECURITIES EXCHANGE ACT of
    1934
  For the fiscal year ended March 30, 2008
  Commission File
    No. 0-23298
 QLogic Corporation
 (Exact name of registrant as
    specified in its charter)
  Delaware

33-0537669(State of
    incorporation)

(I.R.S. Employer Identification
    No.)26650 Aliso Viejo Parkway
    Aliso Viejo, California

92656(Address of principal executive
    offices)

(Zip Code)   (949) 389-6000
 (Registrants telephone
    number, including area code)
      Securities registered pursuant to Section 12(b) of the
    Act:
  Title of Each Class

Name of Each Exchange on Which RegisteredCommon Stock, $0.001 Par Value

The NASDAQ Stock Market, LLC   Securities registered pursuant to Section 12(g) of the
    Act:
 None
 (Title of class)
    þ o
  o þ
  þ o
  Regulation S-K Form 10-K Form 10-K. þ
  12b-2
  Large accelerated
    filer þ

Accelerated
    filer o

Non-accelerated
    filer o

Smaller reporting company o(Do
    not check if a smaller reporting company)   Rule 12b-2 o þ
      DOCUMENTS
    INCORPORATED BY REFERENCE
  Form 10-K




---





TABLE OF CONTENTS  PART IItem 1. BusinessItem 1A. Risk FactorsItem 1B. Unresolved Staff CommentsItem 2. PropertiesItem 3. Legal ProceedingsItem 4. Submission of Matters to a Vote of Security HoldersPART IIItem 5. Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of Equity SecuritiesItem 6. Selected Financial DataItem 7. Managements Discussion and Analysis of Financial Condition and Results of OperationsRESULTS OF OPERATIONSItem 7a. Quantitative and Qualitative Disclosures About Market RiskItem 8. Financial Statements and Supplementary DataItem 9. Changes in and Disagreements with Accountants on Accounting and Financial DisclosureItem 9A. Controls and ProceduresItem 9B. Other InformationPART IIIItem 10. Directors, Executive Officers and Corporate GovernanceItem 11. Executive CompensationItem 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder MattersItem 13. Certain Relationships and Related Transactions, and Director IndependenceItem 14. Principal Accountant Fees and ServicesPART IVItem 15. Exhibits and Financial Statement SchedulesFINANCIAL STATEMENT INDEXSIGNATURESSCHEDULE IIEXHIBIT INDEXEXHIBIT 10.14EXHIBIT 21.1EXHIBIT 23.1EXHIBIT 31.1EXHIBIT 31.2EXHIBIT 32    Table of Contents  
 PART I
 
  Item 1.
    Business  Introduction
  (949) 389-6000. Form 10-K, Form 10-Q Form 8-K,
      Overview
  ®
  Customers,
    Markets and Applications
      
    Data warehousing, data mining and online transaction processing;
    Media-rich environments such as film/video, broadcast, medical
    imaging, computer-aided design, or CAD, and computer-aided
    manufacturing, or CAM;
    Server clustering, high-speed backup and data
    replication; and
    Research and scientific applications.   1




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Our SAN
    Solutions
      Our
    Server Fabric Solutions
    Sales and
    Marketing
            Engineering
    and Development
   2




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##### Table of Contents



Backlog
  just-in-time
  Competition
    
    time-to-market;
    product quality, reliability and performance;
    price;
    new product innovation;
    customer relationships;
    design capabilities;
    customer service and technical support; and
    interoperability of components in the SAN and server fabric
    infrastructure.      Manufacturing
   3




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Intellectual
    Property
       4




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Environment
      Employees
   
  Item 1A.
    Risk
    Factors    Our
    operating results may fluctuate in future periods, which could
    cause our stock price to decline.
    
    the timing, size and mix of orders from customers;
    gain or loss of significant customers;
    customer policies pertaining to desired inventory levels of our
    products;
    negotiated rebates and extended payment terms;
    changes in our ability to anticipate in advance the mix of
    customer orders;
    levels of inventory our customers require us to maintain in our
    inventory hub locations;
    the availability and sale of new products;
    shifts or changes in technology;
    changes in the mix or average selling prices of our products; 5




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
    variations in manufacturing capacities, efficiencies and costs;
    the availability and cost of components, including silicon chips;
    variations in product development costs, especially related to
    advanced technologies;
    variations in operating expenses;
    changes in effective income tax rates, including those resulting
    from changes in tax laws;
    our ability to timely produce products that comply with new
    environmental restrictions or related requirements of our OEM
    customers;
    actual events, circumstances, outcomes and amounts differing
    from judgments, assumptions and estimates used in determining
    the value of certain assets (including the amounts of related
    valuation allowances), liabilities and other items reflected in
    our consolidated financial statements;
    the timing of revenue recognition and revenue deferrals;
    gains or losses related to our marketable securities;
    changes in accounting rules;
    changes in our accounting policies;
    general economic and other conditions affecting the timing of
    customer orders and capital spending; or
    changes in the global economy that impact information
    technology, or IT, spending.    We expect
    gross margin to vary over time, and our recent level of gross
    margin may not be sustainable.
    
    changes in product mix;
    increased price competition;
    introduction of new products by us or our competitors, including
    products with price, performance or feature advantages;
    our inability to reduce manufacturing-related or component costs;
    entry into new markets or the acquisition of new businesses;
    amortization and impairments of purchased intangible assets;
    sales discounts;
    increases in material, labor or overhead costs;
    excess inventory and inventory holding charges;
    changes in distribution channels; 6




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
    increased warranty costs; and
    how well we execute our business strategy and operating plans.  Our
    revenues may be affected by changes in IT spending
    levels.
    Our stock
    price may be volatile.
    
    differences between our actual operating results and the
    published expectations of analysts;
    quarterly fluctuations in our operating results;
    introduction of new products or changes in product pricing
    policies by our competitors or us;
    conditions in the markets in which we operate;
    changes in market projections by industry forecasters;
    changes in estimates of our earnings by industry analysts;
    operating results or forecasts of our major customers or
    competitors;
    overall market conditions for high technology equities;
    rumors or dissemination of false information; and
    general economic and geopolitical conditions.    Our
    business is dependent on the continued growth of the SAN market
    and if this market does not continue to develop and expand as we
    anticipate, our business will suffer.
      
    educate potential OEM customers, distributors, resellers, system
    integrators, storage service providers and end-user
    organizations about the benefits of SANs;
    maintain and enhance our relationships with OEM customers,
    distributors, resellers, system integrators and storage system
    providers; 7




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
    predict and base our products on standards which ultimately
    become industry standards; and
    achieve interoperability between our products and other SAN
    components from diverse vendors.  Our
    business could be adversely affected by the broad adoption of
    server virtualization technology.
    Our
    business could be adversely affected by a significant increase
    in the market acceptance of blade servers.
    Our
    financial condition will be materially harmed if we do not
    maintain and gain market acceptance of our products.
    
    enhance our current products and develop and introduce in a
    timely manner new products that keep pace with technological
    developments and industry standards;
    compete effectively on the basis of price and
    performance; and
    adequately address OEM and end-user customer requirements and
    achieve market acceptance.    We depend
    on a limited number of customers, and any decrease in revenues
    or cash flows from any one of our major customers could
    adversely affect our results of operations and cause our stock
    price to decline.
     8




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Our
    business may be subject to seasonal fluctuations and uneven
    sales patterns in the future.
    
    the tendency of our customers to close a disproportionate
    percentage of their sales transactions in the last month, weeks
    and days of each quarter;
    spikes in sales during the fourth quarter of each calendar year
    that some of our customers experience; and
    differences between our quarterly fiscal periods and the fiscal
    periods of our customers.    Competition
    within the markets for our products is intense and includes
    various established competitors.
      We expect
    the pricing of our products to continue to decline, which could
    reduce our revenues, gross margins and profitability.
   9




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Our
    distributors may not adequately distribute our products and
    their reseller customers may purchase products from our
    competitors, which could negatively affect our results of
    operations.
      We are
    dependent on sole source and limited source suppliers for
    certain key components.
         10




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We depend
    on our relationships with silicon chip suppliers and a loss of
    any of these relationships may lead to unpredictable
    consequences that may harm our results of operations if
    alternative supply sources are not available.
    ramp-up
      Our
    marketable securities portfolio could experience a decline in
    market value which could materially and adversely affect our
    financial results.
     11




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Our
    products are complex and may contain undetected software or
    hardware errors that could lead to an increase in our costs,
    reduce our net revenues or damage our reputation.
    The
    migration of our customers toward new products could adversely
    affect our results of operations.
      Environmental
    compliance costs could adversely affect our results of
    operations.
     12




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Because
    we depend on foreign customers and suppliers, we are subject to
    international economic, currency, regulatory, political and
    other risks that could harm our business, financial condition
    and results of operations.
    
    a greater difficulty of administering and managing our business
    globally;
    compliance with multiple and potentially conflicting regulatory
    requirements, such as import or export requirements, tariffs and
    other barriers;
    less effective intellectual property protections;
    potentially longer accounts receivable cycles;
    currency fluctuations;
    overlapping or differing tax structures;
    political and economic instability, including terrorism and
    war; and
    general trade restrictions.        We may
    engage in mergers, acquisitions and strategic investments and
    these activities may adversely affect our results of operations
    and stock price.
    
    the failure of markets for the products of acquired companies to
    develop as expected; 13




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
    uncertainties in identifying and pursuing target companies;
    difficulties in the assimilation of the operations, technologies
    and products of the acquired companies;
    the existence of unknown defects in acquired companies
    products or assets that may not be identified due to the
    inherent limitations involved in the due diligence process of an
    acquisition;
    the diversion of managements attention from other business
    concerns;
    risks associated with entering markets or conducting operations
    with which we have no or limited direct prior experience;
    risks associated with assuming the legal obligations of acquired
    companies;
    risks related to the effect that acquired companies
    internal control processes might have on our financial reporting
    and managements report on our internal control over
    financial reporting;
    the potential loss of, or impairment of our relationships with,
    current customers or failure to retain the acquired
    companies customers;
    the potential loss of key employees of acquired
    companies; and
    the incurrence of significant exit charges if products acquired
    in business combinations are unsuccessful.        If we are
    unable to attract and retain key personnel, we may not be able
    to sustain or grow our business.
   14




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We may
    experience difficulties in transitioning to smaller geometry
    process technologies.
  product-by-product
  Our
    proprietary rights may be inadequately protected and difficult
    to enforce.
    Disputes
    relating to claimed infringement of intellectual property rights
    may adversely affect our business.
   15




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Dependence
    on third-party technology could adversely affect our
    business.
    If we
    fail to carefully manage the use of open source
    software in our products, we may be required to license key
    portions of our products on a royalty-free basis or expose key
    parts of source code.
  and/or and/or and/or
  Unanticipated
    changes in our tax provisions or adverse outcomes resulting from
    examination of our income tax returns could adversely affect our
    results of operations.
    Computer
    viruses and other forms of tampering with our computer systems
    or servers may disrupt our operations and adversely affect our
    results of operations.
   16




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Our
    facilities and the facilities of our suppliers and customers are
    located in regions that are subject to natural
    disasters.
   
  Item 1B.
    Unresolved
    Staff Comments   
  Item 2.
    Properties   
  Item 3.
    Legal
    Proceedings   
  Item 4.
    Submission
    of Matters to a Vote of Security Holders   17




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##### Table of Contents



PART II
 
  Item 5.
    Market
    for Registrants Common Equity, Related Stockholder Matters
    and Issuer Purchases of Equity Securities  Principal
    Market and Prices
    Sales PricesFiscal 2008

High


LowFirst Quarter

$
18.23


$
16.19Second Quarter


17.97



11.46Third Quarter


15.78



12.75Fourth Quarter


16.66



12.04   Sales PricesFiscal 2007

High


LowFirst Quarter

$
21.62


$
16.68Second Quarter


19.50



15.86Third Quarter


22.94



18.55Fourth Quarter


22.46



16.51   Number of
    Common Stockholders
    Dividends
    Recent
    Sales of Unregistered Securities
   18




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Issuer
    Purchases of Equity Securities
    Total Number of


Approximate DollarShares Purchased


Value of Shares thatTotal Number of


Average Price


as Part of Publicly


May Yet be PurchasedPeriod

Shares Purchased


Paid per Share


Announced Plans


Under the PlanDecember 31, 2007  January 27, 2008


859,040


$
13.56



859,040


$
200,000,000January 28, 2008  February 24, 2008


1,015,000


$
14.67



1,015,000


$
185,109,000February 25, 2008  March 30, 2008


627,824


$
15.44



627,824


$
175,415,000Total


2,501,864


$
14.48



2,501,864


$
175,415,000      19




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Stockholder
    Return Performance Presentation
      COMPARISON
    OF 5 YEAR CUMULATIVE TOTAL RETURNS*
    AMONG QLOGIC CORPORATION, THE STANDARD & POORS
    500 INDEX
    AND THE NASDAQ COMPUTER INDEX
  
   Cumulative Total Return3/30/03


3/28/04


4/3/05


4/2/06


4/1/07


3/30/08QLogic Corporation

$
100.00


$
109.71


$
105.49


$
101.26


$
88.96


$
80.22S&P 500 Index


100.00



135.12



144.16



161.07



180.13



170.98NASDAQ Computer Index


100.00



139.78



142.73



162.83



172.29



168.37   
 20




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##### Table of Contents



Item 6.
    Selected
    Financial Data    Fiscal Year Ended(1)(2)March 30,


April 1,


April 2,


April 3,


March 28,2008


2007(3)


2006(4)


2005


2004(In thousands, except per share amounts)Statement of Operations DataNet revenues

$
597,866


$
586,697


$
494,077


$
428,719


$
387,156Cost of revenues


205,959



191,982



144,246



121,074



115,297Gross profit


391,907



394,715



349,831



307,645



271,859Operating expenses:Engineering and development


134,668



135,315



89,753



82,791



75,893Sales and marketing


84,166



86,731



64,416



54,582



48,449General and administrative


34,049



31,044



17,295



16,659



18,102Special charges


5,328















Purchased in-process research and development






3,710



10,510







Total operating expenses


258,211



256,800



181,974



154,032



142,444Operating income


133,696



137,915



167,857



153,613



129,415Interest and other income, net


14,024



16,872



32,627



17,873



16,844Income from continuing operations before income taxes


147,720



154,787



200,484



171,486



146,259Income taxes


51,510



49,369



78,653



60,071



57,698Income from continuing operations


96,210



105,418



121,831



111,415



88,561Income from discontinued operations, net of income taxes










161,757



46,181



45,112Net income

$
96,210


$
105,418


$
283,588


$
157,596


$
133,673Income from continuing operations per share:Basic

$
0.68


$
0.66


$
0.71


$
0.60


$
0.47Diluted

$
0.67


$
0.66


$
0.70


$
0.59


$
0.46Income from discontinued operations per share:Basic

$



$



$
0.95


$
0.25


$
0.24Diluted

$



$



$
0.93


$
0.25


$
0.23Net income per share:Basic

$
0.68


$
0.66


$
1.66


$
0.85


$
0.71Diluted

$
0.67


$
0.66


$
1.63


$
0.84


$
0.69Balance Sheet DataCash and cash equivalents and marketable securities

$
376,409


$
543,922


$
665,640


$
812,338


$
743,034Total assets


810,966



971,359



937,707



1,026,340



926,126Total stockholders equity


665,916



874,531



859,354



956,183



867,718     (1)
    
    The statement of operations data for all periods presented
    reflects the operating results of the hard disk drive controller
    and tape drive controller business as discontinued operations.(2)
    
    The per share amounts for all periods presented reflect the
    effects of the two-for-one split of our common stock in March
    2006. 21




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(3)
    
    In fiscal 2007, the Company adopted Statement of Financial
    Accounting Standards No. 123 (revised 2004),
    Share-Based Payment. In addition, the Company
    completed the acquisitions of PathScale, Inc. and SilverStorm
    Technologies, Inc. during fiscal 2007. See Part II,
    Item 7 Managements Discussion and Analysis of
    Financial Condition and Results of Operations for further
    discussion.(4)
    
    In fiscal 2006, the Company completed the acquisition of Troika
    Networks, Inc. See Part II, Item 7
    Managements Discussion and Analysis of Financial
    Condition and Results of Operations for further discussion. 
  Item 7.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations  This Managements Discussion and Analysis of Financial
    Condition and Results of Operations should be read in
    conjunction with our audited consolidated financial statements
    and related notes. This discussion also contains descriptions of
    our expectations regarding future trends affecting our business.
    These forward-looking statements and other forward-looking
    statements made elsewhere in this report are made in reliance
    upon safe harbor provisions of the Private Securities Litigation
    Reform Act of 1995. Such forward-looking statements include,
    without limitation, descriptions of our expectations regarding
    future trends affecting our business and other statements
    regarding future events or our objectives, goals, strategies,
    beliefs and underlying assumptions that are other than
    statements of historical fact. When used in this report, the
    words anticipates, believes,
    can, continue, could,
    estimates, expects, intends,
    may, plans, potential,
    predicts, should, will and
    similar expressions or the negative of such expressions are
    intended to identify these forward-looking statements. Our
    actual results could differ materially from those anticipated in
    these forward-looking statements as a result of several factors,
    including, but not limited to those factors set forth and
    discussed in Part I, Item 1A Risk Factors
    and elsewhere in this report. In light of the significant
    uncertainties inherent in the forward-looking information
    included in this report, the inclusion of this information
    should not be regarded as a representation by us or any other
    person that our objectives or plans will be achieved. We
    undertake no obligation to update or revise these
    forward-looking statements, whether as a result of new
    information, future events or otherwise.
  Overview
  ®
      Business
    Combinations
  SilverStorm
    Technologies
   22




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PathScale
        Troika
    Networks
          Stock-Based
    Compensation
   23




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##### Table of Contents



2008


2007(In millions)Cost of revenues

$
2.1


$
1.9Engineering and development


14.5



11.2Sales and marketing


6.3



8.2General and administrative


8.9



9.0$
31.8


$
30.3     Discontinued
    Operations
    Fiscal
    Year and Fourth Quarter Financial Highlights and Other
    Information
      
    Net revenues of $159.7 million for the fourth quarter of
    fiscal 2008 increased by $12.6 million, or 9%, from
    $147.1 million in the fourth quarter of fiscal 2007.
    Revenues from Host Products and Network Products increased from
    the comparable quarter in the prior year by 5% and 6%,
    respectively. In addition, other revenues increased by
    $5.9 million from the fourth quarter of fiscal 2007 due
    primarily to an increase in royalty revenue.
    Gross profit as a percentage of net revenues of 66.3% for the
    fourth quarter of fiscal 2008, increased from 64.5% for the
    fourth quarter of fiscal 2007. The gross profit percentage for
    the fourth quarter of fiscal 2008 was impacted by the increase
    in royalty revenue, partially offset by the $2.3 million
    impairment charge related to intangible assets.
    Operating income as a percentage of net revenues increased to
    24.9% for the fourth quarter of fiscal 2008 from 18.3% in the
    fourth quarter of fiscal 2007.
    Net income was $22.8 million, or $0.17 per diluted share,
    in the fourth quarter of fiscal 2008 and increased from
    $18.4 million, or $0.12 per diluted share, in the fourth
    quarter of fiscal 2007. Net income included stock-based
    compensation expense, acquisition-related charges, impairment
    charges related to intangible assets and marketable securities,
    special charges, and the related income tax effects, totaling
    $14.9 million for the fourth quarter of fiscal 2008
    compared to $16.8 million for the fourth quarter of fiscal
    2007. 24




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
    Cash, cash equivalents and marketable securities of
    $376.4 million at March 30, 2008 decreased
    $167.5 million from $543.9 million at April 1,
    2007. This decrease is primarily due to $352.8 million in
    repurchases of our common stock, partially offset by
    $211.6 million of cash flow from operations. During the
    fourth quarter of fiscal 2008, we generated $49.0 million
    of cash from operating activities.
    Accounts receivable was $81.6 million as of March 30,
    2008, compared to $73.5 million as of April 1, 2007.
    Days sales outstanding (DSO) in receivables as of March 30,
    2008 increased to 47 days from 45 days as of
    April 1, 2007. Our accounts receivable and DSO are
    primarily affected by linearity of shipments within the quarter
    and collections performance.
    Inventories were $27.5 million as of March 30, 2008,
    compared to $38.9 million as of April 1, 2007. Our
    annualized inventory turns in the fourth quarter of fiscal 2008
    of 7.8 turns increased from the 5.4 turns in the fourth quarter
    of fiscal 2007. 
  RESULTS
    OF OPERATIONS
  Net
    Revenues
    2008


2007


2006(Dollars in millions)Net revenues:Host Products

$
437.9


$
410.6


$
328.8Network Products


101.8



88.3



70.7Silicon Products


44.3



76.7



87.8Other


13.9



11.1



6.8Total net revenues

$
597.9


$
586.7


$
494.1Percentage of net revenues:Host Products


73
%


70
%


67
%Network Products


17



15



14Silicon Products


8



13



18Other


2



2



1Total net revenues


100
%


100
%


100
%      25




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##### Table of Contents



2008


2007


2006Hewlett-Packard


20%



16%



15%IBM


16%



17%



15%Sun Microsystems


11%



12%



12%       2008


2007


2006(In millions)United States

$
305.2


$
314.3


$
271.9Europe, Middle East and Africa


144.6



132.0



111.0Asia-Pacific and Japan


113.1



111.1



108.2Rest of world


35.0



29.3



3.0$
597.9


$
586.7


$
494.1  26




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##### Table of Contents



Gross
    Profit
    2008


2007


2006(Dollars in millions)Gross profit

$
391.9


$
394.7


$
349.8Percentage of net revenues


65.6
%


67.3
%


70.8
%         Operating
    Expenses
    2008


2007


2006(Dollars in millions)Operating expenses:Engineering and development

$
134.7


$
135.3


$
89.8Sales and marketing


84.2



86.8



64.4General and administrative


34.0



31.0



17.3Special charges


5.3







Purchased in-process research and development






3.7



10.5Total operating expenses

$
258.2


$
256.8


$
182.0Percentage of net revenues:Engineering and development


22.5
%


23.1
%


18.2
%Sales and marketing


14.1



14.8



13.0General and administrative


5.7



5.3



3.5Special charges


0.9







Purchased in-process research and development






0.6



2.1Total operating expenses


43.2
%


43.8
%


36.8
%  27




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##### Table of Contents



Engineering and Development.
      Sales and Marketing.
      General and Administrative.
 28




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##### Table of Contents



Special Charges.
    Purchased In-Process Research and
    Development.
      Interest
    and Other Income, Net
    2008


2007


2006(In millions)Interest income

$
20.6


$
25.7


$
25.8Gain on sales of marketable securities


0.8



0.2



8.8Loss on sales of marketable securities


(0.2
)


(1.8
)


(2.0
)Impairment of marketable securities


(6.9
)


(8.1
)


Other


(0.3
)


0.9



$
14.0


$
16.9


$
32.6    29




---



##### Table of Contents



Income
    Taxes
      Discontinued
    Operations
      2006(In millions)Net revenues

$
94.6Income from discontinued operations, net of income taxes

$
29.8Gain on sale of discontinued operations, net of income taxes

$
131.9   Liquidity
    and Capital Resources
   30




---



##### Table of Contents



31




---



##### Table of Contents



2009


2010


2011


2012


2013


Thereafter


Total(In millions)Operating leases

$
5.4


$
4.2


$
3.2


$
2.7


$
1.9


$
9.4


$
26.8Non-cancelable purchase obligations


59.5



0.2



















59.7Total

$
64.9


$
4.4


$
3.2


$
2.7


$
1.9


$
9.4


$
86.5     Critical
    Accounting Policies and Estimates
    Revenue
    Recognition
    No. 01-9,
 32




---



##### Table of Contents



No. 00-21,
  97-2,
    Stock-Based
    Compensation
   33




---



##### Table of Contents



Income
    Taxes
        Marketable
    Securities and Investments
         34




---



##### Table of Contents



Inventories
  (first-in,
  Goodwill
    and Other Intangible Assets
        Long-Lived
    Assets
    Recent
    Accounting Pronouncements
   35




---



##### Table of Contents



No. FAS 157-2,
  instrument-by-instrument
   
  Item 7a.
    Quantitative
    and Qualitative Disclosures About Market Risk         36




---



##### Table of Contents



37




---



##### Table of Contents



Item 8.
    Financial
    Statements and Supplementary Data  REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
             Internal Control  Integrated
    Framework
  
  
 38




---



##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
     Internal Control  Integrated
    Framework
        Internal Control  Integrated Framework
    
  
 39




---



##### Table of Contents



QLOGIC
    CORPORATION
  CONSOLIDATED BALANCE SHEETS
 March 30, 2008 and April 1, 2007
  2008


2007(In thousands, except share and per share amounts)ASSETSCurrent assets:Cash and cash equivalents

$
160,009


$
76,804Short-term marketable securities


160,497



467,118Accounts receivable, less allowance for doubtful accounts of
    $1,176 and $1,075 as of March 30, 2008 and April 1,
    2007, respectively


81,642



73,538Inventories


27,520



38,935Deferred tax assets


32,227



27,866Other current assets


8,925



12,892Total current assets


470,820



697,153Long-term marketable securities


55,903



Property and equipment, net


93,726



90,913Goodwill


127,409



102,910Purchased intangible assets, net


34,652



55,093Deferred tax assets


25,870



49Other assets


2,586



25,241$
810,966


$
971,359LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable

$
35,643


$
29,280Accrued compensation


31,120



34,483Accrued taxes


5,262



15,729Deferred revenue


8,693



4,669Other current liabilities


5,952



7,674Total current liabilities


86,670



91,835Accrued taxes


48,163



Other liabilities


10,217



4,993Total liabilities


145,050



96,828Commitments and contingenciesStockholders equity:Preferred stock, $0.001 par value; 1,000,000 shares
    authorized; no shares issued and outstanding






Common stock, $0.001 par value; 500,000,000 shares
    authorized; 199,652,000 and 197,907,000 shares issued at
    March 30, 2008 and April 1, 2007, respectively


200



198Additional paid-in capital


657,893



608,515Retained earnings


1,084,938



988,728Accumulated other comprehensive income (loss)


(2,530
)


169Treasury stock, at cost: 66,638,000 and 42,490,000 shares
    at March 30, 2008 and April 1, 2007, respectively


(1,074,585
)


(723,079
)Total stockholders equity


665,916



874,531$
810,966


$
971,359    40




---



##### Table of Contents



QLOGIC
    CORPORATION
  CONSOLIDATED STATEMENTS OF INCOME
 Years Ended March 30, 2008, April 1, 2007 and
    April 2, 2006
  2008


2007


2006(In thousands, except pershare amounts)Net revenues

$
597,866


$
586,697


$
494,077Cost of revenues


205,959



191,982



144,246Gross profit


391,907



394,715



349,831Operating expenses:Engineering and development


134,668



135,315



89,753Sales and marketing


84,166



86,731



64,416General and administrative


34,049



31,044



17,295Special charges


5,328







Purchased in-process research and development






3,710



10,510Total operating expenses


258,211



256,800



181,974Operating income


133,696



137,915



167,857Interest and other income, net


14,024



16,872



32,627Income from continuing operations before income taxes


147,720



154,787



200,484Income taxes


51,510



49,369



78,653Income from continuing operations


96,210



105,418



121,831Discontinued operations:Income from operations, net of income taxes










29,816Gain on sale, net of income taxes










131,941Income from discontinued operations










161,757Net income

$
96,210


$
105,418


$
283,588Income from continuing operations per share:Basic

$
0.68


$
0.66


$
0.71Diluted

$
0.67


$
0.66


$
0.70Income from discontinued operations per share:Basic

$



$



$
0.95Diluted

$



$



$
0.93Net income per share:Basic

$
0.68


$
0.66


$
1.66Diluted

$
0.67


$
0.66


$
1.63Number of shares used in per share calculations:Basic


142,167



159,081



171,250Diluted


142,901



160,680



173,467    41




---



##### Table of Contents



QLOGIC
    CORPORATION
  CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY AND
    COMPREHENSIVE INCOME
 Years Ended March 30, 2008, April 1, 2007 and
    April 2, 2006
  AccumulatedOtherCommon Stock


Additional





Comprehensive





TotalOutstanding





Paid-In


Retained


Income


Treasury


StockholdersShares


Amount


Capital


Earnings


(Loss)


Stock


Equity(In thousands)Balance at April 3, 2005


184,417


$
193


$
504,663


$
599,722


$
(3,394
)

$
(145,001
)

$
956,183Net income














283,588











283,588Change in unrealized gains and losses on marketable securities,
    net of tax


















1,595







1,595Comprehensive income


























285,183Issuance of common stock under stock plans (including tax
    benefit of $5,055)


2,488



2



32,985















32,987Purchase of treasury stock


(24,813
)


















(414,999
)


(414,999
)Balance at April 2, 2006


162,092



195



537,648



883,310



(1,799
)


(560,000
)


859,354Net income














105,418











105,418Change in unrealized gains and losses on marketable securities,
    net of tax


















1,968







1,968Comprehensive income


























107,386Issuance of common stock under stock plans (including tax
    benefit of $5,816)


2,578



3



39,516















39,519Stock-based compensation expense related to stock options,
    restricted stock units and employee stock purchases










30,279















30,279Common stock issued related to business acquisitions


40







1,072















1,072Purchase of treasury stock


(9,293
)


















(163,079
)


(163,079
)Balance at April 1, 2007


155,417



198



608,515



988,728



169



(723,079
)


874,531Net income














96,210











96,210Change in unrealized gains and losses on marketable securities,
    net of tax


















(2,699
)






(2,699
)Comprehensive income


























93,511Issuance of common stock under stock plans (including tax
    benefit of $288)


1,591



2



14,982















14,984Stock-based compensation expense related to stock options,
    restricted stock units and employee stock purchases










31,764















31,764Common stock issued related to business acquisitions


154







2,632















2,632Purchase of treasury stock


(24,148
)


















(351,506
)


(351,506
)Balance at March 30, 2008


133,014


$
200


$
657,893


$
1,084,938


$
(2,530
)

$
(1,074,585
)

$
665,916    42




---



##### Table of Contents



QLOGIC
    CORPORATION
  CONSOLIDATED STATEMENTS OF CASH FLOWS
 Years Ended March 30, 2008, April 1, 2007 and
    April 2, 2006
  2008


2007


2006(In thousands)Cash flows from operating activities:Net income

$
96,210


$
105,418


$
283,588Income from discontinued operations, net of income taxes










(29,816
)Gain on sale of discontinued operations, net of income taxes










(131,941
)Income from continuing operations


96,210



105,418



121,831Adjustments to reconcile income from continuing operations to
    net cash provided by continuing operating activities:Depreciation and amortization


30,857



27,554



17,697Stock-based compensation


31,764



30,279



175Acquisition-related:Amortization of purchased intangible assets


16,725



12,940



201Stock-based compensation


1,209



9,092



530Purchased in-process research and development






3,710



10,510Deferred income taxes


(14,549
)


(4,154
)


(4,480
)Impairment of marketable securities


6,867



8,094



Provision for losses on accounts receivable


399



30



(54
)Loss on disposal of property and equipment


1,328



214



168Impairment of intangible assets


2,338







Tax benefit from issuance of stock under stock plans










5,055Changes in operating assets and liabilities, net of acquisitions:Accounts receivable


(8,503
)


(2,275
)


(12,825
)Inventories


11,415



2,771



(16,230
)Other assets


3,593



(1,906
)


(5,840
)Accounts payable


7,282



(7,401
)


11,877Accrued compensation


(1,940
)


2,264



3,263Accrued taxes


20,635



2,809



(1,205
)Deferred revenue


6,412



3,706



2,166Other liabilities


(453
)


(2,076
)


(291
)Net cash provided by continuing operating activities


211,589



191,069



132,548Cash flows from investing activities:Purchases of marketable securities


(185,707
)


(298,220
)


(946,087
)Sales and maturities of marketable securities


425,033



366,677



1,101,680Additions to property and equipment


(30,001
)


(31,708
)


(28,295
)Acquisition of businesses, net of cash acquired


67



(142,521
)


(35,210
)Restricted cash placed in escrow






(24,000
)


(12,000
)Restricted cash received from escrow






12,508



Net cash provided by (used in) continuing investing activities


209,392



(117,264
)


80,088Cash flows from financing activities:Proceeds from issuance of stock under stock plans


14,696



33,703



27,757Tax benefit from issuance of stock under stock plans


288



5,816



Payoff of line of credit assumed in acquisition






(1,632
)


Purchase of treasury stock


(352,760
)


(160,080
)


(414,999
)Net cash used in continuing financing activities


(337,776
)


(122,193
)


(387,242
)Net cash provided by (used in) continuing operations


83,205



(48,388
)


(174,606
)Cash flows from discontinued operations:Net cash used in operating activities










(47,182
)Net cash provided by investing activities, including proceeds
    from sale










181,336Net cash provided by discontinued operations










134,154Net increase (decrease) in cash and cash equivalents


83,205



(48,388
)


(40,452
)Cash and cash equivalents at beginning of year


76,804



125,192



165,644Cash and cash equivalents at end of year

$
160,009


$
76,804


$
125,192Supplemental disclosure of cash flow information:Cash paid during the year for:Income taxes

$
41,475


$
47,552


$
180,641    43




---



##### Table of Contents



QLOGIC
    CORPORATION
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  Note 1.
    Description
    of Business and Summary of Significant Accounting
    Policies  General
    Business Information
  ®
  Principles
    of Consolidation and Financial Reporting Period
      Basis
    of Presentation
        Use of
    Estimates
    Revenue
    Recognition
   44




---



##### Table of Contents



QLOGIC
    CORPORATION
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  No. 01-9,
  No. 00-21,
  97-2,
  Research
    and Development
    Advertising
    Costs
   45




---



##### Table of Contents



QLOGIC
    CORPORATION
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Income
    Taxes
      Net
    Income per Share
    Concentration
    of Credit Risk
       46




---



##### Table of Contents



QLOGIC
    CORPORATION
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Cash
    and Cash Equivalents
    Marketable
    Securities and Investments
        Accounts
    Receivable and Allowance for Doubtful Accounts
    Inventories
  (first-in,
  Property
    and Equipment
   47




---



##### Table of Contents



QLOGIC
    CORPORATION
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Goodwill
    and Other Intangible Assets
        Long-Lived
    Assets
      Warranty
    Comprehensive
    Income
    Foreign
    Currency Translation
   48




---



##### Table of Contents



QLOGIC
    CORPORATION
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Stock-Based
    Compensation
        Recent
    Accounting Pronouncements
  No. FAS 157-2,
 49




---



##### Table of Contents



QLOGIC
    CORPORATION
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    instrument-by-instrument
    Note 2.
    Business
    Combinations  SilverStorm
    Technologies
   50




---



##### Table of Contents



QLOGIC
    CORPORATION
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    (In thousands)Cash

$
538Accounts receivable


3,455Inventories


2,109Property and equipment


430Goodwill


41,956Identifiable intangible assets


24,800Other assets


134Accounts payable and accrued expenses


(4,355
)Line of credit


(1,632
)Deferred tax liabilities


(9,636
)In-process research and development


1,800Total purchase price allocation

$
59,599     WeightedAverageUseful Lives(Years)


Amount(Dollars in thousands)Intangible Assets:Core/developed technology


5


$
14,600Customer relationships


3



9,700Other


2.5



500$
24,800       PathScale
   51




---



##### Table of Contents



QLOGIC
    CORPORATION
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
        (In thousands)Cash

$
3,096Accounts receivable


267Other current assets


801Property and equipment


1,315Deferred tax asset


5,858Goodwill


68,717Identifiable intangible assets


30,100Other assets


255Accrued compensation


(412
)Other current liabilities


(1,109
)In-process research and development


1,600Total purchase price allocation

$
110,488  52




---



##### Table of Contents



QLOGIC
    CORPORATION
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    WeightedAverageUseful Lives(Years)


Amount(Dollars in thousands)Intangible Assets:Core/developed technology


4.5


$
28,400Customer relationships


3



700Other


2.6



1,000$
30,100       Troika
    Networks
     53




---



##### Table of Contents



QLOGIC
    CORPORATION
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
        Purchased
    In-Process Research and Development
        Note 3.
    Discontinued
    Operations   54




---



##### Table of Contents



QLOGIC
    CORPORATION
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
        2006(In thousands)Net revenues

$
94,632Income from operations before income taxes

$
48,234Income taxes


18,418Income from operations, net of income taxes

$
29,816Gain on sale before income taxes

$
213,443Income taxes


81,502Gain on sale, net of income taxes

$
131,941     Note 4.
    Income
    per Share    2008


2007


2006(In thousands, except per share amounts)Income from continuing operations

$
96,210


$
105,418


$
121,831Shares:Weighted-average shares outstanding  basic


142,167



159,081



171,250Dilutive potential common shares, using treasury stock method


734



1,599



2,217Weighted-average shares outstanding  diluted


142,901



160,680



173,467Income from continuing operations per share:Basic

$
0.68


$
0.66


$
0.71Diluted

$
0.67


$
0.66


$
0.70  55




---



##### Table of Contents



QLOGIC
    CORPORATION
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Note 5.
    Marketable
    Securities    Gross


GrossAmortized


Unrealized


Unrealized


EstimatedCost


Gains


Losses


Fair Value(In thousands)March 30, 2008Corporate bonds

$
68,234


$
635


$
(168
)

$
68,701U.S. Government securities


40,242



964







41,206Asset and mortgage backed securities


35,373



490



(28
)


35,835Auction rate debt securities


25,640







(1,582
)


24,058Municipal bonds


4,548



67







4,615Total debt securities


174,037



2,156



(1,778
)


174,415Auction rate preferred securities


36,425







(4,580
)


31,845Publicly-traded common stock (see Note 3)


10,140











10,140Total available-for-sale securities

$
220,602


$
2,156


$
(6,358
)

$
216,400April 1, 2007Corporate bonds

$
190,351


$
88


$



$
190,439U.S. Government securities


127,677



151







127,828Asset and mortgage backed securities


49,875



85







49,960Auction rate debt securities


23,439











23,439Other debt securities


10,141











10,141Total debt securities


401,483



324







401,807Auction rate preferred securities


50,014











50,014Publicly-traded common stock (see Note 3)


15,297











15,297Total available-for-sale securities

$
466,794


$
324


$



$
467,118    56




---



##### Table of Contents



QLOGIC
    CORPORATION
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Amortized


EstimatedCost


Fair Value(In thousands)Due in one year or less

$
7,910


$
7,888Due after one year through three years


92,776



94,119Due after three years through five years


11,900



12,077Due after five years


61,451



60,331$
174,037


$
174,415       Less Than 12 Months


12 Months or Greater


TotalFair


Unrealized


Fair


Unrealized


Fair


UnrealizedDescription of Securities

Value


Losses


Value


Losses


Value


Losses(In thousands)March 30, 2008Corporate bonds

$
25,510


$
(168
)

$



$



$
25,510


$
(168
)Asset and mortgage backed securities


6,927



(28
)










6,927



(28
)Auction rate debt securities


23,899



(1,582
)










23,899



(1,582
)Auction rate preferred securities


26,545



(4,580
)










26,545



(4,580
)Total

$
82,881


$
(6,358
)

$



$



$
82,881


$
(6,358
)  57




---



##### Table of Contents



QLOGIC
    CORPORATION
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Note 6.
    Inventories    2008


2007(In thousands)Raw materials

$
7,403


$
5,937Finished goods


20,117



32,998$
27,520


$
38,935   Note 7.
    Property
    and Equipment    2008


2007(In thousands)Land

$
11,663


$
11,663Buildings and improvements


37,240



31,370Production and test equipment


140,812



124,890Furniture and fixtures


7,849



7,349197,564



175,272Less accumulated depreciation and amortization


103,838



84,359$
93,726


$
90,913   Note 8.
    Goodwill
    and Purchased Intangible Assets  Goodwill
    April 1,





March 30,2007


Activity


2008(In thousands)AcquisitionPathScale

$
52,826


$
15,891


$
68,717SilverStorm


33,348



8,608



41,956Troika


12,662







12,662Other


4,074







4,074$
102,910


$
24,499


$
127,409  58




---



##### Table of Contents



QLOGIC
    CORPORATION
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Purchased
    Intangible Assets
    March 30, 2008


April 1, 2007Gross





Net


Gross





NetCarrying


Accumulated


Carrying


Carrying


Accumulated


CarryingValue


Amortization


Value


Value


Amortization


Value(In thousands)Acquisition-related intangibles:Core/developed technology

$
43,700


$
15,737


$
27,963


$
54,300


$
11,138


$
43,162Customer relationships


9,700



4,580



5,120



10,400



1,581



8,819Other


775



439



336



1,400



322



1,07854,175



20,756



33,419



66,100



13,041



53,059Other purchased intangibles:Technology-related


2,596



1,363



1,233



2,596



562



2,034$
56,771


$
22,119


$
34,652


$
68,696


$
13,603


$
55,093       2008


2007


2006(In thousands)Cost of revenues

$
13,668


$
13,087


$
738Engineering and development


314



267



Sales and marketing


3,544



2,692



667$
17,526


$
16,046


$
1,405     Fiscal(In thousands)2009

$
15,8062010


9,7612011


7,3822012


1,703$
34,652   Note 9.
    Stockholders
    Equity  Capital
    Stock
   59




---



##### Table of Contents



QLOGIC
    CORPORATION
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Treasury
    Stock
      Note 10.
    Stock-Based
    Compensation  Employee
    Stock Purchase Plan
    Stock
    Incentive Compensation Plans
         60




---



##### Table of Contents



QLOGIC
    CORPORATION
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
            Weighted-Weighted-


AverageAverage


Remaining


AggregateNumber of


Exercise


Contractual


IntrinsicShares


Price


Term (Years)


Value(In thousands)








(In thousands)Outstanding at April 2, 2006


24,854


$
20.90Options assumed as part of acquisition


308



3.00Granted


4,512



18.50Exercised


(2,173
)


12.64Forfeited (cancelled pre-vesting)


(884
)


15.73Expired (cancelled post-vesting)


(490
)


27.44Outstanding at April 1, 2007


26,127



21.01Granted


4,027



16.24Exercised


(954
)


10.32Forfeited (cancelled pre-vesting)


(2,054
)


16.91Expired (cancelled post-vesting)


(1,067
)


22.36Outstanding at March 30, 2008


26,079


$
20.94



5.5


$
11,429Vested and expected to vest at March 30, 2008


25,206


$
21.09



5.4


$
11,141Exercisable at March 30, 2008


19,645


$
22.36



4.6


$
9,023  61




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##### Table of Contents



QLOGIC
    CORPORATION
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Weighted-AverageNumber of


Grant DateShares


Fair Value(In thousands)Outstanding and unvested at April 2, 2006





$
Granted


968



18.82Vested






Forfeited


(29
)


18.09Outstanding and unvested at April 1, 2007


939



18.84Granted


842



16.52Vested(a)


(214
)


18.79Forfeited


(294
)


17.72Outstanding and unvested at March 30, 2008


1,273


$
17.57     (a)
    
    During fiscal 2008, the Company issued 136,000 shares of
    common stock in connection with the vesting of restricted stock
    units during the year. The difference between the number of
    shares vested and issued is the result of restricted stock units
    withheld in satisfaction of minimum tax withholding obligations
    associated with the vesting.  Stock-Based
    Compensation Expense
    2008


2007(In thousands)Cost of revenues

$
2,128


$
1,897Engineering and development


14,531



11,190Sales and marketing


6,255



8,155General and administrative


8,850



9,037$
31,764


$
30,279    62




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##### Table of Contents



QLOGIC
    CORPORATION
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    2008


2007Stock


Employee Stock


Stock


Employee StockOptions


Purchase Plan


Options


Purchase PlanFair value

$
6.43


$
3.39


$
8.31


$
4.09Expected volatility


38
%


35
%


46
%


29
%Risk-free interest rate


4.7
%


4.0
%


4.9
%


5.0
%Expected life (years)


5.1



0.25



5.0



0.25Dividend yield














               Pro
    Forma Information Under SFAS No. 123 for Periods Prior
    to Fiscal 2007
   63




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##### Table of Contents



QLOGIC
    CORPORATION
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    (In thousands, exceptper share amounts)Net income, as reported

$
283,588Add: Stock-based employee compensation expense included in
    reported net income, net of related tax effects


105Deduct: Stock-based employee compensation expense determined
    under the fair value based method for all awards, net of related
    tax effects


(31,477
)Pro forma net income

$
252,216Net income per share:Basic, as reported

$
1.66Diluted, as reported

$
1.63Basic, pro forma

$
1.47Diluted, pro forma

$
1.45     Stock


Employee StockOptions


Purchase PlanFair value

$
6.35


$
3.54Expected volatility


46
%


34
%Risk-free interest rate


4.3
%


3.2
%Expected life (years)


4.0



0.25Dividend yield






        64




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##### Table of Contents



QLOGIC
    CORPORATION
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Note 11.
    Employee
    Retirement Savings Plan    Note 12.
    Special
    Charges      ContractWorkforce


CancellationReductions


and Other


Total(In thousands)Charged to costs and expenses

$
3,761


$
1,235


$
4,996Cash payments


(3,202
)


(742
)


(3,944
)Non-cash adjustments






60



60Balance as of March 30, 2008

$
559


$
553


$
1,112     Note 13.
    Interest
    and Other Income, net    2008


2007


2006(In thousands)Interest income

$
20,590


$
25,713


$
25,818Gain on sales of marketable securities


804



191



8,766Loss on sales of marketable securities


(197
)


(1,853
)


(1,952
)Impairment of marketable securities


(6,867
)


(8,094
)


Other


(306
)


915



(5
)$
14,024


$
16,872


$
32,627  65




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##### Table of Contents



QLOGIC
    CORPORATION
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Note 14.
    Commitments
    and Contingencies  Leases
    Fiscal Year(In thousands)2009

$
5,4212010


4,1432011


3,2402012


2,6742013


1,888Thereafter


9,433Total future minimum lease payments

$
26,799     Litigation
    Indemnifications
    Note 15.
    Income
    Taxes    2008


2007


2006(In thousands)United States

$
96,450


$
102,603


$
220,872Foreign


51,270



52,184



(20,388
)$
147,720


$
154,787


$
200,484  66




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##### Table of Contents



QLOGIC
    CORPORATION
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    2008


2007


2006(In thousands)Current:Federal

$
53,371


$
45,618


$
76,295State


8,784



4,032



6,485Foreign


3,904



3,996



257Total current


66,059



53,646



83,037Deferred:Federal


(10,918
)


(3,067
)


(4,029
)State


(3,947
)


(331
)


(434
)Foreign


316



(879
)


79Total deferred


(14,549
)


(4,277
)


(4,384
)Total income taxes from continuing operations

$
51,510


$
49,369


$
78,653     2008


2007


2006(In thousands)Continuing operations

$
51,510


$
49,369


$
78,653Discontinued operations










99,920$
51,510


$
49,369


$
178,573       2008


2007


2006(In thousands)Expected income tax provision at the statutory rate

$
51,702


$
54,175


$
70,169State income taxes, net of federal tax benefit


4,954



2,406



3,933Foreign income at other than U.S. tax rates


(5,752
)


(10,400
)


6,729Benefit from export sales






(269
)


(1,963
)Benefit from research and other credits


(4,800
)


(1,772
)


(857
)Nondeductible business combination related costs






1,190



Stock-based compensation


4,239



5,469



61Resolution of prior period tax matters






(3,920
)


Other, net


1,167



2,490



581$
51,510


$
49,369


$
78,653  67




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##### Table of Contents



QLOGIC
    CORPORATION
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    2008


2007(In thousands)Deferred tax assets:Reserves and accruals not currently deductible

$
24,325


$
17,688Foreign tax credits


9,387



Stock-based compensation


9,129



4,824Net operating loss carryforwards


7,397



12,951State income taxes


6,098



1,301Impairment of marketable securities


5,813



3,145Purchased in-process research and development


3,614



3,678Research credits


3,227



2,789Property and equipment


2,303



621Capital loss carryovers


1,751



1,812Net unrealized loss on marketable securities


1,632



Other


1,168



Total gross deferred tax assets


75,844



48,809Deferred tax liabilities:Purchased intangible assets


11,664



17,470Research and development expenditures


6,083



5,594Net unrealized gain on marketable securities






124Total gross deferred tax liabilities


17,747



23,188Net deferred tax assets

$
58,097


$
25,621     2008


2007(In thousands)Current assets

$
32,227


$
27,866Noncurrent assets


25,870



49Noncurrent liabilities






(2,294
)Net deferred tax assets

$
58,097


$
25,621      68




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##### Table of Contents



QLOGIC
    CORPORATION
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
                (In thousands)Balance at April 2, 2007

$
32,911Additions based on tax positions related to the current year


7,865Additions for tax positions of prior years


5,006Reductions for tax positions of prior years


(4,375
)Lapses of statute of limitations


(1,245
)Balance at March 30, 2008

$
40,162    69




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##### Table of Contents



QLOGIC
    CORPORATION
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Note 16.
    Product
    Revenues, Geographic Revenues and Significant
    Customers    Product
    Revenues
    2008


2007


2006(In thousands)Host Products

$
437,882


$
410,607


$
328,774Network Products


101,758



88,307



70,685Silicon Products


44,323



76,652



87,834Other


13,903



11,131



6,784$
597,866


$
586,697


$
494,077   Geographic
    Revenues
    2008


2007


2006(In thousands)United States

$
305,146


$
314,300


$
271,937Europe, Middle East and Africa


144,631



131,954



111,000Asia-Pacific and Japan


113,063



111,130



108,166Rest of world


35,026



29,313



2,974$
597,866


$
586,697


$
494,077  70




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##### Table of Contents



QLOGIC
    CORPORATION
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Significant
    Customers
    2008


2007


2006Hewlett-Packard


20
%


16
%


15
%IBM


16
%


17
%


15
%Sun Microsystems


11
%


12
%


12
%   Note 17.
    Condensed
    Quarterly Results (Unaudited)    Three Months EndedJune


September


December


March(1)(In thousands, except per share amounts)Fiscal 2008:Net revenues

$
139,777


$
140,326


$
158,040


$
159,723Gross profit


88,914



91,313



105,803



105,877Operating income


22,735



27,176



44,077



39,708Net income


18,995



22,580



31,870



22,765Net income per share:Basic


0.12



0.16



0.23



0.17Diluted


0.12



0.16



0.23



0.17Fiscal 2007:Net revenues

$
136,692


$
145,298


$
157,611


$
147,096Gross profit


93,372



99,542



106,913



94,888Operating income


27,699



39,221



44,086



26,909Net income


21,076



30,447



35,454



18,441Net income per share:Basic


0.13



0.19



0.22



0.12Diluted


0.13



0.19



0.22



0.12     (1)
    
    During the three months ended March 30, 2008 and
    April 1, 2007, the Company recorded impairment charges
    related to marketable securities of $6.9 million and
    $8.1 million, respectively. 71




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##### Table of Contents



Item 9.
    Changes
    in and Disagreements with Accountants on Accounting and
    Financial Disclosure   
  Item 9A.
    Controls
    and Procedures  Conclusion
    Regarding the Effectiveness of Disclosure Controls and
    Procedures
  Rules 13a-15(e) 15d-15(e)
  Managements
    Report on Internal Control Over Financial Reporting
  Rule 13a-15(f)
  Internal Control  Integrated
    Framework
    Changes
    in Internal Control over Financial Reporting
  Rule 13a-15(f)
 
  Item 9B.
    Other
    Information   72




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##### Table of Contents



PART III
 
  Item 10.
    Directors,
    Executive Officers and Corporate Governance     
  Item 11.
    Executive
    Compensation   
  Item 12.
    Security
    Ownership of Certain Beneficial Owners and Management and
    Related Stockholder Matters     
  Item 13.
    Certain
    Relationships and Related Transactions, and Director
    Independence   
  Item 14.
    Principal
    Accountant Fees and Services   73




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##### Table of Contents



PART IV
 
  Item 15.
    Exhibits
    and Financial Statement Schedules  Consolidated Financial Statements
   
  FINANCIAL
    STATEMENT INDEX
  PageNumberReports of Independent Registered Public Accounting Firm


38Consolidated Balance Sheets as of March 30, 2008 and
    April 1, 2007


40Consolidated Statements of Income for the years ended
    March 30, 2008, April 1, 2007 and April 2, 2006


41Consolidated Statements of Stockholders Equity and
    Comprehensive Income for the years ended March 30, 2008,
    April 1, 2007 and April 2, 2006


42Consolidated Statements of Cash Flows for the years ended
    March 30, 2008, April 1, 2007 and April 2, 2006


43Notes to Consolidated Financial Statements


44   Financial Statement Schedule
        Exhibits
   74




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##### Table of Contents



SIGNATURES
      By:
    /s/  H.K.
    Desai   Chairman of the Board and
 Chief Executive Officer
    POWER OF
    ATTORNEY
  and/or and/or Form 10-K.
    Signature

Title

DatePrincipal Executive Officer:/s/  H.K.
    DesaiH.K.
    Desai

Chairman of the Board and 
    Chief Executive Officer

May 22, 2008Principal Financial and Accounting Officer:/s/  Simon
    BiddiscombeSimon
    Biddiscombe

Senior Vice President and
    Chief Financial Officer

May 22, 2008/s/  Joel
    S. BirnbaumJoel
    S. Birnbaum

Director

May 22, 2008/s/  Larry
    R. CarterLarry
    R. Carter

Director

May 22, 2008/s/  James
    R. FiebigerJames
    R. Fiebiger

Director

May 22, 2008/s/  Balakrishnan
    S. IyerBalakrishnan
    S. Iyer

Director

May 22, 2008/s/  Kathryn
    B. LewisKathryn
    B. Lewis

Director

May 22, 2008/s/  Carol
    L. MiltnerCarol
    L. Miltner

Director

May 22, 2008/s/  George
    D. WellsGeorge
    D. Wells

Director

May 22, 2008  75




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##### Table of Contents



SCHEDULE II
  QLOGIC
    CORPORATION
 VALUATION
    AND QUALIFYING ACCOUNTS
  Additions:Charged to


Deductions:Balance at


Costs and


Amounts


Balance atBeginning of


Expenses


Written Off, Net


End ofYear


or Revenues


of Recoveries


Year(In thousands)Continuing Operations:Year ended March 30, 2008:Allowance for doubtful accounts

$
1,075


$
399


$
298


$
1,176Sales returns and allowances

$
5,219


$
29,820


$
27,438


$
7,601Year ended April 1, 2007:Allowance for doubtful accounts

$
1,239


$
30


$
194


$
1,075Sales returns and allowances

$
4,102


$
26,503


$
25,386


$
5,219Year ended April 2, 2006:Allowance for doubtful accounts

$
1,311


$
(54
)

$
18


$
1,239Sales returns and allowances

$
4,828


$
16,566


$
17,292


$
4,102Total, including Discontinued Operations:Year ended March 30, 2008:Allowance for doubtful accounts

$
1,075


$
399


$
298


$
1,176Sales returns and allowances

$
5,219


$
29,820


$
27,438


$
7,601Year ended April 1, 2007:Allowance for doubtful accounts

$
1,239


$
30


$
194


$
1,075Sales returns and allowances

$
4,102


$
26,503


$
25,386


$
5,219Year ended April 2, 2006:Allowance for doubtful accounts

$
1,445


$
(188
)

$
18


$
1,239Sales returns and allowances

$
5,233


$
16,802


$
17,933


$
4,102  76




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##### Table of Contents



EXHIBIT INDEX
  ExhibitNo.

Description3
.1

Certificate of Incorporation of Emulex Micro Devices
    Corporation, dated November 13, 1992. (incorporated by
    reference to Exhibit 3.1 of the Registrants
    Registration Statement on Form 10/A filed on
    February 15, 1994)3
.2

EMD Incorporation Agreement, dated as of January 1, 1993.
    (incorporated by reference to Exhibit 3.2 of the
    Registrants Registration Statement on Form 10/A filed
    on February 15, 1994)3
.3

Certificate of Amendment of Certificate of Incorporation, dated
    May 26, 1993. (incorporated by reference to
    Exhibit 3.3 of the Registrants Registration Statement
    on Form 10/A filed on February 15, 1994)3
.4

Certificate of Amendment of Certificate of Incorporation, dated
    February 24, 1994. (incorporated by reference to
    Exhibit 3.4 of the Registrants Annual Report on
    Form 10-K
    for the year ended March 30, 2003)3
.5

Certificate of Designation of Rights, Preferences and Privileges
    of Series A Junior Participating Preferred Stock, dated
    June 4, 1996. (incorporated by reference to
    Exhibit 3.5 of the Registrants Annual Report on
    Form 10-K
    for the year ended March 30, 2003)3
.6

Certificate of Amendment of Certificate of Incorporation, dated
    February 5, 1999. (incorporated by reference to
    Exhibit 3.6 of the Registrants Annual Report on
    Form 10-K
    for the year ended March 28, 1999)3
.7

Certificate of Amendment of Certificate of Incorporation, dated
    January 4, 2000. (incorporated by reference to
    Exhibit 3.7 of the Registrants Quarterly Report on
    Form 10-Q
    for the quarter ended December 26, 1999)3
.8

Certificate of Amendment of Certificate of Incorporation, dated
    September 28, 2000. (incorporated by reference to
    Exhibit 3.8 of the Registrants Annual Report on
    Form 10-K
    for the year ended March 30, 2003)3
.9

By-Laws of QLogic Corporation. (incorporated by reference to
    Exhibit 3.9 of the Registrants Current Report on
    Form 8-K
    filed on February 15, 2008)10
.1

QLogic Corporation Non-Employee Director Stock Option Plan, as
    amended.* (incorporated by reference to Exhibit 4.1 of the
    Registrants Registration Statement on
    Form S-8
    filed on February 6, 2004 (File
    No. 333-112572))10
.2

QLogic Corporation Stock Awards Plan, as amended.* (incorporated
    by reference to Exhibit 4.2 of the Registrants
    Registration Statement on
    Form S-8
    filed on February 6, 2004 (File
    No. 333-112572))10
.3

Form of Indemnification Agreement between QLogic Corporation and
    Directors and Executive Officers.* (incorporated by reference to
    Exhibit 10.1 of the Registrants Current Report on
    Form 8-K
    filed on April 7, 2006)10
.4

QLogic Corporation 1998 Employee Stock Purchase Plan, Amended
    and Restated Effective June 9, 2005.* (incorporated by
    reference to Exhibit 10.1 of the Registrants
    Quarterly Report on
    Form 10-Q
    for the quarter ended July 3, 2005)10
.5

QLogic Corporation 2005 Performance Incentive Plan.*
    (incorporated by reference to Exhibit 10.1 of the
    Registrants Quarterly Report on
    Form 10-Q
    for the quarter ended October 2, 2005)10
.6

First Amendment to QLogic Corporation 2005 Performance Incentive
    Plan, dated as of June 1, 2006.* (incorporated by reference
    to Exhibit 10.11 of the Registrants Annual Report on
    Form 10-K
    for the year ended April 2, 2006)10
.7

Second Amendment to QLogic Corporation 2005 Performance
    Incentive Plan.* (incorporated by reference to Exhibit 10.1
    of the Registrants Quarterly Report on
    Form 10-Q
    for the quarter ended October 1, 2006)10
.8

Terms and Conditions of Nonqualified Stock Option under the
    QLogic Corporation 2005 Performance Incentive Plan.*
    (incorporated by reference to Exhibit 10.1 of the
    Registrants Quarterly Report on
    Form 10-Q
    for the quarter ended July 2, 2006)10
.9

Terms and Conditions of Incentive Stock Option under the QLogic
    Corporation 2005 Performance Incentive Plan.* (incorporated by
    reference to Exhibit 10.2 of the Registrants
    Quarterly Report on
    Form 10-Q
    for the quarter ended July 2, 2006) 77




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##### Table of Contents



ExhibitNo.

Description10
.10

Terms and Conditions of Stock Unit Award under the QLogic
    Corporation 2005 Performance Incentive Plan.* (incorporated by
    reference to Exhibit 10.3 of the Registrants
    Quarterly Report on
    Form 10-Q
    for the quarter ended July 2, 2006)10
.11

Change in Control Severance Agreement between QLogic Corporation
    and H.K. Desai.* (incorporated by reference to Exhibit 10.1
    of the Registrants Current Report on
    Form 8-K
    filed on November 13, 2006)10
.12

Change in Control Severance Agreement between QLogic Corporation
    and Anthony J. Massetti.* (incorporated by reference to
    Exhibit 10.2 of the Registrants Current Report on
    Form 8-K
    filed on November 13, 2006)10
.13

Employment Agreement, dated April 19, 2007, between QLogic
    Corporation and Jeff Benck.* (incorporated by reference to
    Exhibit 10.1 of the Registrants Current Report on
    Form 8-K
    filed on April 25, 2007)10
.14

Change in Control Severance Agreement between QLogic Corporation
    and Simon Biddiscombe.*21
.1

Subsidiaries of the Registrant.23
.1

Consent of Independent Registered Public Accounting Firm.24


Power of Attorney (included on signature page).31
.1

Certification of Chief Executive Officer pursuant to
    Rule 13a-14(a)
    of the Securities Exchange Act of 1934, as amended, as adopted
    pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.31
.2

Certification of Chief Financial Officer pursuant to
    Rule 13a-14(a)
    of the Securities Exchange Act of 1934, as amended, as adopted
    pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.32


Certification of Chief Executive Officer and Chief Financial
    Officer pursuant to 18 U.S.C. Section 1350, as adopted
    pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.     *
    
    Compensation plan, contract or arrangement required to be filed
    as an exhibit pursuant to applicable rules of the Securities and
    Exchange Commission. 78