10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

[x]	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the quarterly period ended September 30, 2016

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

INTERSIL CORPORATION

(Exact name of registrant as specified in its charter)

Delaware	59-3590018
State or other jurisdiction of incorporation or organization	(I.R.S. Employer Identification No.)
1001 Murphy Ranch Road Milpitas, California	95035
(Address of principal executive offices)	(Zip Code)
408-432-8888
(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

☒ Yes     ☐No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period the registrant was required to submit and post such files).

☒ Yes     ☐No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company (as defined in Rule 12b-2 of the Exchange Act).

Largeacceleratedfiler	☒	Acceleratedfiler	☐
Non‑acceleratedfiler	☐	SmallerReportingCompany	☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

☐Yes☒No

The number of shares outstanding of the issuer’s classes of common stock as of the close of business on October 21, 2016:

Title of Each Class	Number of Shares
Class A common stock par value $.01 per share	136,879,920

1

INTERSIL CORPORATION

INDEX

		Page
PART I-FINANCIAL INFORMATION
Item 1.	Financial Statements	3
	Unaudited Condensed Consolidated Statements of Operations for the quarter and three quarters ended September 30, 2016 and October 2, 2015	3
	Unaudited Condensed Consolidated Statements of Comprehensive Income (Loss) for the quarter and three quarters ended September 30, 2016 and October 2, 2015	4
	Unaudited Condensed Consolidated Balance Sheets as of September 30, 2016 and January 1, 2016	5
	Unaudited Condensed Consolidated Statements of Cash Flows for the quarter and three quarters ended September 30, 2016 and October 2, 2015	6
	Notes to Unaudited Condensed Consolidated Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	15
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	23
Item 4.	Controls and Procedures	23
PART II-OTHER INFORMATION
Item 1.	Legal Proceedings	24
Item 1A.	Risk Factors	24
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	24
Item 3.	Defaults Upon Senior Securities	24
Item 4.	Mine Safety Disclosures	24
Item 5.	Other Information	25
Item 6.	Exhibits	25
	SIGNATURES	27

2

PART I-FINANCIAL INFORMATION

Item 1.Financial Statements.

INTERSIL CORPORATION

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share amounts)

	Quarter Ended				Three Quarters Ended
	September 30, 2016		October 2, 2015		September 30, 2016		October 2, 2015
Revenue	$	139,045	$	128,396	$	402,333	$	394,990
Cost of revenue		54,825		52,338		162,565		160,113
Gross profit		84,220		76,058		239,768		234,877
Operating costs and expenses:
Research and development		31,315		31,252		99,204		96,367
Selling, general and administrative		22,782		23,532		71,579		74,179
Amortization of purchased intangibles		2,669		3,777		9,064		13,364
Restructuring and related costs		14		-		13,522		-
Provision for the TAOS litigation		-		-		1,255		81,100
Merger-related expenses		4,639		-		4,639		-
Operating income (loss)		22,801		17,497		40,505		(30,133)
Interest expense and other		(340)		(75)		(1,359)		(835)
Gain (loss) on investments, net		454		(140)		666		562
Income (loss) before taxes		22,915		17,282		39,812		(30,406)
Income tax expense (benefit)		7,032		298		10,789		(16,290)
Net income (loss)	$	15,883	$	16,984	$	29,023	$	(14,116)
Earnings (loss) per share
Basic	$	0.12	$	0.13	$	0.22	$	(0.11)
Diluted	$	0.11	$	0.13	$	0.21	$	(0.11)
Cash dividends declared per common share	$	0.12	$	0.12	$	0.36	$	0.36
Weighted average common shares outstanding:
Basic		135,908		132,133		134,617		131,521
Diluted		138,760		132,445		136,668		131,521
See accompanying Notes to Unaudited Condensed Consolidated Financial Statements

3

INTERSIL CORPORATION

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(in thousands)

	Quarter Ended				Three Quarters Ended
	September 30, 2016		October 2, 2015		September 30, 2016		October 2, 2015
Net income (loss)	$	15,883	$	16,984	$	29,023	$	(14,116)
Currency translation adjustments, net		825		(216)		234		(1,024)
Comprehensive income (loss)	$	16,708	$	16,768	$	29,257	$	(15,140)
See accompanying Notes to Unaudited Condensed Consolidated Financial Statements

4

INTERSIL CORPORATION

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share amounts)

	September 30, 2016		January 1, 2016
Assets
Current Assets:
Cash and cash equivalents	$	284,047	$	247,403
Trade receivables, net of reserves ($15,753 as of September 30, 2016 and $14,541 as of January 1, 2016)		61,628		42,684
Inventories		68,277		65,334
Prepaid expenses and other current assets		9,332		7,176
Assets held-for-sale		4,901		-
Income taxes receivable		4,529		7,584
Total Current Assets		432,714		370,181
Non-current Assets:
Property, plant & equipment, net of accumulated depreciation ($243,051 as of September 30, 2016 and $273,352 as of January 1, 2016)		51,572		71,044
Purchased intangibles, net of accumulated amortization ($54,189 as of September 30, 2016 and $77,225 as of January 1, 2016)		23,443		32,507
Goodwill		571,770		571,770
Deferred income tax assets		59,385		63,139
Other non-current assets		31,255		29,977
Total Non-current Assets		737,425		768,437
Total Assets	$	1,170,139	$	1,138,618
Liabilities and Stockholders' Equity
Current Liabilities:
Trade payables	$	21,912	$	23,382
Accrued compensation		35,289		31,662
Other accrued expenses and liabilities		26,073		17,251
Deferred income		18,077		14,482
Income taxes payable		3,301		3,270
Provision for TAOS litigation		78,317		77,988
Total Current Liabilities		182,969		168,035
Non-current liabilities:
Income taxes payable		1,653		1,609
Other non-current liabilities		10,792		14,225
Total Non-current Liabilities		12,445		15,834
Stockholders' Equity:
Preferred stock, $0.01 par value, 2 million shares authorized; no shares issued or outstanding		-		-
Class A common stock, $0.01 par value, voting; 600 million shares authorized; 136,690,919 shares issued and outstanding as of September 30, 2016 and 132,728,391 shares issued and outstanding as of January 1, 2016		1,367		1,327
Additional paid-in capital		1,550,013		1,559,334
Accumulated deficit		(575,914)		(604,937)
Accumulated other comprehensive loss		(741)		(975)
Total Stockholders' Equity		974,725		954,749
Total Liabilities and Stockholders' Equity	$	1,170,139	$	1,138,618
See accompanying Notes to Unaudited Condensed Consolidated Financial Statements

5

INTERSIL CORPORATION

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

	Three Quarters Ended
	September 30, 2016		October 2, 2015
Operating Activities
Net income (loss)	$	29,023	$	(14,116)
Adjustments to reconcile net income (loss) to net cash flows from operating activities:
Depreciation		9,949		11,728
Amortization of intangibles		9,064		13,364
Equity-based compensation		20,167		18,010
Deferred income taxes		2,464		(4,038)
Excess tax benefit received on exercise of stock options		(1,742)		(862)
Loss on sale of fixed assets		50		16
Non-cash portion of restructuring charges		9,998		-
Gain on investments		(205)		(1,048)
Changes in operating assets and liabilities:
Trade receivables		(18,944)		4,773
Inventories		(2,943)		4,804
Prepaid expenses and other current assets		(2,156)		2,145
Trade payables and other liabilities		3,205		68
Provision for the TAOS litigation		329		78,014
Income taxes		4,490		(57,516)
Other long-term assets / liabilities, net		5,386		30,474
Net cash flows provided by operating activities		68,135		85,816
Investing Activities
Cash paid for acquisition, net of cash acquired		-		(15,948)
Proceeds from investments		935		1,048
Purchase of property, plant and equipment		(6,504)		(11,751)
Advance received for planned disposition of 200mm line		2,422		-
Net cash flows used in investing activities		(3,147)		(26,651)
Financing Activities
Proceeds, net of taxes withheld, from equity-based awards		21,695		8,793
Dividends paid		(51,203)		(48,852)
Net cash flows used in financing activities		(29,508)		(40,059)
Effect of exchange rates on cash and cash equivalents		1,164		(1,424)
Net change in cash and cash equivalents		36,644		17,682
Cash and cash equivalents at the beginning of the period		247,403		211,216
Cash and cash equivalents at the end of the period	$	284,047	$	228,898
See accompanying Notes to Unaudited Condensed Consolidated Financial Statements

6

INTERSIL CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 1 — Basis of Presentation

Intersil Corporation (“Intersil,” which may also be referred to as “we,” “us,” or “our”) is a leading provider of innovative power management and precision analog semiconductor solutions. Our products address some of the largest markets within the industrial and infrastructure, and consumer and computing end markets.

In our opinion, these unaudited condensed consolidated financial statements include all adjustments necessary to present fairly, in all material respects, the financial position, results of operations, and cash flows for all periods presented. We prepared these unaudited condensed consolidated financial statements in accordance with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X, using management estimates where necessary. We derived the January 1, 2016 condensed consolidated balance sheet from our audited consolidated year-end financial statements. You should read this interim report in conjunction with our Annual Report on Form 10-K for the year ended January 1, 2016.

We utilize a 52/53 fiscal week year, ending on the nearest Friday to December 31.  Fiscal years 2016 and 2015, are and were, respectively, 52-week years. Quarterly and annual periods vary from exact calendar quarters and years.

Pending Merger with Renesas Electronics Corporation

On September 12, 2016,  we entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Renesas Electronics Corporation, a Japanese corporation (“Renesas”). The Merger Agreement provides that, upon the terms and subject to the satisfaction or valid waiver of the conditions set forth in the Merger Agreement, a wholly owned subsidiary of Renesas will merge with and into Intersil (the “Merger”), with Intersil continuing as the surviving corporation and a direct wholly owned subsidiary of Renesas. At the effective time of the Merger, each outstanding share of Class A common stock, par value $0.01 per share, of Intersil(“Class A common stock” or “common stock”), other than shares held by stockholders who have validly exercised their appraisal rights under Delaware law, and certain shares owned by Intersil, Renesas and their subsidiaries, will be automatically converted into the right to receive $22.50 in cash, without interestand less any applicable withholding taxes, plus, if applicable, the amount of any dividend which has a record date prior to the closing date of the Merger but remains unpaid as of the closing date of the Merger.

The consummation of the merger is conditioned on the receipt of the approval of our stockholders, as well as the satisfaction of other customary closing conditions, including domestic and foreign regulatory approvals and performance in all material respects by each party of its obligations under the Merger Agreement. Consummation of the Merger is not subject to a financing condition.Closing of the merger is expected in the first half of 2017.

The Merger Agreement contains certain termination rights for us and Renesas, including if a governmental body prohibits the Merger or if the Merger is not consummated before July 12, 2017. Upon termination of the Merger Agreement under specified circumstances, we or Renesas will be required to pay the other party a termination fee of $96.5 million.

We recorded transaction-related costs of $4.6 million, principally for outside financial advisory, legal, and related fees and expenses associated with the pending acquisition, in the quarter ended September 30, 2016. Additional transaction-related costs are expected to be incurred through the closing of the Merger.

Recent Accounting Guidance Not Yet Adopted

In January 2016, the Financial Accounting Standards Board, or FASB, issued Accounting Standard update, or ASU, 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities, which provides guidance for the recognition, measurement, presentation, and disclosure of financial assets and liabilities. This ASU will be effective for us beginning in the first quarter of 2018. We are currently evaluating the impact of the adoption of this ASU on our financial statements.

In February 2016, FASB issued ASU 2016-02, Leases (Topic 842), which supersedes existing guidance on accounting for leases in “Leases (Topic 840)” and generally requires all leases to be recognized in the consolidated balance sheet. ASU 2016-02 is effective for annual and interim reporting periods beginning after December 15, 2018; early adoption is permitted. The provisions of ASU 2016-02 are to be applied using a modified retrospective approach. We are currently evaluating the impact of the adoption of this guidance on our consolidated financial statements.

7

In March 2016, FASB issued ASU 2016-09, Improvements to Employee Share-Based Payment Accounting. This ASU affects entities that issue equity-based payment awards to their employees. The ASU is designed to simplify several aspects of accounting for equity-based payment award transactions, which include income tax consequences, classification of awards as either equity or liabilities, classification on the statement of cash flows, and forfeiture rate calculations. ASU 2016-09 will become effective for us beginning in the first quarter of 2017; early adoption is permitted. We are currently evaluating the impact of the adoption of this guidance on our consolidated financial statements.

In April 2016, FASB issued an update to ASU 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing.  The amendments in this update clarify the following two aspects of Topic 606: identifying performance obligations and the licensing implementation guidance, while retaining the related principles for those areas. We are currently evaluating the impact of the adoption of this guidance on our consolidated financial statements.

Note 2 — Significant Accounting Policies

The accompanying unaudited condensed consolidated financial statements reflect all normal recurring adjustments necessary to present fairly the financial position, results of operations, and cash flows for the interim periods, but are not necessarily indicative of the results of operations to be anticipated for the full year ending December 30, 2016.

There have been no changes to our significant accounting policies described in our Annual Report on Form 10-K for the year ended January 1, 2016 that have had a material impact on our unaudited condensed consolidated financial statements and related notes.

Note 3 — Fair Value Measurements

We determine the fair value of our assets and liabilities utilizing three levels of inputs, focusing on the most observable level of inputs when available. Level 1 inputs use quoted prices in active markets which are unadjusted and accessible as of the measurement date for identical, unrestricted assets or liabilities. Level 2 uses quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly. Level 3 uses prices or valuations that require inputs that are unobservable and significant to the overall fair value measurement.

We determine fair value on the following assets using these input levels (in thousands):

	Fair value as of September 30, 2016 using:
	Total		Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)
Assets
Other non-current assets:
Deferred compensation investments	$	9,917	$	87	$	9,830
Total assets measured at fair value	$	9,917	$	87	$	9,830
	Fair value as of January 1, 2016 using:
		Total	Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)
Assets
Other non-current assets:
Deferred compensation investments	$	9,855	$	400	$	9,455
Total assets measured at fair value	$	9,855	$	400	$	9,455

There were notransfers into or out of Level 1, Level 2, or Level 3 financial assets during the three quarters ended September 30, 2016 and October 2, 2015.

8

Note 4 — Inventories

Inventories are summarized below (in thousands):

	As of		As of
	September 30, 2016		January 1, 2016
Finished products	$	18,139	$	22,522
Work in process		46,355		38,238
Raw materials		3,783		4,574
Total inventories	$	68,277	$	65,334

Note 5 — Goodwill and Purchased Intangibles

Goodwill — We perform our annual test of impairment in our fourth quarter, or if indicators of impairment exist, in interim periods. Factors that could trigger a goodwill impairment review include adverse legal factors, adverse changes in our business climate, unanticipated competition, regulatory issues, loss of key personnel, significant changes or losses in business operations, weakness in our industry, downward revisions to forecasts for future periods, restructuring plans, and declines in market capitalization below equity book value.

There were no impairment triggers noted during the three quarters ended September 30, 2016.

Purchased Intangibles —  Our intangible assets consisted of the following (in thousands):

	As of September 30, 2016
		Definite-lived: developed technologies		Definite-lived: other		Total purchased intangibles
Gross carrying amount	$	63,032	$	14,600	$	77,632
Accumulated amortization		42,151		12,038		54,189
Purchased intangibles, net	$	20,881	$	2,562	$	23,443
		As of January 1, 2016
		Definite-lived: developed technologies		Definite-lived: other		Total purchased intangibles
Gross carrying amount	$	63,032	$	46,700	$	109,732
Accumulated amortization		36,065		41,160		77,225
Purchased intangibles, net	$	26,967	$	5,540	$	32,507

Substantially all of our purchased intangibles consist of multiple elements of developed technology which have estimated useful lives of five to seven years. Other purchased intangibles consist primarily of customer relationships and other identifiable assets, which have an estimated useful life of three to seven years.  No trigger requiring an impairment review was noted during the three quarters ended September 30, 2016.

Expected remaining amortization expense by year to the end of the current amortization schedule is as follows (in thousands):

To be recognized in:
2016	$	2,670
2017		9,480
2018		4,362
2019		1,890
2020 and thereafter		5,041
Total expected amortization expense	$	23,443

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Note 6 — Income Taxes

Our income tax expense was $7.0 million, which equates to an effective tax rate of 30.7%, for the quarter ended September 30, 2016 compared to an income tax expense of $0.3 million, which equated to an effective tax rate of 1.7%, for the quarter ended October 2, 2015.  Our income tax expense was $10.8 million, which equates to an effective tax rate of 27.1%, for the three quarters ended September 30, 2016 compared to an income tax benefit of $16.3 million, which equated to a negative effective tax rate of 53.6%, for the three quarters ended October 2, 2015.

Our effective tax rate for the quarter ended September 30, 2016 differs from the 35% U.S. federal statutory income tax rate due primarily to income earned in jurisdictions where the tax rate is lower than the United States, principally in Malaysia, state income taxes, U.S. research and development tax credits, U.S. domestic production activity and other permanent non-deductible items.  Our effective tax rate was negative for the quarter ended October 2, 2015, primarily due to losses in foreign jurisdictions related to the TAOS litigation.  The $81.1 million accrual recorded for the TAOS litigation was treated as an unusual and discrete item for the quarter, for which the future tax benefit was $1.2 million, and the loss was allocated primarily to our Malaysian operations.  Additionally, the three quarters ended October 2, 2015 included a net tax benefit of $27.7 million related to the release of a reserve for an uncertain tax position for which the statutes of limitation in certain jurisdictions expired during the period.

As of September 30, 2016, we have no material changes resulting from examinationsin major tax jurisdictions.  Accordingly, we have no material changes to our unrecognized tax benefits and related interest and penalty since the year ended January 1, 2016.  We do not believe that there will be a significant increase or decrease in unrecognized tax benefits within the next twelve months.

Note 7 — Long-Term Debt

On July 19, 2016, we entered into an amended and restated five-year, $225.0 million revolving credit facility, or the Amended Facility, that matures on July 19, 2021 and is payable in full upon maturity. The Amended Facility replaces our five-year, $325.0 million revolving credit facility, or the Facility, that would have matured on September 1, 2016. Under the Amended Facility, $50.0 million is available for the issuance of standby letters of credit, $30.0 million is available as swing line loans, and $70.0 million is available for multicurrency borrowings. Amounts repaid under the Amended Facility may be re-borrowed. We didnot have any outstanding borrowings against the Amended Facility as of September 30, 2016 or against the Facility as of January 1, 2016.

Standby Letters of Credit — We issue standby letters of credit during the ordinary course of business through major financial institutions as required for certain regulatory matters. We had outstanding letters of credit totaling $1.1 million and $1.3 million as of September 30, 2016 and January 1, 2016, respectively. The standby letters of credit are secured by pledged deposits.

Note 8 — Common Stock and Dividends

Class A Common Stock — Share activity for Class A common stock since January 1, 2016 (in thousands):

Beginning balance as of January 1, 2016	132,728
Shares issued under stock plans, net of shares withheld for taxes	3,963
Ending balance as of September 30, 2016	136,691

Dividends —In April 2016 and July 2016, our Board of Directors declared quarterly cash dividends of $0.12per share of common stock. In October 2016, our Board of Directors declared a dividend of $0.12 per share of common stock payable on or about November 28, 2016, to stockholders of record as of the close of business on November 15, 2016. Dividends paid during the three quarters ended September 30, 2016 and October 2, 2015 totaled $51.2 million and $48.9 million, respectively.

Pursuant to the terms of the Merger Agreement, we are not permitted to declare or pay any dividends on our outstanding shares of capital stock, except (i) a quarterly cash dividend in an amount not in excess of $0.12 per share of Common Stock, consistent with past practice and (ii) any dividends or dividend equivalent rights with respect to any vested equity awards.

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Note 9 — Equity-based Compensation

The following table represents the weighted-average fair value compensation cost per share of restricted and deferred stock awards (“Awards”) granted:

	Three Quarters Ended
	September 30, 2016		October 2, 2015
Awards	$	13.86	$	11.26

Equity-based Compensation Summary — The following table presents information about stock options (“Options”) and Awards as of and activity for the three quarters ended September 30, 2016:

	Options				Awards	Aggregate information
	Shares	Weighted-average price		Weighted-average remaining contract lives	Shares	Aggregate intrinsic value		Aggregate unrecognized compensation cost
	(in thousands)		(per share)	(in years)	(in thousands)		(in thousands)		(in thousands)
Outstanding as of January 1, 2016	4,013	$	12.02	2.2	5,509	$	75,432	$	29,042
Granted (1)	-		-	-	2,008
Exercised (2)	(2,198)		12.01	1.0	(1,932)
Canceled	(120)		16.30	0.2	(463)
Outstanding as of September 30, 2016	1,695	$	11.72	2.2	5,122	$	129,623	$	33,897
As of September 30, 2016:
Exercisable/vested (2)	1,619	$	11.67	2.0	121	$	19,264
Vested and expected to vest	1,695	$	11.72	2.2	5,122	$	129,623

(1) Grants include 345,543 MSU Awards issued during the three quarters ended September 30, 2016.

(2) Awards exercised are those that are fully vested and have been delivered to the recipients as a taxable event due to an elected deferral, available in the case of deferred stock units. Deferred stock units for which the deferral is elected timely are vested but still outstanding as Awards. Total un-issued shares related to deferred stock units as of September 30, 2016 were 121,000shares as shown in the Awards column as Exercisable/vested.

Additional Disclosures	Three Quarters Ended
	September 30, 2016		October 2, 2015
	(in thousands)
Shares issued under the employee stock purchase plan		396		537
Aggregate intrinsic value of stock options exercised	$	8,484	$	1,919

Financial Statement Effects and Presentation — The following table shows total equity-based compensation expense for the periods indicated that are included in our unaudited condensed consolidated statements of operations (in thousands):

	Quarter Ended				Three Quarters Ended
	September 30, 2016		October 2, 2015		September 30, 2016		October 2, 2015
By statement of operations line item
Cost of revenue	$	207	$	304	$	949	$	1,132
Research and development		2,779		2,390		9,716		7,799
Selling, general and administrative		2,577		2,871		9,502		9,079
Total	$	5,563	$	5,565	$	20,167	$	18,010
By stock type
Stock options	$	9	$	90	$	57	$	574
Restricted and deferred stock awards		5,342		5,250		19,389		16,613
Employee stock purchase plan		212		225		721		823
Total	$	5,563	$	5,565	$	20,167	$	18,010

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Market based Grants — As of September 30, 2016, we had Options and Awards outstanding that include service conditions as well as market conditions related to total stockholder return. Under the terms of the agreements, participants may receive from 0 - 300% of the original grant. Equity-based compensation cost is measured at the grant date, based on the fair value of the number of shares ultimately expected to vest, and is recognized as an expense, on a straight line basis, over the requisite service period:

	September 30, 2016
	Options		Awards
	(in thousands)
Market-based units outstanding		-		961
Maximum shares that could be issued assuming the highest level of performance		-		2,163
Market-based shares expected to vest / vested		-		1,371
Amount to be recognized as compensation cost over the performance period	$	-	$	3,410

Note 10 —Earnings (Loss) Per Share

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

	Quarter Ended				Three Quarters Ended
	September 30, 2016		October 2, 2015			September 30, 2016		October 2, 2015
Numerator:
Net income (loss) to common stockholders	$	15,883	$	16,984		$	29,023	$	(14,116)
Denominator:
Denominator for basic earnings per share—weighted average common shares		135,908		132,133			134,617		131,521
Effect of stock options and awards		2,852		312			2,051		-
Denominator for diluted earnings per share—adjusted weighted average common shares		138,760		132,445			136,668		131,521
Earnings per share:
Basic	$	0.12	$	0.13		$	0.22	$	(0.11)
Diluted	$	0.11	$	0.13		$	0.21	$	(0.11)
Anti-dilutive shares not included in the above calculations:
Awards		-		-			-		-
Options		-		3,405			-		1,083

Note 11 — Segment Information

We report our results in one reportable segment. We design and develop innovative power management and precision analog integrated circuits, or ICs. Our chief executive officer is our chief operating decision maker.

Note 12 — Legal Matters and Indemnifications

Other than as stated in this Note 12, there were no material changes in our legal matters and indemnifications, from those disclosed in our Annual Report on Form 10-K for the year endedJanuary 1, 2016.

TAOS litigation

Texas Advanced Optoelectronic Solutions, Inc., or TAOS, named us as a defendant in a lawsuit filed on November 25, 2008 in the United States District Court for the Eastern District of Texas. In this action, TAOS alleged four claims consisting of patent infringement, breach of contract, trade secret misappropriation, and tortious interference with a business relationship. On March 6, 2015, the jury found in favor of TAOS on each of the four claims.  After certain post-trial motions were heard, the court entered a final judgment on June 9, 2016 against us in the amount of $77.3 million plus court costs and a continuing royalty on certain products found to be infringing TAOS’ patent.  On June 10, 2016, we filed a notice of appeal; TAOS filed a notice of cross-appeal. Our opening brief is due to be filed on October 28, 2016.

As a consequence of the jury’s verdict, during the quarter ended April 3, 2015, we recorded a provision of $81.1 million related to this matter, including pre-judgment interest and estimated legal costs. As a result of the entry of the June 9, 2016 judgment, we increased our accrual for this matter by $1.3 million in the quarter ended July 1, 2016. Given the unpredictable nature of this type of litigation and because the outcome remains subject to appeal, the ultimate impact of this lawsuit may be materially different from our estimate.

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Environmental matter

In correspondence dated September 28, 2015, counsel for Thomson Consumer Electronics Television Taiwan, Ltd., or TCETVT, notified us that it reserved its right to seek indemnification from us for any and all costs, fees, and expenses incurred as a result of a toxic tort class action lawsuit filed in Taiwan against TCETVT and others.  The lawsuit pertains to alleged injuries resulting from groundwater contamination at a manufacturing facility in Taiwan currently owned by TCETVT, which was previously owned and operated by predecessors, including General Electric, or GE, and Harris Corporation, or Harris, of our Taiwan subsidiary, Intersil Ltd. In the September 28 correspondence, TCETVT also informed us that the Taipei District Court entered a judgment of $18.5 million in the lawsuit against TCETVT, which judgment has been appealed. In addition, TCETVT informed us that they have incurred costs of $11.2 million in defending against the lawsuit through September 1, 2015.  We were also advised by TCETVT that additional claimants made be added to the lawsuit and TCETVT believes that if such additional claimants were successfully added, the resulting liability could be as high as $200.0 million.  In its September 28, 2015 letter, TCETVT informed us that it reserved its right to seek indemnification from us for any and all costs associated with the remediation of the contamination on that site and nearby areas. TCETVT claims they have incurred $15.9 million in remediation-related costs through September 1, 2015. 

By letter dated June 22, 2016 from counsel for GE and by letter dated July 14, 2016 from counsel for TCETVT, we were advised that in April 2016 the Taiwan Supreme Court denied the request to add additional claimants to the existing lawsuit and that, in response to the denial, the plaintiffs filed a new, but related lawsuit, claiming damages on behalf of 1,147 new claimants as well as adding additional sites at which the toxic torts were alleged to have occurred, such that the resulting liability could be as high as an additional $225.0 million.

Under the terms of the 1999 Master Transaction Agreement between Harris and Intersil, whereby Harris transferred its semiconductor business assets to us, environmental liabilities (including those associated with Harris’ Taiwan semiconductor operations) were expressly retained by Harris.  The Master Transaction Agreement also requires Harris to indemnify us for any and all costs relating to those retained environmental liabilities.  We have denied liability to TCETVT for the costs associated with the lawsuit as well as the costs associated with the remediation of the contamination on the site. We have also submitted a claim notice to Harris seeking defense and indemnification from Harris under the Master Transaction Agreement for any and all claims made by TCETVT in connection with this matter.  Harris has not yet agreed to indemnify us for the liability asserted by TCETVT.

Export Compliance Settlement

A portion of our activities are subject to export control regulations administered by the U.S. Department of State, or DOS, under the U.S. Arms Export Control Act, or AECA, and the International Traffic in Arms Regulations, or ITAR.  In September 2010, in response to a request for information, we disclosed to the Directorate of Defense Trade Controls, or DTCC, information concerning export activities for the years of 2005 through 2010.  ITAR gives the DOS authority to impose civil penalties and other administrative sanctions for violations, including debarment from engaging in the exporting of defense articles.  In June of 2013, the DTCC notified us of potential ITAR violations and that it was considering pursuing administrative proceedings against us.  On June 16, 2014, we entered into a Consent Agreement with the DTCC for the purpose of resolving the potential ITAR violations.  The Consent Agreement contained a two-year term and provided for: (i) payment of an aggregate civil penalty of $10.0 million, $4.0 million of which was suspended and eligible for an offset credit based on verified expenditures for certain past and future remedial compliance measures; (ii) the appointment of an Internal Special Compliance Official to oversee compliance with the Consent Agreement and U.S. export control regulations, in general; (iii) two external audits of our ITAR compliance program; and (iv) continued implementation of ongoing remedial compliance measures and additional remedial compliance measures related to automated systems and ITAR compliance policies, procedures, and training.  In connection with the Consent Agreement, we estimated and recorded a $6.0 million charge in the quarter ended October 4, 2013 and an additional $4.0 million charge in the quarter ended April 4, 2014, when the amount of the penalty was determined.  The $6.0 million portion of the settlement, which was not subject to suspension, was paid in two installments of $3.0 million each, in June 2014 and June 2015.  On March 29, 2016, we notified the DTCC that we had met all of the requirements under the Consent Agreement, as required by Paragraph 30 of the Consent Agreement.  On June 17, 2016, we notified the DTCC that the investments we had made in our export control compliance program,which included additional staffing, ongoing implementation of a new software system, employee training, and establishment of a regular compliance audit program and corrective action process, were eligible for credit against the entire amount of the suspended portion of the settlement amount.  On June 20, 2016, the DTCC notified us that the expenses we incurred were eligible for and credited against the entire $4.0 million suspended payment.  Finally, on June 21, 2016, the DTCC notified us that it had closed the Consent Agreement based, in part, on DTCC’s conclusion that we had fulfilled the terms of the Consent Agreement.

We are currently party to various claims and legal proceedings, including those discussed above. When we believe that a loss is probable and the amount of the loss can be reasonably estimated, we recognize the estimated amount of the loss. We include legal costs in the estimate of losses. As additional information becomes available, we reassess any potential liability related to these matters and, if necessary, revise the estimates.

13

We do not believe, based on currently available facts and circumstances that the ultimate outcome of these matters, individually and in the aggregate, will have a material adverse effect on our financial position or overall trends in results of our operations in excess of amounts already accrued. However, litigation is subject to inherent uncertainties and unfavorable rulings could occur, including an award of substantial monetary damages or issuance of an injunction prohibiting us from selling one or more products. From time-to-time, we may enter into confidential discussions regarding the potential settlement of such lawsuits. Any settlement of pending litigation could require us to incur substantial costs and other ongoing expenses, such as future royalty payments in the case of an intellectual property dispute. There can be no assurances that the actual amounts required to satisfy any liabilities arising from the matters described above will not have a material adverse effect on our results of operations, financial position, or cash flows. 

We incur indemnification obligations for intellectual property infringement claims related to our products. We accrue for known indemnification issues and estimate unidentified issues based on historical activity.

Note 13 — Assets held for sale and Restructuring and Related Costs

On June 29, 2016, we began implementation of a plan to decommission our 200 millimeter wafer fabrication line in Palm Bay, Florida or the 200mm Line.  The investment in the 200mm Line was made approximately four years ago to address the need to extend the production life of certain products manufactured at a third party wafer foundry when the supply commitments from the supplier for these products were set to expire at the end of 2014.  In July 2015, the supplier was acquired and the acquirer recently decided to continue long-term support for the manufacturing of these products.  To avoid the future capital investment anticipated to be required for the 200mm Line, we determined it would be beneficial to our long-term cost structure to source the manufacturing for these products from this supplier and decommission our 200mm Line. Due to this shift in manufacturing to an outside provider, we recorded an impairment charge of $9.9 million during the quarter ended July 1, 2016 on these long-lived assets related to the 200mm Line. The impairment charge was calculated as the excess of the assets’ carrying value over their fair value as determined by the market prices of these types of assets. We also recorded impairment charges of $1 million during the quarter ended July 1, 2016 for specific inventory items related to the 200 mm Line which had no alternative use. In addition we recorded $2.5 million of severance and other employee benefit costs in the quarter ended July 1, 2016 related to the decommissioning and other cost reduction actions.

During the quarter ended September 30, 2016, long lived assets (comprising of property, plant and equipment with a net book value of $4.9 million) relating to the 200 mm Line have been classified as assets held for sale. We measure long-lived assets to be disposed of by sale at the lower of carrying amount or fair value less cost to sell. Fair value is determined using quoted market prices or the anticipated cash flows discounted at a rate commensurate with the risk involved. No additional gain or loss was recorded since these assets were reduced to their fair value during the quarter ended July 1, 2016. We have entered into an agreement for sale of these assets and received an advance of $2.5 million. We expect to complete the sale within next twelve months.

—End of Unaudited Condensed Consolidated Financial Statements—

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Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations.

You should read the following discussion in conjunction with our unaudited condensed 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 on Form 10-Q contains statements relating to expected future results and business trends of Intersil Corporation (“Intersil” which may also be referred to as “we,” “us,” or “our”) that are based upon our current estimates, expectations, assumptions, and projections about our industry, as well as upon certain views and beliefs held by management, that are “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995, as amended. Forward-looking statements generally can be identified by words such as “anticipates,” “believes,” “estimates,” “expects,” “intends,” “plans,” “predicts,” “projects,” “will be,” “will continue,” “will likely result,” and similar expressions. In addition, any statements that refer to our pending merger with Renesas Electronics Corporation (“Renesas”) as well as other expectations, projections, or other characterizations of future events or circumstances, including any underlying assumptions, are “forward-looking statements.” These forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties, which could cause our actual results to differ materially from those reflected in the forward-looking statements. These factors include, but are not limited to:

· risks and uncertainties associated with the pending merger with Renesas, including that various conditions of the merger may not be satisfied or waived, regulatory approvals may delay or prevent the merger, or the merger may not otherwise be consummated for any reason;

· industry and global economic and market conditions, such as the cyclical nature of the semiconductor industry and the markets addressed by our products and our customers’ products;

· global economic weakness, including insufficient credit available for our customers to purchase our products;

· successful development of new products;

· demand for, and market acceptance of, new and existing products;

· the timing of new product introductions and new product performance and quality;

· manufacturing difficulties, such as the availability, cost, and extent of utilization of manufacturing capacity and raw materials;

· the failure of our suppliers or outsource providers to perform their obligations in a manner consistent with our expectations;

· pricing pressures and other competitive factors, such as competitors’ new products;

· changes in product mix;

· product obsolescence;

· legal challenges to our products and technology, such as intellectual property infringement and misappropriation claims;

· the ability to service our customers;

· the need for additional capital;

· legislative, tax, accounting, or regulatory changes, or changes in their interpretation;

· the ability to develop and implement new technologies and to obtain protection of the related intellectual property;

· the extent and timing that customers order and use our products and services in their production or business;

· competitors with significantly greater financial, technical, manufacturing, and marketing resources;

· fluctuations in manufacturing yields;

· procurement shortage;

· transportation, communication, demand, information technology, or supply disruptions based on factors outside our control such as natural disasters, wars, and terrorist activities;

· changes in import or export regulations; 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.

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Overview

We are a leading provider of innovative power management and precision analog semiconductor solutions. Our products form the building blocks of increasingly intelligent, mobile and power-hungry electronics, enabling advances in power management to improve efficiency and extend battery life. With a deep portfolio of intellectual property and a rich history of design and process innovation, we are the trusted partner to leading companies in some of the world’s largest markets, including industrial and infrastructure, mobile computing, automotive and aerospace.

Critical Accounting Policies

There have been no significant changes to ourcritical accounting policiesduring the three quarters ended September 30, 2016 as compared to the previous disclosuresintheManagement’s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the year endedJanuary 1, 2016.

Recent Accounting Guidance Not Yet Adopted

In January 2016, the Financial Accounting Standards Board, or FASB, issued Accounting Standards Update, or ASU 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities, which provides guidance for the recognition, measurement, presentation, and disclosure of financial assets and liabilities. This ASU will be effective for us beginning in the first quarter of 2018. We are currently evaluating the impact of the adoption of this ASU on our consolidated financial statements.

In February 2016, FASB issued ASU 2016-02, Leases (Topic 842), which supersedes existing guidance on accounting for leases in Leases (Topic 840) and generally requires all leases to be recognized in the consolidated balance sheet. ASU 2016-02 is effective for annual and interim reporting periods beginning after December 15, 2018; early adoption is permitted. The provisions of ASU 2016-02 are to be applied using a modified retrospective approach. We are currently evaluating the impact of the adoption of this standard on our consolidated financial statements.

In March 2016, FASB issued ASU 2016-09, Improvements to Employee Share-Based Payment Accounting. This ASU affects entities that issue equity-based payment awards to their employees. The ASU is designed to simplify several aspects of accounting for equity-based payment award transactions which include income tax consequences, classification of awards as either equity or liabilities, classification on the statement of cash flows, and forfeiture rate calculations. ASU 2016-09 will become effective for us beginning in the first quarter of 2017; early adoption is permitted. We are currently evaluating the impact of the adoption of this guidance on our consolidated financial statements.

In April 2016, FASB issued an update to ASU 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing.  The amendments in this update clarify the following two aspects of Topic 606: identifying performance obligations and the licensing implementation guidance, while retaining the related principles for those areas. We are currently evaluating the impact of the adoption of this guidance on our consolidated financial statements.

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Results of Operations

Pending Merger with Renesas Electronics Corporation

On September 12, 2016, we entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Renesas Electronics Corporation, a Japanese corporation (“Renesas”). The Merger Agreement provides that, upon the terms and subject to the satisfaction or valid waiver of the conditions set forth in the Merger Agreement, a wholly owned subsidiary of Renesas will merge with and into Intersil (the “Merger”), with Intersil continuing as the surviving corporation and a direct wholly owned subsidiary of Renesas. At the effective time of the Merger, each outstanding share of Class A common stock, par value $0.01 per share, of Intersil, other than shares held by stockholders who have validly exercised their appraisal rights under Delaware law, and certain shares owned by Intersil, Renesas and their subsidiaries, will be automatically converted into the right to receive $22.50 in cash, without interest and less any applicable withholding taxes, plus, if applicable, the amount of any dividend which has a record date prior to the closing date of the Merger but remains unpaid as of the closing date of the Merger.

The consummation of the merger is conditioned on the receipt of the approval of our stockholders, as well as the satisfaction of other customary closing conditions, including domestic and foreign regulatory approvals and performance in all material respects by each party of its obligations under the Merger Agreement. Consummation of the Merger is not subject to a financing condition.

The Merger Agreement contains certain termination rights for us and Renesas, including if a governmental body prohibits the Merger or if the Merger is not consummated before July 12, 2017. Upon termination of the Merger Agreement under specified circumstances, we or Renesas will be required to pay the other party a termination fee of $96.5 million. For additional details on the transaction, refer to the copy of the Merger Agreement attached as an Exhibit to the Form 8-K filed with the U.S. Securities and Exchange Commission on September 13, 2016.

We recorded transaction-related costs of $4.6 million, principally for outside financial advisory, legal, and related fees and expenses associated with the pending acquisition in the quarter ended September 30, 2016. Additional transaction-related costs are expected to be incurred through the closing of the Merger.

Unaudited condensed consolidated statements of operations data and percentage of revenue for the periods ($ in thousands):

	Quarter Ended								Three Quarters Ended
	September 30, 2016				October 2, 2015				September 30, 2016				October 2, 2015
Revenue	$	139,045	100.0	%	$	128,396	100.0	%	$	402,333	100.0	%	$	394,990	100.0	%
Cost of revenue		54,825	39.4	%		52,338	40.8	%		162,565	40.4	%		160,113	40.5	%
Gross profit		84,220	60.6	%		76,058	59.2	%		239,768	59.6	%		234,877	59.5	%
Operating costs and expenses:
Research and development		31,315	22.5	%		31,252	24.3	%		99,204	24.7	%		96,367	24.4	%
Selling, general and administrative		22,782	16.4	%		23,532	18.3	%		71,579	17.8	%		74,179	18.8	%
Amortization of purchased intangibles		2,669	1.9	%		3,777	2.9	%		9,064	2.3	%		13,364	3.4	%
Restructuring and related costs		14	-	%		-	-	%		13,522	3.4	%		-	-	%
Provision for the TAOS litigation		-	-	%		-	-	%		1,255	0.3	%		81,100	20.5	%
Merger-related expenses		4,639	3.3	%		-	-	%		4,639	1.2	%		-	-	%
Operating income (loss)		22,801	16.5	%		17,497	13.7	%		40,505	9.9	%		(30,133)	(7.6)	%
Interest expense and other		(340)	(0.2)	%		(75)	(0.1)	%		(1,359)	(0.3)	%		(835)	(0.2)	%
Gain (loss) on investments, net		454	0.3	%		(140)	(0.1)	%		666	0.2	%		562	0.1	%
Income (loss) before taxes		22,915	16.6	%		17,282	13.5	%		39,812	9.8	%		(30,406)	(7.7)	%
Income tax expense (benefit)		7,032	5.1	%		298	0.2	%		10,789	2.7	%		(16,290)	(4.1)	%
Net income (loss)	$	15,883	11.5	%	$	16,984	13.3	%	$	29,023	7.1	%	$	(14,116)	(3.6)	%

17

Revenue and Gross Margin

Revenue by end market was as follows ($ in thousands):

	Quarter Ended								Three Quarters Ended
	September 30, 2016				October 2, 2015				September 30, 2016				October 2, 2015
Industrial & infrastructure	$	90,779	65.3	%	$	84,242	65.6	%	$	261,522	65.0	%	$	262,822	66.5	%
Computing & Consumer		48,266	34.7			44,154	34.4			140,811	35.0			132,168	33.5
Total	$	139,045	100.0	%	$	128,396	100.0	%	$	402,333	100.0	%	$	394,990	100.0	%

Revenue increased by $10.6 million, or 8.3%, to $139.0 million during the quarter ended September 30, 2016 from $128.4 million during the quarter ended October 2, 2015.  Revenue from the industrial and infrastructure end market increased by 7.8% compared to the quarter ended October 2, 2015 with automotive and aerospace end markets exhibiting strong growth. Revenue from the consumer and computing end market increased by 9.3% helped by introduction of new products.  In the quarter ended September 30, 2016, the favorable impact from changes in average selling prices, or ASPs, increased revenue by $2.7 million, and higher overall unit demand also increased revenue by $7.9 million.

Revenue increased by $7.3 million, or 1.9%, to $402.3 million during the three quarters ended September 30, 2016 from $395.0 million during the three quarters ended October 2, 2015.  Revenue from the industrial and infrastructure end market decreased by 0.5% compared to the three quarters ended October 2, 2015, while revenue from the consumer and computing end market increased by 6.5% helped by new product introductions. In the three quarters ended September 30, 2016, higher overall unit demand increased revenue by $31.3 million, which was partially offset bythe unfavorable impact from changes in ASPs, which decreased revenue by $24.0 million.

We expect revenue to grow in the future driven by demand for new automotive and infrastructure power products in the industrial and infrastructure end markets, combined with new product ramps for our mobile power products in the consumer and computing end markets.

Geographical revenue ($ in thousands and % of revenue):

	Quarter Ended								Three Quarters Ended
	September 30, 2016				October 2, 2015				September 30, 2016				October 2, 2015
Asia	$	98,279	70.7	%	$	96,635	75.3	%	$	288,050	71.6	%	$	272,900	69.1	%
North America		25,691	18.5			20,872	16.3			72,990	18.1			70,091	17.7
Europe and other		15,075	10.8			10,889	8.4			41,293	10.3			51,999	13.2
Total	$	139,045	100.0	%	$	128,396	100.0	%	$	402,333	100.0	%	$	394,990	100.0	%

One distributor that supports a wide range of customers around the world accounted for 20.1% and 20.9% of our revenue during the quarters ended September 30, 2016 and October 2, 2015, respectively, and 18.7% and 21.6% of our revenue during the three quarters ended September 30, 2016 and October 2, 2015, respectively.

Cost of Revenue and Gross Margin

Cost of revenue consists primarily of purchased materials and services, labor, overhead, and depreciation associated with manufacturing pertaining to products sold. 

As a percentage of revenue, gross margin was 60.6% during the quarter ended September 30, 2016 compared to 59.2% during the quarter ended October 2, 2015.  The increase in gross margin was primarily due to a change in the mix of products sold. 

As a percentage of revenue, gross margin was 59.6% during the three quarters ended September 30, 2016 compared to 59.5% during the three quarters ended October 2, 2015.  The increase in gross margin was primarily due to a change in the mix of products sold. 

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Operating Costs and Expenses

Research and Development (“R&D”)

R&D expenses consist primarily of salaries and expenses of employees engaged in product/process research, design and development activities, as well as related subcontracting activities,masks, design automation software, engineering wafers, and technology license agreement expenses.

R&D expenses increased marginally by 0.2% to $31.3 million during the quarter ended September 30, 2016, compared to $31.2 million during the quarter ended October 2, 2015.

R&D expenses increased by 2.9% to $99.2 million during the three quarters ended September 30, 2016, compared to $96.4 million during the three quarters ended October 2, 2015, mainly due to higher variable compensation expense.

Selling, General and Administrative (“SG&A”)

SG&A expenses consist primarily of salaries and expenses of employees engaged in selling and marketing of our products as well as the salaries and expenses required to perform our human resources, finance, information systems, legal, executive, and other administrative functions.

SG&A expenses decreased by 3.2% to $22.8 million during the quarter ended September 30, 2016, compared to $23.5million during the quarter ended October 2, 2015, mainly due to reduction in facilities expenses offset by higher variable compensation expense.

SG&A expenses decreased by 3.5% to $71.6 million during the three quarters ended September 30, 2016 from $74.2 million during the three quarters ended October 2, 2015.  The three quarters ended October 2, 2015 included termination pay of $1.1 million which did not recur in the three quartersended September 30, 2016. In addition, spending on legal and professional services was lower in the three quarters ended September 30, 2016 offset by higher variable compensation expense.

Amortization of Purchased Intangibles

Amortization of purchased intangibles decreased to $2.7 million during the quarter ended September 30, 2016 from $3.8 million during the quarter ended October 2, 2015 and decreased to $9.1 million during the three quarters ended September 30, 2016 from $13.4 million during the three quarters ended October 2, 2015.  These decreases were a result of certain intangible assets becoming fully amortized during the three quarters ended September 30, 2016 and January 1, 2016, offset partially by an increase in amortization related to intangible assets associated with our acquisition of Great Wall Semiconductor Corporation on September 8, 2015.

Restructuring and related costs

On June 29, 2016, we began implementation of a plan to decommission our 200 millimeter wafer fabrication line in Palm Bay, Florida or the 200mm Line.  The investment in the 200mm Line was made approximately four years ago to address the need to extend the production life of certain products manufactured at a third party wafer foundry when the supply commitments from the supplier for these products were set to expire at the end of 2014.  In July 2015, the supplier was acquired and the acquirer recently decided to continue long-term support for the manufacturing of these products.  To avoid the future capital investment anticipated to be required for the 200mm Line, we determined it would be beneficial to our long-term cost structure to source the manufacturing for these products from this supplier and decommission our 200mm Line. Due to this shift in manufacturing to an outside provider, we recorded an impairment charge of $9.9 million during the quarter ended July 1, 2016 on these long-lived assets related to the 200mm Line. The impairment charge was calculated as the excess of the assets’ carrying value over their fair value as determined by the market prices of these types of assets. We also recorded impairment charges of $1 million during the quarter ended July 1, 2016 for specific inventory items related to the 200 mm Line which had no alternative use. In addition we recorded $2.5 million of severance and other employee benefit costs in the quarter ended July 1, 2016 related to the decommissioning and other cost reduction actions.We have entered into an agreement for sale of these assets and received an advance of $2.5 million. We expect to complete the sale within next twelve months.

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Provision for the TAOS litigation

Texas Advanced Optoelectronic Solutions, Inc., or TAOS, named us as a defendant in a lawsuit filed on November 25, 2008 in the United States District Court for the Eastern District of Texas. In this action, TAOS alleged four claims consisting of patent infringement, breach of contract, trade secret misappropriation, and tortious interference with a business relationship. On March 6, 2015, the jury found in favor of TAOS on each of the four claims.  After certain post-trial motions were heard, the court entered a final judgment on June 9, 2016against us in the amount of $77.3 million plus court costs and a continuing royalty on certain products found to be infringing TAOS’ patent.  On June 10, 2016, we filed a notice of appeal; TAOS filed a notice of cross-appeal. Our opening brief is due to be filed on October 28, 2016.

As a consequence of the jury’s verdict, during the quarter ended April 3, 2015, we recorded a provision of $81.1 million related to this matter, including pre-judgment interest and estimated legal costs. As a result of the entry of the June 9, 2016 judgment, we increased our accrual for this matter by $1.3 million during the quarter ended July 1, 2016.  Given the unpredictable nature of this type of litigation and because the outcome remains subject to appeal, the ultimate impact of this lawsuit may be materially different from our estimate.

Gain (loss) on Investments, net

We have a liability for a non-qualified deferred compensation plan. We maintain a portfolio of $10 million in mutual fund investments and corporate-owned life insurance under the plan. Changes in the fair value of the plan assets are recorded as a gain or loss on deferred compensation investments and changes in the fair value of the deferred compensation liabilities are recorded as a component of compensation expense. In general, the compensation expense or benefit is substantially offset by the gains and losses on the investment.

During the quarter ended September 30, 2016, we recorded a gain of $0.3 million on deferred compensation investments and a $0.1 million gain on recovery of auction rate securities that had previously been written off.

Income Taxes

Our income tax expense was $7.0 million, which equates to an effective tax rate of 30.7%, for the quarter ended September 30, 2016 compared to an income tax expense of $0.3 million, which equated to an effective tax rate of 1.7%, for the quarter ended October 2, 2015.  Our income tax expense was $10.8 million, which equates to an effective tax rate of 27.1%, for the three quarters ended September 30, 2016 compared to an income tax benefit of $16.3 million, which equated to a negative effective tax rate of 53.6%, for the three quarters ended October 2, 2015.

Our effective tax rate for the quarter ended September 30, 2016 differs from the 35% U.S. federal statutory income tax rate due primarily to income earned in jurisdictions where the tax rate is lower than the United States, principally in Malaysia, state income taxes, U.S. research and development tax credits, U.S. domestic production activity and other permanent non-deductible items.  Our effective tax rate was negative for the quarter ended October 2, 2015, primarily due to losses in foreign jurisdictions related to the TAOS litigation.  The $81.1 million accrual recorded for the TAOS litigation was treated as an unusual and discrete item for the quarter, for which the future tax benefit was $1.2 million, and the loss was allocated primarily to our Malaysian operations.  Additionally, the three quarters ended October 2, 2015 included a net tax benefit of $27.7 million related to the release of a reserve for an uncertain tax position for which the statutes of limitation in certain jurisdictions expired during the period.

Contractual Obligations and Off-Balance Sheet Arrangements

As of September 30, 2016,  we had $13.7 million of open purchase orders for inventory from suppliers and $3.1 million of open asset purchase commitments for leasehold improvements and production equipment. We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future material effect on our financial condition, revenues, expenses, results of operations, liquidity, capital expenditures, or capital resources.

20

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 cash flows from operations, together with our cash and investment balances and available credit facility, will provide the financial resources necessary to meet business requirements for the next 12 months for both our domestic and foreign operations. These requirements include our dividend program, the requisite capital expenditures for the maintenance of worldwide manufacturing capacity, working capital requirements and potential acquisitions or strategic investments. As of September 30, 2016, our total stockholders’ equity was $974.7 million and we had $284 million in cash and cash equivalents.

As of September 30, 2016, $217.7 million of our cash and cash equivalents were held by our foreign subsidiaries. We have provided for federal and state taxation at 37.5% in connection with our Revenue Procedure 99-32 election related to the 2008-2009 IRS examination periods, which allows for the repatriation of $125.0 million. As of September 30, 2016, $70.5 million of our cash and cash equivalents held by our foreign subsidiaries would not be subject to further taxation upon repatriation.

On July 19, 2016, we entered into an amended and restated five-year, $225.0 million revolving credit facility, or the Amended Facility, that matures on July 19, 2021 and is payable in full upon maturity. The Amended Facility replaces our five-year, $325.0 million revolving credit facility, or the Facility, that would have matured on September 1, 2016. Under the Amended Facility, $50.0 million is available for the issuance of standby letters of credit, $30.0 million is available as swing line loans, and $70.0 million is available for multicurrency borrowings. Amounts repaid under the Amended Facility may be re-borrowed. We did not have any outstanding borrowings against the Amended Facility as of September 30, 2016 or against the Facility as of January 1, 2016.

Operating Activities

Cash provided by operating activities consists of net income (loss) adjusted for certain non-cash items and changes in certain assets and liabilities.

Our cash flows from operations were $68.1 million during the three quarters ended September 30, 2016, as compared to $85.8 million during the three quarters ended October 2, 2015. During the three quarters ended September 30, 2016, we recorded a net income of $29 million as compared to a net loss of $14.1 million in the three quarters ended October 2, 2015.  Changes in operating assets and liabilities contributed $10.6 million in net cash outflows from operating activities, as compared to cash inflows of $62.8 million from operating activities, in the three quarters ended September 30, 2016 and October 2, 2015, respectively.

The changes in operating assets and liabilities during the three quarters ended September 30, 2016 were primarily due to the following:

· Trade receivables increased by $18.9 million due to higher revenue in the current quarter as well as unfavorable linearity of revenue compared to the quarter ended January 1, 2016.

· Inventories at September 30, 2016 increased by $2.9 million due to a last-time buy of inventory from a supplier.

· Other accrued expensesand liabilities increased by $7.0 million primarily due to accruals for merger related expenses of $4.6 million.

· Income taxes payable increased by $4.5 million.  Please see Note 6 of our Unaudited Condensed Consolidated Financial Statements contained in this Quarterly Report on Form 10-Q for further discussion.

Investing activities

Investing cash flows consist primarily of capital expenditures, net off capital advances received and net investment purchases and maturities.

For the three quarters ended September 30, 2016, our cash flows used in investing activities were $3.1 million, compared to $26.7 million during the three quarters ended October 2, 2015, primarily due to the acquisition of Great Wall Semiconductor during the quarter ended October 2, 2015 and a decrease in purchases of property, plant, and equipment during the three quarters ended September 30, 2016.

21

Financing activities

Financing cash flows consist primarily of payment of dividends to stockholders, proceeds from issuance of stock under our employee stock purchase plan, and exercise of employee stock options.

For the three quarters ended September 30, 2016, our cash flows used in financing activities were $29.5 million, compared to $40.1 million during the three quarters ended October 2, 2015, primarily due to increase in proceeds from exercise of employee stock options during the three quarters ended September 30, 2016.

Dividends on Common Stock

In October 2016, our Board of Directors declared a dividend of $0.12 per share of common stock payable on or about November 28, 2016, to stockholders of record as of the close of business on November 15, 2016.

22

Item 3.Quantitative and Qualitative Disclosures about Market Risk.

Global economic conditions pose a risk to the overall economy as consumers and businesses may defer purchases in response to the uncertainty around tighter credit and negative financial news. These conditions could reduce product demand and affect other related matters. Demand could be different from our expectations due to many factors including changes in business and economic conditions, conditions in the credit market that could affect consumer confidence, customer acceptance of our products, changes in customer order patterns including, order cancellations, and changes in the level of inventory held by vendors.

Moreover, in the normal course of doing business, we are exposed to the risks associated with foreign currency exchange rates and changes in interest rates. We employ established policies and procedures governing the use of financial instruments, entered into for purposes other than trading purposes, to manage our exposure to these risks.

Our cash and cash equivalents and investments are subject to three market risks: interest rate risk, credit risk, and liquidity risk.

For further discussion of the risk related to foreign currency exchange rates and market risk, see our 2015 Annual Report on Form 10-K filed with the SEC on February 12, 2016.

Item 4.Controls and Procedures.

(a) Evaluation of Disclosure Controls and Procedures. Our management, with the participation of our Chief Executive Officer, or CEO, and Chief Financial Officer, or 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 of 1934, as amended, or the “Exchange Act”) as of September 30, 2016. 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 management concluded that, as of September 30, 2016, 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 to ensure that all material information required to be disclosed by us in the reports that it files or furnishes under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the rules and forms of the SEC, and that all such material information is accumulated and communicated to our management, including our CEO and CFO, to allow timely decisions regarding required disclosures.

(b) Changes in Internal Controls. No change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) occurred during the quarter ended September 30, 2016, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

23

PART II-OTHER INFORMATION

Item 1.Legal Proceedings.

Please see Note 12 to our unaudited condensed consolidated financial statements contained in this Quarterly Report on Form 10-Q for further discussion.

Item 1A.Risk Factors.

In addition to the cautionary information included in this report, you should carefully consider the factors discussed in “Item 1A. Risk Factors” in our 2015 Annual Report on Form 10-K, filed with the SEC on February 12, 2016, which could materially adversely affect our business, financial condition, and/or results of operations. The following risk factors also could also affect our financial condition and results of operations.

There are risks and uncertainties associated with the Merger.

On September 12, 2016, we entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Renesas Electronics Corporation, a Japanese corporation (“Renesas”). The Merger Agreement provides that, upon the terms and subject to the satisfaction or valid waiver of the conditions set forth in the Merger Agreement, a wholly-owned subsidiary of Renesas will merge with and into Intersil (the “Merger”), with Intersil continuing as the surviving corporation and a wholly-owned subsidiary of Renesas. The consummation of the merger is conditioned on the receipt of the approval of our stockholders, as well as the satisfaction of other customary closing conditions, including domestic and foreign regulatory approvals and performance in all material respects by each party of its obligations under the Merger Agreement. Consummation of the Merger is not subject to a financing condition. There is no assurance that the conditions to the Merger will be satisfied in a timely manner or at all. Additionally, if the Merger is not completed, we may suffer a number of consequences that could adversely affect our business, results of operations, and stock price. There are numerous risks related to the Merger, including the following:

· Various conditions to the closing of the Merger may not be satisfied or waived;

· The Merger may not be consummated, which among other things may cause our share price to decline to the extent that the current price of our common stock reflects an assumption that the Merger will be completed;

· The failure to consummate the Merger may result in negative publicity and a negative impression of us in the investment community;

· Required regulatory approvals from governmental entities may delay the Merger or result in the imposition of conditions that could cause Renesas to abandon the Merger;

· Our ability to attract, recruit, retain and motivate current and prospective employees may be adversely affected;

· The attention of our employees and management may be diverted due to activities related to the Merger;

· Disruptions from the Merger, whether or not it is completed, may harm our relationships with our employees, customers, distributors, suppliers or other business partners, and may result in a loss of or a substantial decrease in purchases by our customers; and

· The Merger Agreement restricts us from engaging in certain actions without Renesas's approval, which could prevent us from pursuing certain business opportunities outside the ordinary course of business that arise prior to the closing of the Merger.

In addition, we have incurred, and will continue to incur, significant costs, expenses and fees for professional services and other transaction costs in connection with the Merger, and these fees and costs are payable by us regardless of whether the Merger is consummated.

Item 2.Unregistered Sales of Equity Securities and Use of Proceeds.

None.

Item 3.Defaults Upon Senior Securities.

None.

Item 4.Mine Safety Disclosures.

Not applicable.

24

Item 5.Other Information.

None

Item 6.Exhibits.

Exhibit No.	Description
2.1	Agreement and Plan of Merger, dated September 12, 2016, by and between Intersil Corporation and Renesas Electronics Corporation (incorporated by reference to Exhibit 2.1 to the Current Report of Form 8-K filed on September 13, 2016 (File No. 000-29617))*.
3.1	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 August 9, 2005 (File No. 000-29617)).
3.2	Fourth Amended and Restated Bylaws of Intersil Corporation (incorporated by reference to Exhibit 3.2 to the Quarterly Report on Form 10-Q filed on April 26, 2016 (File No. 000-29617)).
4	Specimen Certificate of Intersil Corporation’s Class A Common Stock (incorporated by reference to Exhibit 4.1 to the Annual Report on Form 10-K, filed February 27, 2007 (File No. 000-29617)).
10.1	Amended and Restated Credit Agreement, dated July 19, 2016, by and among Intersil Corporation, as the Borrower, Bank of America, N.A., as administrative agent, swing line lender and letter of credit issuer, and the other lender parties (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on July 21, 2016 (File No. 000-29617)).
10.2	Credit Agreement dated September 1, 2011, by and among Intersil Corporation, the Lenders (as defined therein), Bank of America, N.A. as administrative agent, swing line lender, and letter of credit issuer (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on September 8, 2011 (File No. 000-29617)).
10.3	First Amendment to Credit Agreement dated June 20, 2012, by and among Intersil Corporation, the Lenders (as defined therein), and Bank of America, N.A. as administrative agent, swing line lender, and letter of credit issuer (incorporated by reference to Exhibit 10 to the Quarterly Report on Form 10-Q filed on August 3, 2012 (File No. 000-29617)).
10.4	Second Amendment to Credit Agreement dated September 20, 2012, by and among Intersil Corporation, the Lenders (as defined therein), and Bank of America, N.A. as administrative agent, swing line lender, and letter of credit issuer (incorporated by reference to Exhibit 10 to the Quarterly Report on Form 10-Q filed on November 2, 2012 (File No. 000-29617)).
10.5	Office Lease between MRTP, LLC and Intersil Corporation, dated March 1, 2010 (incorporated by reference to Exhibit 10 to the Quarterly Report on Form 10-Q filed on May 7, 2010 (File No. 000-29617)).
10.6	First Amendment to Office Lease by and between Intersil Corporation and SPUS6 Murphy Crossing, LP (as successor-in-interest to MRTP, LLC), dated as of December 22, 2015 (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on December 24, 2015 (File No. 000-29617)).
10.7	Consent Agreement between Intersil Corporation and the Office of Defense Trade Controls Compliance ("DTCC"), Bureau of Political-Military Affairs, U.S. Department of State, dated June 16, 2014 (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on June 18, 2014 (File No. 000-29617)).
10.8+	Intersil Corporation Amended and Restated 2008 Equity Compensation Plan (incorporated by reference to Exhibit A to the Definitive Proxy Statement on Form DEF 14A filed on March 14, 2014 (File No. 000-29617)).
10.9+	Intersil Corporation Amended and Restated 2008 Equity Compensation Plan Terms and Conditions RSU Award (effective August 1, 2015) (incorporated by reference to Exhibit 10.8 to the Annual Report on Form 10-K filed on February 12, 2016 (File No. 000-29617)).
10.10+	Intersil Corporation Employee Stock Purchase Plan, as amended (incorporated by reference to Exhibit B to the Definitive Proxy Statement on Form DEF 14A filed on March 14, 2014 (File No. 000-29617)).
10.11+	Intersil Corporation Executive Incentive Plan (incorporated by reference to Exhibit C to the Definitive Proxy Statement on Form DEF 14A filed on March 14, 2014 (File No. 000-29617)).
10.12+	Intersil Corporation 2008 Equity Compensation Plan Terms and Conditions One-Year Cliff, effective December 9, 2012, in favor of James Diller (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on December 13. 2012 (File No. 000-29617)).
10.13+	Employment Agreement between Intersil Corporation and Necip Sayiner, dated March 11, 2013 (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on March 12, 2013 (File No. 000-29617)).
10.14+	Executive Change in Control Severance Benefits Agreement between Intersil Corporation and Necip Sayiner, dated March 14, 2013 (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K filed on March 12, 2013 (File No. 000-29617)).

25

10.15+	Intersil Corporation 2008 Equity Compensation Plan Terms and Conditions One-Year Cliff, effective April 1, 2013, in favor of Necip Sayiner (incorporated by reference to Exhibit 10.3 to the Current Report on Form 8-K filed on March 12, 2013 (File No. 000-29617)).
10.16+	Separation Agreement and General Release between Intersil Corporation and Gerry Edwards, dated January 26, 2015 (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on January 27, 2015 (File No. 000-29617)).
10.17+	Agreement and General Release between Thomas Tokos and Intersil Corporation, dated as of November 9, 2015 (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on November 9, 2015 (File No. 000-29617)).
10.18	Form of Intersil Corporation Indemnity Agreement (incorporated by reference to Exhibit 10.17 to the Quarterly Report on Form 10-Q filed on April 26, 2016 (File No. 000-29617)).
10.19+	Form of Amended and Restated Executive Change in Control Severance Benefits Agreement (incorporated by reference to Exhibit 10.18 to the Annual Report on Form 10-K filed on February 12, 2016 (File No. 000-29617)).
31.1	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.**
31.2	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	Certifications 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.**
101.INS	XBRL Instance document**
101.SCH	XBRL Taxonomy Extension Schema**
101.CAL	XBRL Taxonomy Extension Calculation Linkbase**
101.DEF	XBRL Taxonomy Extension Definition Linkbase**
101.LAB	XBRL Taxonomy Extension Label Linkbase**
101.PRE	XBRL Taxonomy Extension Presentation Linkbase**
*	Certain exhibits and schedules have been omitted pursuant to Item 601(b)(2) of Regulation S-K, and Intersil agrees to furnish supplementally to the SEC a copy of any omitted exhibits or schedules upon request of the SEC.
**	Filed or furnished, as required, herewith.
+	Indicates management contract or compensatory plan or arrangement in which executive officers of the Company are eligible to participate.

Attached as Exhibit 101 to this report are the following, formatted in XBRL (Extensible Business Reporting Language): (i) Unaudited Condensed Consolidated Statements of Operations,  (ii) Unaudited Condensed Consolidated Statements of Comprehensive Income (Loss), (iii) Unaudited Condensed Consolidated Balance Sheets, (iv) Unaudited Condensed Consolidated Statements of Cash Flows, and (v) Notes to Unaudited Condensed Consolidated Financial Statements.

26

SIGNATURES

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

INTERSIL CORPORATION

(Registrant)

/s/ Richard Crowley

Richard Crowley

Senior Vice President, Chief Financial Officer and Treasurer

Date: October 25, 2016

27

EX-31.1

Exhibit 31.1

CERTIFICATION

I, Necip Sayiner, certify that:

1) I have reviewed this quarterly report on Form 10-Q of Intersil Corporation;

2) Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

3) Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4) The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5) The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal controls over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent function):

a) All significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls over financial reporting.

/s/ Necip Sayiner

Necip Sayiner

President, Chief Executive Officer, and Director

Date: October 25, 2016

EX-31.2

Exhibit 31.2

CERTIFICATION

I, Richard Crowley, certify that:

1) I have reviewed this quarterly report on Form 10-Q of Intersil Corporation;

2) Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

3) Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4) The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5) The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal controls over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent function):

a) All significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls over financial reporting.

/s/ Richard Crowley

Richard Crowley

Senior Vice President, Chief Financial Officer and Treasurer

Date: October 25, 2016

EX-32

Exhibit 32

CERTIFICATIONS

Each of the undersigned hereby certifies, for the purposes of Section 1350 of Title 18 of the United States Code, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, in their capacity as an officer of Intersil Corporation (“Intersil”), that the quarterly report on Form 10-Q of Intersil for the quarterly period ended September 30, 2016, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that the information contained in such report fairly presents, in all material respects, the financial condition and results of operation of Intersil.  This written statement is being furnished to the Securities and Exchange Commission as an exhibit to such Form 10-Q.

Date:  October 25, 2016	By:	/s/ Necip Sayiner
		Necip Sayiner President, Chief Executive Officer, and Director
Date:  October 25, 2016	By:	/s/ Richard Crowley
		Richard Crowley Senior Vice President, Chief Financial Officer and Treasurer

XML

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2016	Oct. 21, 2016
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2016
Document Fiscal Year Focus	2016
Document Fiscal Period Focus	Q3
Trading Symbol	ISIL
Entity Registrant Name	INTERSIL CORP/DE
Entity Central Index Key	0001096325
Current Fiscal Year End Date	--12-30
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		136,879,920

XML

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Oct. 02, 2015	Sep. 30, 2016	Oct. 02, 2015
Condensed Consolidated Statements Of Operations [Abstract]
Revenue	$ 139,045	$ 128,396	$ 402,333	$ 394,990
Cost of revenue	54,825	52,338	162,565	160,113
Gross profit	84,220	76,058	239,768	234,877
Operating costs and expenses:
Research and development	31,315	31,252	99,204	96,367
Selling, general and administrative	22,782	23,532	71,579	74,179
Amortization of purchased intangibles	2,669	3,777	9,064	13,364
Restructuring and related costs	14		13,522
Provision for the TAOS litigation			1,255	81,100
Merger-related expenses	4,639		4,639
Operating income (loss)	22,801	17,497	40,505	(30,133)
Interest expense and other	(340)	(75)	(1,359)	(835)
Gain (loss) on investments, net	454	(140)	666	562
Income (loss) before taxes	22,915	17,282	39,812	(30,406)
Income tax expense (benefit)	7,032	298	10,789	(16,290)
Net income (loss)	$ 15,883	$ 16,984	$ 29,023	$ (14,116)
Earnings (loss) per share
Basic	$ 0.12	$ 0.13	$ 0.22	$ (0.11)
Diluted	0.11	0.13	0.21	(0.11)
Cash dividends declared per common share	$ 0.12	$ 0.12	$ 0.36	$ 0.36
Weighted average common shares outstanding:
Basic	135,908	132,133	134,617	131,521
Diluted	138,760	132,445	136,668	131,521

XML

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Oct. 02, 2015	Sep. 30, 2016	Oct. 02, 2015
Condensed Consolidated Statements Of Comprehensive Income (Loss) [Abstract]
Net income (loss)	$ 15,883	$ 16,984	$ 29,023	$ (14,116)
Currency translation adjustments, net	825	(216)	234	(1,024)
Comprehensive income (loss)	$ 16,708	$ 16,768	$ 29,257	$ (15,140)

XML

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Sep. 30, 2016	Jan. 01, 2016
Current Assets:
Cash and cash equivalents	$ 284,047	$ 247,403
Trade receivables, net of reserves ($15,753 as of September 30, 2016 and $14,541 as of January 1, 2016)	61,628	42,684
Inventories	68,277	65,334
Prepaid expenses and other current assets	9,332	7,176
Assets held-for-sale	4,901
Income taxes receivable	4,529	7,584
Total Current Assets	432,714	370,181
Non-current Assets:
Property, plant & equipment, net of accumulated depreciation ($243,051 as of September 30, 2016 and $273,352 as of January 1, 2016)	51,572	71,044
Purchased intangibles, net of accumulated amortization ($54,189 as of September 30, 2016 and $77,225 as of January 1, 2016)	23,443	32,507
Goodwill	571,770	571,770
Deferred income tax assets	59,385	63,139
Other non-current assets	31,255	29,977
Total Non-current Assets	737,425	768,437
Total Assets	1,170,139	1,138,618
Current Liabilities:
Trade payables	21,912	23,382
Accrued compensation	35,289	31,662
Other accrued expenses and liabilities	26,073	17,251
Deferred income	18,077	14,482
Income taxes payable	3,301	3,270
Provision for TAOS litigation	78,317	77,988
Total Current Liabilities	182,969	168,035
Non-current Liabilities:
Income taxes payable	1,653	1,609
Other non-current liabilities	10,792	14,225
Total Non-current Liabilities	12,445	15,834
Stockholders' Equity:
Preferred stock, $0.01 par value, 2 million shares authorized; no shares issued or outstanding
Class A common stock, $0.01 par value, voting; 600 million shares authorized; 136,690,919 shares issued and outstanding as of September 30, 2016 and 132,728,391 shares issued and outstanding as of January 1, 2016	1,367	1,327
Additional paid-in capital	1,550,013	1,559,334
Accumulated deficit	(575,914)	(604,937)
Accumulated other comprehensive loss	(741)	(975)
Total Stockholders' Equity	974,725	954,749
Total Liabilities and Stockholders' Equity	$ 1,170,139	$ 1,138,618

XML

CONDENSED CONSOLIDATED BALANCE SHEETS (PARENTHETICAL) - USD ($) $ in Thousands	Sep. 30, 2016	Jan. 01, 2016
Condensed Consolidated Balance Sheets [Abstract]
Trade receivables, reserves	$ 15,753	$ 14,541
Property, plant and equipment, accumulated depreciation	243,051	273,352
Purchased intangibles, accumulated amortization	$ 54,189	$ 77,225
Preferred stock, par value	$ 0.01	$ 0.01
Preferred stock, shares authorized	2,000,000	2,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Class A common stock, par value	$ 0.01	$ 0.01
Class A common stock, shares authorized	600,000,000	600,000,000
Class A common stock, shares issued	136,690,919	132,728,391
Class A common stock, shares outstanding	136,690,919	132,728,391

XML

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2016	Oct. 02, 2015
Operating Activities
Net income (loss)	$ 29,023	$ (14,116)
Adjustments to reconcile net income (loss) to net cash flows from operating activities:
Depreciation	9,949	11,728
Amortization of intangibles	9,064	13,364
Equity-based compensation	20,167	18,010
Deferred income taxes	2,464	(4,038)
Excess tax benefit received on exercise of stock options	(1,742)	(862)
Loss on sale of fixed assets	50	16
Non-cash portion of restructuring charges	9,998
Gain on investments	(205)	(1,048)
Changes in operating assets and liabilities:
Trade receivables	(18,944)	4,773
Inventories	(2,943)	4,804
Prepaid expenses and other current assets	(2,156)	2,145
Trade payables and other liabilities	3,205	68
Provision for the TAOS litigation	329	78,014
Income taxes	4,490	(57,516)
Other long-term assets / liabilities, net	5,386	30,474
Net cash flows provided by operating activities	68,135	85,816
Investing Activities
Cash paid for acquisition, net of cash acquired		(15,948)
Proceeds from investments	935	1,048
Purchase of property, plant and equipment	(6,504)	(11,751)
Advance received for planned disposition of 200mm line	2,422
Net cash flows used in investing activities	(3,147)	(26,651)
Financing Activities
Proceeds, net of taxes withheld, from equity-based awards	21,695	8,793
Dividends paid	(51,203)	(48,852)
Net cash flows used in financing activities	(29,508)	(40,059)
Effect of exchange rates on cash and cash equivalents	1,164	(1,424)
Net change in cash and cash equivalents	36,644	17,682
Cash and cash equivalents at the beginning of the period	247,403	211,216
Cash and cash equivalents at the end of the period	$ 284,047	$ 228,898

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Basis Of Presentation

9 Months Ended

Sep. 30, 2016

Basis Of Presentation [Abstract]

Basis Of Presentation

Note 1 — Basis of Presentation

Intersil Corporation (“Intersil,” which may also be referred to as “we,” “us,” or “our”) is a leading provider of innovative power management and precision analog semiconductor solutions. Our products address some of the largest markets within the industrial and infrastructure, and consumer and computing end markets.

In our opinion, these unaudited condensed consolidated financial statements include all adjustments necessary to present fairly, in all material respects, the financial position, results of operations, and cash flows for all periods presented. We prepared these unaudited condensed consolidated financial statements in accordance with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X, using management estimates where necessary. We derived the January 1, 2016 condensed consolidated balance sheet from our audited consolidated year-end financial statements. You should read this interim report in conjunction with our Annual Report on Form 10-K for the year ended January 1, 2016.

We utilize a 52/53 fiscal week year, ending on the nearest Friday to December 31.  Fiscal years 2016 and 2015, are and were, respectively, 52-week years. Quarterly and annual periods vary from exact calendar quarters and years.

Pending Merger with Renesas Electronics Corporation

On September 12, 2016,  we entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Renesas Electronics Corporation, a Japanese corporation (“Renesas”). The Merger Agreement provides that, upon the terms and subject to the satisfaction or valid waiver of the conditions set forth in the Merger Agreement, a wholly owned subsidiary of Renesas will merge with and into Intersil (the “Merger”), with Intersil continuing as the surviving corporation and a direct wholly owned subsidiary of Renesas. At the effective time of the Merger, each outstanding share of Class A common stock, par value $0.01 per share, of Intersil(“Class A common stock” or “common stock”), other than shares held by stockholders who have validly exercised their appraisal rights under Delaware law, and certain shares owned by Intersil, Renesas and their subsidiaries, will be automatically converted into the right to receive $22.50 in cash, without interestand less any applicable withholding taxes, plus, if applicable, the amount of any dividend which has a record date prior to the closing date of the Merger but remains unpaid as of the closing date of the Merger.

The consummation of the merger is conditioned on the receipt of the approval of our stockholders, as well as the satisfaction of other customary closing conditions, including domestic and foreign regulatory approvals and performance in all material respects by each party of its obligations under the Merger Agreement. Consummation of the Merger is not subject to a financing condition.Closing of the merger is expected in the first half of 2017.

The Merger Agreement contains certain termination rights for us and Renesas, including if a governmental body prohibits the Merger or if the Merger is not consummated before July 12, 2017. Upon termination of the Merger Agreement under specified circumstances, we or Renesas will be required to pay the other party a termination fee of $96.5 million.

We recorded transaction-related costs of $4.6 million, principally for outside financial advisory, legal, and related fees and expenses associated with the pending acquisition, in the quarter ended September 30, 2016. Additional transaction-related costs are expected to be incurred through the closing of the Merger.

Recent Accounting Guidance Not Yet Adopted

In January 2016, the Financial Accounting Standards Board, or FASB, issued Accounting Standard update, or ASU, 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities, which provides guidance for the recognition, measurement, presentation, and disclosure of financial assets and liabilities. This ASU will be effective for us beginning in the first quarter of 2018. We are currently evaluating the impact of the adoption of this ASU on our financial statements.

In February 2016, FASB issued ASU 2016-02, Leases (Topic 842), which supersedes existing guidance on accounting for leases in “Leases (Topic 840)” and generally requires all leases to be recognized in the consolidated balance sheet. ASU 2016-02 is effective for annual and interim reporting periods beginning after December 15, 2018; early adoption is permitted. The provisions of ASU 2016-02 are to be applied using a modified retrospective approach. We are currently evaluating the impact of the adoption of this guidance on our consolidated financial statements.

In March 2016, FASB issued ASU 2016-09, Improvements to Employee Share-Based Payment Accounting. This ASU affects entities that issue equity-based payment awards to their employees. The ASU is designed to simplify several aspects of accounting for equity-based payment award transactions, which include income tax consequences, classification of awards as either equity or liabilities, classification on the statement of cash flows, and forfeiture rate calculations. ASU 2016-09 will become effective for us beginning in the first quarter of 2017; early adoption is permitted. We are currently evaluating the impact of the adoption of this guidance on our consolidated financial statements.

In April 2016, FASB issued an update to ASU 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing.  The amendments in this update clarify the following two aspects of Topic 606: identifying performance obligations and the licensing implementation guidance, while retaining the related principles for those areas. We are currently evaluating the impact of the adoption of this guidance on our consolidated financial statements.

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Significant Accounting Policies

9 Months Ended

Sep. 30, 2016

Significant Accounting Policies [Abstract]

Significant Accounting Policies

Note 2 — Significant Accounting Policies

The accompanying unaudited condensed consolidated financial statements reflect all normal recurring adjustments necessary to present fairly the financial position, results of operations, and cash flows for the interim periods, but are not necessarily indicative of the results of operations to be anticipated for the full year ending December 30, 2016.

There have been no changes to our significant accounting policies described in our Annual Report on Form 10-K for the year ended January 1, 2016 that have had a material impact on our unaudited condensed consolidated financial statements and related notes.

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Fair Value Measurements

9 Months Ended

Sep. 30, 2016

Fair Value Measurements [Abstract]

Fair Value Measurements

Note 3 — Fair Value Measurements

We determine the fair value of our assets and liabilities utilizing three levels of inputs, focusing on the most observable level of inputs when available. Level 1 inputs use quoted prices in active markets which are unadjusted and accessible as of the measurement date for identical, unrestricted assets or liabilities. Level 2 uses quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly. Level 3 uses prices or valuations that require inputs that are unobservable and significant to the overall fair value measurement.

We determine fair value on the following assets using these input levels (in thousands):

	Fair value as of September 30, 2016 using:
	Total		Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)
Assets
Other non-current assets:
Deferred compensation investments	$	9,917	$	87	$	9,830
Total assets measured at fair value	$	9,917	$	87	$	9,830
	Fair value as of January 1, 2016 using:
		Total	Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)
Assets
Other non-current assets:
Deferred compensation investments	$	9,855	$	400	$	9,455
Total assets measured at fair value	$	9,855	$	400	$	9,455

There were notransfers into or out of Level 1, Level 2, or Level 3 financial assets during the three quarters ended September 30, 2016 and October 2, 2015.

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Inventories

9 Months Ended

Sep. 30, 2016

Inventories [Abstract]

Inventories

Note 4 — Inventories

Inventories are summarized below (in thousands):

	As of		As of
	September 30, 2016		January 1, 2016
Finished products	$	18,139	$	22,522
Work in process		46,355		38,238
Raw materials		3,783		4,574
Total inventories	$	68,277	$	65,334

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Goodwill And Purchased Intangibles

9 Months Ended

Sep. 30, 2016

Goodwill And Purchased Intangibles [Abstract]

Goodwill And Purchased Intangibles

Note 5 — Goodwill and Purchased Intangibles

Goodwill — We perform our annual test of impairment in our fourth quarter, or if indicators of impairment exist, in interim periods. Factors that could trigger a goodwill impairment review include adverse legal factors, adverse changes in our business climate, unanticipated competition, regulatory issues, loss of key personnel, significant changes or losses in business operations, weakness in our industry, downward revisions to forecasts for future periods, restructuring plans, and declines in market capitalization below equity book value.

There were no impairment triggers noted during the three quarters ended September 30, 2016.

Purchased Intangibles —  Our intangible assets consisted of the following (in thousands):

	As of September 30, 2016
		Definite-lived: developed technologies		Definite-lived: other		Total purchased intangibles
Gross carrying amount	$	63,032	$	14,600	$	77,632
Accumulated amortization		42,151		12,038		54,189
Purchased intangibles, net	$	20,881	$	2,562	$	23,443
		As of January 1, 2016
		Definite-lived: developed technologies		Definite-lived: other		Total purchased intangibles
Gross carrying amount	$	63,032	$	46,700	$	109,732
Accumulated amortization		36,065		41,160		77,225
Purchased intangibles, net	$	26,967	$	5,540	$	32,507

Substantially all of our purchased intangibles consist of multiple elements of developed technology which have estimated useful lives of five to seven years. Other purchased intangibles consist primarily of customer relationships and other identifiable assets, which have an estimated useful life of three to seven years.No trigger requiring an impairment review was noted during the three quarters ended September 30, 2016.

Expected remaining amortization expense by year to the end of the current amortization schedule is as follows (in thousands):

To be recognized in:
2016	$	2,670
2017		9,480
2018		4,362
2019		1,890
2020 and thereafter		5,041
Total expected amortization expense	$	23,443

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Income Taxes

9 Months Ended

Sep. 30, 2016

Income Taxes [Abstract]

Income Taxes

Note 6 — Income Taxes

Our income tax expense was $7.0 million, which equates to an effective tax rate of 30.7%, for the quarter ended September 30, 2016 compared to an income tax expense of $0.3 million, which equated to an effective tax rate of 1.7%, for the quarter ended October 2, 2015.  Our income tax expense was $10.8 million, which equates to an effective tax rate of 27.1%, for the three quarters ended September 30, 2016 compared to an income tax benefit of $16.3 million, which equated to a negative effective tax rate of 53.6%, for the three quarters ended October 2, 2015.

Our effective tax rate for the quarter ended September 30, 2016 differs from the 35% U.S. federal statutory income tax rate due primarily to income earned in jurisdictions where the tax rate is lower than the United States, principally in Malaysia, state income taxes, U.S. research and development tax credits, U.S. domestic production activity and other permanent non-deductible items.  Our effective tax rate was negative for the quarter ended October 2, 2015, primarily due to losses in foreign jurisdictions related to the TAOS litigation.  The $81.1 million accrual recorded for the TAOS litigation was treated as an unusual and discrete item for the quarter, for which the future tax benefit was $1.2 million, and the loss was allocated primarily to our Malaysian operations.  Additionally, the three quarters ended October 2, 2015 included a net tax benefit of $27.7 million related to the release of a reserve for an uncertain tax position for which the statutes of limitation in certain jurisdictions expired during the period.

As of September 30, 2016, we have no material changes resulting from examinationsin major tax jurisdictions.  Accordingly, we have no material changes to our unrecognized tax benefits and related interest and penalty since the year ended January 1, 2016.  We do not believe that there will be a significant increase or decrease in unrecognized tax benefits within the next twelve months.

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Long-Term Debt

9 Months Ended

Sep. 30, 2016

Long Term Debt [Abstract]

Long-Term Debt

Note 7 — Long-Term Debt

On July 19, 2016, we entered into an amended and restated five-year, $225.0 million revolving credit facility, or the Amended Facility, that matures on July 19, 2021 and is payable in full upon maturity. The Amended Facility replaces our five-year, $325.0 million revolving credit facility, or the Facility, that would have matured on September 1, 2016. Under the Amended Facility, $50.0 million is available for the issuance of standby letters of credit, $30.0 million is available as swing line loans, and $70.0 million is available for multicurrency borrowings. Amounts repaid under the Amended Facility may be re-borrowed. We didnot have any outstanding borrowings against the Amended Facility as of September 30, 2016 or against the Facility as of January 1, 2016.

Standby Letters of Credit — We issue standby letters of credit during the ordinary course of business through major financial institutions as required for certain regulatory matters. We had outstanding letters of credit totaling $1.1 million and $1.3 million as of September 30, 2016 and January 1, 2016, respectively. The standby letters of credit are secured by pledged deposits.

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Common Stock And Dividends

9 Months Ended

Sep. 30, 2016

Common Stock And Dividends [Abstract]

Common Stock And Dividends

Note 8 — Common Stock and Dividends

Class A Common Stock — Share activity for Class A common stock since January 1, 2016 (in thousands):

Beginning balance as of January 1, 2016	132,728
Shares issued under stock plans, net of shares withheld for taxes	3,963
Ending balance as of September 30, 2016	136,691

Dividends —In April 2016 and July 2016, our Board of Directors declared quarterly cash dividends of $0.12per share of common stock. In October 2016, our Board of Directors declared a dividend of $0.12 per share of common stock payable on or about November 28, 2016, to stockholders of record as of the close of business on November 15, 2016. Dividends paid during the three quarters ended September 30, 2016 and October 2, 2015 totaled $51.2 million and $48.9 million, respectively.

Pursuant to the terms of the Merger Agreement, we are not permitted to declare or pay any dividends on our outstanding shares of capital stock, except (i) a quarterly cash dividend in an amount not in excess of $0.12 per share of Common Stock, consistent with past practice and (ii) any dividends or dividend equivalent rights with respect to any vested equity awards.

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Equity-Based Compensation

9 Months Ended

Sep. 30, 2016

Equity-Based Compensation [Abstract]

Equity-Based Compensation

Note 9 — Equity-based Compensation

The following table represents the weighted-average fair value compensation cost per share of restricted and deferred stock awards (“Awards”) granted:

	Three Quarters Ended
	September 30, 2016		October 2, 2015
Awards	$	13.86	$	11.26

Equity-based Compensation Summary — The following table presents information about stock options (“Options”) and Awards as of and activity for the three quarters ended September 30, 2016:

	Options				Awards	Aggregate information
	Shares	Weighted-average price		Weighted-average remaining contract lives	Shares	Aggregate intrinsic value		Aggregate unrecognized compensation cost
	(in thousands)		(per share)	(in years)	(in thousands)		(in thousands)		(in thousands)
Outstanding as of January 1, 2016	4,013	$	12.02	2.2	5,509	$	75,432	$	29,042
Granted (1)	-		-	-	2,008
Exercised (2)	(2,198)		12.01	1.0	(1,932)
Canceled	(120)		16.30	0.2	(463)
Outstanding as of September 30, 2016	1,695	$	11.72	2.2	5,122	$	129,623	$	33,897
As of September 30, 2016:
Exercisable/vested (2)	1,619	$	11.67	2.0	121	$	19,264
Vested and expected to vest	1,695	$	11.72	2.2	5,122	$	129,623

(1) Grants include 345,543 MSU Awards issued during the three quarters ended September 30, 2016.

(2) Awards exercised are those that are fully vested and have been delivered to the recipients as a taxable event due to an elected deferral, available in the case of deferred stock units. Deferred stock units for which the deferral is elected timely are vested but still outstanding as Awards. Total un-issued shares related to deferred stock units as of September 30, 2016 were 121,000shares as shown in the Awards column as Exercisable/vested.

Additional Disclosures	Three Quarters Ended
	September 30, 2016		October 2, 2015
	(in thousands)
Shares issued under the employee stock purchase plan		396		537
Aggregate intrinsic value of stock options exercised	$	8,484	$	1,919

Financial Statement Effects and Presentation — The following table shows total equity-based compensation expense for the periods indicated that are included in our unaudited condensed consolidated statements of operations (in thousands):

	Quarter Ended				Three Quarters Ended
	September 30, 2016		October 2, 2015		September 30, 2016		October 2, 2015
By statement of operations line item
Cost of revenue	$	207	$	304	$	949	$	1,132
Research and development		2,779		2,390		9,716		7,799
Selling, general and administrative		2,577		2,871		9,502		9,079
Total	$	5,563	$	5,565	$	20,167	$	18,010
By stock type
Stock options	$	9	$	90	$	57	$	574
Restricted and deferred stock awards		5,342		5,250		19,389		16,613
Employee stock purchase plan		212		225		721		823
Total	$	5,563	$	5,565	$	20,167	$	18,010

Market based Grants — As of September 30, 2016, we had Options and Awards outstanding that include service conditions as well as market conditions related to total stockholder return. Under the terms of the agreements, participants may receive from 0 - 300% of the original grant. Equity-based compensation cost is measured at the grant date, based on the fair value of the number of shares ultimately expected to vest, and is recognized as an expense, on a straight line basis, over the requisite service period:

	September 30, 2016
	Options		Awards
	(in thousands)
Market-based units outstanding		-		961
Maximum shares that could be issued assuming the highest level of performance		-		2,163
Market-based shares expected to vest / vested		-		1,371
Amount to be recognized as compensation cost over the performance period	$	-	$	3,410

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Earnings (Loss) Per Share

9 Months Ended

Sep. 30, 2016

Earnings (Loss) Per Share [Abstract]

Earnings (Loss) Per Share

Note 10 —Earnings (Loss) Per Share

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

	Quarter Ended				Three Quarters Ended
	September 30, 2016		October 2, 2015			September 30, 2016		October 2, 2015
Numerator:
Net income (loss) to common stockholders	$	15,883	$	16,984		$	29,023	$	(14,116)
Denominator:
Denominator for basic earnings per share—weighted average common shares		135,908		132,133			134,617		131,521
Effect of stock options and awards		2,852		312			2,051		-
Denominator for diluted earnings per share—adjusted weighted average common shares		138,760		132,445			136,668		131,521
Earnings per share:
Basic	$	0.12	$	0.13		$	0.22	$	(0.11)
Diluted	$	0.11	$	0.13		$	0.21	$	(0.11)
Anti-dilutive shares not included in the above calculations:
Awards		-		-			-		-
Options		-		3,405			-		1,083

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Segment Information

9 Months Ended

Sep. 30, 2016

Segment Information [Abstract]

Segment Information

Note 11 — Segment Information

We report our results in one reportable segment. We design and develop innovative power management and precision analog integrated circuits, or ICs. Our chief executive officer is our chief operating decision maker.

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Legal Matters And Indemnifications

9 Months Ended

Sep. 30, 2016

Legal Matters And Indemnifications [Abstract]

Legal Matters And Indemnifications

Note 12 — Legal Matters and Indemnifications

Other than as stated in this Note 12, there were no material changes in our legal matters and indemnifications, from those disclosed in our Annual Report on Form 10-K for the year endedJanuary 1, 2016.

TAOS litigation

Texas Advanced Optoelectronic Solutions, Inc., or TAOS, named us as a defendant in a lawsuit filed on November 25, 2008 in the United States District Court for the Eastern District of Texas. In this action, TAOS alleged four claims consisting of patent infringement, breach of contract, trade secret misappropriation, and tortious interference with a business relationship. On March 6, 2015, the jury found in favor of TAOS on each of the four claims.  After certain post-trial motions were heard, the court entered a final judgment on June 9, 2016 against us in the amount of $77.3 million plus court costs and a continuing royalty on certain products found to be infringing TAOS’ patent.  On June 10, 2016, we filed a notice of appeal; TAOS filed a notice of cross-appeal. Our opening brief is due to be filed on October 28, 2016.

As a consequence of the jury’s verdict, during the quarter ended April 3, 2015, we recorded a provision of $81.1 million related to this matter, including pre-judgment interest and estimated legal costs. As a result of the entry of the June 9, 2016 judgment, we increased our accrual for this matter by $1.3 million in the quarter ended July 1, 2016. Given the unpredictable nature of this type of litigation and because the outcome remains subject to appeal, the ultimate impact of this lawsuit may be materially different from our estimate.

Environmental matter

In correspondence dated September 28, 2015, counsel for Thomson Consumer Electronics Television Taiwan, Ltd., or TCETVT, notified us that it reserved its right to seek indemnification from us for any and all costs, fees, and expenses incurred as a result of a toxic tort class action lawsuit filed in Taiwan against TCETVT and others.  The lawsuit pertains to alleged injuries resulting from groundwater contamination at a manufacturing facility in Taiwan currently owned by TCETVT, which was previously owned and operated by predecessors, including General Electric, or GE, and Harris Corporation, or Harris, of our Taiwan subsidiary, Intersil Ltd. In the September 28 correspondence, TCETVT also informed us that the Taipei District Court entered a judgment of $18.5 million in the lawsuit against TCETVT, which judgment has been appealed. In addition, TCETVT informed us that they have incurred costs of $11.2 million in defending against the lawsuit through September 1, 2015.  We were also advised by TCETVT that additional claimants made be added to the lawsuit and TCETVT believes that if such additional claimants were successfully added, the resulting liability could be as high as $200.0 million.  In its September 28, 2015 letter, TCETVT informed us that it reserved its right to seek indemnification from us for any and all costs associated with the remediation of the contamination on that site and nearby areas. TCETVT claims they have incurred $15.9 million in remediation-related costs through September 1, 2015. 

By letter dated June 22, 2016 from counsel for GE and by letter dated July 14, 2016 from counsel for TCETVT, we were advised that in April 2016 the Taiwan Supreme Court denied the request to add additional claimants to the existing lawsuit and that, in response to the denial, the plaintiffs filed a new, but related lawsuit, claiming damages on behalf of 1,147 new claimants as well as adding additional sites at which the toxic torts were alleged to have occurred, such that the resulting liability could be as high as an additional $225.0 million.

Under the terms of the 1999 Master Transaction Agreement between Harris and Intersil, whereby Harris transferred its semiconductor business assets to us, environmental liabilities (including those associated with Harris’ Taiwan semiconductor operations) were expressly retained by Harris.  The Master Transaction Agreement also requires Harris to indemnify us for any and all costs relating to those retained environmental liabilities.  We have denied liability to TCETVT for the costs associated with the lawsuit as well as the costs associated with the remediation of the contamination on the site. We have also submitted a claim notice to Harris seeking defense and indemnification from Harris under the Master Transaction Agreement for any and all claims made by TCETVT in connection with this matter.  Harris has not yet agreed to indemnify us for the liability asserted by TCETVT.

Export Compliance Settlement

A portion of our activities are subject to export control regulations administered by the U.S. Department of State, or DOS, under the U.S. Arms Export Control Act, or AECA, and the International Traffic in Arms Regulations, or ITAR.  In September 2010, in response to a request for information, we disclosed to the Directorate of Defense Trade Controls, or DTCC, information concerning export activities for the years of 2005 through 2010.  ITAR gives the DOS authority to impose civil penalties and other administrative sanctions for violations, including debarment from engaging in the exporting of defense articles.  In June of 2013, the DTCC notified us of potential ITAR violations and that it was considering pursuing administrative proceedings against us.  On June 16, 2014, we entered into a Consent Agreement with the DTCC for the purpose of resolving the potential ITAR violations.  The Consent Agreement contained a two-year term and provided for: (i) payment of an aggregate civil penalty of $10.0 million, $4.0 million of which was suspended and eligible for an offset credit based on verified expenditures for certain past and future remedial compliance measures; (ii) the appointment of an Internal Special Compliance Official to oversee compliance with the Consent Agreement and U.S. export control regulations, in general; (iii) two external audits of our ITAR compliance program; and (iv) continued implementation of ongoing remedial compliance measures and additional remedial compliance measures related to automated systems and ITAR compliance policies, procedures, and training.  In connection with the Consent Agreement, we estimated and recorded a $6.0 million charge in the quarter ended October 4, 2013 and an additional $4.0 million charge in the quarter ended April 4, 2014, when the amount of the penalty was determined.  The $6.0 million portion of the settlement, which was not subject to suspension, was paid in two installments of $3.0 million each, in June 2014 and June 2015.  On March 29, 2016, we notified the DTCC that we had met all of the requirements under the Consent Agreement, as required by Paragraph 30 of the Consent Agreement.  On June 17, 2016, we notified the DTCC that the investments we had made in our export control compliance program,which included additional staffing, ongoing implementation of a new software system, employee training, and establishment of a regular compliance audit program and corrective action process, were eligible for credit against the entire amount of the suspended portion of the settlement amount.  On June 20, 2016, the DTCC notified us that the expenses we incurred were eligible for and credited against the entire $4.0 million suspended payment.  Finally, on June 21, 2016, the DTCC notified us that it had closed the Consent Agreement based, in part, on DTCC’s conclusion that we had fulfilled the terms of the Consent Agreement.

We are currently party to various claims and legal proceedings, including those discussed above. When we believe that a loss is probable and the amount of the loss can be reasonably estimated, we recognize the estimated amount of the loss. We include legal costs in the estimate of losses. As additional information becomes available, we reassess any potential liability related to these matters and, if necessary, revise the estimates.

We do not believe, based on currently available facts and circumstances that the ultimate outcome of these matters, individually and in the aggregate, will have a material adverse effect on our financial position or overall trends in results of our operations in excess of amounts already accrued. However, litigation is subject to inherent uncertainties and unfavorable rulings could occur, including an award of substantial monetary damages or issuance of an injunction prohibiting us from selling one or more products. From time-to-time, we may enter into confidential discussions regarding the potential settlement of such lawsuits. Any settlement of pending litigation could require us to incur substantial costs and other ongoing expenses, such as future royalty payments in the case of an intellectual property dispute. There can be no assurances that the actual amounts required to satisfy any liabilities arising from the matters described above will not have a material adverse effect on our results of operations, financial position, or cash flows. 

We incur indemnification obligations for intellectual property infringement claims related to our products. We accrue for known indemnification issues and estimate unidentified issues based on historical activity.

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Assets Held For Sale And Restructuring And Related Costs

9 Months Ended

Sep. 30, 2016

Assets Held For Sale And Restructuring And Related Costs [Abstract]

Assets Held For Sale And Restructuring And Related Costs

Note 13 — Assets held for sale and Restructuring and Related Costs

On June 29, 2016, we began implementation of a plan to decommission our 200 millimeter wafer fabrication line in Palm Bay, Florida or the 200mm Line.  The investment in the 200mm Line was made approximately four years ago to address the need to extend the production life of certain products manufactured at a third party wafer foundry when the supply commitments from the supplier for these products were set to expire at the end of 2014.  In July 2015, the supplier was acquired and the acquirer recently decided to continue long-term support for the manufacturing of these products.  To avoid the future capital investment anticipated to be required for the 200mm Line, we determined it would be beneficial to our long-term cost structure to source the manufacturing for these products from this supplier and decommission our 200mm Line. Due to this shift in manufacturing to an outside provider, we recorded an impairment charge of $9.9 million during the quarter ended July 1, 2016 on these long-lived assets related to the 200mm Line. The impairment charge was calculated as the excess of the assets’ carrying value over their fair value as determined by the market prices of these types of assets. We also recorded impairment charges of $1 million during the quarter ended July 1, 2016 for specific inventory items related to the 200 mm Line which had no alternative use. In addition we recorded $2.5 million of severance and other employee benefit costs in the quarter ended July 1, 2016 related to the decommissioning and other cost reduction actions.

During the quarter ended September 30, 2016, long lived assets (comprising of property, plant and equipment with a net book value of $4.9 million) relating to the 200 mm Line have been classified as assets held for sale. We measure long-lived assets to be disposed of by sale at the lower of carrying amount or fair value less cost to sell. Fair value is determined using quoted market prices or the anticipated cash flows discounted at a rate commensurate with the risk involved. No additional gain or loss was recorded since these assets were reduced to their fair value during the quarter ended July 1, 2016. We have entered into an agreement for sale of these assets and received an advance of $2.5 million. We expect to complete the sale within next twelve months.

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Basis Of Presentation (Policy)

9 Months Ended

Sep. 30, 2016

Basis Of Presentation [Abstract]

Fiscal Period

We utilize a 52/53 fiscal week year, ending on the nearest Friday to December 31.  Fiscal years 2016 and 2015, are and were, respectively, 52-week years. Quarterly and annual periods vary from exact calendar quarters and years.

Recent Accounting Guidance Not Yet Adopted

Recent Accounting Guidance Not Yet Adopted

In January 2016, the Financial Accounting Standards Board, or FASB, issued Accounting Standard update, or ASU, 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities, which provides guidance for the recognition, measurement, presentation, and disclosure of financial assets and liabilities. This ASU will be effective for us beginning in the first quarter of 2018. We are currently evaluating the impact of the adoption of this ASU on our financial statements.

In February 2016, FASB issued ASU 2016-02, Leases (Topic 842), which supersedes existing guidance on accounting for leases in “Leases (Topic 840)” and generally requires all leases to be recognized in the consolidated balance sheet. ASU 2016-02 is effective for annual and interim reporting periods beginning after December 15, 2018; early adoption is permitted. The provisions of ASU 2016-02 are to be applied using a modified retrospective approach. We are currently evaluating the impact of the adoption of this guidance on our consolidated financial statements.

In March 2016, FASB issued ASU 2016-09, Improvements to Employee Share-Based Payment Accounting. This ASU affects entities that issue equity-based payment awards to their employees. The ASU is designed to simplify several aspects of accounting for equity-based payment award transactions, which include income tax consequences, classification of awards as either equity or liabilities, classification on the statement of cash flows, and forfeiture rate calculations. ASU 2016-09 will become effective for us beginning in the first quarter of 2017; early adoption is permitted. We are currently evaluating the impact of the adoption of this guidance on our consolidated financial statements.

In April 2016, FASB issued an update to ASU 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing.  The amendments in this update clarify the following two aspects of Topic 606: identifying performance obligations and the licensing implementation guidance, while retaining the related principles for those areas. We are currently evaluating the impact of the adoption of this guidance on our consolidated financial statements.

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Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2016

Fair Value Measurements [Abstract]

Fair Value Of Financial Assets

	Fair value as of September 30, 2016 using:
	Total		Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)
Assets
Other non-current assets:
Deferred compensation investments	$	9,917	$	87	$	9,830
Total assets measured at fair value	$	9,917	$	87	$	9,830
	Fair value as of January 1, 2016 using:
		Total	Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)
Assets
Other non-current assets:
Deferred compensation investments	$	9,855	$	400	$	9,455
Total assets measured at fair value	$	9,855	$	400	$	9,455

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Inventories (Tables)

9 Months Ended

Sep. 30, 2016

Inventories [Abstract]

Schedule Of Inventories

	As of		As of
	September 30, 2016		January 1, 2016
Finished products	$	18,139	$	22,522
Work in process		46,355		38,238
Raw materials		3,783		4,574
Total inventories	$	68,277	$	65,334

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Goodwill And Purchased Intangibles (Tables)

9 Months Ended

Sep. 30, 2016

Goodwill And Purchased Intangibles [Abstract]

Purchased Intangibles

	As of September 30, 2016
		Definite-lived: developed technologies		Definite-lived: other		Total purchased intangibles
Gross carrying amount	$	63,032	$	14,600	$	77,632
Accumulated amortization		42,151		12,038		54,189
Purchased intangibles, net	$	20,881	$	2,562	$	23,443
		As of January 1, 2016
		Definite-lived: developed technologies		Definite-lived: other		Total purchased intangibles
Gross carrying amount	$	63,032	$	46,700	$	109,732
Accumulated amortization		36,065		41,160		77,225
Purchased intangibles, net	$	26,967	$	5,540	$	32,507

Expected Amortization Expense

To be recognized in:
2016	$	2,670
2017		9,480
2018		4,362
2019		1,890
2020 and thereafter		5,041
Total expected amortization expense	$	23,443

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Common Stock And Dividends (Tables)

9 Months Ended

Sep. 30, 2016

Common Stock And Dividends [Abstract]

Share Activity For Class A Common Stock

Beginning balance as of January 1, 2016	132,728
Shares issued under stock plans, net of shares withheld for taxes	3,963
Ending balance as of September 30, 2016	136,691

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Equity-Based Compensation (Tables)

9 Months Ended

Sep. 30, 2016

Equity-Based Compensation [Abstract]

Summary Of Weighted-Average Fair Value Compensation Cost Per Share Of Awards Granted

	Three Quarters Ended
	September 30, 2016		October 2, 2015
Awards	$	13.86	$	11.26

Equity-Based Compensation Summary

	Options				Awards	Aggregate information
	Shares	Weighted-average price		Weighted-average remaining contract lives	Shares	Aggregate intrinsic value		Aggregate unrecognized compensation cost
	(in thousands)		(per share)	(in years)	(in thousands)		(in thousands)		(in thousands)
Outstanding as of January 1, 2016	4,013	$	12.02	2.2	5,509	$	75,432	$	29,042
Granted (1)	-		-	-	2,008
Exercised (2)	(2,198)		12.01	1.0	(1,932)
Canceled	(120)		16.30	0.2	(463)
Outstanding as of September 30, 2016	1,695	$	11.72	2.2	5,122	$	129,623	$	33,897
As of September 30, 2016:
Exercisable/vested (2)	1,619	$	11.67	2.0	121	$	19,264
Vested and expected to vest	1,695	$	11.72	2.2	5,122	$	129,623

(1) Grants include 345,543 MSU Awards issued during the three quarters ended September 30, 2016.

(2) Awards exercised are those that are fully vested and have been delivered to the recipients as a taxable event due to an elected deferral, available in the case of deferred stock units. Deferred stock units for which the deferral is elected timely are vested but still outstanding as Awards. Total un-issued shares related to deferred stock units as of September 30, 2016 were 121,000shares as shown in the Awards column as Exercisable/vested.

Equity-Based Compensation, Additional Disclosures

Additional Disclosures	Three Quarters Ended
	September 30, 2016		October 2, 2015
	(in thousands)
Shares issued under the employee stock purchase plan		396		537
Aggregate intrinsic value of stock options exercised	$	8,484	$	1,919

Equity-Based Compensation Expense

	Quarter Ended				Three Quarters Ended
	September 30, 2016		October 2, 2015		September 30, 2016		October 2, 2015
By statement of operations line item
Cost of revenue	$	207	$	304	$	949	$	1,132
Research and development		2,779		2,390		9,716		7,799
Selling, general and administrative		2,577		2,871		9,502		9,079
Total	$	5,563	$	5,565	$	20,167	$	18,010
By stock type
Stock options	$	9	$	90	$	57	$	574
Restricted and deferred stock awards		5,342		5,250		19,389		16,613
Employee stock purchase plan		212		225		721		823
Total	$	5,563	$	5,565	$	20,167	$	18,010

Market Based Grants

	September 30, 2016
	Options		Awards
	(in thousands)
Market-based units outstanding		-		961
Maximum shares that could be issued assuming the highest level of performance		-		2,163
Market-based shares expected to vest / vested		-		1,371
Amount to be recognized as compensation cost over the performance period	$	-	$	3,410

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Earnings (Loss) Per Share (Tables)

9 Months Ended

Sep. 30, 2016

Earnings (Loss) Per Share [Abstract]

Computation Of Basic And Diluted Earnings (Loss) Per Share

	Quarter Ended				Three Quarters Ended
	September 30, 2016		October 2, 2015			September 30, 2016		October 2, 2015
Numerator:
Net income (loss) to common stockholders	$	15,883	$	16,984		$	29,023	$	(14,116)
Denominator:
Denominator for basic earnings per share—weighted average common shares		135,908		132,133			134,617		131,521
Effect of stock options and awards		2,852		312			2,051		-
Denominator for diluted earnings per share—adjusted weighted average common shares		138,760		132,445			136,668		131,521
Earnings per share:
Basic	$	0.12	$	0.13		$	0.22	$	(0.11)
Diluted	$	0.11	$	0.13		$	0.21	$	(0.11)
Anti-dilutive shares not included in the above calculations:
Awards		-		-			-		-
Options		-		3,405			-		1,083

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Basis Of Presentation (Narrative) (Details) - USD ($) $ / shares in Units, $ in Millions	9 Months Ended
	Sep. 30, 2016	Jan. 01, 2016
Class A common stock, par value	$ 0.01	$ 0.01
Pending Merger with Renesas Electronics Corporation [Member]
Business acquisition date of agreement	Sep. 12, 2016
Class A common stock, par value	$ 0.01
Merger transaction related costs	$ 4.6
Pending Merger with Renesas Electronics Corporation [Member] | Upon Termination Of Merger Agreement Under Specified Circumstances [Member]
Payments for merger related costs	$ 96.5
Pending Merger with Renesas Electronics Corporation [Member] | Effective Time Of Merger July 12, 2017 [Member]
Business acquisition share price	$ 22.50

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Fair Value Measurements (Fair Value Of Financial Assets) (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Jan. 01, 2016	Oct. 02, 2015
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Deferred compensation investments	$ 9,917	$ 9,855
Total assets measured at fair value	9,917	9,855
Fair value transfers of assets from level 1 to level 2	0		$ 0
Fair value transfers of assets from level 2 to level 1	0		$ 0
Quoted Prices In Active Markets For Identical Assets (Level 1) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Deferred compensation investments	87	400
Total assets measured at fair value	87	400
Significant Other Observable Inputs (Level 2) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Deferred compensation investments	9,830	9,455
Total assets measured at fair value	$ 9,830	$ 9,455

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Inventories (Schedule of Inventories) (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Jan. 01, 2016
Inventories [Abstract]
Finished products	$ 18,139	$ 22,522
Work in process	46,355	38,238
Raw materials	3,783	4,574
Total inventories	$ 68,277	$ 65,334

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Goodwill And Purchased Intangibles (Narrative) (Details)	9 Months Ended
	Sep. 30, 2016
Definite-Lived: Developed Technologies [Member] | Minimum [Member]
Finite-Lived Intangible Assets [Line Items]
Finite lived intangible asset useful life	5 years
Definite-Lived: Developed Technologies [Member] | Maximum [Member]
Finite-Lived Intangible Assets [Line Items]
Finite lived intangible asset useful life	7 years
Definite-Lived: Other [Member] | Minimum [Member]
Finite-Lived Intangible Assets [Line Items]
Finite lived intangible asset useful life	3 years
Definite-Lived: Other [Member] | Maximum [Member]
Finite-Lived Intangible Assets [Line Items]
Finite lived intangible asset useful life	7 years

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Goodwill And Purchased Intangibles (Purchased Intangibles) (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Jan. 01, 2016
Finite-Lived Intangible Assets [Line Items]
Gross carrying amount	$ 77,632	$ 109,732
Accumulated amortization	54,189	77,225
Purchased intangibles, net	23,443	32,507
Definite-Lived: Developed Technologies [Member]
Finite-Lived Intangible Assets [Line Items]
Gross carrying amount	63,032	63,032
Accumulated amortization	42,151	36,065
Purchased intangibles, net	20,881	26,967
Definite-Lived: Other [Member]
Finite-Lived Intangible Assets [Line Items]
Gross carrying amount	14,600	46,700
Accumulated amortization	12,038	41,160
Purchased intangibles, net	$ 2,562	$ 5,540

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Goodwill And Purchased Intangibles (Expected Amortization Expense) (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Jan. 01, 2016
Goodwill And Purchased Intangibles [Abstract]
2016	$ 2,670
2017	9,480
2018	4,362
2019	1,890
2020 and thereafter	5,041
Purchased intangibles, net	$ 23,443	$ 32,507

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Income Taxes (Narrative) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Oct. 02, 2015	Sep. 30, 2016	Oct. 02, 2015
Income Taxes [Abstract]
Income tax expense	$ 7,032	$ 298	$ 10,789	$ (16,290)
Effective income tax rate	30.70%	1.70%	27.10%	(53.60%)
Statutory U.S. income tax rate			35.00%
Accrual recorded for the TAOS litigation	$ 81,100		$ 81,100
Estimated future tax benefit			$ 1,200
Net tax benefit related to reserves for uncertain tax position				$ 27,700

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Long-Term Debt (Narrative) (Details) - USD ($) $ in Millions		9 Months Ended
	Jul. 19, 2016	Sep. 30, 2016	Jan. 01, 2016
Debt Instrument [Line Items]
Outstanding letters of credit		$ 1.1	$ 1.3
Revolving Credit Facility [Member]
Debt Instrument [Line Items]
Term of credit facility		5 years
Credit facility maximum borrowing capacity		$ 325.0
Debt instrument maturity date		Sep. 01, 2016
Credit facility outstanding borrowings			$ 0.0
Amended Facility [Member]
Debt Instrument [Line Items]
Term of credit facility	5 years
Credit facility maximum borrowing capacity	$ 225.0	$ 50.0
Debt instrument maturity date		Jul. 19, 2021
Credit facility outstanding borrowings		$ 0.0
Swing Line Loans [Member] | Amended Facility [Member]
Debt Instrument [Line Items]
Credit facility maximum borrowing capacity		30.0
Multicurrency Borrowings [Member] | Amended Facility [Member]
Debt Instrument [Line Items]
Credit facility maximum borrowing capacity		$ 70.0

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Common Stock And Dividends (Narrative) (Details) - USD ($) $ / shares in Units, $ in Millions	1 Months Ended	9 Months Ended
	Oct. 24, 2016	Sep. 30, 2016	Oct. 02, 2015	Jul. 31, 2016	Apr. 30, 2016
Dividends Payable [Line Items]
Dividends declared and payable, amount per share				$ 0.12	$ 0.12
Common stock dividends cash paid		$ 51.2	$ 48.9
Subsequent Event [Member]
Dividends Payable [Line Items]
Dividends declared and payable, amount per share	$ 0.12
Dividend payable date	Nov. 28, 2016
Dividend record date	Nov. 15, 2016

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Common Stock And Dividends (Share Activity For Class A Common Stock) (Details)	9 Months Ended
	Sep. 30, 2016 shares
Common Stock And Dividends [Abstract]
Beginning balance	132,728,391
Shares issued under stock plans, net of shares withheld for taxes	3,963,000
Ending balance	136,690,919

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Equity-Based Compensation (Summary Of Weighted-Average Fair Value Compensation Cost Per Share Of Awards Granted) (Details) - $ / shares	9 Months Ended
	Sep. 30, 2016	Oct. 02, 2015
Awards [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Weighted-average fair value compensation cost per share of Awards	$ 13.86	$ 11.26

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Equity-Based Compensation (Equity Based Compensation Summary) (Details) - USD ($) $ / shares in Units, $ in Thousands		9 Months Ended	12 Months Ended
		Sep. 30, 2016	Jan. 01, 2016
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares, Outstanding, Beginning balance		4,013,000
Shares, Exercised	[1]	(2,198,000)
Shares, Canceled		(120,000)
Shares, Outstanding, Ending balance		1,695,000	4,013,000
Shares, Exercisable/vested	[1]	1,619,000
Shares, Vested and expected to vest		1,695,000
Options, Weighted-average price (per share), Outstanding, beginning balance		$ 12.02
Options, Weighted-average price (per share), Exercised	[1]	12.01
Options, Weighted-average price (per share), Canceled		16.30
Options, Weighted-average price (per share), Outstanding, ending balance		11.72	$ 12.02
Options, Weighted-average price (per share), Exercisable/vested	[1]	11.67
Options, Weighted-average price (per share), Vested and expected to vest		$ 11.72
Options, Weighted-average remaining contract lives (in years), Outstanding		2 years 2 months 12 days	2 years 2 months 12 days
Options, Weighted-average remaining contract lives (in years), Exercised	[1]	1 year
Options, Weighted-average remaining contract lives (in years), Canceled		2 months 12 days
Options, Weighted-average remaining contract lives (in years), Exercisable/vested	[1]	2 years
Options, Weighted-average remaining contract lives (in years), Vested and expected to vest		2 years 2 months 12 days
Awards, Shares, Outstanding, Beginning balance		5,509,000
Awards, Shares, Granted	[2]	2,008,000
Awards, Shares, Exercised	[1]	(1,932,000)
Awards, Shares, Canceled		(463,000)
Awards, Shares, Outstanding, Ending Balance		5,122,000	5,509,000
Awards, Shares, Exercisable/Vested	[1]	121,000
Awards, Shares, Vested and expected to vest		5,122,000
Aggregate intrinsic value, Outstanding balance		$ 129,623	$ 75,432
Aggregate intrinsic value, Exercisable/vested	[1]	19,264
Aggregate intrinsic value, Vested and expected to vest		129,623
Aggregate unrecognized compensation cost, Outstanding		$ 33,897	$ 29,042
MSU Awards [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares issued under plan		345,543
Awards [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Awards, Shares, Exercisable/Vested		121,000

[1] Awards exercised are those that are fully vested and have been delivered to the recipients as a taxable event due to an elected deferral, available in the case of deferred stock units. Deferred stock units for which the deferral is elected timely are vested but still outstanding as Awards. Total un-issued shares related to deferred stock units as of September 30, 2016 were 121,000 shares as shown in the Awards column as Exercisable/vested.

[2] Grants include 345,543 MSU Awards issued during the three quarters ended September 30, 2016.

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Equity-Based Compensation (Equity-Based Compensation, Additional Disclosures) (Details) - USD ($) shares in Thousands, $ in Thousands	9 Months Ended
	Sep. 30, 2016	Oct. 02, 2015
Equity-Based Compensation [Abstract]
Shares issued under the employee stock purchase plan	396	537
Aggregate intrinsic value of stock options exercised	$ 8,484	$ 1,919

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Equity-Based Compensation (Equity-Based Compensation Expense) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Oct. 02, 2015	Sep. 30, 2016	Oct. 02, 2015
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Equity-based compensation expense	$ 5,563	$ 5,565	$ 20,167	$ 18,010
Options [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Equity-based compensation expense	9	90	57	574
Awards [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Equity-based compensation expense	5,342	5,250	19,389	16,613
Employee Stock Purchase Plan [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Equity-based compensation expense	212	225	721	823
Cost of Revenue [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Equity-based compensation expense	207	304	949	1,132
Research and Development [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Equity-based compensation expense	2,779	2,390	9,716	7,799
Selling, General and Administrative [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Equity-based compensation expense	$ 2,577	$ 2,871	$ 9,502	$ 9,079

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Equity-Based Compensation (Market Based Grants) (Details) shares in Thousands, $ in Thousands	Sep. 30, 2016 USD ($) shares
Awards [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Market-based units outstanding	961
Maximum shares that could be issued assuming the highest level of performance	2,163
Market-based shares expected to vest / vested	1,371
Amount to be recognized as compensation cost over the performance period | $	$ 3,410
Minimum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Grants participants may receive from original grant	0.00%
Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Grants participants may receive from original grant	300.00%

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Earnings (Loss) Per Share (Computation of Basic And Diluted Earnings (Loss) Per Share) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Oct. 02, 2015	Sep. 30, 2016	Oct. 02, 2015
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Net income (loss) to common stockholders	$ 15,883	$ 16,984	$ 29,023	$ (14,116)
Denominator for basic earnings per share—weighted average common shares	135,908	132,133	134,617	131,521
Effect of stock options and awards	2,852	312	2,051
Denominator for diluted earnings per share—adjusted weighted average common shares	138,760	132,445	136,668	131,521
Earnings per share, Basic	$ 0.12	$ 0.13	$ 0.22	$ (0.11)
Earnings per share, Diluted	$ 0.11	$ 0.13	$ 0.21	$ (0.11)
Options [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti-dilutive shares not included in the above calculations		3,405		1,083

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Segment Information (Narrative) (Details)	9 Months Ended
	Sep. 30, 2016 segment
Segment Information [Abstract]
Number of reportable segments	1

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Legal Matters And Indemnifications (Narrative) (Details) $ in Thousands								3 Months Ended	9 Months Ended
	Jun. 09, 2016 USD ($)	Sep. 28, 2015 USD ($)	Jun. 30, 2015 USD ($)	Jun. 30, 2014 USD ($)	Jun. 16, 2014 USD ($) item	Apr. 04, 2014 USD ($)	Oct. 04, 2013 USD ($)	Apr. 03, 2015 USD ($)	Sep. 30, 2016 USD ($) item claim	Oct. 02, 2015 USD ($)
Loss Contingencies [Line Items]
Provision for the TAOS litigation									$ 1,255	$ 81,100
TAOS [Member]
Loss Contingencies [Line Items]
Number of claims in favor of TAOS | claim									4
Lawsuit filed by TAOS, date									November 25, 2008
Provision for the TAOS litigation								$ 81,100
Consent Agreement [Member]
Loss Contingencies [Line Items]
Agreement term with DTCC					2 years
Charge recorded from legal matters						$ 4,000	$ 6,000
Consent Agreement [Member] | Civil Penality [Member]
Loss Contingencies [Line Items]
Accrual for loss contingency					$ 10,000
Number of installments to settle legal payment | item					2
Consent Agreement [Member] | Suspended And Eligible For Offset Credit [Member] | Civil Penality [Member]
Loss Contingencies [Line Items]
Accrual for loss contingency					$ 4,000
Consent Agreement [Member] | Not Subject To Suspension [Member] | Civil Penality [Member]
Loss Contingencies [Line Items]
Accrual for loss contingency					$ 6,000
Payments for legal matters			$ 3,000	$ 3,000
Pending Litigation [Member] | TECTVT [Member]
Loss Contingencies [Line Items]
Loss contingency damage awarded value		$ 18,500
Loss contingency damage sought value									$ 200,000
Pending Litigation [Member] | New Claimnants Filed New but Related Lawsuit [Member] | TECTVT [Member]
Loss Contingencies [Line Items]
Loss contingency damage sought value									$ 225,000
Loss contingency number of claimants | item									1,147
Pending Litigation [Member] | Costs Related To Defending Lawsuit [Member] | TECTVT [Member]
Loss Contingencies [Line Items]
Loss contingency damage sought value		11,200
Pending Litigation [Member] | Costs Related To Remediation [Member] | TECTVT [Member]
Loss Contingencies [Line Items]
Loss contingency damage sought value		$ 15,900
Final Judgment [Member] | TAOS [Member]
Loss Contingencies [Line Items]
Increase in accrual amount to account for attorney fees	$ 1,300
Final Judgment [Member] | TAOS [Member] | Patent Infringement [Member]
Loss Contingencies [Line Items]
Loss contingency damage awarded value	$ 77,300

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Assets Held For Sale And Restructuring And Related Costs (Narrative) (Details) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Jul. 01, 2016	Sep. 30, 2016	Oct. 02, 2015
Restructuring and Related Cost [Abstract]
Gain (loss) on disposal of property, plant and equipment		$ (50)	$ (16)
Advance received for planned disposition of 200mm line		$ 2,422
200mm Line [Member]
Restructuring and Related Cost [Abstract]
Investment period		4 years
Impairment of fixed assets held for use	$ 9,900
Impairment of other assets with no alternative use	1,000
Long lived assets classified as assets held-for-sale		$ 4,900
Severance and other employee benefit costs	$ 2,500
Gain (loss) on disposal of property, plant and equipment		0
Advance received for planned disposition of 200mm line		$ 2,500