10-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

ý	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Fiscal Year Ended December 31, 2009
or
o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number: 000-51448

HITTITE MICROWAVE CORPORATION
(Exact name of registrant as specified in its charter)

DELAWARE (State or other jurisdiction of incorporation or organization)	04-2854672 (I.R.S. Employer Identification No.)
20 ALPHA ROAD CHELMSFORD, MA 01824 (Address of principal executive offices)
Telephone Number: (978) 250-3343 Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class	Name of Each Exchange on Which Registered
Common Stock, $.01 par value	The Nasdaq Stock Market, LLC (Nasdaq Global Select Market)
Securities registered pursuant to Section 12(g) of the Act:
None. Title of each class

         Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ý    No o

         Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. Yes o    No ý

         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 ý    No o

         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 during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes o    No o

         Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. o

         Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definition of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer ý Accelerated filer o Non-accelerated filer o
(Do not check if a smaller
reporting company) Smaller reporting company o

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

         The aggregate market value of the voting and non-voting common equity held by non-affiliates as of June 30, 2009 was $767,841,456.

         As of February 15, 2010 there were 30,215,719 common shares outstanding.

Documents Incorporated by Reference

         Portions of the definitive Proxy Statement for the 2010 Annual Meeting of Shareholders to be filed with the Securities and Exchange Commission on or before April 30, 2010 are incorporated by reference in Part III of this Annual Report on Form 10-K.

HITTITE MICROWAVE CORPORATION

FORM 10-K

FOR THE FISCAL YEAR ENDED DECEMBER 31, 2009

INDEX

PART I
Item 1.	Business	2
Item 1A.	Risk Factors	21
Item 1B.	Unresolved Staff Comments	35
Item 2.	Properties	35
Item 3.	Legal Proceedings	36
Item 4.	Submission of Matters to a Vote of Security Holders	36
PART II
Item 5.	Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	37
Item 6.	Selected Financial Data	39
Item 7.	Management's Discussion and Analysis of Financial Condition and Results of Operations	40
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	52
Item 8.	Financial Statements and Supplementary Data	53
Item 9.	Changes in and Disagreements With Accountants on Accounting and Financial Disclosure	53
Item 9A.	Controls and Procedures	53
Item 9B.	Other Information	54
PART III
Item 10.	Directors, Executive Officers and Corporate Governance	55
Item 11.	Executive Compensation	55
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	55
Item 13.	Certain Relationships and Related Transactions and Director Independence	55
Item 14.	Principal Accountant Fees and Services	55
PART IV
Item 15.	Exhibits and Financial Statement Schedules	56
	Signatures	58

PART I

Item 1.    Business

Our Company

        We design and develop high performance integrated circuits (ICs) modules and subsystems for technically demanding radio frequency (RF) microwave and millimeterwave applications. As a result of our 25 years of experience and innovation, we have developed a deep knowledge of analog, digital and mixed-signal semiconductor technology, from the device level to the design and assembly of complete subsystems. Our fabless business model enables us to leverage our broad engineering, assembly and test capabilities and our intellectual property portfolio, including our semiconductor modeling expertise and library of proprietary circuit designs.

Industry Background

         Growth in advanced electronic systems using RF, microwave and millimeterwave technology

        Global demand for mobile communication services and for real-time access to diverse types of data continues to increase. This demand, coupled with the increasing capabilities and decreasing cost of computing devices, has led to rapid adoption of a wide variety of advanced electronic systems that rely on electromagnetic waves for high speed data transmission, reception or acquisition. These systems utilize a variety of data transmission technologies over a wide range of electromagnetic frequency bands, including RF, microwave and millimeterwave frequencies. These advanced electronic systems are integral to wireless networks such as cellular telephone, fixed wireless and satellite communication systems, as well as wired networks such as cable TV, broadband access and optical data networks. In addition, an increasing number of automotive, industrial, military, homeland security, scientific and medical applications use RF, microwave and millimeterwave technology to perform detection, measurement and imaging functions. All of these applications increase the demand for high speed networking equipment. The growth of advanced electronic systems using RF, microwave and millimeterwave technologies has accelerated demand for analog, digital and mixed-signal ICs, modules and subsystems that are optimized to provide high performance signal processing across the electromagnetic frequency spectrum.

         The electromagnetic frequency spectrum

        The terms RF, microwave and millimeterwave refer generally to electromagnetic waves that are propagated when an alternating current is applied to an antenna or conductor. The properties and uses of electromagnetic energy depend on its frequency. Each type of system typically uses a different frequency range, or band, of the frequency spectrum. For example:

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Broadband access devices, cellular telephone systems, cable TV systems, global positioning system (GPS) equipment and magnetic resonance imaging machines typically operate in what we refer to as the RF frequency band, between one megahertz and six gigahertz (GHz).

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Direct broadcast satellite receivers, military electronic countermeasure systems and point-to-point radio systems used in cellular backhaul applications commonly use frequencies in what we refer to as the microwave frequency band, between six GHz and 20 GHz.

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Automotive collision avoidance systems, ground uplink and downlink stations used in satellite communications systems and many commercial and military radar systems operate in what we refer to as the millimeterwave frequency band, between 20 GHz and 110 GHz.

        Access to specific bands of the frequency spectrum is limited due to spectrum capacity constraints. Frequency use is regulated globally by government agencies, which assign each type of communication service to one or more specific frequency bands. Growth in the volume of communications traffic, and

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increasing demand for services such as multimedia that require higher data rates and consequently consume greater bandwidth, have resulted in more extensive use of the frequency spectrum.

        Congestion of the limited available frequency bands is driving the electronics industry to develop more creative and efficient uses of available frequency spectrum. For example, some applications, such as newer 3G and 4G cellular telephone systems, have migrated to higher frequencies, which are inherently able to provide higher data transfer rates. Other applications, such as broadband wireless local loop applications, and cellular telephone systems being deployed in developing nations, take advantage of recently introduced modulation schemes to utilize lower frequency bands more efficiently. Still others, such as emerging ultra wide band systems, use new system architectures and complex modulation schemes to distribute data over the entire frequency spectrum. The implementation of these more complex system architectures and modulation schemes, and their distribution over a wider portion of the frequency spectrum, increase the technical challenges associated with the design and manufacture of ICs, modules and subsystems used in these systems.

Requirements of manufacturers of advanced electronic systems operating at RF, microwave and millimeterwave frequencies

        The need for advanced electronic systems offering improved functionality, reliability and speed has intensified the challenges faced by original equipment manufacturers (OEMs) that design and develop these systems. Many OEMs do not have the IC design or semiconductor process expertise necessary to develop their own ICs, modules and subsystems for RF, microwave and millimeterwave applications. As a result, they increasingly look to qualified merchant suppliers to provide this expertise and these solutions and, in many cases, to design and manufacture custom products to meet their application-specific requirements.

        Across all markets, OEMs seek semiconductor suppliers that provide technology that will enable them to differentiate their product offerings with respect to a number of criteria, including:

        High performance.    OEMs face continuously increasing competitive pressures to improve their products' overall system performance. As a result, OEMs require advanced semiconductor products that offer performance attributes such as higher power and linearity, lower noise, reduced power consumption, improved signal level and frequency accuracy and better isolation.

        High reliability.    OEMs seek suppliers with a demonstrated track record of delivering high quality products that will perform reliably for long periods of time under a variety of conditions. Manufacturers of advanced electronic systems used in certain commercial, military and aerospace applications have particularly stringent reliability requirements that mandate specialized design and manufacturing, quality assurance and testing processes.

        Increased integration.    Under constant pressure to offer their customers lower prices, OEMs seek to simplify their assembly operations and reduce their manufacturing costs by using more highly integrated components that combine multiple functions, thereby reducing design complexity, component count and system size.

        Streamlined procurement processes.    OEMs desiring to streamline their procurement processes seek suppliers with the proven ability to provide a broad range of products covering the full range of functions required for the design and manufacturing of high performance electronic systems that operate across the frequency spectrum.

        Faster time to market.    OEMs seek to shorten their product development cycles by outsourcing the highly specialized task of designing and manufacturing RF, microwave and millimeterwave semiconductor products. Additionally, they select vendors that have strong manufacturing and product fulfillment capabilities and can meet short delivery lead time requirements.

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        An OEM's requirements may vary by market and application. In a particular application, an OEM may seek a highly integrated subsystem, while for another application the same OEM may prefer a single function IC that offers a specific performance attribute. A manufacturer of systems designed for consumer markets may require a supplier that can meet high volume manufacturing requirements, while that same manufacturer, when addressing military or aerospace markets, may require relatively low volumes of highly specialized, high value subsystems.

         Challenges of developing ICs for manufacturers of advanced electronic systems

        Advanced electronic systems typically rely upon a complex chain of analog and digital signals. Conversion of continuously varying real-world analog signals to binary digital form, and vice versa, and other signal transformations are known as signal processing functions. Semiconductor devices that combine analog and digital signal processing are referred to as mixed-signal ICs. The performance of an advanced electronic system depends substantially on the performance of the analog and mixed-signal ICs that provide its core functionality. Significant challenges are involved in designing and manufacturing analog and mixed-signal ICs that will operate satisfactorily at RF, microwave and millimeterwave frequencies, including the following:

        RF, microwave and millimeterwave circuit design.    RF, microwave and millimeterwave circuit design requires an understanding of complex electromagnetic and mathematical theory. Success in this field requires a combination of advanced scientific study and practical experience in implementing design techniques. Performance characteristics such as linearity and efficiency that are critical to electronic communications are more difficult to achieve at RF, microwave and millimeterwave frequencies. Unlike digital circuits, the performance of analog and mixed-signal circuits operating at these frequencies is affected by temperature, power supply and other external factors, as well as by the interaction of adjacent circuit elements. The design of an analog or mixed-signal circuit requires a sophisticated understanding of the complex interaction of all of these variables and the ability to predict, or model, the behavior of the IC under a variety of conditions.

        Semiconductor device modeling.    Creating an accurate device-level model of a semiconductor is fundamental to successful circuit design, particularly when the circuit is to be used at higher frequencies. The ability to predict the performance of a device manufactured using a particular process is necessary to enable a designer to modify the circuit design in order to meet the customer's requirements. Accurate device modeling requires the ability to measure and predict the behavior and interaction of the active and passive elements on a semiconductor under a range of conditions, including temperature, input power levels, frequency and voltage. Device modeling requires specialized skills and equipment, and engineers often develop proprietary methods to measure and validate the accuracy of their models. Because modeling is an iterative process, the accuracy, and thus the value, of device models increases with experience in using them over time.

        Integration.    Advances in gallium arsenide (GaAs) and silicon semiconductor technology have enabled higher degrees of integration in the design and manufacture of semiconductor devices. For example, analog and digital signal processing can now be combined on a single monolithic microwave integrated circuit (MMIC) or system on a chip (SOC). It has also become possible to combine multiple MMICs into a multi-chip module (MCM), which integrates multiple functions required by an advanced electronic system into a single compact package. Because MCMs can combine MMICs manufactured under different semiconductor process technologies, they can take advantage of the process technology that is best suited for each function. Higher degrees of integration can also be attained through the assembly of a number of MCMs into subsystems that provide greater functionality and can be more easily incorporated into an OEM's product.

        The benefits of higher integration to an OEM can include superior performance, higher reliability, smaller form factor, lower parts count and simplified assembly processes. However, in order to deliver

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the benefits of higher integration to an OEM effectively, a semiconductor supplier must possess a broad range of engineering capabilities, including expertise in device modeling and the ability to optimize IC design and component interfaces based on system-level knowledge. The necessary capabilities also include the ability to manage the thermal, mechanical and package engineering issues that affect the performance of a highly integrated system, as well as the capability to perform more complex assembly and test operations.

        As a result of all these factors, the knowledge and skills required to design integrated analog and mixed-signal devices operating at higher frequencies are highly specialized and can take many years to develop. We believe that a significant market opportunity exists for a supplier of high performance ICs, modules and subsystems optimized for RF, microwave and millimeterwave applications that can meet OEMs' diverse requirements.

Our Competitive Strengths

        Our key competitive strengths as we address market opportunities include:

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advanced RF, microwave and millimeterwave engineering capabilities;

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ability to optimize circuit design and semiconductor process and packaging technologies to meet customers' application requirements;

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broad product portfolio, comprising 24 product lines;

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diverse customer base, end markets and applications;

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multi-channel sales and support capabilities; and

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our fabless business model.

        Advanced RF, microwave and millimeterwave engineering capabilities.    We have developed broad expertise in a number of disciplines that are critical to the design and manufacture of ICs, modules and subsystems for technically demanding RF, microwave and millimeterwave applications. These include:

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analog, digital and mixed-signal IC design;

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SOC design;

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semiconductor device modeling;

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RF, microwave and millimeterwave subsystem and instrument design;

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mechanical, thermal and packaging engineering;

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digital hardware and related software engineering;

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automated test software engineering; and

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manufacturing, process and quality engineering.

        Our knowledge of analog and mixed-signal semiconductor technology, from the device level to the design and assembly of subsystems and instruments optimized for RF, microwave and millimeterwave applications, enables us to deliver high performance, high value products to our customers.

        Ability to optimize circuit design and semiconductor process and packaging technologies to meet customers' application requirements.    Based on customers' requirements, we select the foundry and semiconductor process that we believe will provide the best combination of performance attributes and form factor for use in that application. We also have expertise in a range of industry standard and proprietary packaging technologies. Our fabless business model and broad engineering expertise enable us to optimize our product designs using the semiconductor process and packaging technology that best address our customers' needs.

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        Broad product portfolio.    We offer a broad range of standard and custom ICs, modules and subsystems that perform a variety of functions across the RF, microwave and millimeterwave frequency bands. At December 31, 2009, we had more than 800 standard products spanning 24 product lines:

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amplifiers

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attenuators

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data converters

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dielectric resonator oscillators

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frequency dividers and detectors

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frequency multipliers

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high-speed comparators

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high speed digital logic products

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interface

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limiting amplifiers

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mixers and converters

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modulators

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oscillators

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passives

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phase lock loops

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phase lock loops with integrated voltage controlled oscillators

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phase shifters

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power conditioners

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power detectors

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sensors

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switches

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synthesizer ICs and instruments

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transimpedance amplifiers

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variable gain amplifiers

        We offer our products in a wide variety of packaging formats, modules and subsystems facilitating their use in a broad range of applications. We have the ability to rapidly design, prototype and commence volume production of our products, assisting our customers in meeting their time-to-market requirements. We introduced four new product lines in each of 2009 and 2008, and three new product lines in 2007. We introduced 83 new standard products in 2009, 100 in 2008 and 152 in 2007, and also added custom products in comparable numbers during those years.

        Diverse customer base, end markets and applications.    The diversity of our customers, end markets and applications provides us with multiple long-term growth opportunities. In 2009, we sold our products to approximately 3,000 commercial and U.S. government customers for use in a variety of applications and end markets worldwide. Our principal end markets include:

Automotive	•	telematics and GPS systems
	•	collision avoidance, blind spot detection and intelligent cruise control
	•	pre-collision sensors
Broadband	•	cable TV and cable modems
	•	direct broadcast satellite
	•	fixed and mobile wireless networks

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Cellular infrastructure	•	cellular telephone base stations and repeaters
	•	E911 and GPS location systems
	•	handheld radios and other mobile voice and data devices
Fiber optics	•	communications infrastructure
	•	fiber optic test equipment
	•	data communications equipment
Microwave and millimeterwave communications	•	high and low capacity point-to-point and multi-point radio systems
	•	commercial very small aperture terminal (VSAT) systems
	•	short range local area networks
Military	•	communications systems
	•	radar, guidance and electronic countermeasure systems
	•	sensing and detection platforms
Space	•	communication and imaging payloads
	•	command, control and communications for commercial, scientific and military spacecraft
Test and measurement	•	medical and industrial imaging systems
	•	homeland security systems
	•	telecommunications test equipment
	•	scientific and industrial equipment

        Many of our standard products are purchased by a variety of customers in different markets for use in numerous types of applications. We believe that the diversity of our customers, end markets and applications helps to mitigate the impact on our business of fluctuations in demand from any particular customer or industry.

        Multi-channel sales and support capabilities.    Due to the technical nature of our products and markets, we utilize a multi-channel sales and support model that is intended to facilitate our customers' evaluation and selection of our products. Our sales and support channels include our direct sales force, our applications engineering staff, our worldwide network of independent sales representatives, a distributor and our website.

        We have established flexible sales and support capabilities. For example:

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We offer our customers and prospective customers comprehensive technical sales support and application engineering services, provided by dedicated staff in local offices located in key geographies, to accelerate their understanding of our products' capabilities and how best to use them in their own system designs. Our technical sales staff frequently visits customers at their engineering and manufacturing facilities to exchange design, product and production information.

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We include in our product catalog detailed technical specifications, performance data, suggested design block diagrams and recommended applications for our standard products.

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We offer comprehensive on-line technical resources and tools to assist system designers and engineers in specifying and using our products.

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We offer qualified customers free samples of our products for evaluation purposes. To accelerate evaluation and design of our products, we offer versions mounted on printed circuit boards or in modular housings to facilitate their use in experimental prototypes.

        We believe that our multi-channel approach to sales and technical support encourages the selection of our products, results in high customer satisfaction and leads to repeat sales.

        Our fabless business model.    We outsource wafer manufacturing to multiple third party fabricators and foundries. We believe that this fabless business model and our expertise in a wide range of semiconductor process technologies enables us to develop products using the technology most appropriate for our customers' applications. We believe that investing in our core design and engineering competencies, including advanced RF, microwave and millimeterwave circuit design, device modeling, system-level engineering and packaging engineering, while outsourcing the capital-intensive task of semiconductor fabrication, best enables us to meet the needs of our customers.

Products

        We design, develop and sell high performance analog and mixed-signal ICs, modules and subsystems used in technically challenging RF, microwave and millimeterwave applications. We offer a broad range of radio frequency integrated circuits (RFICs), MMICs, MCMs and subsystems that perform a variety of signal processing functions and that operate across the RF, microwave and millimeterwave frequency spectrum. Our products are used in a wide range of wired and wireless communications applications, such as cellular telephone base stations, microwave and millimeterwave radio systems, broadband wireless access systems and direct broadcast satellite systems. They are also used in detection, measurement and imaging applications including military communication, targeting, guidance and electronic countermeasure systems, commercial, scientific and military spacecraft, automotive collision avoidance systems, medical imaging systems and industrial test equipment.

        We offer standard products and custom products. We develop standard products from our own specifications and offer them for sale through our direct sales organization and network of sales representatives, a distributor and our website. We currently offer more than 800 standard products. Our strategy in developing standard products is to introduce high performance products that will be valued by customers for their ability to address technically challenging applications, rather than to offer commodity ICs for use in high volume applications where cost, rather than performance, is the highest priority. We believe that many of our standard products offer a combination of form factor, functionality and performance attributes that are not available from any other vendor. The standard products listed in our catalog generally are purchased by multiple customers for use in a variety of applications.

        We also develop custom products to meet the specialized requirements of individual customers. Our custom products are not listed in our catalog and are sold by our direct sales force, which works with customers and prospective customers to have our products selected and designed into our customers' systems and programs. Our custom products generally are purchased by the customer for which they were developed.

Our IC product lines

        We currently provide standard and custom semiconductor products spanning 24 product lines. Our product lines include most of the functional circuit blocks required to create both receiver and transmitter subsystems for any RF, microwave or millimeterwave application.

        Many of our products are designed to perform across numerous frequency bands, making them useful for diverse applications. We also offer products that optimize particular performance attributes required in specific applications. These products are offered in a variety of packaging formats, including

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bare die, surface mount packages and connectorized modules. Our current product line offerings are as follows:

        1.    Amplifiers.    Amplifiers boost the gain, or power, of an RF, microwave or millimeterwave signal. We offer a broad line of amplifiers, including:

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high power amplifier modules that are chassis mounted with standard connectors, offer power outputs up to 15 watts and can be easily inserted into RF and microwave communication, test and sensor systems;

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wideband amplifiers having more than an octave of operating frequency bandwidth (that is, where the highest frequency is twice the lowest frequency), used in military, space and commercial systems where a wide range of frequencies need to be processed by one subsystem;

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power amplifiers used to increase the power level of the signal in transmitter or high power level applications;

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linear driver amplifiers used in transmitters or receivers where distortion must be minimized to maintain signal fidelity;

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microwave and optical driver amplifiers used in fiber optic applications where wide bandwidth and high output voltage swings are required to drive optical components;

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low noise amplifiers used in the first stage of a receiver, where amplification with minimum distortion of an incoming signal having a low power level is required; and

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broadband gain blocks used throughout the receiver and transmitter sections of already fixed systems to boost signal level.

        2.    Attenuators.    Attenuators are used to reduce the power of a RF, microwave or millimeterwave signal in specific controlled amounts without distorting the signal quality. For example, to avoid overloading a base station's receiving circuitry as a mobile transmitter approaches a base station or tower, an attenuator is used in the receiver to optimize the received signal for processing. Our portfolio of standard attenuators is classified into two types:

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analog attenuators that provide control of the RF, microwave or millimeterwave signal in response to an analog direct current (DC) voltage input and can deliver continuously varying, very fine to very large levels of attenuation; and

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digital attenuators that provide control of the RF, microwave or millimeterwave signal in response to a digital logic input and deliver preprogrammed levels of attenuation according to the digital input.

        3.    Data converters.    Data converters are used to convert signals between analog and digital format. Currently our product line includes:

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track-and-hold (T/H) amplifiers that convert analog sinusoidal signals to high speed digital square wave signals for baseband processing.

        4.    Dielectric Resonator Oscillator.    An oscillator is a device that produces a RF, microwave or millimeterwave frequency. A dielectric resonator oscillator (DRO) is a class of oscillator in which the output frequency is mechanically stabilized over a very narrow range by a resonating dielectric material. Our DRO products are optimized for military, test equipment and industrial/medical equipment applications, and are characterized by their low phase noise, low temperature drift and robust packaging.

        5.    Frequency dividers and detectors.    Frequency dividers, also called prescalers, and phase-frequency detectors are used in frequency generation circuits, or synthesizers, to help process and

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distribute the carrier frequency of the system. We offer a full range of frequency dividers and phase-frequency detectors. Our standard dividers and detectors include:

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phase-frequency detectors that are used to detect the frequency and phase of an input signal accurately, and can be combined with a divider to detect an incoming frequency and divide it by a predetermined factor;

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wideband frequency divider modules that provide division ratios of 2, 4, 5, 8 and 10 and are characterized by having more than an octave of operating frequency bandwidth for use in military, space and commercial systems where a wide range of frequencies need to be processed by one subsystem;

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programmable frequency dividers that provide continuous division ratios from 1 to 32 in response to digital logic input; and

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frequency dividers that provide fixed division ratios, including innovative divide-by-3 and divide-by-5 ratios, by dividing and digitizing a frequency without generating unwanted noise to enable the synthesizer to lock on the desired output signal.

        6.    Frequency multipliers.    Frequency multipliers are used in frequency generation circuits, or synthesizers, to increase by a predetermined factor the carrier frequency and to help distribute it throughout the system. We offer a full range of active and passive frequency multiplier standard products, including:

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active multipliers that utilize external DC power and integrate gain and/or power amplification with frequency multiplier circuits (factors of 2, 4, 8 or 16) to deliver output power levels the same as the input level or higher; and

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passive multipliers, or frequency doublers that rely on a higher RF, microwave or millimeterwave input signal power level while utilizing no DC power to deliver a signal that is two times the input frequency.

        7.    High Speed Comparators.    A high speed comparator is a device that constantly monitors signal levels at its inputs. The device generates a digital output signal based on the difference in amplitude of the input signal levels. Our high speed comparators are optimized for high speed military, test equipment and industrial/medical equipment applications and exhibit low propagation dispersion, short minimum detectable pulse widths and low power consumption.

        8.    High speed digital logic products.    High speed digital logic products are used to select, split, invert, route, multiply or delay high speed digital signals. High performance digital systems require these functions to route the signal throughout a digital backplane. Our high speed digital logic products can support digital signals which propagate at speeds of 13, 26 and 40 gigabits per second (Gb/s), which makes them suitable for OC-48, OC-192 and OC-768 applications. These products contain functions such as clock dividers, NRZ to RZ converters, XOR and NAND logic gates, flip-flops and 1:2 fanout buffers.

        9.    Interface.    Interface products are used in the digital or analog control of RF, microwave, and millimeterwave integrated circuits. Our first interface product converts a serial or parallel logic input to a six bit wide complementary output, and can be used to simplify the control of digital attenuators, digital phase shifters, digital variable gain amplifiers and switch matrices.

        10.    Limiting amplifiers.    Limiting amplifiers increase the gain or power of an RF, microwave, millimeterwave or digital signal, and have the feature of adding more gain or power to low level signals, and less gain or power to high level signals. Our limiting amplifier product line is optimized for fiber optic communications and features low jitter and high data rate capability.

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        11.    Mixers and converters.    Mixers, upconverters and downconverters are used to transform frequencies from a higher frequency input to a lower intermediate frequency, or vice versa, for easier processing of the RF, microwave or millimeterwave signal. The input signal is combined with a fixed carrier signal generated by a local oscillator (LO) to produce the higher or lower output frequency. Our standard mixer and converter products include:

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mixers in a variety of types including balanced mixers, sub-harmonic mixers, mixers with LO drivers and I/Q mixers, each utilizing our proprietary transformer circuit technology; and

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converters, including receivers and transmitters, which combine multiple functions, such as LO drivers, gain blocks, low noise amplifiers and mixer circuits on a single IC or in a single package.

        12.    Modulators and demodulators.    Modulators are used in radio transmitters to combine a digital information signal with an analog carrier signal generated by an LO. Demodulators are used in radio receivers to extract the digital information signal from the analog carrier signal. Our modulators and demodulators address a variety of modulation schemes and feature high linearity, low noise and wide bandwidth. Our standard modulator and demodulator products include:

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direct quadrature modulators utilizing analog and digital circuit techniques to support current and future high data rate modulation protocols;

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vector modulators used for error correction signal processing in high power wireless system amplifiers by enabling the variation of an incoming signal's phase and amplitude via a digital/analog dual control input;

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bi-phase modulators based upon our double-balanced MMIC mixer circuits and using a simple modulation format that supports low data rates;

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I/Q demodulators that utilize analog and digital circuit techniques to separate the in-phase and quadrature data from the received modulated signal.

        13.    Oscillators.    An oscillator produces an RF, microwave or millimeterwave frequency. The output frequency of our voltage controlled oscillators (VCOs) can be varied by an analog DC input control voltage. We offer three types of MMIC oscillators:

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wide band VCOs that offer octave tuning bandwidth;

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narrow band VCOs that offer narrower frequency tuning and lower phase noise performance; and

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phase lock oscillators that offer integrated phase lock loop (PLL) functionality.

Our standard VCO products cover the frequency spectrum of 2.0 to 26.8 GHz, while our custom VCOs cover frequency bands between 2.0 to 80.0 GHz. Our self-contained VCOs integrate all necessary circuitry on a single chip, so that no external components are required.

        14.    Passives.    Our passive product line consists of 12 fixed attenuators which operate at frequencies up to 50 GHz. Fixed attenuators, or pads, are used to accurately reduce the power level of a signal without distorting the signal's characteristics.

        15.    Phased lock loops.    PLL integrated circuits are used in conjunction with oscillators in RF, microwave, and millimeterwave signal generation circuitry to accurately select and stabilize the frequency of transmitted and received signals. Our PLL products are designed to minimize noise, allow wide input bandwidth and provide advanced features. Our PLL products coupled with our VCO products can offer customers state of the art signal generation performance.

        16.    Phase lock loops with integrated voltage controlled oscillators—A PLL with integrated VCO produces an RF, microwave or millimeterwave frequency. Our PLL with integrated VCO products

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combine a fully integrated, low noise VCO, with an advanced PLL integrated circuit. Our single and tri-band PLL with integrated VCO products are optimized for RF and microwave signal generation applications, and exhibit low phase noise, low spurious products and flexible programming capabilities.

        17.    Phase shifters.    Phase shifters are used to change the phase of an RF, microwave or millimeter wave signal while providing little or no amplitude change or distortion. High performance systems such as phased array radars, RF medical equipment, wide band electronic warfare receivers, and time domain systems require tight design control over a signal's phase. These systems often rely on phase shifter components to maintain this control.

•

Analog phase shifters provide continuous phase change as a function of control voltage, often allowing over 360 degrees of phase shift; and

•

Digital phase shifters provide discrete phase shift changes with a single control voltage, often in a combination of small and large phase steps.

        18.    Power Conditioners—A power conditioner supplies DC power to an integrated circuit. Our power conditioner regulates the voltage level of a DC power supply, and removes unwanted noise and spurious products that can be detrimental to the performance of RF, microwave or millimeterwave integrated circuits. Our first power conditioner product is optimized for frequency generation applications and provides four independent regulated outputs with excellent power supply rejection ratio (PSRR).

        19.    Power detectors.    Power detectors convert RF signals to DC voltages that can be measured by simple digital circuitry. These devices convert power levels from logarithmic to linear voltages.

        20.    Sensors.    Our sensors use RF, microwave and millimeterwave energy to detect, measure or form an image of an object. These sensor ICs integrate multiple circuit functions and are effectively subsystems on a chip. For example, our single chip sensors are used for range detection in multiple military and commercial applications.

        21.    Switches.    Switches are used to route RF, microwave or millimeterwave signals from one or more input paths to one or more output paths. Control of the selected input and output signal path is achieved via digital logic input. Our switches are designed to reduce signal loss, minimize noise and interference, and operate at high frequencies and power levels. Our standard switch products provide the following functionality:

•

single pole single throw switches;

•

single pole double throw high isolation switches;

•

single pole double throw transmit/receive switches providing high power handling of signals up to 10 watts of power with low distortion;

•

single pole multi-throw switches offering throw configurations of 3, 4, 6 and 8 while providing digital control, high isolation and low signal distortion and loss; and

•

bypass, transfer and matrix switches that handle multiple inputs and outputs while providing digital control, high isolation and low signal distortion and loss.

        22.    Synthesizers.    Synthesizers generate a coherent set of RF, microwave or millimeterwave frequencies over a specified range of frequency and power. Synthesizers are generally used to generate the frequency that acts as a carrier for voice or data communication.

        23.    Transimpedance Amplifiers.    Transimpedance amplifiers are used between devices which have very different levels of impedance or resistance. Our transimpedance amplifier provides a differential

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output voltage that is proportional to the current at its input, and is optimized for photodiode and fiber optic data communication applications.

        24.    Variable gain amplifiers.    Variable gain amplifiers (VGAs) boost the gain or power of a RF, microwave or millimeterwave signal and have the feature of allowing the user to set the gain or power at a specific level. Our variable gain amplifier MCMs utilize GaAs linear amplifiers, high performance six bit GaAs digital attenuators, and CMOS silicon drivers.

Modules, subsystems and instrumentation

        Our highly integrated modules and subsystems leverage our extensive portfolio of standard and custom ICs with our knowledge of RF, microwave and millimeterwave system design and our electrical, thermal and mechanical engineering expertise. Our modules and subsystems are mounted on either ceramic substrates or printed circuit boards in self-contained metal housings. Products include:

•

connectorized modules, which utilize ICs from our product lines, housed in connectorized, hermetically sealed modules, for use in test and measurement equipment;

•

RF, microwave and millimeterwave receivers and synthesizers used in military communication, targeting, guidance and countermeasure systems;

•

telecom and test equipment modules, such as our jitter generator used in fiber optic test systems;

•

self-contained, 15-watt power amplifier, for use in test equipment and laboratory applications; and

•

instrumentation, such as our single and dual output synthesized signal generators for use in engineering, production and reliability screening applications.

Technology

        We consider the following technologies to be important in the design and manufacture of our products.

Semiconductor process technologies

        We have expertise in designing RF, microwave and millimeterwave RFICs and MMICs using a variety of semiconductor manufacturing processes. Different processes produce devices that have characteristic performance attributes that are particularly suitable for specific applications. In choosing the foundry, semiconductor material and process technology to be used to manufacture a new product, we seek to optimize the match between the process technology and the desired performance parameters of the product.

        Our products are manufactured using GaAs and silicon semiconductor processes, including SiGe, Bi-CMOS and CMOS. We continuously investigate advanced GaAs- and silicon-based processes that we believe may offer product performance advantages in RF, microwave and millimeterwave applications.

Packaging technologies

        Interaction between an RF, microwave or millimeterwave semiconductor circuit and its package can significantly affect product performance, particularly at high frequencies. Characteristics such as the ability of the package to dissipate heat produced by the semiconductor, or to withstand vibration, shock, high temperature and humidity and other environmental conditions, are also critical in certain applications.

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        We carefully match the circuit design, semiconductor process and packaging technologies and, where necessary, develop new packaging technologies to ensure the product will perform as desired under the specified conditions. In this process, we use proprietary techniques to model the interaction between semiconductor and package, and our engineers make appropriate adjustments in the design of both the semiconductor and its package to take account of that interaction. We consider our expertise in package, design and modeling to be one of our core competencies and a key factor distinguishing us from our competitors.

        We offer our products in a wide variety of packaging formats, ranging from bare die to surface mount plastic and ceramic packages and highly integrated, chassis-mounted connectorized subsystems. We offer plastic, ceramic and metal packaging formats, including many industry standard formats, as well as proprietary packaging technologies. Our microwave surface mount packages are offered in either a hermetically sealed format for military, space and high reliability commercial applications or a non-hermetically sealed format for commercial communications and sensor applications. Our highly integrated modules and subsystems are constructed utilizing a variety of formats including ceramic substrates or printed circuit boards mounted in self-contained metal housings.

        When an application requires a standard packaging format, such as a product to be manufactured in large volumes using an industry standard plastic surface mount technology package, we outsource the packaging step in the manufacturing process to a third-party supplier. We typically perform the packaging of high value ceramic and metal package components in our own facility utilizing our automated wafer inspection, die attach and wire bond assembly equipment.

RoHS Directive

        In response to environmental concerns, some customers and government agencies impose requirements for the elimination of hazardous substances, such as lead (which is widely used in soldering connections in the process of semiconductor packaging and assembly), from electronic equipment. For example, in 2003, the European Union (EU) adopted its Restrictions on Use of Hazardous Substances Directive (RoHS) Directive. Effective July 1, 2006, the RoHS Directive prohibits, with specified exceptions, the sale in the EU market of new electrical and electronic equipment containing more than agreed levels of lead or other hazardous materials. We have a program in place to meet these customer and governmental requirements, including the RoHS Directive, where applicable to us, by making available versions of our products that do not include lead or other hazardous substances.

Research and Development

        We focus our research and development efforts on designing and introducing new and improved standard and custom products and on developing new semiconductor device modeling and advanced RF, microwave or millimeterwave circuit design.

        We have made significant investments in our core engineering capabilities, including semiconductor device modeling and advanced RF, microwave and millimeterwave circuit design. Recently, we expanded our digital software and hardware engineering capabilities to support our subsystem and instrumentation product development efforts. In the area of device modeling, we are expanding our library of device models that measure and predict the performance of a transistor within a given circuit design and packaging technology. This allows us to select the process technology that provides the best combination of performance attributes for use in a given application. Our circuit design efforts are focused on developing products that provide superior performance and reliability.

        We have four design centers, located in Chelmsford, Massachusetts; Colorado Springs, Colorado; Istanbul, Turkey; and Ottawa, Ontario, Canada. Our Chelmsford design center is the primary location of our module, subsystem and instrument development efforts. The integrated circuit design and

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background intellectual property licensed in 2007 from Northrop Grumman Space Technology sector is being used to further expand our millimeterwave product line.

        We continuously develop products using our own specifications, guided by input from our customers and end markets, that combine technological innovation and general application. Our team of experienced engineers also works closely with many of our customers to develop and introduce custom products that address the specific requirements of those customers.

Sales, Marketing and Support

        We sell our products worldwide through multiple channels, including our worldwide direct sales force and applications engineering staff, our network of domestic and international independent sales representatives and our website. In addition, many of our standard products are available for sale in North America through our distributor, Future Electronics. Each of these sales channels is supported by our customer service and marketing organizations. We have sales and customer support offices in the United States, China, Germany, India, Japan, Korea, Sweden, and the United Kingdom. We intend to expand our sales and support capabilities and our network of independent sales representatives in key regions domestically and internationally.

        Our direct sales force and applications engineers provide our customers with technical assistance regarding the selection and use of our products. We believe that maintaining a close relationship with our customers and providing them with technical support improves their level of satisfaction and enables us to anticipate and influence their future product needs. We provide ongoing technical training to our distributor and sales representatives to keep them informed of our existing and new products. Our website also provides our customers with on-line tools and technical resources to help them select and use our products.

        We maintain an internal marketing organization that is responsible for the production and dissemination of sales and advertising materials, such as product announcements, press releases, brochures, magazine articles, advertisements and cover features in trade journals and other publications and our product catalog. We participate in public relations and promotional events, including industry tradeshows and technical conferences. Our marketing organization is also responsible for the content and maintenance of our website.

Manufacturing

        We design and develop our proprietary products and utilize third-party foundries to manufacture the semiconductors used in our products. In some cases, we use third-party suppliers to assemble our products. Outsourcing many of our manufacturing and assembly activities, rather than investing heavily in capital-intensive production facilities, provides us with the flexibility to respond to new market opportunities, simplifies our operations and significantly reduces our capital requirements.

        We currently utilize a wide range of semiconductor processes to develop and manufacture our products, although each of our foundries tends to use a particular process technology in the production of its semiconductor wafers. Based on the requirements of a particular product, we choose the foundry and semiconductor process that we believe will provide the best combination of performance attributes for use in that product. For most of our products, we use a single foundry for the production of the semiconductor wafer. Our principal foundries are Cobham, Global Communications Semiconductors, IBM, Jazz Semiconductor, Northop Grumman, Taiwan Semiconductor Manufacturing Company (TSMC), Telefunken Semiconductor, TriQuint Semiconductor, United Monolithic Semiconductors (UMS) and WIN Semiconductors. We are actively engaged with these and other foundries to develop device models and intellectual property which can be included in our future production or research and development programs. Because the quality and reliability of our products is critical, we carefully qualify each of our foundries and processes before applying the technology to a production program.

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        For most of our products, the production process begins with a GaAs or silicon semiconductor substrate, or wafer. The foundry that we select to manufacture a particular product utilizes a set of masks that are generated from our proprietary circuit layout designs. Completed wafers or die are shipped by the foundry to us or to our third-party packaging vendors. Depending on the application, the integrated circuit may be sold as bare die or assembled into an injection molded plastic package or a ceramic or metal package or housing, using a wide variety of packaging technologies. Standard plastic packaged parts are assembled by third-party suppliers located primarily in Asia and the United States, while packaging of high value package components is performed primarily at our Chelmsford facility. We utilize contract manufacturers to produce complex printed circuit board assemblies for certain military and commercial subsystems and instruments. Following the assembly process, we perform a final test for validation, inspection and quality assurance purposes on all finished products before they are shipped to our customers.

        Our Chelmsford facility contains class 100K clean rooms certified for commercial, military and space level product manufacturing. Our networked material requirements planning documentation and test data acquisition systems enable us to track materials throughout our suppliers and our own facility, as well as schedule production activities and shipments based on customer demand. We utilize automated and manual test stations for each of our numerous package types, driven by proprietary test equipment configurations and software. Our manual and automatic hybrid assembly equipment includes die shear and bond pull inspection equipment, die inspect/pick, die/substrate attach and wire bond functions. We are capable of testing our products from DC up to 110 GHz, utilizing our automated and semi-automated RF, microwave and millimeterwave equipment.

        We conduct environmental screening on production material, including tests such as temperature cycling and temperature shock, constant acceleration, mechanical vibration and shock, liquid and ambient burn-in, fine and gross hermeticity leak test and particle impact noise detection. Our reliability test equipment includes high temperature life-test equipment, highly accelerated stress test and infrared reflow testing and acoustic sonic scanning, as well as field emission scanning electron microscope (SEM) and energy dispersive spectroscopy (EDS) capability.

Quality Assurance

        We are committed to maintaining the highest level of quality in our products. Our objective is that our products meet all of our customer requirements, are delivered on-time and function reliably throughout their useful lives. As part of our total quality assurance program, our quality management system has been certified to ISO 9001 since 1997 and is ISO 9001:2000 certified. The ISO 9001:2000 standards provide models for quality assurance in design and development, production, installation and servicing. This level of quality certification is required by many of our customers. Recently, we expanded our quality initiatives and certifications to include S20.20 electrostatic discharge (ESD) management system certification and AS-9100 aerospace certification. These certifications evidence the fact that our operating policies and procedures satisfy industry requirements for our products' ESD protection and aerospace manufacturing controls. Many of our customers involved in the manufacture of systems used in military and aerospace applications have particularly stringent reliability requirements that mandate specialized manufacturing, quality assurance and testing processes. To meet these specialized needs, we have processes in place to manufacture parts to the requirements of MIL-PRF-38543/38535.

Competition

        The markets for our products are highly competitive and are characterized by rapid technological change and continuously evolving customer requirements. We compete primarily with other suppliers of high performance analog and mixed-signal semiconductor components used in RF, microwave and millimeterwave applications. Because of the breadth and diversity of our product lines and end

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markets, our competition is fragmented, and there is no principal competitor that we encounter in most or all of our markets. Our competitors include large, diversified semiconductor manufacturers with broad product lines, such as Avago, Analog Devices, Eudyna, Linear Technology, NEC, RFMD, Skyworks, TriQuint Semiconductor and UMS. We also encounter competition from manufacturers of advanced electronic systems that also manufacture semiconductor components internally. Some of our competitors, such as NEC, are also our customers. Additionally, in certain product categories we compete with semiconductor manufacturers from which we also obtain foundry services, including TriQuint Semiconductor and UMS.

        Many of our existing competitors have significantly greater financial, technical, manufacturing and marketing resources than we do and might be perceived by prospective customers to offer financial and operational stability superior to ours. This is particularly true of competitors in the markets for silicon-based products. We expect competition in our markets to intensify, as new competitors enter the RF, microwave and millimeterwave component market, existing competitors merge or form alliances, and new technologies emerge.

Intellectual Property

        We seek to protect our proprietary technology under United States and foreign laws affording protection for trade secrets, and to seek United States and foreign patent, copyright and trademark protection of our products and developments where appropriate. We rely on trade secrets, patents, technical know-how and other unpatented proprietary information relating to our product development and manufacturing activities. We seek to protect our trade secrets and proprietary information, in part, by requiring our employees to enter into agreements providing for the maintenance of confidentiality and the assignment of rights to inventions made by them while employed by us. We also enter into non-disclosure agreements with our consultants, semiconductor foundries and other suppliers to protect our confidential information delivered to them.

        We believe that while the protection afforded by trade secret, patent, copyright and trademark laws may provide some advantages, our ability to maintain our competitive position is largely determined by such factors as the technical and creative skills of our personnel, new product developments, and frequent product enhancements. There can be no assurance that our confidentiality agreements with employees, consultants and other parties will not be breached, that we will have adequate remedies for any breach or that our trade secrets and other proprietary information will not otherwise become known. There also can be no assurance that others will not independently develop technologies that are similar or superior to our technology or reverse engineer our products. Additionally, the laws of countries in which we operate may afford little or no protection to our intellectual property rights.

Employees

        As of December 31, 2009, we had 349 full-time employees, compared with 332 full-time employees at December 31, 2008. We have never experienced a work stoppage, and none of our employees is subject to a collective bargaining agreement. We believe that our current relations with our employees are good.

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Executive Officers and Directors of the Registrant

        The following table sets forth certain information regarding our executive officers and directors.

Name	Age		Position
Stephen G. Daly		44	Chairman of the Board, President and Chief Executive Officer
William W. Boecke		58	Vice President, Chief Financial Officer and Treasurer
Everett N. Cole III		48	Vice President of Hybrid Manufacturing
William D. Hannabach		47	Vice President of Global Operations
Norman G. Hildreth, Jr.		46	Vice President
Dong Hyun (Thomas) Hwang		46	Vice President of Sales
Brian J. Jablonski		50	Vice President of Operations
Michael A. Olson		49	Vice President
Ernest L. Godshalk		64	Director (1)
Rick D. Hess		56	Director (2)
Adrienne M. Markham		58	Director (3)
Brian P. McAloon		59	Director (4)
Cosmo S. Trapani		71	Director (5)
Franklin Weigold		71	Director (6)

(1)

Member of the Audit and Compensation Committees

(2)

Chairman of the Nominating and Corporate Governance Committee and member of the Audit Committee

(3)

Member of the Compensation and Nominating and Corporate Governance Committees

(4)

Member of the Compensation and Nominating and Corporate Governance Committees

(5)

Chairman of the Audit Committee

(6)

Chairman of the Compensation Committee and member of the Nominating and Corporate Governance Committee. Mr. Weigold also serves as our Lead Director, a position established by our Board of Directors in November 2009. Our Lead Director is a non-employee director, appointed by the Board, whose responsibilities are to preside over Board meetings in the absence of the Chairman and lead executive sessions of the Board (i.e., sessions without management present); to act as a liaison between the independent directors and the Chairman and facilitate discussions among the independent directors on key issues and concerns outside of Board meetings (without limiting the ability of any independent director to communicate directly with the Chairman); and to work with the Chairman to set an appropriate calendar of Board meetings and develop the agendas for Board meetings. Our Lead Director has no role in the management or operations of the Company, does not establish Company policy or strategy and, except as directed by the Board, does not act as a spokesman for the Company.

        Stephen G. Daly has served as our President since January 2004, as our Chief Executive Officer since December 2004 and as our Chairman since December 2005. Since joining Hittite in 1996, Mr. Daly has held various positions, including Director of Marketing, Director of Sales, Principal Sales Engineer and Applications Engineer. From 1992 to 1996, Mr. Daly held sales management positions at Alpha Industries and M/A-COM, which are RF and microwave semiconductor companies. From 1988 to 1992, Mr. Daly held various microwave design engineering positions at Raytheon's Missile Systems

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Division and Special Microwave Device Operations Division. Mr. Daly received a B.S. in Electrical Engineering from Northeastern University.

        William W. Boecke has served as our Chief Financial Officer and Treasurer since March 2001. From 1997 to 2001, Mr. Boecke served as Vice President, Corporate Controller of PRI Automation, Inc., a supplier of semiconductor manufacturing automation systems. From 1991 to 1997, Mr. Boecke served as Director of Finance of LTX Corporation, a developer of automated semiconductor test equipment. Mr. Boecke received a B.S. from St. John's University and an M.B.A. from Boston College, and is a Certified Public Accountant.

        Everett N. Cole III has served as our Vice President of Hybrid Manufacturing since January 2010. From October 1997 to January 2010, Mr. Cole served as our Director of Quality. From 1985 until joining Hittite in 1997, Mr. Cole held various quality engineering positions at Raytheon's Missile Systems Division. Mr. Cole received a B.S. in Electrical Engineering from the University of Lowell and an M.S. in Manufacturing Management Science from the University of Massachusetts at Lowell.

        William D. Hannabach has served as our Vice President of Global Operations since January 2010. Since joining Hittite in February 2005, Mr. Hannabach has held various positions, including Director of Operations and Director of Programs. From 2003 to 2005, Mr. Hannabach was a Global Supply Chain Strategy Program Manager at GE Healthcare. From 2000 to 2003, Mr. Hannabach was the Director of Project Management at the Surface Mount Division of Universal Instruments, a capital equipment manufacturer for the printed wire board industry. From 1985 to 2000, Mr. Hannabach held various program and operations management positions at Lockheed Martin Corporation and GE Aerospace. Mr. Hannabach received a B.S. in Mechanical Engineering from The Pennsylvania State University and an M.B.A. from Boston University.

        Norman G. Hildreth, Jr. has served as Vice President since January 2010, managing research and development engineering. From January 2004 to January 2010, Mr. Hildreth served as our Vice President of Sales and Marketing, and from February 2002 to January 2004, he served as our Director of Product Development. He was employed by Sirenza Microdevices, a designer and supplier of RF components, from August 2000 to February 2002, as Vice President, Wireless Products, and Director of Fixed Wireless Products. From February 1992 to August 2000, Mr. Hildreth held various positions at Hittite including Director of Marketing, Director of Sales, Engineering Sales Manager and Senior Engineer. From 1985 to 1992 he held design engineering positions at Adams-Russell, M/A-Com and ST Olektron. Mr. Hildreth received a B.S. in Electrical Engineering from the University of Massachusetts at Dartmouth.

        Dong Hyun (Thomas) Hwang has served as our Vice President of Sales since January 2010. Since joining Hittite in January 2002, Mr. Hwang has held various positions, including Asia-Pacific Regional Sales Manager and Director of Sales. From 1997 to 2002, Mr. Hwang served as Country Manager for Korea for M/A-COM. Mr. Hwang received a B.S in Electrical Engineering from Lehigh University and an M.S. in Electrical Engineering from Lehigh University.

        Brian J. Jablonski has served as our Vice President of Operations since December 2005. From May 2004 to December 2005, Mr. Jablonski served as our Director of Operations. From 2003 until joining Hittite in 2004, Mr. Jablonski served as a Capital Planning Manager at Allegro Microsystems Corp., a supplier of advanced mixed signal power IC semiconductors. From 2000 to 2003, he served as Materials Manager at M/A-Com and as the Director of Operations at Trebia Networks, a developer of storage networking applications. From 1986 to 2000, he served in a number of management positions, including Director of Materials, for Unitrode Integrated Circuits, a manufacturer of analog and mixed signal integrated circuits. Mr. Jablonski received a B.S. in Industrial Management from Northeastern University and an M.B.A. from New Hampshire College.

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        Michael A. Olson has served as Vice President since January 2010, managing research and development engineering. From January 2008 to January 2010, Mr. Olson served as our Vice President of Engineering. From March 1996 to January 2008, Mr. Olson held various positions at Hittite including Director of IC Engineering, Director of Product Development, Sales Engineer and Applications Manager. From 1985 to 1996, Mr. Olson held various design engineering positions at Raytheon's Microwave and Power Tube Division and Raytheon's Special Microwave Device Operations Division. Mr. Olson received a B.S. in Electrical Engineering from Lehigh University.

        Ernest L. Godshalk has served as a member of our board of directors since 2008. Mr. Godshalk is Managing Director of ELGIN Management Group, a private investment company. From 2001 until his retirement in 2004, Mr. Godshalk served as President, Chief Operating Officer and a director of Varian Semiconductor Equipment Associates, Inc., a manufacturer of semiconductor processing equipment. Previously, he served as Varian's Vice President and Chief Financial Officer. He is a director of Verigy Ltd. and of GT Solar International Inc. Mr. Godshalk received his B.A. from Yale University in 1967 and his M.B.A. from Harvard University in 1969.

        Rick D. Hess has served as a member of our board of directors since 2005. Mr. Hess is currently the President and Chief Executive Officer of Konarka Technologies, a developer of photovoltaic cells on plastic. From 2004 to 2006, Mr. Hess was Chief Executive Officer of Integrated Fuel Cell Technologies, Inc., a developer of micro-fuel cell systems. From 1999 to 2004, Mr. Hess served as President of M/A-COM, a subsidiary of Tyco Electronics. Mr. Hess received a B.S. in Electrical Engineering from Purdue University and an M.S. in Electrical Engineering from Johns Hopkins University.

        Adrienne M. Markham has served as a member of our board of directors since 2008. Ms. Markham has been a director in the law firm of Goulston & Storrs, a Professional Corporation, since 1991. Ms. Markham brings 25 years of experience focusing on employment and corporate litigation. She has been an advisor to several bio-science and bio-tech firms. Ms. Markham received a B.S. in Education from Boston University and a J.D. from Suffolk University School of Law.

        Brian P. McAloon has served as a member of our board of directors since 2008. Mr. McAloon was, from 2001 to March 2008, Group Vice President of the DSP and Systems Products Group of Analog Devices, Inc., a provider of semiconductors for high performance signal processing applications. He also served in a number of other roles at Analog Devices, including Vice President, Sales, Vice President, Sales and Marketing—Europe and Southeast Asia and General Manager, Analog Devices, B.V. Mr. McAloon received his B.Sc. in Electronics and Electrical Engineering from Glasgow University.

        Cosmo S. Trapani has served as a member of our board of directors since 2000. From 2000 to 2002, Mr. Trapani served as Vice President and Chief Financial Officer of PRI Automation, Inc. From 1999 to 2000, Mr. Trapani was Senior Vice President and Chief Financial Officer at Circor International, Inc., a manufacturer of fluid control systems. From 1990 to 1998, Mr. Trapani was Executive Vice President and Chief Financial Officer of Unitrode Corporation, a manufacturer of analog and mixed-signal integrated circuits. Prior to Unitrode Mr. Trapani was Vice President Finance for Instron Corporation, a testing products company, and Corporate Controller and General Manager of Computervision CAD/CAM Division, an integrated computer systems company. Mr. Trapani was a member of the board of directors and Chairman of the audit committee of Ibis Technology, a manufacturer of equipment for the semiconductor industry. Mr. Trapani is a Certified Public Accountant and has been a member of various societies including AICPA, Massachusetts Society of CPAs, Board of Directors of Massachusetts Society of CPAs and Chapter President of IMA. Mr. Trapani received a B.S. from Boston College and was a Commanding Officer in the U.S. Army.

        Franklin Weigold has served as a member of our board of directors since 2003 and as our lead director since November 2009. From 1999 to 2003, Mr. Weigold served as Vice President and General

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Manager of The Micromachined Products Division of Analog Devices, Inc., and from 1992 to 1999 was Vice President and General Manager of its Transportation and Industrial Products Division. Prior to joining Analog Devices, Mr. Weigold served as President and Chief Operating Officer of Unitrode Corporation. Previously, he was President of Silicon General Inc. Mr. Weigold is also a member of the Board of Directors of Enpirion, Inc. and Siimpel Corp. Mr. Weigold received a B.S. in Electrical Engineering from Michigan Technological University and an M.B.A. from the University of Pittsburgh.

Available Information

        Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to reports filed or furnished pursuant to Sections 13(a) and 15(d) of the Securities Exchange Act of 1934, as amended, are available free of charge on our website at www.hittite.com as soon as reasonably practicable after such reports are electronically filed with, or furnished to, the Securities and Exchange Commission. The information posted on our website is not incorporated into this Annual Report.

Item 1A.    Risk Factors

        The Private Securities Litigation Reform Act of 1995 contains certain safe harbor provisions regarding forward-looking statements. This Annual Report on Form 10-K, and other information provided by us or statements made by our directors, officers or employees from time to time, may contain "forward-looking" statements and information, which involve risks and uncertainties. Actual future results may differ materially. Statements indicating that we "expect," "estimate," "believe," "are planning" or "plan to" are forward-looking, as are other statements concerning future financial results, product offerings or other events that have not yet occurred. There are several important factors that could cause actual results or events to differ materially from those anticipated by the forward-looking statements. Such factors include those described below. Although we have sought to identify the most significant risks to our business, we cannot predict whether, or to what extent, any of such risks may be realized. We also cannot assure that we have identified all possible issues which we might face. We undertake no obligation to update any forward-looking statements that we make.

         The recent global recession and related credit crisis has adversely affected our business, results of operations and financial condition.

        The recent global recession has affected all sectors of the economy, resulting in declines in economic growth and consumer confidence, increases in unemployment rates and uncertainty about economic stability. Global credit and financial markets have also experienced extreme disruptions, including diminished liquidity and credit availability and rapid fluctuations in market valuations. Our business was significantly affected by these conditions during 2009. Although we have experienced three sequential quarters of revenue growth and our backlog at December 31, 2009, increased compared to December 31, 2008, given weak economic conditions, there is no certainty that our business will continue to grow. These uncertainties affect businesses such as ours in a number of ways, making it difficult to accurately forecast and plan our future business activities. Deteriorating economic conditions may lead consumers and businesses to reduce or postpone spending, which may cause our customers to cancel, decrease or delay their existing and future orders with us. The inability of customers to obtain credit could negatively affect our revenue and our ability to collect receivables. In addition, financial difficulties experienced by our suppliers, independent sales representatives or distributor could result in product delays, increased accounts receivable defaults and inventory challenges. If the recent uncertain economic conditions continue or deteriorate, we may recognize charges relating to restructuring costs or the impairment of assets. These trends could have a material adverse impact on our business, our

21

ability to achieve targeted results of operations and our financial condition as a result of, among other things:

•

reduced demand for our products;

•

increased risk of order cancellations or delays;

•

increased pressure on the prices for our products;

•

greater difficulty in collecting accounts receivable; and

•

risks to our liquidity, including the possibility that we might not have access to our cash and short-term investments when needed.

         Our efforts to control operating expenses during the recent global recession may to some extent have adversely affected our ability to maintain our competitive position and meet operational challenges.

        Effectively managing our operations and maintaining our competitiveness while continuing to deliver acceptable financial performance in this environment represents a significant challenge. In light of the recent global recession, we took steps early in 2009 to reduce expenses across our business and maintained certain of these measures throughout the year. These expense control measures may to some extent have adversely affected our ability to meet our product development targets and make necessary improvements to our operational, financial and information technology organizations and systems.

         Our quarterly revenue and operating results are difficult to predict accurately and may fluctuate significantly from period to period. As a result, we may fail to meet the expectations of investors, which could cause our stock price to decline.

        We operate in a highly dynamic industry and our future results could be subject to significant fluctuations, particularly on a quarterly basis. Our quarterly revenue and operating results have fluctuated significantly in the past and may continue to vary from quarter to quarter due to a number of factors, many of which are not within our control. Although some of our customers, such as those who serve the military and space industries, place long-term orders with us or provide us with forecasts of their future requirements for our products, a significant percentage of our revenue in each quarter is dependent on sales that are booked and shipped during that quarter, typically attributable to a large number of orders from diverse customers and markets, which we refer to as our turns business. Accurately forecasting our turns business and our total revenue in any quarter is difficult. In addition, our business is being adversely affected by recent global economic factors, which has made it more difficult for our customers and for us to forecast our near term results. If our operating results do not meet our publicly stated guidance, if any, or the expectations of investors, our stock price may decline. Additional factors that can contribute to fluctuations in our operating results include:

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changes in demand for our products due to global economic conditions;

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changes in our product mix or customer mix;

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the increase, reduction, rescheduling or cancellation of significant customer orders;

•

the timing of customer qualification of our products and commencement of volume sales of systems that include our products;

•

the rate at which our present and future customers adopt our technologies in our target end markets;

•

the timing and success of the introduction of new products and technologies by us and our competitors, and the acceptance of our new products by our customers;

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•

the gain or loss of one or more key customers;

•

the availability, cost and quality of materials and components that we purchase from third-party vendors and any problems or delays in the fabrication, assembly, testing or delivery of our products;

•

the quality of our products and any remediation costs; and

•

changes in our effective tax rate.

        Due to these and other factors, quarter-to-quarter comparisons of our historical operating results should not be relied upon as accurate indicators of our future performance.

         Our financial results are exposed to the cyclicality of the semiconductor industry.

        The recent global recession reduced demand in the semiconductor industry as well as numerous other industries. In addition to being subject to such broad, macroeconomic conditions, the semiconductor industry is particularly cyclical and has historically experienced significant fluctuations in supply and demand, resulting in product overcapacity, high inventory levels and accelerated erosion of average selling prices, which may occur even during periods of growth in the broader economy. These conditions have sometimes lasted for extended periods of time. Downturns in many sectors of the electronic systems industry have in the past contributed to weak demand for semiconductor products. We experienced slower growth during periods of weak demand in the past, and our business may be adversely impacted by any downturns in the future. Future downturns in the electronic systems industry could adversely impact our revenue and harm our business, financial condition and results of operations.

         Our gross margin fluctuates from period to period, which affects our results of operations.

        Our gross margin has fluctuated on a quarterly basis. For example, our quarterly gross margin since the first quarter of 2006 has ranged from a low of 70.1% to a high of 74.8%. A number of factors can cause our gross margin to fluctuate from period to period. Our gross margin in any period is significantly affected by industry demand and the intensity of competition in the markets into which we sell our products. Our gross margin is also significantly affected by product mix, that is, the percentage of our revenue in that period that is attributable to higher or lower margin products, and by pricing, including fluctuations in the relative proportion of high volume orders, on which we offer higher discounts. Additional factors affecting our gross margin include changes in the cost of wafers and materials, the timing of indirect costs for pre-production masks and evaluation materials, project cost variations on customer-funded contracts, changes in overhead absorption rates and other manufacturing efficiencies, and other factors, some of which are not under our control. Our margin also can be substantially affected by changes in our manufacturing yields. Our yields depend on many factors that we control, such as product design and the effectiveness of our own assembly and test operations, but they are also affected by the activities of third parties, such as the foundries and packaging subcontractors that supply us with critical materials and services, that are beyond our control. As a result of these or other factors, we may be unable to maintain or increase our gross margin in future periods. A significant decrease in our gross margin would affect our profitability and likely have an adverse effect on our stock price.

         If we fail to develop new products that achieve market acceptance or fail to introduce new products that enable us to address additional markets, our operating results could be adversely affected.

        The markets for our products are characterized by frequent new product introductions and changes in product and process technologies. The future success of our business and continued growth in our revenue will depend on our ability to develop new products for existing and new markets, introduce

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these products in a cost-effective and timely manner and have our products designed into the products of OEMs. The development of new high performance semiconductor ICs, modules and subsystems is highly complex, and from time to time we may experience delays in completing the development and introduction of new products or fail to efficiently manufacture such products in the early production phase. As the complexity and degree of integration of our products increases, maintaining or increasing our historical rate of new product introductions will become increasingly challenging. Our ability to successfully develop, manufacture, introduce and deliver new types of high performance semiconductor ICs, modules and subsystems will depend on various factors, including our ability to:

•

attract and retain skilled engineering personnel;

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accurately understand market requirements;

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complete and introduce new products;

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achieve design wins with our customers;

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obtain adequate supplies of materials and components that meet our quality requirements; and

•

achieve adequate manufacturing yields.

        Furthermore, a newly introduced standard product generally has little immediate impact on our revenue. A new standard product may not generate meaningful revenue for two or more years, if ever. In the meantime, we will have incurred expenses to design and produce the product, and we may not recover these expenses if demand for the product fails to reach forecasted levels.

         We depend on third-party suppliers, including our foundries and packaging subcontractors, for components, materials and services that are critical to the manufacture of our products, which makes us susceptible to shortages, price fluctuations and quality risks that could adversely affect our operating results.

        We purchase a number of the key components and materials used in our products from sole source suppliers. For example, we obtain all the semiconductor wafers used in our products from third-party wafer fabrication facilities, known as foundries. Our principal third-party foundries include Cobham in Virginia, Global Communications Semiconductors in California, IBM in Vermont, Jazz Semiconductor in California, Northrop Grumman in California, Telefunken Semiconductors in Germany, TriQuint Semiconductor in Oregon, TSMC in Taiwan, UMS in France and WIN Semiconductors in Taiwan. We typically rely on a single foundry for the production of the wafer used in a particular product. Our reliance on third-party foundries involves several risks, including reduced control over our manufacturing costs, delivery times, reliability and process quality, which can adversely affect the quality of our components produced from these wafers, the possible misappropriation of our technology and the possibility that third parties may claim that our products infringe their intellectual property, as a result of activities by our foundries. Our contracts with our foundries and other sole source suppliers generally commit them to supply specified quantities of components or materials at agreed prices, typically over a one to two-year period.

        We also rely on a small number of subcontractors, primarily in Asia and the United States, to package some of our products, particularly those that utilize standard plastic packages. We do not have long-term contracts with our third-party packaging subcontractors stipulating fixed prices or packaging volumes. Therefore, in the future, we may be unable to obtain sufficiently high quality or timely packaging of our products. If our packaging subcontractors fail to achieve and maintain acceptable production yields in the future, we could experience increased costs, including warranty and product liability expense and costs associated with customer support, delays in or cancellations or rescheduling of orders or shipments, product returns or discounts and lost net revenue, any of which could have a material adverse effect on our business, financial condition and results of operations.

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        We believe that our suppliers currently have manufacturing capacity adequate to meet our foreseeable requirements. However, some of our suppliers could in the future extend their lead times or seek to increase the prices of materials we purchase from them as their contracts with us expire. If our key suppliers were to experience difficulties that affected their manufacturing yields or the quality of the materials they supply to us or seek to increase their prices, our cost of revenue could be adversely affected. Longer lead times and quality problems experienced by our suppliers or packaging subcontractors could also prevent us from fulfilling our customers' demands for our products on a timely basis, and thus adversely affect our revenue. Longer lead times could also require us to increase our raw materials inventory levels, in order to be able to meet customers' delivery requirements.

        The ability of our suppliers to meet our requirements could be impaired or interrupted by factors beyond their control, such as earthquakes or other natural phenomena, labor strikes or shortages or political unrest. Furthermore, financial or other difficulties faced by our suppliers, or significant changes in demand for the components, materials or services they use in the products they supply to us, could limit the availability of those products, components or materials to us. We believe that a supplier of wafers that are used in a significant number of our products has been experiencing financial difficulties. Failure of this supplier to meet its supply commitments to us would impair our ability to supply customers with the related products and adversely impact our revenue and financial results. We are taking steps to mitigate our exposure to this risk; however, there can be no assurance that these measures would be sufficient to avoid disruption of our business if there were to be a near-term interruption in the supply of wafers that we currently purchase from this supplier. If this or one of our other key suppliers is unable to provide us with its materials, components or services, our operations may be adversely affected. We might experience difficulty identifying alternative sources of supply for the materials, components and services used in our products or that we obtain through outsourcing. We could experience delays if we were required to test and evaluate products and services of potential alternative suppliers. Any of these occurrences could negatively affect our operating results and liquidity and harm our business.

         We are subject to claims that we are infringing third-party intellectual property rights, which could result in costly and lengthy litigation that could harm our business.

        In recent years there has been significant litigation involving intellectual property rights in many technology-based industries, including our own. Although we have not to date incurred any damages as a result of claims that our products infringe any patents or other proprietary rights of third parties, we have from time to time received notice of such claims from third parties, two of which have resulted in legal actions against us that are currently pending, and we could be subject to other such claims in the future. Since patent applications often are not disclosed until a patent issues, it is not always possible for us to know whether patent applications are pending that might be infringed by our products, and there could be issued patents that are pertinent to our business of which we are not aware. Our products may also be claimed to infringe intellectual property rights of others as a result of activities by our foundries or other suppliers with respect to which we have no control or knowledge. In connection with the sale of our products, we often make representations affirming, among other things, that our products do not infringe on the intellectual property rights of others, and we agree to indemnify customers against third-party claims of such infringement. During the first quarter of 2008, we received a letter from a third party asserting that sales by us of certain of our products infringe a patent that allegedly applies to a semiconductor process used by certain of our foundries in manufacturing wafers they supply to us for use in these products. We believe that to the extent that we might incur liability as a result of infringement by any of our foundries of this or any other third party's patent, we would be entitled to be indemnified by such foundry. During the third quarter of 2008, another third party commenced an action against us in which it alleges that certain of our products infringe patents held by the third party. During the third quarter of 2009, another third party commenced an action against us, in which it alleges that certain of our products infringe a patent held by the third party. We have

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incurred significant costs in defending these actions, and there can be no assurance that these or any other pending or future litigation or claims relating to infringement of third-party intellectual property rights can be resolved in a manner favorable to us. Any claims relating to the alleged infringement by us of third-party proprietary rights, whether meritorious or not, could be time-consuming to defend and could harm our working relationships with our foundries and customers, damage our reputation, result in substantial and unanticipated costs associated with litigation, require us to enter into royalty or licensing agreements, which may not be available on acceptable terms or at all, or result in the payment by us of substantial damages. If we were found to infringe the intellectual property rights of any third party and if a license were not available on reasonable terms, we could be required to redesign the infringing product so as not to infringe, which could be time consuming and costly, or if this is not feasible, we could be required to withdraw the infringing product from the market.

         Operations at our Chelmsford, Massachusetts facility that are critical to our business are subject to disruption from a variety of causes, including those that may be beyond our control.

        Our executive management and administrative functions, most of our research and development and product design activities, final assembly of our module and subsystem-level products, and final testing for all of our products are carried out at our headquarters facility in Chelmsford, Massachusetts. These operations are critical to our business, and could be affected by disruptions such as electrical power outages, fire, earthquake, flooding, acts of terrorism, health advisories or risks, or other natural or man-made disasters that could damage that facility. Although we seek to mitigate these risks by maintaining business interruption insurance, insurance may be inadequate to protect against all the consequences of such occurrences. A major disruption affecting our Chelmsford assembly and test operations, in particular, could cause significant delays in shipments until we are able to procure and outfit another suitable facility or to qualify and contract with alternative third party suppliers, processes which could take many months. Even if alternative assembly and test capacity is available, we may not be able to obtain it on a timely basis, or favorable terms, which could result in higher costs and/or a loss of customers.

         We design and manufacture products in our standard product line based upon our internal assessment and forecasts of market requirements, and our results of operations will be adversely affected if we fail to assess market requirements accurately.

        A majority of our revenue is typically derived from sales of our standard products. We order components and materials, such as semiconductor wafers, used in the manufacture of our standard products 12-14 weeks in advance, while our customers typically place orders for those products one to eight weeks in advance, exposing us to inventory and manufacturing costs in advance of anticipated revenue. If we or our customers fail to predict market demand accurately for new and existing standard products, we may experience a delay or reduction of anticipated revenue without having sufficient time to adjust our inventory and operating expenses. As the number of products we offer increases, we may be exposed to increased inventory risk.

        Lead times for our manufacturing materials can vary significantly and depend on factors such as specific supplier requirements, the size of the order, contract terms and current market demand. As a result, we make financial commitments in the form of purchase commitments. Furthermore, we generally lack visibility into the finished goods inventories of our customers, which makes it more difficult for us to accurately forecast their requirements. If we overestimate our customers' requirements, we may have excess inventory, which would increase our costs. If we underestimate our customers' requirements, we may have inadequate inventory, which could prevent us from delivering our products to our customers on a timely basis, which could disrupt our customers' production schedules. Any of these occurrences could negatively impact our operating results and our business.

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         We design custom products to meet specific requirements of our customers. The amount and timing of revenue from such products can cause fluctuations in our quarterly operating results.

        The design and sales cycle for our custom products, from initial contact by our sales force to the commencement of shipments of those products in commercial quantities, is lengthy and can range from three months to as long as two years or more. In this process, our sales and application engineers work closely with the OEM customer to analyze the customer's system requirements and establish a technical specification for the custom product. We then select a semiconductor process and foundry, evaluate test wafers and components, and establish assembly and test procedures before manufacturing in commercial quantities can begin. The length of this cycle is influenced by many factors, including the difficulty of the technical specification, the novelty and complexity of the design and the customer's procurement processes. OEMs typically do not commit to purchase significant quantities of the custom product until they are ready to commence volume shipment of their own systems, and volume purchases of our products by an OEM customer or its contract manufacturer generally do not occur until the OEM customer has successfully introduced the system incorporating our product. Our receipt of substantial revenue from sales of a custom product depends on that customer's commercial success in manufacturing and selling its system incorporating our product. As a result, a significant period may elapse between our investment of time and resources in a custom product and our receipt of substantial revenue from sales of that product.

        The length of this process increases the risk that a customer will decide to cancel or change its product plans. Such a cancellation or change in plans by a customer could cause us to lose anticipated sales. In addition, our business, financial condition and results of operations could be adversely affected if a significant customer curtails, reduces or delays orders during our sales cycle, chooses not to release equipment that contains our products, or is not successful in the sale and marketing its products that incorporate our custom products.

        Finally, if we fail to achieve initial design wins in the customer's qualification process, we may lose the opportunity for significant sales to that customer for a lengthy period of time because the customer may be unlikely to change its source for those products in the future due to the significant costs associated with qualifying a new supplier and potentially redesigning its product.

         We rely on a small number of customers for a significant percentage of our revenue, and the loss of, or a reduction in, orders from these customers could result in a decline in revenue.

        We have historically depended on a small number of customers for a large percentage of our annual revenue. Although the degree of concentration in our customer base has diminished in recent years, it remains substantial. Revenue derived from our 10 largest customers as a percentage of our annual revenue was 31.9% in 2009, 34.6% in 2008 and 38.8% in 2007. No single customer exceeded 10% of our total revenue in 2009, 2008 or 2007. We include in these calculations revenue from products sold to these customers directly by us or through sales representatives and our distributor, as well as from products sold to contract manufacturers for use in a system manufactured by the contract manufacturer for that customer. Our major customers often use our products in multiple systems or programs, sometimes developed by different business units within the customer's organization, each having differing product life cycles, end customers and market dynamics. While the composition of our top 10 customers varies from year to year, we expect that sales to a limited number of customers will continue to account for a significant percentage of our revenue for the foreseeable future. Additionally, we have noted consolidation among OEMs in some of our end markets, which could result in an increased concentration in our sources of revenue. It is possible that any of our major customers could terminate its purchasing arrangements with us or significantly reduce or delay the amount of our products that it orders, purchase products from our competitors or develop its own products internally. The loss of, or a reduction in, orders from any major customer could cause a decline in revenue and adversely affect our results of operations.

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         Our failure to continue to keep pace with new or improved semiconductor process technologies could impair our competitive position.

        Semiconductor manufacturers constantly seek to develop new and improved semiconductor process technologies. Our future success depends in part upon our ability to continue to gain access to these semiconductor process technologies in order to adapt to emerging customer requirements and competitive market conditions. If we fail for any reason to remain abreast of new and improved semiconductor process technologies as they emerge, we may lose market share which could adversely affect our operating results.

         Our business depends on international customers, suppliers and operations, and as a result we are subject to regulatory, operational, financial and political risks which could adversely affect our financial results.

        The percentage of our revenue attributable to sales to customers outside the United States, based on the location to which the product shipped, was 57.3%, 59.3% and 56.4% in 2009, 2008 and 2007, respectively. We expect that revenue from customers outside the United States will continue to account for the majority of our revenue. Currently, we maintain international sales offices in Europe and Asia, and we rely on a network of independent sales representatives to sell our products internationally. We also have design centers in Istanbul, Turkey and Ottawa, Ontario, Canada. We have in the past relied on, and expect to continue to rely on, suppliers, manufacturers and subcontractors located in countries other than the United States, including France, Germany, Malaysia, Taiwan and Thailand. Accordingly, we will be subject to several risks and challenges, any of which could adversely affect our business and financial results. These risks and challenges include:

•

difficulties and costs of staffing and managing international operations across different geographic areas and cultures;

•

compliance with a wide variety of domestic and foreign laws and regulations, including those relating to the import or export of semiconductor products;

•

legal uncertainties regarding taxes, tariffs, quotas, export controls, export licenses and other trade barriers;

•

seasonal reductions in business activities;

•

our ability to receive timely payment and collect our accounts receivable;

•

political, legal and economic instability, foreign conflicts, and the impact of regional and global infectious illnesses in the countries in which we and our customers, suppliers, manufacturers and subcontractors are located;

•

legal uncertainties regarding protection for intellectual property rights in some countries; and

•

fluctuations in freight rates and transportation disruptions.

        Political and economic instability and changes in governmental regulations could adversely affect our ability to effectively operate our foreign sales offices and foreign design centers, as well as the ability of our foreign suppliers to supply us with required materials or services. Any interruption or delay in the supply of our required components, products, materials or services, or our inability to obtain these components, materials, products or services from alternate sources at acceptable prices and within a reasonable amount of time, could impair our ability to meet scheduled product deliveries to our customers and could cause customers to cancel orders.

        Additionally, most of our foreign sales, as well as our purchases of material from international suppliers, are denominated in U.S. dollars. An increase in the value of the U.S. dollar relative to foreign currencies could make our products more expensive for our international customers to

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purchase, thus rendering the prices of our products less competitive. Conversely, a reduction in the value of the U.S. dollar relative to foreign currencies could increase our supply costs. At the present time, we do not have a foreign currency hedging policy in place.

         The segment of the semiconductor industry in which we participate is intensely competitive, and our inability to compete effectively would harm our business.

        The markets for our products are extremely competitive, and are characterized by rapid technological change and continuously evolving customer requirements. We compete primarily with other suppliers of high performance analog and mixed-signal semiconductor components used in RF, microwave and millimeterwave applications. These competitors include large, diversified semiconductor manufacturers with broad product lines, such as Avago and Analog Devices, with whom we compete in a number of our end markets. We also compete in specific markets or product categories with a large number of semiconductor manufacturers such as Eudyna, Linear Technology, NEC, RFMD, Skyworks, TriQuint Semiconductor and UMS. We also encounter competition from manufacturers of advanced electronic systems that also manufacture semiconductor components internally. Some of these competitors, such as NEC, are also our customers. Additionally, in certain product categories we compete with semiconductor manufacturers from which we also obtain foundry services, such as TriQuint Semiconductor and UMS. Our competitors may develop new technologies, enhancements of existing products or new products that offer price or performance features superior to ours. Many of our competitors have significantly greater financial, technical, manufacturing, sales and marketing resources than we do, and might be perceived by prospective customers to offer financial and operational stability superior to ours. This is particularly true of competitors in the markets for silicon-based products. We expect competition in our markets to intensify, as new competitors enter the RF, microwave and millimeterwave component market, existing competitors merge or form alliances, and new technologies emerge. If we are not able to compete effectively, our market share and revenue could be adversely affected, and our business and results of operations could be harmed.

         We rely on the significant experience and specialized expertise of our senior management and engineering staff and must retain and attract qualified engineers and other highly skilled personnel in order to grow our business successfully.

        Our performance is substantially dependent on the continued services and performance of our senior management and our highly qualified team of engineers, many of whom have numerous years of experience and specialized expertise in our business. Highly skilled analog and mixed-signal IC engineers, in particular, are in short supply. We expect to continue to hire additional engineering personnel as we expand our IC design and system-level engineering capabilities. If we are not successful in hiring and retaining highly qualified engineers, we may not be able to extend or maintain our engineering expertise, and our future product development efforts could be adversely affected.

        Our future success also depends on our ability to identify, attract, hire, train, retain and motivate highly skilled managerial, operations, sales, marketing and customer service personnel. If we fail to attract, integrate and retain the necessary personnel, our ability to maintain and grow our business could suffer significantly. Further, stock price volatility could impact our ability to retain key personnel.

         Our business could be adversely affected if we experience product returns, product liability and defects claims.

        We introduce a significant number of new products every year, and we may not be able to anticipate all of the possible performance or reliability problems that could arise with these products. If such problems occur or become significant, we could experience a reduction in our revenue and increased costs related to inventory write-offs, warranty claims and other expenses which could have an adverse effect on our financial condition.

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        The materials used to manufacture our products are complex and are provided by a significant number of vendors in our supply chain. While we perform extensive testing and inspections during the manufacturing process, some defects may escape detection in our manufacturing process and subsequently pass through to our customers. These matters have arisen from time to time and may reasonably be expected to occur again in the future. The occurrence of defects such as these could result in product returns from, and reduced product shipments to, our customers. Such defects also could result in the loss of or delay in market acceptance of our products or harm our reputation.

        Our purchase agreements with our customers typically contain provisions designed to limit our exposure to potential product liability claims. However, the limitation of liability provisions contained in these agreements may not be effective as a result of federal, state or local laws, or ordinances or unfavorable judicial decisions in the United States or other countries. The insurance we maintain to protect against claims associated with the use of our products may not adequately cover all claims asserted against us. In addition, even if ultimately unsuccessful, such claims could result in costly litigation, divert our management's time and resources, and damage our customer relationships.

         Our test and measurement instrument products are more complex than our core IC, module and subsystem products, and as a result, present quality, regulatory and product liability risks that differ from those we have faced in our core IC business and module business.

        Our test and measurement instrument products, such as our HMC-T2000 and HMC-T2100 signal generators, are complex microwave test instruments and could be subject to multiple internal component failures and manufacturing and software defects which could result in product failure. Defects in the hardware or software incorporated in these products could cause us to incur significant warranty, support and repair costs, divert the attention of our engineering personnel from our product development efforts and harm our relationship with our customers. Our test and measurement instrument products operate using line voltages of 100 volts or more and certain products require AC-to-DC power transformers which we purchase from a third party and supply to our customers. The failure of these products or their power transformers could cause safety problems for the operator, including the risk of electrical shock, injury or death in the event of a short circuit or other malfunction, and a product liability claim brought against us, even if unsuccessful, would likely be time consuming and costly to defend. We may be required to comply with various domestic and international legal directives governing the manufacture of our test and measurement instrument products. Failure of our test and measurement system products to meet domestic and international safety and other regulatory requirements for electromagnetic radiation, power consumption or workmanship standards could result in a loss of revenue, loss of market share or failure to achieve market acceptance. We may conclude that it is advisable or necessary, in order to promote the sale of these products, to seek certification of the products by various third parties such as Underwriters Laboratories (UL) in the United States or Conformité Européenne (CE) in Europe. We cannot ensure that we will be able to obtain, or if obtained, maintain any such certifications for our test and measurement instrument products. Our failure to obtain or maintain such certifications could adversely affect the market acceptance of the products.

         We use specialized technologies and know-how to design, develop and manufacture our products. Our inability to protect our intellectual property could hurt our competitive position, harm our reputation and adversely affect our results of operations.

        We seek to protect our proprietary technology under United States and foreign laws affording protection for trade secrets, and seek United States and foreign patent, copyright and trademark protection of our products and developments where appropriate. We rely primarily on trade secrets, technical know-how and other unpatented proprietary information relating to our product development and manufacturing activities. While we own a small number of patents, we have not historically

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emphasized patents as a source of significant competitive advantage. We believe that while the protection afforded by trade secret, patent, copyright and trademark laws may provide some advantages, the competitive position of participants in our industry is largely determined by such factors as the technical and creative skills of their personnel, the frequency of their new product developments and their ability to anticipate and rapidly respond to evolving market requirements. To the extent that a competitor effectively uses its intellectual property portfolio, including patents, to prevent us from selling products that allegedly infringe such competitor's products, our operating results would be adversely affected.

        We seek to protect our trade secrets and proprietary information, in part, by requiring our employees to enter into agreements providing for the maintenance of confidentiality and the assignment of rights to inventions made by them while employed by us. We also enter into non-disclosure agreements with our consultants, semiconductor foundries and other suppliers to protect our confidential information delivered to them. There can be no assurance that our confidentiality agreements with employees, consultants and other parties will not be breached, that we will have adequate remedies for any breach or that our trade secrets and other proprietary information will not otherwise become known. There also can be no assurance that others will not independently develop technologies that are similar or superior to our technology or reverse engineer our products. Additionally, the laws of countries in which we operate may afford little or no protection to our intellectual property rights. If we are unable to prevent misappropriation of our technology or to deter independent development of similar technologies, our competitive position and reputation could suffer.

         We generate a portion of our revenue from sales made by third parties, including our independent sales representatives and our distributor, and the failure to manage successfully our relationships with these third parties could cause our revenue to decline and harm our business.

        We rely in part upon third parties, including our independent sales representatives and our distributor, Future Electronics, to promote our products, generate demand and sales leads, and obtain orders for our products. In addition, these parties provide technical sales support to our customers. The activities of these third parties are not within our direct control. Our failure to manage our relationships with these third parties effectively could impair the effectiveness of our sales, marketing and support activities. A reduction in the sales efforts, technical capabilities or financial viability of these parties, a misalignment of interest between us and them, or a termination of our relationship with a major sales representative or our distributor could have a negative effect on our sales, financial results and ability to support our customers. These parties are engaged under short-term contracts, which typically may be terminated by either party on 30 to 60 days notice. It generally takes approximately three to six months for a third party such as a sales representative to become educated about our products and capable of providing quality sales and technical support to our customers. If we were to terminate our relationship with our distributor or one of our larger sales representatives, or if one of them decided to discontinue its relationship with us, sales to current and prospective customers could be disrupted or delayed, and we could experience a diversion of substantial time and resources as we seek to identify, contract with and train a replacement.

         We may pursue acquisitions and investments in new businesses, products or technologies that involve numerous risks, which could disrupt our business and may harm our financial results.

        In October 2007, we entered into a strategic agreement with Northrop Grumman Space Technology sector to market a specified list of existing Velocium products worldwide, to license related technology and to assume the associated customer relationships, at a cost of $7.1 million. In August 2005, we acquired substantially all of the assets of Q-Dot, Inc., a subsidiary of Simtek Corporation, for an aggregate purchase price of $2.5 million. We may make other similar or significantly larger acquisitions of and investments in new businesses, products and technologies, or we

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may acquire other operations that expand our current capabilities. Acquisitions present a number of potential risks and challenges that could, if not met, disrupt our business operations, increase our operating costs and reduce the value to us of the acquired company. For example, if we identify an acquisition candidate, we may not be able to successfully negotiate or finance the acquisition on favorable terms. Even if we are successful, we may not be able to integrate the acquired businesses, products or technologies into our existing business and products. Further, there can be no assurance that we will be successful in retaining key employees or customers of the acquired business. In some cases, the consent of a customer may be required before contracts between that customer and a company that we acquire may be assumed by us, and it may not be feasible to obtain all such consents prior to closing. As a result of the rapid pace of technological change, we may misgauge the long-term potential of the acquired business or technology, or the acquisition may not be complementary to our existing business. Furthermore, potential acquisitions and investments, whether or not consummated, may divert our management's attention and require considerable cash outlays at the expense of our existing operations. In addition, to complete future acquisitions, we may issue equity securities, incur debt, assume contingent liabilities or have amortization expenses and write-downs of acquired assets, which could adversely affect our profitability.

         If our principal end markets fail to grow or experience declines, our revenue may suffer.

        Although our products are used in a variety of end markets, our future growth depends to a significant extent on the success of our principal end markets, which are automotive, broadband, cellular infrastructure, fiber optics, microwave and millimeterwave communications, military, space and test and measurement systems. Revenue derived from our three largest end markets, cellular infrastructure, microwave and millimeterwave communications and military, represented 79.3%, 75.9% and 72.1% of our annual revenue in 2009, 2008 and 2007, respectively. Given the current economic climate, the rate at which our principal end markets will grow or decline is difficult to predict. These markets may fail to grow or may decline for many reasons, including insufficient consumer demand, lack of access to capital, changes in the United States defense budget and procurement processes and changes in regulatory environments. If demand for electronic systems in which our products are incorporated declines, fails to grow, or grows more slowly than we anticipate, our revenue could decline.

         Our financial results may be adversely affected by increased tax rates and exposure to additional tax liabilities.

        As a global company, our effective tax rate is highly dependent upon the geographic composition of worldwide earnings and tax regulations governing each region. We are subject to income taxes in both the United States and various foreign jurisdictions, and significant judgment is required to determine worldwide tax liabilities. Our effective tax rate as well as the actual tax ultimately payable could be adversely affected by changes in the split of earnings between countries with differing statutory tax rates, in the valuation of deferred tax assets, in tax laws or by material audit assessments, which could affect our profitability. In addition, the amount of income taxes we pay is subject to ongoing audits in various jurisdictions, and a material assessment by a governing tax authority could affect our profitability.

         If we fail to comply with export control regulations we could be subject to substantial fines or other sanctions.

        Certain of our products are subject to the Export Administration Regulations, administered by the Department of Commerce, Bureau of Industry Security, which require that we obtain an export license before we can export products or technology to specified countries. Additionally, some of our products are subject to the International Traffic in Arms Regulations, which restrict the export of information

32

and material that may be used for military or intelligence applications by a foreign person. Failure to comply with these laws could result in sanctions by the government, including substantial monetary penalties, denial of export privileges and debarment from government contracts.

         If we fail to comply with government contracting regulations, we could suffer a loss of revenue or incur price adjustments or other penalties.

        Some of our revenue is derived from contracts with agencies of the United States government and subcontracts with its prime contractors. As a United States government contractor or subcontractor, we are subject to federal contracting regulations, including the Federal Acquisition Regulations, which govern the allowability of costs incurred by us in the performance of United States government contracts. Certain contract pricing is based on estimated direct and indirect costs, which are subject to change. Additionally, the United States government is entitled after final payment on certain negotiated contracts to examine all of our cost records with respect to such contracts and to seek a downward adjustment to the price of the contract if it determines that we failed to furnish complete, accurate and current cost or pricing data in connection with the negotiation of the price of the contract.

        In connection with our United States government business, we are also subject to government audits and to review and approval of our policies, procedures, and internal controls for compliance with procurement regulations and applicable laws. In certain circumstances, if we do not comply with the terms of a contract or with regulations or statutes, we could be subject to downward contract price adjustments or refund obligations or could in extreme circumstances be assessed civil and criminal penalties or be debarred or suspended from obtaining future contracts for a specified period of time. Any such suspension or debarment or other sanction could have an adverse effect on our business.

        Under some of our government subcontracts, we are required to maintain secure facilities and to obtain security clearances for personnel involved in performance of the contract, in compliance with applicable federal standards. If we were unable to comply with these requirements, or if personnel critical to our performance of these contracts were to lose their security clearances, we might be unable to perform these contracts or compete for other projects of this nature, which could adversely affect our revenue.

         Some of our long-term contracts may be terminated for the convenience of the customer and may involve significant expenditures on our part that, if the contract is terminated early, we may be unable to recover.

        Our United States government contracts and subcontracts may be funded in increments over a number of government budget periods and typically can be terminated by the government for its convenience. Some of our contracts, such as our $35 million production order for microwave subsystems that will be used in an advanced U.S. military weapon system, which we announced in February 2009, are long-term contracts for the manufacture of complex subsystems for which we are required to expand our production facilities, hire additional personnel, incur costs to meet customer qualification requirements and make other substantial investments in advance of our receipt of significant revenue. If such a contract is terminated, in addition to the loss of anticipated revenue, we may be unable to recover all of our costs incurred or committed.

         In order to comply with current and pending environmental and climate change laws and regulations, we may need to modify our activities or incur substantial costs, and if we fail to comply with environmental regulations we could be subject to substantial fines or be required to suspend production, alter manufacturing processes or cease operations.

        We are subject to a variety of international, federal, state and local governmental regulations directed at preventing or mitigating climate change and other environmental harms, as well as to the storage, discharge, handling, generation, disposal and labeling of toxic or other hazardous substances

33

used to manufacture our products. If we fail to comply with these regulations, substantial fines could be imposed on us, and we could be required to suspend production, alter manufacturing processes or cease operations, any of which could have a negative effect on our sales, income and business operations. Failure to comply with environmental regulations could subject us to civil or criminal sanctions and property damage or personal injury claims. Compliance with current or future environmental laws and regulations could restrict our ability to expand our facilities or build new facilities or require us to acquire additional expensive equipment, modify our manufacturing processes, or incur other substantial expenses which could harm our business, financial condition and results of operations. In response to environmental concerns, some customers and government agencies impose requirements for the elimination of hazardous substances, such as lead (which is widely used in soldering connections in the process of semiconductor packaging and assembly), from electronic equipment. For example, in 2003, the EU adopted its RoHS Directive. Effective July 1, 2006, the RoHS Directive prohibits, with specified exceptions, the sale in the EU market of new electrical and electronic equipment containing more than agreed levels of lead or other hazardous materials. We have a program in place to meet these customer and governmental requirements, including the RoHS Directive, where applicable to us, by making available versions of our products that do not include lead or other hazardous substances. The European Parliament has also adopted the Waste Electrical and Electronic Equipment Directive, or WEEE Directive, which makes producers of electrical and electronic equipment financially responsible for specified collection, recycling, treatment and disposal of past and future covered products. Environmental laws and regulations such as these could become more stringent over time, imposing even greater compliance costs and increasing risks and penalties associated with violations, which could seriously harm our business, financial condition and results of operations.

         Dr. Ayasli, our founder and a principal stockholder, controls approximately 20% of our voting power, and is able to exert significant control over the outcome of director elections and other matters requiring stockholder approval, including a change in corporate control.

        Dr. Yalcin Ayasli, our founder, and the Ayasli Children LLC, of which Dr. Ayasli is the sole manager, are the beneficial owners of an aggregate of approximately 20% of our common stock. As a result, Dr. Ayasli has the power to exert significant control over the outcome of matters requiring stockholder approval, such as:

•

the election of our directors;

•

amendments to our certificate of incorporation or by-laws; and

•

approval of mergers, consolidations or the sale of all or substantially all our assets.

        Dr. Ayasli's significant ownership interest could adversely affect investors' perception of our corporate governance or delay, prevent or cause a change in control of our company, any of which could adversely affect the market price of our common stock.

         We are required to evaluate our internal control over financial reporting under Section 404 of the Sarbanes-Oxley Act of 2002, and any adverse results from such evaluation could result in a loss of investor confidence in our financial reports and have an adverse effect on our stock price.

        Pursuant to Section 404 of the Sarbanes-Oxley Act of 2002, we are required to furnish annually a report by our management on our internal control over financial reporting. Such a report is required to contain, among other matters, an assessment of the effectiveness of our internal control over financial reporting as of the end of our fiscal year, including a statement as to whether or not our internal control over financial reporting is effective. This assessment must include disclosure of any material weaknesses in our internal control over financial reporting identified by management.

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        If our management identifies one or more material weaknesses in our internal control over financial reporting, we will be unable to assert that our internal control is effective. If we are unable to assert that our internal control over financial reporting is effective, or if our independent registered public accounting firm is unable to express an opinion on the effectiveness of our internal controls, investors could lose confidence in the accuracy and completeness of our financial reports, which could have an adverse effect on our stock price.

         We could be the subject of securities class action litigation due to stock price volatility, which could divert management's attention and adversely affect our financial position or results of operations.

        The stock market in general, and market prices for the securities of technology companies like ours in particular, have experienced volatility that often has been unrelated to the operating performance of the underlying companies. These broad market and industry fluctuations may adversely affect the market price of our common stock, regardless of our operating performance. In several recent situations where the market price of a stock has been volatile, holders of that stock have initiated securities class action litigation against the company that issued the stock. If any of our stockholders were to bring a lawsuit against us, the defense and disposition of the lawsuit could be costly and divert the time and attention of our management and harm our business.

         Anti-takeover provisions in our charter documents and Delaware law could prevent or delay a change in control of our Company that stockholders may consider beneficial and may adversely affect the price of our stock.

        Provisions of our certificate of incorporation and by-laws may discourage, delay or prevent a merger, acquisition or change of control that a stockholder may consider favorable. These provisions could also discourage proxy contests and make it more difficult for stockholders to elect directors and take other corporate actions. The existence of these provisions could limit the price that investors might be willing to pay in the future for shares of our common stock. These provisions include authorizing the issuance of "blank check" preferred stock and establishing advance notice requirements for nominations for election to the board of directors and for proposing matters to be submitted to a stockholder vote.

        Provisions of Delaware law may also discourage, delay or prevent someone from acquiring or merging with our Company or obtaining control of our Company. Specifically, Section 203 of the Delaware General Corporate Law may prohibit business combinations with stockholders owning 15% or more of our outstanding voting stock and could reduce the value of our Company.

Item 1B.    Unresolved Staff Comments

        Not applicable.

Item 2.    Properties

        Our headquarters are located in Chelmsford, Massachusetts in a 71,000 square foot building that we own. We occupy leased premises of approximately 13,000 square feet for our design center in Colorado Springs, Colorado; 8,000 square feet for our design center in Istanbul, Turkey; and 7,000 square feet for our design center in Ottawa, Ontario, Canada. We also occupy approximately 1,000 square feet or less for each of our sales offices in China, Germany, India, Japan, Korea, Sweden and the United Kingdom. We believe that our existing facilities meet our current needs and that we will be able to obtain additional commercial space as needed.

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Item 3.    Legal Proceedings

        In September 2008, Analog Devices, Inc. commenced an action against us in the United States District Court for the District of Massachusetts, in which it alleges that certain of our products infringe patents held by Analog Devices. The action seeks injunctive relief and damages in an unspecified amount. We have filed an answer denying that we infringe and asserting defenses, including that the patents in question are invalid. Discovery in the action is proceeding.

        In August 2009, ON Semiconductor Corporation and its subsidiary, Semiconductor Components Industries, LLC, commenced an action against us, along with Hynix Semiconductor, Inc., Elpida Memory, Inc. and Nanya Technology Corporation and entities affiliated with those defendants, in the United States District Court for the Eastern District of Texas. The ON Semiconductor action alleges that certain of our products infringe a patent owned by ON Semiconductor. The action seeks injunctive relief and damages in an unspecified amount. We have filed an answer denying that we infringe and asserting defenses, including that the patent in question is invalid.

Item 4.    Submission of Matters to a Vote of Security Holders

        No matters were submitted to a vote of our shareholders during the fourth quarter of the fiscal year ended December 31, 2009.

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PART II

Item 5.    Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

        The following table sets forth, for the periods indicated, the range of high and low sale prices for our common stock. Our common stock trades on the Nasdaq Global Select Market under the symbol HITT.

	Year Ended December 31,
	2009				2008
	High		Low		High		Low
First Quarter	$	31.98	$	24.05	$	49.27	$	30.82
Second Quarter		37.74		31.22		43.79		35.62
Third Quarter		38.99		33.34		36.58		29.19
Fourth Quarter		41.10		35.12		33.82		23.77

        As of December 31, 2009, our common stock was held by approximately 420 shareholders of record.

        On July 27, 2005, we paid a cash dividend in the aggregate amount of approximately $34.2 million to our stockholders of record at June 24, 2005. The dividend was funded out of our then-existing cash and cash equivalents. Our board of directors found it prudent and consistent with our historical policy as a then-private company to return retained earnings to the holders of our capital stock in the form of a cash dividend, prior to, and contingent upon, the closing of our initial public offering. We have not paid cash dividends since that time, and do not anticipate paying cash dividends for the foreseeable future.

Stock Repurchase Program

        In April 2008, our board of directors authorized a stock repurchase program to offset the dilutive impact of equity-based compensation granted to our employees. The shares may be repurchased from time to time in the open market or in privately negotiated transactions. During the three months ended December 31, 2009, we repurchased 227,159 shares of our common stock at a cost of $8.7 million, as set forth in the table below.

Period	Total number of shares purchased(1)		Average price paid per share		Total number of shares purchased as part of publicly announced plan		Approximate dollar value of shares that may yet be purchased under the plans or programs (in thousands)(2)
October 2009		8,980	$	38.92		8,980
November 2009		139,246		38.01		139,246
December 2009		78,933		38.84		78,933
Total		227,159				227,159	$	15,834

(1)

Includes shares repurchased in connection with our stock-based compensation plans.

(2)

Value based on an aggregate of 388,370 shares at an assumed purchase price of $40.77 per share, which was the last sale price of our common stock on December 31, 2009, as reported by the Nasdaq Global Market.

        For information concerning securities authorized for issuance under our equity compensation plans, see Part III, Item 12, "Security Ownership of Certain Beneficial Owners and Related Stockholder Matters."

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COMPARISON OF 53 MONTH CUMULATIVE TOTAL RETURN*

Among Hittite Microwave Corporation, The NASDAQ Composite Index
And The Philadelphia Semiconductor Index

* $100 invested on 7/22/05 in stock or 6/30/05 in index—including reinvestment of dividends.
Fiscal year ending December 31.

	7/05		9/05		12/05		3/06		6/06		9/06		12/06		3/07		6/07		9/07		12/07		3/08		6/08		9/08		12/08		3/09		6/09		9/09		12/09
Hittite Microwave Corporation		100.00		104.11		118.97		173.32		185.91		228.79		166.17		206.53		219.69		226.99		245.55		192.39		183.14		172.75		151.47		160.41		178.66		189.10		209.61
NASDAQ Composite		100.00		105.22		107.35		114.15		106.96		111.91		120.78		121.25		130.62		133.48		131.06		112.10		113.12		101.06		77.45		75.07		90.15		104.39		111.88
Philadelphia Semiconductor		100.00		105.35		109.51		103.75		95.73		101.26		100.86		99.86		113.69		115.42		108.90		93.75		97.27		80.84		61.08		65.87		74.31		90.26		97.40

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Item 6.    Selected Financial Data

        The following tables set forth our selected financial data for the last five fiscal years.

		Year Ended December 31,
		2009		2008			2007		2006			2005
		(in thousands, except per share data)
Consolidated Statement of Operations Data:
Revenue		$	162,990	$	180,251		$	156,412	$	130,290		$	80,677
Cost of revenue			45,239		51,556			45,363		35,398			25,715
Gross profit			117,751		128,695			111,049		94,892			54,962
Operating expenses:
	Research and development		22,971		24,438			18,546		15,179			10,800
	Sales and marketing		15,034		15,988			13,313		11,183			8,648
	General and administrative		9,737		8,347			7,316		6,501			3,408
	In-process research and development		—		—			—		—			1,778
Total operating expenses			47,742		48,773			39,175		32,863			24,634
Income from operations			70,009		79,922			71,874		62,029			30,328
Interest income			394		3,420			5,474		3,180			1,090
Interest expense			—		—			—		(30	)		(54	)
Other income (expense), net			2		(343	)		74		109			—
Income before income taxes			70,405		82,999			77,422		65,288			31,364
Provision for income taxes			24,232		29,157			26,184		22,598			10,286
Net income			46,173		53,842			51,238		42,690			21,078
Accretion on redeemable convertible preferred stock			—		—			—		—			944
Net income attributable to common stockholders		$	46,173	$	53,842		$	51,238	$	42,690		$	20,134
Earnings per share attributable to common stockholders:
	Basic	$	1.57	$	1.77		$	1.67	$	1.43		$	0.76
	Diluted	$	1.55	$	1.74		$	1.64	$	1.38		$	0.71
Weighted average shares outstanding:
	Basic		29,380		30,473			30,630		29,856			25,085
	Diluted		29,850		30,955			31,263		30,882			26,822
Cash dividend declared and paid per common share		$	—	$	—		$	—	$	—		$	1.36

	As of December 31,
	2009		2008		2007		2006		2005
	(in thousands)
Consolidated Balance Sheet Data:
Cash and cash equivalents	$	220,477	$	180,856	$	65,735	$	83,798	$	40,559
Short-term available-for-sale investments		—		—		99,007		38,757		22,082
Working capital		255,372		216,894		192,530		142,133		70,762
Total assets		292,693		255,084		234,495		172,671		94,397
Long-term debt		—		—		—		—		213
Stockholders' equity		274,149		236,929		216,293		156,162		83,330

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Item 7.    Management's Discussion and Analysis of Financial Condition and Results of Operations

        Our discussion and analysis of financial condition and results of operations contains "forward-looking" statements and information, which involve risks and uncertainties. Actual future results may differ materially. Statements indicating that we "expect," "estimate," "believe," "are planning" or "plan to" are forward-looking, as are other statements concerning future financial results, product offerings or other events that have not yet occurred. There are several important factors that could cause actual results or events to differ materially from those anticipated by the forward-looking statements. Such factors include those described below and in "Risk Factors." Although we have sought to identify the most significant risks to our business, we cannot predict whether, or to what extent, any of such risks may be realized. We also cannot assure that we have identified all possible issues which we might face. We undertake no obligation to update any forward-looking statements that we make.

Overview

        We were organized as a Massachusetts corporation in 1985 and reincorporated under the laws of Delaware in 1988. Since our founding, we have established a 25-year track record of innovation in RF, microwave and millimeterwave semiconductor technology.

•

From 1985 to 1993, our principal activity was government-sponsored research and development relating to advanced, application-specific radio frequency integrated circuits, or RFICs, and monolithic microwave integrated circuits, or MMICs, primarily for military and other government-related programs. During this period, we developed many innovative technologies that we continue to incorporate in our products today.

•

In 1993, we began to transition our focus from government-sponsored research and development activities to the design, development and production of our own ICs, modules and subsystems. Our early products were custom MMICs designed for use in specific defense programs, such as radar applications.

•

In 1996, we published our first catalog, which contained 50 standard products, and began to expand our operations to support our growing commercial business. We also established a dedicated direct technical sales force to promote our emerging standard product line.

•

In 2001, we opened our first international sales office in the United Kingdom, and began to focus on expanding our international business. We have since opened sales and technical support offices in China, Germany, India, Japan, Korea and Sweden, to complement our United States offices. In 2009, we derived 57.3% of our revenue from customers outside the United States.

•

In 2005, we established our first remote design center in Istanbul, Turkey.

•

In July 2005, we sold 3,375,000 shares of common stock in an initial public offering at $17.00 per share, for net proceeds, after the underwriting discount and offering costs, of $51,630,000. Related to the initial public offering, in July 2005, 1,288,628 shares of Series A redeemable convertible preferred stock were converted into 2,414,887 shares of our common stock. In April 2005, our Board of Directors declared a cash dividend in the aggregate amount of $34,190,000, which was paid to those persons who were holders of record of our common stock and of our Series A preferred stock on June 24, 2005.

•

In August 2005, we acquired substantially all the assets and employees of Q-Dot, Inc., a research and development organization based in Colorado Springs, Colorado.

•

In December 2006, we opened a design center in Ottawa, Ontario, Canada.

•

In October 2007, we entered into a strategic agreement with Northrop Grumman Space Technology sector to market a specified list of existing Velocium products worldwide, to license related technology and to assume the associated customer relationships, at a cost of $7.1 million.

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•

In 2009, we introduced the 14^th annual edition of our product catalog. We currently offer more than 800 standard products in our catalog and many more custom products, spanning 24 product lines.

        We employ a fabless business strategy, which means that we do not own a semiconductor fabrication facility, or fab, and purchase all of our semiconductor wafer requirements from third-party wafer fabrication facilities, known as foundries. We believe that our fabless business model enables us to access a broad range of technologies and quickly respond to new market opportunities, while significantly reducing our capital requirements.

Description of Our Revenue, Costs and Expenses

        Revenue.    Our revenue is derived primarily from the sale of standard and custom products. We develop standard products from our own specifications, which we sell through our direct sales organization, our network of independent sales representatives, a distributor and our website. We also develop custom products to meet the specialized requirements of individual customers, which are sold by our direct sales organization.

        We sell our products to OEMs, that supply advanced electronic systems to commercial and military end users, and to these OEMs' contract manufacturers. In general, the decision to purchase our product is made by the OEM, which has designed our product into its system. In the event that we sell to an OEM's contract manufacturer, the contract manufacturer typically does not have discretion to replace our product with one from a different supplier.

        Our sales cycle varies substantially, ranging from a period of a month or less when a customer selects a standard product from our catalog or website, to as long as two years or more for custom products. In the sales process, our sales and application engineers work closely with the OEM customer to analyze the customer's system requirements and select an appropriate standard product or establish a technical specification for a custom product. In the case of a custom product, we also select a semiconductor process and foundry, and evaluate test wafers and finished components before manufacturing in commercial quantities can begin. Volume purchases of our products by an OEM customer, or its contract manufacturer, generally do not occur until the OEM customer has made the decision to begin production of the system incorporating our product. Our receipt of substantial revenue from sales of a product to an OEM customer depends on that customer's commercial success in manufacturing and selling its system incorporating our product. It may take several years for a newly introduced standard product to generate substantial revenue, if ever. However, the life cycles of our standard products tend to be lengthy.

        Although most of our revenue is derived from sales of our products, we also receive a small percentage of our revenue from customer-sponsored research and development activities. These activities range from pure research, in which we investigate IC design techniques on new semiconductor technologies at the request of a government agency or commercial customer, to custom development projects in which we are paid to enhance or modify an existing product or develop a new product to meet a customer's specifications.

        Historically, a portion of our customer-sponsored research and development activities have been funded by U.S. government agencies under the Small Business Innovation Research (SBIR) program. We are no longer eligible to compete for new SBIR awards and during 2009 completed substantially all of our SBIR projects. Revenue from SBIR contracts was immaterial in both 2008 and 2009. There has been no impact to our other U.S. government- or commercial-sponsored research and development activities.

        Cost of revenue.    Cost of revenue consists primarily of the cost of semiconductor wafers that we purchase from our foundries and other materials such as packages, epoxies, connectors and production masks. Cost of revenue also includes personnel costs and overhead related to our manufacturing and

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engineering operations, including occupancy and equipment costs, inbound shipping costs, charges for inventory obsolescence and warranty obligations and amortization of certain intangible assets.

        Research and development.    Research and development expense consists primarily of personnel costs of our research and development organization, costs of development wafers, license fees for computer-aided design software, costs of development testing and evaluation, costs of developing automated test software, and related occupancy and equipment costs. We expense all research and development costs as incurred.

        Sales and marketing.    Sales and marketing expense consists primarily of personnel costs of our sales and marketing organization, sales commissions paid to independent sales representatives, costs of advertising, trade shows, corporate marketing, promotion, travel, related occupancy and equipment costs, amortization of certain intangible assets and other marketing costs.

        General and administrative.    General and administrative expense consists primarily of personnel costs of our executive management, finance, and other administrative staff, outside professional fees, related occupancy and equipment costs and other corporate expenses.

Critical Accounting Policies and Estimates

        Our discussion and analysis of our financial condition and results of operations are based on our consolidated financial statements. The preparation of financial statements, in conformity with accounting principles generally accepted in the United States of America, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. By their nature, these estimates and judgments are subject to an inherent degree of uncertainty. On an ongoing basis, we re-evaluate our judgments and estimates including those related to uncollectible accounts receivable, inventories, intangible assets, stock-based compensation, income taxes, warranty obligations, accrued expenses and other contingencies. We base our estimates and judgments on our historical experience and on other assumptions that we believe are reasonable under the circumstances, the results of which form the basis for making the judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results could differ from those estimates, and material effects on our operating results and financial position may result. The accounting policies described below are those which, in our opinion, involve the most significant application of judgment, or involve complex estimation, and which could, if different judgments or estimates were made, materially affect our reported results of operations.

        Revenue recognition.    We recognize revenue for the majority of our business when the following criteria have been met: (1)  persuasive evidence of an arrangement exists; (2) delivery has occurred or services have been rendered; (3) the fee is fixed or determinable; and (4) collectibility is reasonably assured. For arrangements that involve multiple elements, we allocate arrangement consideration among the elements based on the relative fair values of those elements as determined using objective and reliable evidence of fair value. If the fair value of an undelivered element cannot be established, the arrangement is accounted for as a single unit of accounting and revenue is recognized when all performance obligations are met. We maintain a reserve for potential sales returns and allowances. Returns and customer credits are immaterial and are recorded as a reduction to revenue. A portion of our sales are made to a distributor under an agreement that provides for limited product return privileges. As a result, we defer recognition of such revenue until the product is resold by the distributor.

        Revenue from contracts with the United States government, government prime contractors and some commercial customers is generally recorded on a percentage of completion basis using costs incurred as the measurement basis for progress toward completion. Where appropriate, we use an

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output measure, such as units delivered, to measure progress toward completion. Estimated revenue in excess of amounts billed is reported as unbilled receivables. Contract accounting requires judgment in estimating costs and assumptions related to technical issues and delivery schedule. Contract costs include material, subcontract costs, labor and an allocation of indirect costs. The estimation of costs at completion of a contract is subject to numerous variables involving contract costs and estimates as to the length of time to complete the contract. Changes in contract performance and estimated gross margin, including the impact of final contract settlements, are recognized in the period in which the changes are determined. Estimated losses on a contract are recognized in full in the period when they become known.

        Allowance for doubtful accounts.    We perform ongoing credit evaluations of our customers and adjust credit limits, as determined by our review of current credit information. We continuously monitor collections and payments from our customers and maintain an allowance for doubtful accounts based upon our historical experience, our anticipation of uncollectible accounts receivable and any specific customer collection issues that we have identified. While our credit losses have historically been within our expectations and the allowance established, we may not continue to experience the same credit loss rates that we have in the past.

        Inventory.    Inventory is stated at the lower of cost (first-in, first-out method) or market. We review the inventory and compare product costs with current market value, and write down any inventory with costs in excess of current market value to its net realizable value. Estimating demand is inherently difficult, particularly given the cyclical nature of the semiconductor industry, which can result in excess or obsolete inventory. We recorded expense of $1,988,000, $1,678,000 and $655,000 in 2009, 2008 and 2007, respectively, to reduce inventory to its net realizable value. Once we have written down inventory to its estimated net realizable value, we establish a new cost basis for that inventory and do not increase its carrying value due to subsequent changes in demand forecasts. Accordingly, if inventory previously written down is subsequently sold, we may realize improved gross profit margins on these transactions.

        Long-lived assets.    We evaluate our long-lived assets for potential impairment whenever events or circumstances suggest that the carrying amount of an asset or group of assets is not recoverable. Our judgments regarding the existence of impairment indicators are based on market and operational performance. Indicators of potential impairment include:

•

a significant change in the manner in which an asset is used;

•

a significant decrease in the market value of an asset;

•

a significant adverse change in the business or industry in which the asset is used or sold;

•

a current period operating cash flow loss combined with a history of operating or cash flow losses or a projection or forecast that demonstrates continuing losses associated with the asset; and

•

significant advances in our technologies that require changes in one or more of our manufacturing processes.

        If we believe that an indicator of potential impairment exists, we test to determine whether the impairment recognition criteria have been met. To analyze a potential impairment, we project undiscounted future cash flows over the remaining life of the asset or the primary asset in the asset group, using a probability-weighted multiple scenario approach, reflecting a range of possible outcomes. If these projected cash flows are less than the carrying amount, an impairment loss is recognized based on the fair value of the asset or asset group less any costs of disposition. Evaluating the impairment requires judgment by our management to estimate future operating results and cash flows. If different estimates were used, the amount and timing of asset impairments could be affected. We charge

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impairments of the long-lived assets to operations if our evaluations indicate that the carrying values of these assets are not fully recoverable.

        Warranty Obligations.    We accrue for warranty costs at the time revenue is recognized based on the historical rate of claims and costs to provide warranty services. If we experience an increase in warranty claims above historical experience or our costs to provide warranty services increase, we would increase our warranty accrual, which would adversely impact our gross margins.

        Stock-based compensation.    For share-based payments made on or after January 1, 2006, we measure compensation cost at fair value on the date of grant, and recognize this cost as expense over the service period the awards are expected to vest, net of estimated forfeitures. The fair value of restricted stock is determined based on the excess of the quoted price of our common stock on the date of grant over the exercise price of the restricted stock. The fair value of stock options is determined using the Black-Scholes valuation model. Determining the appropriate fair value model and calculating the fair value of share-based awards requires judgment, including estimating stock price volatility, the expected life of each equity instrument and the amount of share-based payments that will ultimately either vest or be forfeited. We consider many factors when estimating expected forfeitures, including the type of the award, employee group, and historical experience. Actual results, and future changes in estimates, may differ substantially from our current estimates. See Note 11 to the Consolidated Financial Statements included in this Form 10-K for further disclosure regarding our stock-based compensation.

        Income taxes.    We determine deferred tax assets and liabilities based upon the difference between the financial statements and the tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to affect taxable income. The tax consequences of most events recognized in the current year's financial statements are included in determining income taxes currently payable. However, because tax laws and financial accounting standards differ in their recognition and measurement of assets, liabilities, equity, revenue, expenses, gains and losses, differences arise between the amount of taxable income and pretax financial income for a year and the tax basis of assets or liabilities and their reported amounts in the financial statements. Because we assume that the reported amounts of assets and liabilities will be recovered and settled, respectively, a difference between the tax basis of an asset or a liability and its reported amount in the balance sheet will result in a taxable or a deductible amount in some future years when the related assets or liabilities are settled or the reported amount of the assets are recovered, hence giving rise to a deferred tax asset or liability. We must then periodically assess the likelihood that our deferred tax assets will be recovered from our future taxable income, and, to the extent we believe that it is more likely than not our deferred tax assets will not be recovered, we must establish a valuation allowance against our deferred tax assets. We recognize in our financial statements the tax benefit from an uncertain tax position taken or expected to be taken in an income tax return only if it is more likely than not that such benefit would be sustained on its technical merits in the event of a tax audit. The assessment of each tax position requires significant judgment. All tax positions are periodically analyzed and adjusted as a result of events, such as the resolution of tax audits or the expiration of statutes of limitations, which may result in charges or credits to the provision for income taxes. See Note 12 to the Consolidated Financial Statements included in this Form 10-K for further disclosure regarding income taxes.

Factors and Trends That Affect Our Results of Operations

        In reading our financial statements, you should be aware of the following factors and trends that our management believes are important in understanding our financial performance.

        Revenue.    From 2003 to 2008, our revenue grew from $42.0 million to $180.3 million, representing a compound annual growth rate of 33.8%. In 2009, our revenue decreased 9.6% to $163.0 million, due

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to the global economic downturn and related credit crisis that affected us along with the entire semiconductor industry. We have also experienced periods of relatively flat year-over-year growth, as in 2001 and 2002. Although we have experienced three sequential quarters of revenue growth and our backlog at December 31, 2009, increased compared to December 31, 2008, given weak economic conditions, there is no certainty that our business will continue to grow. Generally, our revenue growth results from increased sales of our standard products, derived from the introduction of new products, which expands the breadth and diversity of our standard product offerings, growing market acceptance of standard products we introduced in prior periods, and the expansion of our domestic and international sales efforts.

        In establishing current and future planned levels of operating expenses, we seek to balance near-term financial goals with our longer term strategic objectives. Accordingly, we took steps early in 2009 to reduce expenses across our business, and maintained certain of these measures throughout the year. We expect to increase spending in research and development in order to remain competitive, and our plans for growth also require increased spending to support our operations, sales, marketing and administrative functions. Accordingly, we expect that our spending will increase as conditions improve.

        Gross margin.    One of our objectives is to maintain and improve our gross margin, which is our gross profit expressed as a percentage of our revenue. In the last three years our gross margins were 72.2% in 2009, 71.4% in 2008 and 71.0% in 2007. In general, we seek to introduce high performance products that are valued by our customers for their ability to address technically challenging applications, rather than commodity ICs for use in high volume applications where cost, rather than performance, is the highest priority. We also seek continuously to reduce our costs and to improve the efficiency of our manufacturing operations.

        Our gross margin in any period is significantly affected by industry demand and the intensity of competition in the markets into which we sell our products. Gross margins are also significantly affected by product mix, that is, the percentage of our revenue in that period that is attributable to higher or lower margin products and by pricing, including fluctuations in the relative proportion of high volume orders, on which we offer higher discounts. Additional factors affecting our gross margins include changes in the cost of wafers and materials, the timing of indirect costs for pre-production masks and evaluation materials, changes in estimates for contracts recognized on a percentage of completion basis, variations in overhead absorption rates and other manufacturing efficiencies, and numerous other factors, some of which are not under our control. Our margins can be substantially affected by changes in our manufacturing yields. Our yields depend on many factors that we control, such as product design and the effectiveness of our own assembly and test operations, but they are also affected by the activities of third parties, such as the foundries and packaging subcontractors that supply us with critical materials and services, that are beyond our control. As a result of these or other factors, we may be unable to maintain or increase our gross margin in future periods.

        Purchasing patterns of our standard products.    A majority of our revenue in each quarter is typically derived from sales of our standard products. Purchasers of our standard products generally do not enter into long-term contracts with us. Customers that purchase large volumes of our standard products generally provide us with periodic forecasts of their requirements for those products, but these forecasts do not commit the customer to minimum purchases, and customers generally may revise these forecasts without penalty. A significant portion of our revenue in each quarter is attributable to purchase orders for standard products that are received and fulfilled in that quarter, often including a large number of orders from diverse customers and end markets. The price list for our standard products includes discounts based on purchase order volume, and, as a result, the revenue we receive from sales of a particular product in any period is influenced by the average order size for that product during that period. Our forecasting of sales of standard products takes into account a number of factors, including historical sales patterns for each individual product, our assessment of overall market conditions and our knowledge of the current requirements and purchasing practices of our larger customers. However,

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the absence, in most cases, of long-term purchase commitments for our standard products complicates the task of predicting the exact sources and amount of our revenue from standard products and thus, to some extent, the amount of our total revenue in any quarter. The difficulty of this task is compounded by the uncertainties we and our customers face, related to the recent global economic downturn.

        Relationships with major customers.    We have historically depended on a small number of customers for a large percentage of our annual revenue. Revenue derived from our 10 largest customers as a percentage of our annual revenue was 31.9% in 2009, 34.6% in 2008 and 38.8% in 2007. No single customer exceeded 10% of our total revenue in 2009, 2008 or 2007. We include in these calculations revenue from products sold to these customers directly by us or through sales representatives and our distributor, as well as from products sold to contract manufacturers for use in a system manufactured by the contract manufacturer for that customer. Our major customers often use our products in multiple systems or programs, sometimes developed by different business units within the customer's organization, each having differing product life cycles, end customers and market dynamics. While the composition of our top 10 customers varies from year to year, we expect that sales to a limited number of customers will continue to account for a significant percentage of our revenue for the foreseeable future. Additionally, we have noted consolidation among OEMs in some of our end markets, which could result in an increased concentration in our sources of revenue.

        Need for continued product and technology innovation.    We believe that the breadth of our product line with respect to functionality, performance and frequency coverage, and our ability to introduce new products rapidly, afford us significant competitive advantage and have contributed significantly to our revenue growth. We introduced 152 new standard catalog products in 2007 (including 51 Velocium products), 100 in 2008 and 83 in 2009. Our future competitive position will depend in large part on our ability to continue to innovate, to anticipate the rapid changes in semiconductor technology and RF, microwave and millimeterwave circuit design techniques that characterize our industry and to develop, introduce and successfully market new products that meet the evolving application requirements of our customers. As the complexity and degree of integration of our products increases, maintaining or increasing our historical rate of new product introductions will become increasingly challenging. Driving and supporting this process of continuous innovation and new product introduction is one of our key priorities, and one that will require continuing expenditures.

        Need to meet customer demand for on-time delivery and high quality.    The success of our business also depends on our continued ability to supply our products on time and in quantities adequate to meet our customers' requirements, while maintaining the high standards of quality and reliability that our customers require. Our senior management spends a significant amount of its time on these key operational issues, and we devote substantial resources to maintain our sources of supply and to improve our manufacturing and quality control processes.

        Need to continue to expand the diversity of our product lines, customer base, end markets and target applications.    The semiconductor industry in general, and specific segments of the markets that we serve, are highly cyclical and have historically experienced significant fluctuations in demand, including periods of rapid growth as well as periods of product overcapacity and weak demand, which occur even during periods of growth in the broader economy. For example, our revenue declined in 2009 due to a global economic downturn, and our revenue growth rate was largely flat in 2001 and 2002 as a result of a downturn in the telecommunications industry. Revenue derived from our three largest end markets, cellular infrastructure, microwave and millimeterwave communications and military, represented 79.3%, 75.9% and 72.1% of our annual revenue in 2009, 2008 and 2007, respectively. An important objective of our management is to reduce our exposure to fluctuations in demand from any particular customer or industry segment by continuing to broaden our customer base and end markets and the range of applications that our products address.

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Results of Operations

        The following tables set forth, for the periods indicated, selected statement of operations data in dollar amount and expressed as a percentage of our revenue:

		Years Ended December 31,
		2009		2008			2007
		(in thousands)
Revenue		$	162,990	$	180,251		$	156,412
Cost of revenue			45,239		51,556			45,363
	Gross profit		117,751		128,695			111,049
Operating expenses:
	Research and development		22,971		24,438			18,546
	Sales and marketing		15,034		15,988			13,313
	General and administrative		9,737		8,347			7,316
	Total operating expenses		47,742		48,773			39,175
Income from operations			70,009		79,922			71,874
Interest income			394		3,420			5,474
Other income (expense), net			2		(343	)		74
	Income before income taxes		70,405		82,999			77,422
Provision for income taxes			24,232		29,157			26,184
Net income		$	46,173	$	53,842		$	51,238

		Years Ended December 31,
		2009			2008			2007
Revenue			100.0	%		100.0	%		100.0	%
Cost of revenue			27.8			28.6			29.0
	Gross profit		72.2			71.4			71.0
Operating expenses:
	Research and development		14.1			13.6			11.9
	Sales and marketing		9.2			8.9			8.5
	General and administrative		6.0			4.6			4.7
	Total operating expenses		29.3			27.1			25.0
Income from operations			43.0			44.3			46.0
Interest income			0.2			1.9			3.5
Other income (expense), net			0.0			(0.2	)		0.0
	Income before income taxes		43.2			46.0			49.5
Provision for income taxes			14.9			16.2			16.7
Net income			28.3	%		29.9	%		32.8	%

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Comparison of Year Ended December 31, 2009 to Year Ended December 31, 2008

        Revenue.    Our revenue decreased $17.3 million, or 9.6%, to $163.0 million in 2009, from $180.3 million in 2008. Revenue from sales to customers outside the United States accounted for 57.3% of our total revenue in 2009, compared with 59.3% in 2008. Our revenue decrease was primarily attributable to decreased sales to the broadband, microwave and millimeterwave communications and test and measurement markets, caused primarily by the recent global economic downturn and related credit crisis, partially offset by an increase in sales to the cellular infrastructure market.

        Gross margin.    Our gross margin was 72.2% in 2009 compared with 71.4% in 2008. The increase in gross margin was primarily attributable to a favorable change in product mix and favorable project costs on certain government contracts, partially offset by unfavorable pricing.

        Research and development expense.    Our research and development expense decreased $1.5 million, or 6.0%, to $23.0 million in 2009, and represented 14.1% of our revenue, compared with $24.4 million, or 13.6% of our revenue, in 2008. The decrease in our research and development expense was attributable to a $0.6 million decrease in personnel costs, a $0.5 million decrease in depreciation, and a $0.4 million decrease in other costs. The decrease in personnel costs reflects our cost savings initiatives, partially offset by the cost increase associated with a shift in engineering resources from customer sponsored activities, the costs for which are charged to cost of revenue, to internal research and development activities.

        Sales and marketing expense.    Our sales and marketing expense decreased $1.0 million, or 6.0%, to $15.0 million in 2009, and represented 9.2% of our revenue, compared with $16.0 million, or 8.9% of our revenue, in 2008. The decrease in our sales and marketing expense was primarily attributable to a $0.4 million decrease in personnel costs, a $0.2 million decrease in advertising and a $0.2 million net decrease in other costs, primarily due to our cost savings initiatives. In addition, third party commissions decreased $0.2 million, due to our decrease in revenue.

        General and administrative expense.    Our general and administrative expense increased $1.4 million, or 16.7%, to $9.7 million in 2009, and represented 6.0% of our revenue, compared with $8.3 million, or 4.6% of our revenue, in 2008. The increase in our general and administrative expense was primarily attributable to a $1.2 million increase in professional fees, including legal fees associated with intellectual property litigation, and a $0.3 million increase in bad debt expense, partially offset by a $0.1 million net decrease in other costs.

        In light of the recent global recession, we took steps early in 2009 to reduce expenses across our business, and maintained certain of these measures throughout the year. We expect to increase spending in research and development in order to remain competitive, and our plans for growth also require increased spending to support our operations, sales, marketing and administrative functions. Accordingly, we expect that our spending will increase as conditions improve.

        Interest income.    Our interest income decreased $3.0 million to $0.4 million in 2009, compared with $3.4 million in 2008, as a result of lower effective yields, due to prevailing market conditions, partially offset by the impact of higher cash and investment balances.

        Provision for income taxes.    Our provision for income taxes decreased $4.9 million to $24.2 million in 2009, from $29.2 million in 2008, representing an effective tax rate of 34.4% in 2009 and 35.1% in 2008. The effective tax rate decreased primarily as a result of an increase in foreign tax benefit, research and development tax credits and tax benefits from manufacturing activities, partially offset by a decrease in our tax-exempt interest income. Generally, the effective tax rates differ from the federal and state statutory tax rates primarily due to the impact of federal and state tax credits, tax-exempt interest income and tax benefits from manufacturing activities.

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Comparison of Year Ended December 31, 2008 to Year Ended December 31, 2007

        Revenue.    Our revenue increased $23.8 million, or 15.2%, to $180.3 million in 2008, from $156.4 million in 2007. The growth was primarily attributable to increased sales to the cellular infrastructure, microwave and millimeterwave communications, and military markets. Our sales growth was primarily due to the increased breadth of our product offerings and the increased market acceptance of the products we introduced in prior years. Revenue from sales to customers outside the United States accounted for 59.3% of our total revenue in 2008, compared with 56.4% in 2007.

        Cost of revenue and gross margin.    Our cost of revenue increased $6.2 million, or 13.7%, to $51.6 million in 2008, from $45.4 million in 2007, primarily as a result of our increased revenue. In 2008, our gross margin was 71.4%, compared with 71.0% in 2007. The increase in gross margin was primarily attributable to a favorable change in product mix and a decrease in direct production material costs, partially offset by an increase in higher volume orders, on which we offer higher discounts, an increase in indirect manufacturing costs and higher project costs on certain government contracts.

        Research and development expense.    Our research and development expense increased $5.9 million, or 31.8%, to $24.4 million in 2008, from $18.5 million in 2007, and represented 13.6% of our revenue in 2008 compared with 11.9% in 2007. The increase in our research and development expense was attributable to a $3.9 million increase in personnel costs, primarily associated with a shift in engineering resources from customer sponsored activities, the costs for which are charged to cost of revenue, to internal research and development activities, as well as the growth of our engineering organization. In addition, we experienced a $0.8 million increase in depreciation, a $0.5 million increase in engineering material and a $0.7 million net increase in other costs.

        Sales and marketing expense.    In 2008, our sales and marketing expense increased $2.7 million, or 20.1%, to $16.0 million in 2008, from $13.3 million in 2007, and represented 8.9% of our revenue in 2008 compared with 8.5% in 2007. The increase in our sales and marketing expense was primarily attributable to a $1.3 million increase in personnel costs, associated with the growth of our worldwide direct sales and marketing organization, $0.8 million of intangible asset amortization related to the October 2007 Velocium strategic agreement, a $0.4 million increase in third party commissions and a $0.2 million net increase in other costs.

        General and administrative expense.    In 2008, our general and administrative expense increased $1.0 million, or 14.1%, to $8.3 million in 2008, from $7.3 million in 2007, and represented 4.6% of our revenue in 2008 compared with 4.7% in 2007. The increase in our general and administrative expense was primarily attributable to a $0.9 million increase in professional fees and a $0.3 million increase in personnel costs, primarily due to equity compensation expense, partially offset by a $0.2 million net decrease in other costs.

        Interest income.    In 2008, our interest income decreased $2.1 million to $3.4 million, compared with $5.5 million in 2007, as the increase in our cash and investment balances was more than offset by lower effective yields, due to prevailing market conditions.

        Other income (expense), net.    In 2008, other expense was $0.3 million, compared with other income of $0.1 million in 2007. Activity in both periods related primarily to foreign currency transaction gains and losses recognized arising in the normal course of business.

        Provision for income taxes.    Our provision for income taxes increased $3.0 million, to $29.2 million in 2008, from $26.2 million in 2007, representing an effective tax rate of 35.1% in 2008 and 33.8% in 2007. The effective tax rate increased primarily as a result of the decrease in our tax-exempt interest income and the elected tax treatment for certain federal and state deductions and incentives provided for under the American Jobs Creation Act of 2004.

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Liquidity and Capital Resources

        As of December 31, 2009, we held $220.5 million of cash and cash equivalents. During 2009, given our cash position, we canceled our $30.0 million bank credit facility, which had been inactive over the past year and had no outstanding balance.

        For the year ended December 31, 2009, cash provided by our operations was $62.4 million, of which the principal components were our net income of $46.2 million and non-cash charges of $15.6 million, as well as a net decrease in operating assets and liabilities of $2.2 million, partially offset by a net increase in deferred taxes of $1.6 million. The net decrease in operating assets and liabilities includes a $9.4 million decrease in accounts receivable, due to the timing of customer invoices and our decrease in revenue, and a decrease in other net operating assets and liabilities of $0.4 million, partially offset by a $7.6 million increase in standard catalog and project inventories.

        For the year ended December 31, 2009, we invested $7.3 million in the purchase of capital equipment, primarily for production test equipment and tooling. We received $3.2 million from the exercise of stock options and $0.8 million from the tax benefit related to our stock-based compensation plans.

        In April 2008, our board of directors authorized a stock repurchase program to offset the dilutive impact of equity-based compensation granted to our employees. The shares may be repurchased from time to time on the open market or in privately negotiated transactions. Since April 2008, we have repurchased 1,939,924 shares for $61.2 million, including 623,417 shares purchased for $19.6 million in 2009. The timing, price and volume of any additional repurchases will be based on market conditions, relevant securities law and other factors as appropriate and repurchases may be suspended or discontinued at any time.

        We believe that our cash, cash equivalents and cash generated from operations will be sufficient to meet our anticipated cash requirements for at least the next 12 months. Our future capital requirements will depend on many factors, including our rate of revenue growth or decline, the timing and extent of spending to support product development efforts, the expansion of our sales and marketing activities, the timing and introduction of new products, the costs to ensure access to adequate manufacturing capacity and the continuing market acceptance of our products. There is no assurance that additional financing, if required or desired, will be available in amounts or on terms acceptable to us, if at all.

Backlog

        We typically do not enter into long-term purchase contracts with our customers, and our revenue in any period is dependent to a significant extent on orders for standard products booked and shipped in that period. Additionally, despite the existence of contractual penalties, our customers from time to time cancel or delay scheduled purchases. As a result, we use backlog for purposes of scheduling production but do not consider it to be an accurate indicator of sales for any future period. Generally, we include in our backlog all accepted purchase orders for which the customer has specified a delivery date within the next 12 months, as well as long-term production contracts that require longer than 12 months to perform and for which funding is committed. At December 31, 2009, our backlog was $63.9 million, compared to $39.6 million at December 31, 2008.

Recent Accounting Pronouncements

        In June 2009, the FASB issued authoritative guidance that is included in ASC 105, "Generally Accepted Accounting Principles." This guidance establishes the FASB Accounting Standards Codification as the source of authoritative U.S. Generally Accepted Accounting Principles (GAAP) recognized by the FASB to be applied by nongovernmental entities. We adopted this guidance effective

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July 1, 2009. This guidance does not change GAAP, therefore its adoption had no impact on our financial position or results of operations. References to GAAP in this Annual Report on Form 10-K have been updated to reflect the ASC.

        In September 2006, the FASB issued authoritative guidance that is included in ASC 820, "Fair Value Measurements and Disclosures." This guidance clarifies the definition of fair value, establishes guidelines for measuring fair value and expands the related disclosure requirements. We adopted this guidance effective January 1, 2008, except as it applies to certain non-financial assets and non-financial liabilities, for which the guidance was implemented effective January 1, 2009. Such adoption did not have a material impact on our financial position or results of operations. See Note 3 to the Consolidated Financial Statements included in this Form 10-K for disclosures regarding the fair value of our financial instruments.

        In December 2007, the FASB issued authoritative guidance that is included in ASC 805, "Business Combinations." This guidance establishes principles and requirements for how an acquirer recognizes and measures the identifiable assets and goodwill acquired, liabilities assumed and noncontrolling interests. The guidance also establishes disclosure requirements to enable the evaluation of the nature and financial effects of the business combination. In April 2009, the FASB amended and clarified this guidance with respect to the initial recognition and measurement, subsequent measurement and disclosure of contingent assets and liabilities arising from a business combination. We adopted this guidance effective January 1, 2009. Such adoption did not have a material impact on our financial position or results of operations.

        In March 2008, the FASB issued authoritative guidance that is included in ASC 815, "Derivatives and Hedging." This guidance requires enhanced disclosures to enable investors to better understand the effects of derivative instruments and hedging activities on an entity's financial position, results of operations and cash flows. We adopted this guidance effective January 1, 2009. Such adoption did not have a material impact on our financial position or results of operations.

        In April 2008, the FASB issued authoritative guidance that is included in ASC 350, "Intangibles—Goodwill and Other." This guidance amends the factors that should be considered in developing renewal or extension assumptions used to determine the useful life of a recognized intangible. The guidance improves the consistency between the useful life of a recognized intangible asset and the period of expected cash flows used to measure the fair value of the asset. We adopted this guidance effective January 1, 2009. Such adoption did not have a material impact on our financial position or results of operations.

        In April 2009, the FASB issued authoritative guidance that is included in ASC 320, "Investments—Debt and Equity Securities." This guidance amends the guidance for recognizing other-than-temporary impairments of debt securities, and requires additional disclosures with respect to both debt and equity securities. We adopted this guidance effective January 1, 2009. Such adoption did not have a material impact on our financial position or results of operations.

        In April 2009, the FASB issued authoritative guidance that is included in ASC 825, "Financial Instruments." This guidance requires that disclosures regarding the fair value of financial instruments be provided in interim financial statements. We adopted this guidance effective January 1, 2009. Such adoption did not have a material impact on our financial position or results of operations.

        In May 2009, the FASB issued authoritative guidance that is included in ASC 855, "Subsequent Events." This guidance provides guidance related to the accounting for and disclosure of events that occur after the balance sheet date but before the financial statements are issued or are available to be issued, and specifies related disclosure requirements. We adopted this guidance for the quarterly period ended June 30, 2009. Such adoption did not have a material impact on our financial position or results of operations.

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        In October 2009, the FASB issued Accounting Standards Update (ASU) 2009-13, "Multiple-Deliverable Revenue Arrangements," which amends ASC 605-25. ASU 2009-13 modifies how consideration is allocated for the purpose of revenue recognition when an arrangement involves multiple deliverables and expands the related disclosure requirements. The guidance eliminates the residual method of revenue allocation, and requires that the vendor use its best estimate to allocate arrangement consideration between the deliverables in cases where neither vendor-specific objective evidence nor third-party evidence is available. We have elected to early adopt ASU 2009-13 effective January 1, 2010. Accordingly, this guidance will be applied to transactions originating or materially modified after such date. We do not believe that the adoption of ASU 2009-13 will have a material effect on our financial position or results of operations.

        In October 2009, the FASB issued ASU 2009-14, "Certain Revenue Arrangements That Include Software Elements," which amends ASC 985-605. ASU 2009-14 modifies the scope of the software revenue guidance in ASC 985-605 to exclude tangible products that contain both software components and non-software components. We have elected to early adopt ASU 2009-14 effective January 1, 2010. Accordingly, this guidance will be applied to transactions originating or materially modified after such date. We do not believe that the adoption of ASU 2009-14 will have a material effect on our financial position or results of operations.

Contractual Obligations

        At December 31, 2009, our known contractual obligations were as follows:

	Payments Due by Period
Contractual Obligations	Total		Less than 1 Year		1-3 Years		3-5 Years		More than 5 Years
	(In thousands)
Operating leases	$	1,453	$	686	$	767	$	—	$	—

        As of December 31, 2009, the total amount of net unrecognized tax benefits for uncertain tax positions and the accrual for the related interest was $6.0 million. Although it is reasonably possible that the unrecognized tax benefits for tax positions taken on previously filed tax returns could materially change in the next 12 months, we are unable to make a reasonably reliable estimate as to when cash settlement of the $6.0 million, if any, will occur with a tax authority as the timing of examinations and ultimate resolution of those examinations is uncertain.

Item 7A.    Quantitative and Qualitative Disclosures About Market Risk

        We are exposed to market risk in the ordinary course of business, which consists primarily of interest rate risk associated with our cash and cash equivalents, as well as foreign exchange rate risk.

        Interest rate risk.    The primary objectives of our investment activity are to preserve principal, provide liquidity and earn a market rate of return. To minimize market risk, we maintain our portfolio in cash and diversified short-term investments, which may consist of bank deposits, money market funds and highly rated, short-term government and commercial securities. The interest rates are variable and fluctuate with current market conditions. The risk associated with fluctuating interest rates is limited to this investment portfolio. We do not believe that a 10% change in interest rates would have a material impact on our financial position or results of operations.

        Foreign currency risk.    To date, our international customer agreements have been denominated primarily in United States dollars. Accordingly, we have limited exposure to foreign currency exchange rates and do not enter into foreign currency hedging transactions. The functional currency of each our foreign operations is the local currency. Accordingly, the effects of exchange rate fluctuations on the net assets of these operations are accounted for as translation gains or losses in accumulated other

52

comprehensive income within stockholders' equity. We do not believe that a change of 10% in such foreign currency exchange rates would have a material impact on our financial position or results of operations.

Item 8.    Financial Statements and Supplementary Data

        This information is incorporated by reference from pages F-1 through F-23 of this report.

Item 9.    Changes in and Disagreements With Accountants on Accounting and Financial Disclosure

        None.

Item 9A.    Controls and Procedures

        Evaluation of Disclosure Controls and Procedures.    Our management (with the participation of our Chief Executive Officer and Chief Financial Officer) 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 (the "Exchange Act")), as of December 31, 2009. Disclosure controls and procedures are designed to ensure that information required to be disclosed by us in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported on a timely basis and that such information is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been or will be detected. These inherent limitations include the fact that there are resource constraints, and that the benefits of controls must be considered relative to their costs. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of December 31, 2009, our disclosure controls and procedures were effective in providing reasonable assurance that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized, reported and accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

Management's Annual Report on Internal Control Over Financial Reporting

        Our management, including our Chief Executive Officer and Chief Financial Officer, is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Company. Internal control over financial reporting is a process designed 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. Our management conducted an assessment of the effectiveness of our internal control over financial reporting as of December 31, 2009 based on criteria established in "Internal Control—Integrated Framework" issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on this assessment, our management concluded that, as of December 31, 2009, our internal control over financial reporting was effective.

        Our independent registered public accounting firm, PricewaterhouseCoopers LLP, has audited the effectiveness of our internal control over financial reporting, as stated in their report that appears on page F-2 of this Annual Report on Form 10-K.

53

Changes in Internal Control over Financial Reporting

        There have been no changes in our internal control over financial reporting during the fiscal quarter ended December 31, 2009, that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.

Limitations on Effectiveness of Controls

        Our management has concluded that our disclosure controls and procedures and internal controls provide reasonable assurance that the objectives of our control system are met. However, our management (including our Chief Executive Officer and Chief Financial Officer) does not expect that the disclosure controls and procedures or internal controls will prevent all error and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Due to the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues, errors and instances of fraud, if any, within the Company have been or will be detected.

Item 9B.    Other Information

        None.

54

PART III

Item 10.    Directors, Executive Officers and Corporate Governance

        The information regarding our directors, executive officers and corporate governance, including that set forth under the captions "Election of Directors," "Our Board of Directors and Executive Officers," "Corporate Governance," "Section 16(a) Beneficial Ownership Reporting Compliance," and "Information about Our Audit Committee" appearing in our definitive Proxy Statement for our 2010 Annual Meeting of Shareholders to be filed with the Securities and Exchange Commission not later than April 30, 2010 (the "Definitive Proxy Statement") is incorporated herein by reference.

Item 11.    Executive Compensation

        The information regarding compensation of our executive officers, including that set forth under the captions "Director Compensation," "Compensation Committee Interlocks and Insider Participation," "Compensation of Executive Officers," "Compensation Discussion and Analysis" and "Compensation Committee Report" appearing in our Definitive Proxy Statement is incorporated herein by reference.

Item 12.    Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

        The information set forth under the captions "Equity Compensation Plan Information" and "Information about Common Stock Ownership" appearing in our Definitive Proxy Statement is incorporated herein by reference.

Item 13.    Certain Relationships and Related Transactions and Director Independence

        The information set forth under the caption "Certain Relationships and Related Transactions" appearing in our Definitive Proxy Statement is incorporated herein by reference.

Item 14.    Principal Accountant Fees and Services

        The information set forth under the caption "Principal Accountant Fees and Services" appearing in our Definitive Proxy Statement is incorporated herein by reference.

55

PART IV

Item 15.    Exhibits and Financial Statement Schedules

(a) Documents Filed as Part of this Annual Report on Form 10-K

1. Financial Statements (included in Item 8 of this report on Form 10-K and appearing on pages F-1 through F-23):

•

Report of Independent Registered Public Accounting Firm

•

Consolidated Balance Sheets as of December 31, 2009 and 2008

•

Consolidated Statements of Operations for the Years Ended December 31, 2009, 2008 and 2007

•

Consolidated Statements of Stockholders' Equity and Comprehensive Income for the Years Ended December 31, 2009, 2008 and 2007

•

Consolidated Statements of Cash Flows for the Years Ended December 31, 2009, 2008 and 2007

•

Notes to Consolidated Financial Statements

(b) Exhibits

        Documents listed below, except for documents followed by parenthetical references, are being filed as exhibits. Documents followed by parenthetical references are not being filed herewith and, pursuant to Rule 12b-32 of the General Rules and Regulations promulgated by the SEC under the Securities Exchange Act of 1934 (the Act), reference is made to such documents as previously filed as exhibits with the SEC. Our file number under the Act is 000-51448.

3.1	Second Amended and Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.1 to our Current Report on Form 8-K filed on August 2, 2005, referred to herein as the "2005 Report on Form 8-K").
3.2	Amended and Restated By-laws (incorporated by reference to Exhibit 3.2 to our Quarterly Report on Form 10-Q for the quarter ended June 30, 2008).
4.1	Specimen certificate for common stock of Hittite Microwave Corporation (incorporated by reference to Exhibit 4.1 to our Registration Statement on Form S-1, File No. 333-124664).
*10.1	Form of Stock Option Agreement pursuant to the 2005 Stock Incentive Plan of Hittite Microwave Corporation (incorporated by reference to Exhibit 10.1 to our Quarterly Report on Form 10-Q for the quarter ended September 30, 2005).
*10.2	Form of Restricted Stock Agreement pursuant to the 2005 Stock Incentive Plan of Hittite Microwave Corporation.
*10.3	Amended and Restated 1996 Stock Option Plan of Hittite Microwave Corporation and form of agreement related thereto (incorporated by reference to Exhibit 10.1 to our Registration Statement on Form S-1, File No. 333-124664).
*10.4	2005 Stock Incentive Plan of Hittite Microwave Corporation and forms of agreements related thereto (incorporated by reference to Exhibit 10.2 to our Registration Statement on Form S-1, File No. 333-124664).
10.5	Registration Rights Agreement, dated November 20, 2000, by and among Hittite Microwave Corporation, Dr. Yalcin Ayasli and the holders of Hittite Microwave Corporation's Series A Convertible Preferred Stock (incorporated by reference to Exhibit 10.3 to our Registration Statement on Form S-1, File No. 333-124664).
10.11	Letter of Indemnification Agreement, dated July 17, 2002, by and between Hittite Microwave Corporation and Cosmo Trapani (incorporated by reference to Exhibit 10.9 to our Registration Statement on Form S-1, File No. 333-124664).

56

10.12	Letter of Indemnification Agreement, dated July 17, 2002, by and between Hittite Microwave Corporation and Bruce Evans (incorporated by reference to Exhibit 10.10 to our Registration Statement on Form S-1, File No. 333-124664).
*10.25	Non-employee director compensation plan.
*10.30	Form of Indemnification Agreement dated December 10, 2008, between Hittite Microwave Corporation and each of Stephen G. Daly, Ernest L. Godshalk, Rick D. Hess, Adrienne M. Markham, Brian P. McAloon, Cosmo S. Trapani and Frankin Weigold (incorporated by reference to Exhibit 10.30 to our Annual Report on Form 10-K for the year ended December 31, 2008).
*10.31	Form of Noncompete Agreement (Senior Employee) entered into between the Company and each of Stephen G. Daly, William W. Boecke, Everett N. Cole, III, William D. Hannabach, Norman G. Hildreth, Jr., Dong Hyun (Thomas) Hwang, Brian J. Jablonski, Michael J. Koechlin and Michael A. Olson.
21.1	List of Subsidiaries of the Registrant.
23.1	Consent of PricewaterhouseCoopers LLP
31.1	Certification of Chief Executive Officer pursuant to Rule 13a-14(a)
31.2	Certification of Chief Financial Officer pursuant to Rule 13a-14(a)
32.1	Certification of Chief Executive Officer pursuant to Section 1350
32.2	Certification of Chief Financial Officer pursuant to Section 1350

*

Management contract or compensatory plan or arrangement

(c) Financial Statement Schedules

        All schedules are omitted because they are either not applicable or the required information is shown on the financial statements or notes thereto.

57

SIGNATURES

        Pursuant to the requirements of Section 13 or 15(d) 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, on the 26th day of February, 2010.

HITTITE MICROWAVE CORPORATION
By:	/s/ STEPHEN G. DALY Chief Executive Officer

        Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Signature	Title	Date
/s/ STEPHEN G. DALY Stephen G. Daly	Chairman of the Board, President and Chief Executive Officer (Principal Executive Officer)	February 26, 2010
/s/ WILLIAM W. BOECKE William W. Boecke	Vice President, Chief Financial Officer and Treasurer (Principal Financial and Accounting Officer)	February 26, 2010
/s/ ERNEST L. GODSHALK Ernest L. Godshalk	Director	February 26, 2010
/s/ RICK D. HESS Rick D. Hess	Director	February 26, 2010
/s/ ADRIENNE M. MARKHAM Adrienne M. Markham	Director	February 26, 2010
/s/ BRIAN P. MCALOON Brian P. McAloon	Director	February 26, 2010
/s/ COSMO S. TRAPANI Cosmo S. Trapani	Director	February 26, 2010
/s/ FRANKLIN WEIGOLD Franklin Weigold	Director	February 26, 2010

58

HITTITE MICROWAVE CORPORATION

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

		Page(s)
Report of Independent Registered Public Accounting Firm			F-2
Consolidated Financial Statements
	Consolidated Balance Sheets at December 31, 2009 and 2008		F-3
	Consolidated Statements of Operations for the Years Ended December 31, 2009, 2008 and 2007		F-4
	Consolidated Statements of Stockholders' Equity and Comprehensive Income for the Years Ended December 31, 2009, 2008 and 2007		F-5
	Consolidated Statements of Cash Flows for the Years Ended December 31, 2009, 2008 and 2007		F-6
	Notes to Consolidated Financial Statements		F-7

F-1

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders of
Hittite Microwave Corporation

        In our opinion, the accompanying consolidated balance sheets and the related consolidated statements of operations, stockholders' equity and comprehensive income and cash flows present fairly, in all material respects, the financial position of Hittite Microwave Corporation and its subsidiaries at December 31, 2009 and December 31, 2008, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2009 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2009, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The Company's management is responsible for these financial statements, for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in Management's Annual Report on Internal Control over Financial Reporting under Item 9A. Our responsibility is to express opinions on these financial statements and on the Company's internal control over financial reporting based on our integrated audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the financial statements included examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

        A company's internal control over financial reporting is a process designed 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. A company's internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.

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

/s/ PricewaterhouseCoopers LLP

Boston, Massachusetts
February 26, 2010

F-2

HITTITE MICROWAVE CORPORATION

CONSOLIDATED BALANCE SHEETS

(in thousands, except per share data)

			December 31,
			2009		2008
Assets
Current assets:
	Cash and cash equivalents		$	220,477	$	180,856
	Accounts receivable, net of allowance for doubtful accounts of $334 and $234, respectively			17,886		27,650
	Inventories			19,564		13,981
	Deferred costs			114		139
	Income taxes receivable			—		20
	Prepaid expenses and other current assets			1,450		1,127
	Deferred taxes			7,946		6,206
		Total current assets		267,437		229,979
Property and equipment, net				19,933		17,927
Other assets				5,323		7,178
		Total assets	$	292,693	$	255,084
Liabilities and stockholders' equity
Current liabilities:
	Accounts payable		$	1,632	$	2,778
	Accrued commissions			766		1,307
	Accrued payroll and benefits			1,747		2,497
	Accrued other expenses			3,695		3,032
	Income taxes payable			209		—
	Customer advances			584		723
	Deferred revenue			3,432		2,748
		Total current liabilities		12,065		13,085
Long-term income taxes payable				5,960		4,689
Deferred taxes				519		381
		Total liabilities		18,544		18,155
Commitments and contingencies (Note 8)
Stockholders' equity:
	Preferred stock, $.01 par value: 5,000 shares authorized; no shares issued or outstanding at December 31, 2009 and 2008			—		—
	Common stock, $.01 par value: 200,000 shares authorized; 30,209 and 30,291 shares issued and outstanding at December 31, 2009 and 2008, respectively			302		303
	Additional paid-in capital			131,750		121,274
	Accumulated other comprehensive income (loss)			117		(73	)
	Retained earnings			141,980		115,425
		Total stockholders' equity		274,149		236,929
		Total liabilities and stockholders' equity	$	292,693	$	255,084

The accompanying notes are an integral part of these consolidated financial statements.

F-3

HITTITE MICROWAVE CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

			Year ended December 31,
			2009		2008			2007
Revenue			$	162,990	$	180,251		$	156,412
Cost of revenue				45,239		51,556			45,363
Gross profit				117,751		128,695			111,049
Operating expenses:
	Research and development			22,971		24,438			18,546
	Sales and marketing			15,034		15,988			13,313
	General and administrative			9,737		8,347			7,316
		Total operating expenses		47,742		48,773			39,175
Income from operations				70,009		79,922			71,874
Interest income				394		3,420			5,474
Other income (expense), net				2		(343	)		74
Income before income taxes				70,405		82,999			77,422
Provision for income taxes				24,232		29,157			26,184
Net income			$	46,173	$	53,842		$	51,238
Earnings per share:
	Basic		$	1.57	$	1.77		$	1.67
	Diluted		$	1.55	$	1.74		$	1.64
Weighted average shares outstanding:
	Basic			29,380		30,473			30,630
	Diluted			29,850		30,955			31,263

The accompanying notes are an integral part of these consolidated financial statements.

F-4

HITTITE MICROWAVE CORPORATION

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY AND

COMPREHENSIVE INCOME

(in thousands)

	Common Stock									Accumulated Other Comprehensive Income (Loss)
							Additional Paid-in Capital						Retained Earnings			Total Stockholders' Equity			Comprehensive Income
	Shares			Amount
Balance, December 31, 2006		30,707		$	307		$	103,644		$	157		$	52,054		$	156,162
Exercise of stock options		276			3			2,731									2,734
Foreign currency translation											394						394		$	394
Stock-based compensation expense								4,087									4,087
Net income														51,238			51,238			51,238
Excess income tax benefit related to stock-based compensation plans								1,830									1,830
Issuance of restricted common stock under stock plan, net of forfeitures		93			1			(1	)								—
Impact of the adoption of new accounting guidance for uncertain tax positions														(152	)		(152	)
Comprehensive income																			$	51,632
Balance, December 31, 2007		31,076			311			112,291			551			103,140			216,293
Exercise of stock options		181			2			2,309									2,311
Foreign currency translation											(624	)					(624	)	$	(624	)
Stock-based compensation expense								5,668									5,668
Net income														53,842			53,842			53,842
Excess income tax benefit related to stock-based compensation plans								1,009									1,009
Issuance of restricted common stock under stock plan, net of forfeitures		350			3			(3	)								—
Purchase of Company common stock		(1,316	)		(13	)								(41,557	)		(41,570	)
Comprehensive income																			$	53,218
Balance, December 31, 2008		30,291			303			121,274			(73	)		115,425			236,929
Exercise of stock options		243			2			3,165									3,167
Foreign currency translation											190						190		$	190
Stock-based compensation expense								6,492									6,492
Net income														46,173			46,173			46,173
Excess income tax benefit related to stock-based compensation plans								822									822
Issuance of restricted common stock under stock plan, net of forfeitures		298			3			(3	)								—
Purchase of Company common stock		(623	)		(6	)								(19,618	)		(19,624	)
Comprehensive income																			$	46,363
Balance, December 31, 2009		30,209		$	302		$	131,750		$	117		$	141,980		$	274,149

The accompanying notes are an integral part of these consolidated financial statements.

F-5

HITTITE MICROWAVE CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

				Year ended December 31,
				2009			2008			2007
Cash flows from operating activities:
Net income				$	46,173		$	53,842		$	51,238
Adjustments to reconcile net income to net cash provided by operating activities:
	Depreciation				5,368			5,675			4,744
	Amortization				1,437			1,443			261
	Provision for doubtful accounts				352			46			28
	Provision for excess or obsolete inventory				1,988			1,678			655
	Deferred taxes				(1,602	)		(1,700	)		(987	)
	Stock-based compensation				6,492			5,668			4,087
	Changes in operating assets and liabilities:
		Accounts receivable			9,421			(5,252	)		(3,843	)
		Inventories			(7,570	)		(1,530	)		(3,835	)
		Deferred costs			24			103			164
		Other assets			123			(920	)		(419	)
		Deferred revenue and customer advances			545			(2,627	)		347
		Accounts payable			(1,146	)		131			1,168
		Accrued expenses			(645	)		765			1,208
		Income taxes			1,482			2,638			(1,553	)
			Net cash provided by operating activities		62,442			59,960			53,263
Cash flows from investing activities:
Purchases of property and equipment					(7,302	)		(5,232	)		(8,878	)
Purchases of available-for-sale investments					—			(28,294	)		(243,742	)
Sales and maturities of available-for-sale investments					—			127,301			183,492
Purchase of Velocium intangible assets					—			—			(7,080	)
			Net cash provided by (used in) investing activities		(7,302	)		93,775			(76,208	)
Cash flows from financing activities:
Purchase of Company common stock					(19,624	)		(41,570	)		—
Proceeds from exercise of stock options					3,167			2,311			2,734
Excess income tax benefit related to stock-based compensation plans					822			1,009			1,830
			Net cash provided by (used in) financing activities		(15,635	)		(38,250	)		4,564
Effect of exchange rate changes on cash and cash equivalents					116			(364	)		318
Net increase (decrease) in cash and cash equivalents					39,621			115,121			(18,063	)
Cash and cash equivalents, beginning of year					180,856			65,735			83,798
Cash and cash equivalents, end of year				$	220,477		$	180,856		$	65,735
Supplemental cash flow information:
Cash paid for taxes				$	23,502			27,376			27,628

The accompanying notes are an integral part of these consolidated financial statements.

F-6

HITTITE MICROWAVE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.     Nature of the Business

        Hittite Microwave Corporation (the "Company") designs and develops high performance integrated circuits, modules and subsystems for technically demanding radio frequency, microwave and millimeterwave applications. The Company's products are used in a variety of applications and end markets, including automotive, broadband, cellular infrastructure, fiber optic, microwave and millimeterwave communications, military, space, and test and measurement. The Company was organized as a Massachusetts corporation in 1985 and reincorporated under the laws of Delaware in 1988. The Company is headquartered and has its primary design and manufacturing center in Chelmsford, MA. In addition, the Company operates design centers in Colorado Springs, CO, Istanbul, Turkey, and Ottawa, Ontario, Canada, and has sales offices in China, Germany, India, Japan, Korea, Sweden and the United Kingdom.

2.     Summary of Significant Accounting Policies

Basis of Presentation

        The consolidated financial statements include the accounts of Hittite Microwave Corporation and its wholly-owned subsidiaries and have been prepared in accordance with generally accepted accounting principles in the United States of America. Intercompany accounts and transactions have been eliminated in consolidation.

Use of Accounting Estimates

        The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

Revenue Recognition

        The Company recognizes revenue for the majority of its business when the following criteria have been met: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred or services have been rendered; (3) the fee is fixed or determinable; and (4) collectibility is reasonably assured. For arrangements that involve multiple elements, the Company allocates arrangement consideration among the elements based on the relative fair values of those elements as determined using objective and reliable evidence of fair value. If the fair value of an undelivered element cannot be established, the arrangement is accounted for as a single unit of accounting and revenue is recognized when all performance obligations are met. The Company maintains a reserve for potential sales return and allowances. Returns and customer credits are immaterial and are recorded as a reduction to revenue. Rights of return are generally not included in sales arrangements. A portion of the Company's sales are made to a distributor under an agreement that provides for product return privileges. As a result, the Company defers recognition of such revenue until the product is resold by the distributor.

        Revenue from contracts with the United States government, government prime contractors and some commercial customers is generally recorded on a percentage of completion basis using costs incurred as the measurement basis for progress toward completion. Where appropriate, the Company uses an output measure, such as units delivered, to measure progress toward completion. Estimated revenue in excess of amounts billed is reported as unbilled receivables. Contract accounting requires

F-7

judgment in estimating costs and assumptions related to technical issues and delivery schedule. Contract costs include material, subcontract costs, labor and an allocation of indirect costs. The estimation of costs at completion of a contract is subject to numerous variables involving contract costs and estimates as to the length of time to complete the contract. Changes in contract performance and estimated gross margin, including the impact of final contract settlements, are recognized in the period in which the changes are determined. Estimated losses on a contract are recognized in full in the period when they become known.

Cash and Cash Equivalents

        Cash equivalents may include money market funds, as well as highly rated government and commercial securities with maturities of three months or less at the time of acquisition. Cash equivalents are carried at cost plus accrued interest, which approximates fair market value.

Allowance for Doubtful Accounts

        The Company maintains an allowance for doubtful accounts to provide for the estimated amount of accounts receivable that will not be collected. The allowance is based upon an assessment of customer creditworthiness, historical payment experience and the age of outstanding receivables.

        Activity related to the allowance for doubtful accounts was as follows (in thousands):

Balance at December 31, 2006		$	283
	Provision		28
	Utilization		(75	)
Balance at December 31, 2007			236
	Provision		46
	Utilization		(48	)
Balance at December 31, 2008			234
	Provision		352
	Utilization		(252	)
Balance at December 31, 2009		$	334

Inventories

        Inventory is stated at the lower of cost (first-in, first-out method) or market value and includes materials, labor and manufacturing overhead. The Company reviews the inventory and compares product costs with current market value and writes down any costs in excess of current market value to its net realizable value. Once the Company has written down inventory to its estimated net realizable value, the carrying value is not changed due to subsequent changes in demand forecasts.

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        Activity related to the inventory reserve was as follows (in thousands):

Balance at December 31, 2006		$	1,776
	Provision		655
	Utilization		(226	)
Balance at December 31, 2007			2,205
	Provision		1,678
	Utilization		(208	)
Balance at December 31, 2008			3,675
	Provision		1,988
	Utilization		(484	)
Balance at December 31, 2009		$	5,179

Property and Equipment

        Property and equipment are recorded at cost. Depreciation is computed using the straight-line method applied over the estimated useful lives of the assets, which are generally as follows: machinery and equipment, three to five years; furniture and fixtures, five years; and building, building improvements and related specialty assets, seven to 30 years. Leasehold improvements are amortized over the shorter of the lease term or the estimated useful life of the related assets.

        Cost of additions and improvements are capitalized while expenditures for maintenance and repairs are charged to expense as incurred. When assets are retired, the related cost and accumulated depreciation and amortization are removed from the accounts, and any gain or loss is reflected in income.

Long-Lived Assets

        Goodwill is carried at cost, and totaled $289,000 at December 31, 2009 and December 31, 2008. The Company evaluates goodwill for impairment on an annual basis and whenever events or changes in circumstances indicate that it may be impaired. No impairment resulted from this evaluation in the years presented.

        Intangible assets other than goodwill are carried at cost less accumulated amortization. The Company's intangible assets are being amortized over their respective useful lives of five years. The Company evaluates the recoverability of these assets whenever there is an indication of possible impairment by measuring the carrying amount of the assets against the related estimated undiscounted future cash flows. When an evaluation indicates that the future undiscounted cash flows are not sufficient to recover the carrying value of the asset, the asset is adjusted to its estimated fair value.

        An impairment review of goodwill or other long-lived assets could be prompted by significant changes in the manner in which the Company uses the asset, negative industry or economic trends or underperformance relative to projected operating results.

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Accounting for Stock-Based Compensation

        For share-based payments made on or after January 1, 2006, the Company measures compensation cost at fair value on the date of grant, and recognizes this cost as expense over the service period the awards are expected to vest, net of estimated forfeitures. The fair value of restricted stock is determined based on the excess of the quoted price of the Company's common stock on the date of grant over the exercise price of the restricted stock. The fair value of stock options is determined using the Black-Scholes valuation model.

        Determining the appropriate fair value model and calculating the fair value of share-based awards requires judgment, including estimating stock price volatility, the expected life of each equity instrument and the amount of share-based payments that will ultimately either vest or be forfeited. The Company considers many factors when estimating expected forfeitures, including the type of the award, employee group, and historical experience.

Foreign Currency Translation

        The Company has determined that the functional currency of each foreign operation is the respective local currency. Transactions in a foreign currency are recorded at the rate of exchange on the date of the transaction. Assets and liabilities at year-end are translated at the rate of exchange in effect at the period-end. Revenue and expenses are translated at average rates of exchange in effect during the period. Translation gains or losses are included as a component of accumulated other comprehensive income (loss) in stockholders' equity. Transaction gains or losses that arise from exchange rate fluctuations on transactions denominated in a currency in other than the functional currency are included in the results of operations as incurred. Such transaction gains and losses were not material for the periods presented.

Fair Value of Financial Instruments

        The carrying amounts in the accompanying consolidated balance sheets for cash and cash equivalents, accounts receivable and accounts payable approximate fair value due to their short-term nature.

Comprehensive Income

        Comprehensive income is comprised of net income and other comprehensive income (loss). Accumulated other comprehensive income (loss) consists of the following:

	December 31,
	2009		2008
	(in thousands)
Foreign currency translation	$	117	$	(73	)

Earnings Per Share

        Basic net income per share is computed by dividing net income by the weighted-average number of common shares outstanding during the period, excluding the dilutive effect of common stock equivalents. Diluted net income per share reflects the dilutive effect of common stock equivalents, such as stock options and restricted stock, under the treasury stock method.

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Risks and Uncertainties

        Financial instruments which potentially subject the Company to credit risk consist primarily of cash, cash equivalents and accounts receivable. The Company maintains its cash and cash equivalents with high credit quality financial institutions, and monitors credit risk with individual financial institutions and issuers. At December 31, 2009 and 2008, the Company had cash balances at certain financial institutions in excess of federally insured limits. However, the Company does not believe that it is subject to unusual credit risk beyond the normal credit risk associated with commercial banking relationships.

        The Company sells its products worldwide through multiple channels, including its direct sales force and applications engineering staff, its network of domestic and international independent sales representatives, its website and through a distributor. The Company has historically depended on a small number of customers for a large percentage of its annual revenue. Revenue derived from the Company's 10 largest customers as a percentage of annual revenue was 31.9% in 2009, 34.6% in 2008 and 38.8% in 2007.

        The Company performs credit checks and maintains an allowance for doubtful accounts. The Company generally does not require collateral, although letters of credit are required in certain circumstances. No customer accounted for 10% or more of the Company's outstanding accounts receivable balance at December 31, 2009 or December 31, 2008.

        The Company typically relies on a single foundry for the production of the semiconductor wafers used in a particular product. The Company also relies on a small number of subcontractors, primarily in Asia and the United States, to package some of its products, particularly those that utilize standard plastic packages. Reliance on these vendors involves several risks, including reduced control over the Company's manufacturing costs, delivery times, reliability and process quality, which can adversely affect product quality, and the possible misappropriation of the Company's technology. Any of these factors could adversely effect the Company's results of operations or financial condition.

Income Taxes

        The Company recognizes deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the financial statements and tax basis of assets and liabilities. Valuation allowances are provided if, based upon the weight of the available evidence, it is more likely than not that some or all of the deferred assets will not be realized.

        The Company recognizes in its financial statements the tax benefit from an uncertain tax position taken or expected to be taken in an income tax return only if it is more likely than not that such benefit would be sustained on its technical merits in the event of a tax audit.

Research and Development

        Internal research and development expenditures are expensed as incurred, and consist of personnel costs, development materials, license fees, and other related costs. During 2009, 2008 and 2007, the Company incurred $3,754,000, $8,572,000 and $7,597,000, respectively, of costs for research and development contracts on behalf of customers. These amounts, funded by customers, are included as cost of revenue in the period the associated revenue is recognized. The Company retains the right to all intellectual property associated with these efforts, including drawings, processes and know-how.

Recent Accounting Pronouncements

        In June 2009, the Financial Accounting Standards Board (FASB) issued authoritative guidance that is included in Accounting Standards Codification (ASC) 105, "Generally Accepted Accounting Principles." This guidance establishes the FASB Accounting Standards Codification as the source of

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authoritative U.S. Generally Accepted Accounting Principles (GAAP) recognized by the FASB to be applied by nongovernmental entities. The Company adopted this guidance effective July 1, 2009. This guidance does not change GAAP, therefore its adoption had no impact on the Company's financial position or results of operations. References to GAAP in the financial statements have been updated to reflect the ASC.

        In September 2006, the FASB issued authoritative guidance that is included in ASC 820, "Fair Value Measurements and Disclosures." This guidance clarifies the definition of fair value, establishes guidelines for measuring fair value and expands the related disclosure requirements. The Company adopted this guidance effective January 1, 2008, except as it applies to certain non-financial assets and non-financial liabilities, for which the guidance was implemented effective January 1, 2009. Such adoption did not have a material impact on the Company's financial position or results of operations. See Note 3 for disclosures regarding the fair value of the Company's financial instruments.

        In December 2007, the FASB issued authoritative guidance that is included in ASC 805, "Business Combinations." This guidance establishes principles and requirements for how an acquirer recognizes and measures the identifiable assets and goodwill acquired, liabilities assumed and noncontrolling interests. The guidance also establishes disclosure requirements to enable the evaluation of the nature and financial effects of the business combination. In April 2009, the FASB amended and clarified this guidance with respect to the initial recognition and measurement, subsequent measurement and disclosure of contingent assets and liabilities arising from a business combination. The Company adopted this guidance effective January 1, 2009. Such adoption did not have a material impact on the Company's financial position or results of operations.

        In March 2008, the FASB issued authoritative guidance that is included in ASC 815, "Derivatives and Hedging." This guidance requires enhanced disclosures to enable investors to better understand the effects of derivative instruments and hedging activities on an entity's financial position, results of operations and cash flows. The Company adopted this guidance effective January 1, 2009. Such adoption did not have a material impact on the Company's financial position or results of operations.

        In April 2008, the FASB issued authoritative guidance that is included in ASC 350, "Intangibles—Goodwill and Other." This guidance amends the factors that should be considered in developing renewal or extension assumptions used to determine the useful life of a recognized intangible. The guidance improves the consistency between the useful life of a recognized intangible asset and the period of expected cash flows used to measure the fair value of the asset. The Company adopted this guidance effective January 1, 2009. Such adoption did not have a material impact on the Company's financial position or results of operations.

        In April 2009, the FASB issued authoritative guidance that is included in ASC 320, "Investments—Debt and Equity Securities." This guidance amends the guidance for recognizing other-than-temporary impairments of debt securities and requires additional disclosures with respect to both debt and equity securities. The Company adopted this guidance effective January 1, 2009. Such adoption did not have a material impact on the Company's financial position or results of operations.

        In April 2009, the FASB issued authoritative guidance that is included in ASC 825, "Financial Instruments." This guidance requires that disclosures regarding the fair value of financial instruments be provided in interim financial statements. The Company adopted this guidance effective January 1, 2009. Such adoption did not have a material impact on the Company's financial position or results of operations.

        In May 2009, the FASB issued authoritative guidance that is included in ASC 855, "Subsequent Events." This guidance provides guidance related to the accounting for and disclosure of events that occur after the balance sheet date but before the financial statements are issued or are available to be issued, and specifies related disclosure requirements. The Company adopted this guidance for the

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quarterly period ended June 30, 2009. Such adoption did not have a material impact on the Company's financial position or results of operations.

        In October 2009, the FASB issued Accounting Standards Update (ASU) 2009-13, "Multiple-Deliverable Revenue Arrangements," which amends ASC 605-25. ASU 2009-13 modifies how consideration is allocated for the purpose of revenue recognition when an arrangement involves multiple deliverables and expands the related disclosure requirements. The guidance eliminates the residual method of revenue allocation, and requires that the vendor use its best estimate to allocate arrangement consideration between the deliverables in cases where neither vendor-specific objective evidence nor third-party evidence is available. The Company has elected to early adopt ASU 2009-13 effective January 1, 2010. Accordingly, this guidance will be applied to transactions originating or materially modified after such date. The Company does not believe that the adoption of ASU 2009-13 will have a material effect on its financial position or results of operations.

        In October 2009, the FASB issued ASU 2009-14, "Certain Revenue Arrangements That Include Software Elements," which amends ASC 985-605. ASU 2009-14 modifies the scope of the software revenue guidance in ASC 985-605 to exclude tangible products that contain both software components and non-software components. The Company has elected to early adopt ASU 2009-14 effective January 1, 2010. Accordingly, this guidance will be applied to transactions originating or materially modified after such date. The Company does not believe that the adoption of ASU 2009-14 will have a material effect on its financial position or results of operations.

3.     Fair Value of Financial Instruments

        The Company measures at fair value certain financial assets and financial liabilities. Fair value is the price that would be received for an asset, or the exit price that would be paid to transfer a liability, in the principal or most advantageous market in an orderly transaction between market participants on the measurement date. There are three levels of inputs used to measure fair value, arranged in a hierarchy that maximizes the use of observable inputs:

Level 1:	Quoted prices in active markets for identical assets or liabilities.
Level 2:	Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the related assets or liabilities.
Level 3:	Unobservable inputs that are supported by little or no market activity.

        Assets and liabilities measured at fair value are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The Company's assessment of the significance of a particular input to the fair value measurement requires judgment and considers factors specific to the asset or liability. The following table sets forth the Company's financial assets that were measured at fair value within the fair value hierarchy:

	December 31, 2009								December 31, 2008
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
	(in thousands)
Money market funds	$	195,530	$	—	$	—	$	195,530	$	166,504	$	—	$	—	$	166,504

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4.     Accounts Receivable

        Accounts receivable consist of the following:

		December 31,
		2009		2008
		(in thousands)
Commercial:
	Billed	$	16,212	$	21,699
	Unbilled		—		80
U.S. government and government prime contractors:
	Billed		670		2,136
	Unbilled		1,080		3,828
	Retainage		258		141
			18,220		27,884
Less: Allowance for doubtful accounts			334		234
Net accounts receivable		$	17,886	$	27,650

5.     Inventories

        Net inventories consist of the following:

	December 31,
	2009		2008
	(in thousands)
Raw materials	$	6,976	$	7,397
Work in process		7,153		2,986
Finished goods		5,435		3,598
	$	19,564	$	13,981

6.     Property and Equipment

        Property and equipment consist of the following:

	December 31,
	2009		2008
	(in thousands)
Land and building	$	6,740	$	6,208
Machinery and equipment		41,548		38,964
Furniture and fixtures		717		690
Leasehold improvements		122		86
		49,127		45,948
Less: Accumulated depreciation and amortization		29,194		28,021
Net property and equipment	$	19,933	$	17,927

        Depreciation and amortization expense related to the Company's property and equipment was $5,368,000, $5,675,000 and $4,744,000 in 2009, 2008 and 2007, respectively.

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7.     Intangible Assets

        On October 17, 2007, the Company entered into a strategic agreement with Northrop Grumman Space Technology sector to market a specified list of existing Velocium products worldwide, to license related technology and to assume the associated customer relationships, at a cost of $7,080,000.

        The Company's intangible assets, all of which relate to the Velocium strategic agreement and are included in other assets in the accompanying consolidated balance sheets, consist of the following:

	December 31, 2009						December 31, 2008
	Gross Carrying Amount		Accumulated Amortization		Net		Gross Carrying Amount		Accumulated Amortization		Net
	(in thousands)
Licensed technology	$	2,711	$	1,175	$	1,536	$	2,711	$	632	$	2,079
Non-compete agreement		2,800		1,213		1,587		2,800		653		2,147
Customer relationships		1,569		679		890		1,569		366		1,203
Total intangible assets	$	7,080	$	3,067	$	4,013	$	7,080	$	1,651	$	5,429

        The Company's intangible assets are being amortized over their original estimated useful lives of 5 years. Amortization expense associated with these assets was $1,416,000, $1,415,000 and $236,000 in 2009, 2008 and 2007, respectively. The accompanying consolidated statements of operations for 2009, 2008 and 2007 reflect such amortization as $874,000, $873,000 and $146,000 of sales and marketing expense and $542,000, $542,000 and $90,000 of cost of revenue, respectively. Based on the current amount of intangible assets subject to amortization, amortization expense is estimated to be $1,416,000, $1,416,000, $1,181,000, $0 and $0 for 2010, 2011, 2012, 2013 and 2014, respectively.

8.     Commitments and Contingencies

Lease Arrangements

        The Company leases office space and equipment under operating leases. The following table summarizes future minimum rental payments under these leases as of December 31, 2009 (in thousands):

2010	$	686
2011		583
2012		184
2013		—
2014		—
Later years		—
	$	1,453

        Rental expense during 2009, 2008 and 2007 was $1,013,000, $962,000 and $878,000, respectively.

Indemnification

        In connection with the sale of products in the ordinary course of business, the Company often makes representations affirming, among other things, that its products do not infringe on the intellectual property rights of others, and agrees to indemnify customers against third-party claims for such infringement. Further, the Company's by-laws require it to indemnify its officers and directors against any action that may arise out of their services in that capacity, and the Company has also entered into indemnification agreements with respect to all of its directors. The Company has not been subject to any material liabilities under such provisions and therefore believes that its exposure for

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these indemnification obligations is minimal. Accordingly, the Company has no liabilities recorded for these indemnity agreements as of December 31, 2009 and 2008.

Product Warranties

        The Company provides product warranties in conjunction with certain product sales. Generally, product sales are accompanied by a one-year warranty period. These warranties cover factors such as nonconformance to specifications and defects in material and workmanship. Estimated standard warranty costs are recorded in the period in which the related product sales occur. The warranty liability recorded at each balance sheet date reflects the estimated number of months of warranty coverage outstanding for products delivered multiplied by the average of historical monthly warranty costs, as well as any additional amounts for major warranty issues that may exceed a normal claims level.

		2009			2008			2007
		(in thousands)
Balance at beginning of year		$	250		$	144		$	112
	Addition for new warranties		300			343			76
	Deductions for payments made		(200	)		(237	)		(44	)
Balance at end of year		$	350		$	250		$	144

Intellectual Property Claims

        In recent years there has been significant litigation involving intellectual property rights in many technology-based industries, including the Company's. Although the Company has not to date incurred any damages as a result of claims that its products infringe any patents or other proprietary rights of third parties, it has from time to time received notice of such claims from third parties, two of which have resulted in legal actions against the Company that are currently pending, and could be subject to other such claims in the future. Since patent applications often are not disclosed until a patent issues, it is not always possible for the Company to know whether patent applications are pending that might be infringed by its products, and there could be issued patents that are pertinent to the Company's business of which it is not aware. The Company's products may also be claimed to infringe intellectual property rights of others as a result of activities by its foundries or other suppliers with respect to which it has no control or knowledge. During the first quarter of 2008, the Company received a letter from a third party asserting that sales by the Company of certain of the Company's products infringe a patent that allegedly applies to a semiconductor process used by certain of the Company's foundries in manufacturing wafers supplied by those foundries to the Company for use in these products. The Company believes that to the extent it might incur liability as a result of infringement by any of its foundries of this or any other third party's patent, the Company would be entitled to be indemnified by such foundry. During the third quarter of 2008, another third party commenced an action against the Company in which it alleges that certain of the Company's products infringe patents held by the third party. During the third quarter of 2009, another third party commenced an action against the Company, in which it alleges that one of the Company's products infringes a patent held by the third party. We have incurred significant costs in defending these actions, and there can be no assurance that these or any other pending or future litigation or claims relating to infringement of third-party intellectual property rights can be resolved in a manner favorable to the Company. The Company has not concluded that it is probable that it has incurred a liability to any such claimant, and cannot estimate the amount of the possible loss that might be incurred in the event that any such claim or litigation is determined adversely to the Company. However, claims relating to the alleged infringement by the Company of third-party proprietary rights, whether meritorious or not, could be time-consuming to defend and could harm the Company's working relationships with the Company's foundries and

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customers, damage the Company's reputation, result in substantial and unanticipated costs associated with litigation, require the Company to enter into royalty or licensing agreements, which may not be available on acceptable terms or at all, or result in the payment by the Company of substantial damages. If the Company were found to infringe the intellectual property rights of any third party and if a license were not available on reasonable terms, the Company could be required to redesign the infringing product so as not to infringe, which could be time consuming and costly, or if this is not feasible, could be required to withdraw the infringing product from the market.

9.     Defined Contribution Plan

        The Company has established a defined contribution plan under the provisions of Section 401(k) of the Internal Revenue Code. All employees are eligible to participate in the plan. The Company may make matching contributions, and may also provide discretionary contributions. During 2007 and 2008, the Company matched 100% of participants' contributions up to 10% of compensation. In February 2009, the Company suspended its matching program, and provided no further contributions in 2009. In 2009, 2008 and 2007, employer contributions were $96,000, $2,361,000 and $1,877,000, respectively.

10.   Stockholders' Equity

        Each share of common stock entitles the holder to one vote on all matters submitted to a vote of the Company's stockholders. Common stockholders are entitled to receive dividends, if any, as may be declared by the Company's Board of Directors.

        The Company has 5,000,000 shares of authorized but unissued, $.01 par value preferred stock. These shares may be issued upon approval of the Board of Directors, without stockholder approval, in one or more series, each of the series to have whatever rights and preferences, including voting rights, dividend rights, conversion rights, redemption privileges and liquidation preferences, that the Board of Directors may determine. The rights of the holders of common stock may be adversely affected by the rights of holders of any such preferred stock that may be issued in the future. The issuance of preferred stock, while providing desirable flexibility in connection with possible acquisitions and other corporate purposes, could have the effect of making it more difficult for others to acquire, or of discouraging others from attempting to acquire, a majority of the outstanding voting stock of the Company. The Company has not issued, and has no current plans to issue, any shares of this preferred stock.

        In April 2008, the Company's board of directors authorized a stock repurchase program to offset the dilutive impact of equity-based compensation granted to the Company's employees. The shares may be repurchased from time to time in the open market or in privately negotiated transactions. During 2009, the Company repurchased 623,417 shares of its common stock for $19,624,000. During 2008, the Company repurchased 1,316,507 shares of its common stock for $41,570,000. The timing, price and volume of additional repurchases will be based on market conditions, relevant securities laws and other factors, as appropriate, and repurchases may be suspended or discontinued at any time.

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Earnings Per Share

        The following table sets forth the computation of basic and diluted net income per share:

	2009		2008		2007
	(in thousands, except per share data)
Basic earnings per share
Net income	$	46,173	$	53,842	$	51,238
Weighted average common shares outstanding		29,380		30,473		30,630
Basic earnings per share	$	1.57	$	1.77	$	1.67
Diluted earnings per share
Net income	$	46,173	$	53,842	$	51,238
Weighted average common shares outstanding		29,380		30,473		30,630
Dilutive effect of stock options and restricted stock		470		482		633
Adjusted weighted average shares—diluted		29,850		30,955		31,263
Diluted earnings per share	$	1.55	$	1.74	$	1.64

        The dilutive effect of outstanding options and restricted stock is reflected in diluted earnings per share by application of the treasury stock method, which includes consideration of unamortized compensation cost and tax benefits on stock-based compensation. An immaterial number of such securities were excluded from the calculation of diluted earnings per share, as their impact would have been anti-dilutive.

11.   Stock-Based Compensation Plans

        The Company had a 1996 Stock Plan (the "1996 Plan"), pursuant to which the Company was authorized to grant to employees, directors and consultants of the Company stock options to purchase up to 3,748,000 shares of common stock. The maximum allowable term of options granted under the 1996 Plan was ten years from the date of grant. On January 2, 2006, the 1996 Plan expired by its terms, and no further awards may be granted under the 1996 Plan.

        The Company has a 2005 Stock Incentive Plan (the "2005 Plan") for its officers, directors and employees. Under the 2005 Plan, the Board of Directors may grant stock options, restricted stock awards, unrestricted stock awards, performance share awards and stock appreciation rights. No maximum contractual term is set for awards under the 2005 Plan, except with respect to incentive stock options, for which a ten-year maximum is prescribed. The 2005 Plan initially authorized the issuance of awards for up to 4,216,500 shares of common stock. The 2005 Plan also authorizes, on each of the first five anniversaries of the effective date of the 2005 Plan, the issuance of an additional 468,500 shares of common stock or such lesser number of shares, including zero, as may be determined by the Board of Directors. Giving effect to these annual increases, the aggregate number of shares authorized for issuance as of December 31, 2009 is 6,090,500. A maximum of 6,559,000 shares of common stock may be issued under the 2005 Plan, giving effect to the maximum annual increase in each year through 2010.

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        Under the 2005 Plan, incentive stock options and nonqualified stock options may be granted at an exercise price not less than the fair market value of the Company's common stock on the date of grant. Substantially all options currently outstanding under both plans vest over a period of five years. No stock options were granted in 2009, 2008 or 2007.

        The following table summarizes stock-based compensation included in the Company's consolidated statements of operations:

	2009		2008		2007
Cost of revenue	$	1,630	$	1,351	$	1,117
Research and development		2,046		1,743		1,039
Sales and marketing		1,072		1,036		764
General and administrative		1,744		1,538		1,167
Stock-based compensation expense	$	6,492	$	5,668	$	4,087

        Stock-based compensation cost for 2009 includes $2,077,000 related to stock options and $4,415,000 related to restricted stock. Stock-based compensation cost for 2008 includes $2,552,000 related to stock options and $3,116,000 related to restricted stock. Stock-based compensation cost for 2007 includes $2,550,000 related to stock options and $1,537,000 related to restricted stock.

        The Company recognizes any excess income tax benefits from stock-based awards in additional paid-in capital only if an incremental income tax benefit would be realized after considering all other tax attributes presently available to the Company. The Company measures the tax benefit associated with excess tax deductions related to stock-based compensation expense by multiplying the excess tax deductions by the statutory tax rates.

        Information related to all stock options granted by the Company is as follows:

	Shares			Weighted Average Exercise Price per Share		Weighted Average Remaining Contractual Life (in years)		Aggregate Intrinsic Value
Outstanding at December 31, 2006		1,726,923			14.49
Options granted		—
Options exercised		(275,755	)		9.91
Options forfeited / cancelled		(30,000	)		17.00
Outstanding at December 31, 2007		1,421,168			15.32
Options granted		—			—
Options exercised		(181,283	)		12.75
Options forfeited / cancelled		(27,369	)		17.05
Outstanding at December 31, 2008		1,212,516			15.67
Options granted		—
Options exercised		(243,568	)		13.05
Options forfeited / cancelled		(23,091	)		17.65
Outstanding at December 31, 2009		945,857			16.29		5.20	$	23,152,000
Exercisable at December 31, 2009		268,713			13.70		4.29		7,275,000
Vested or expected to vest at December 31, 2009		924,124			16.26		5.20		22,651,000

        The intrinsic value of stock options exercised, calculated as the difference between the market value of the shares on the exercise date and the exercise price of the option, was $5,599,000, $4,934,000 and $9,085,000 during 2009, 2008 and 2007, respectively. As of December 31, 2009, total compensation

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cost not yet recognized related to stock options was $1,290,000, which is expected to be recognized over a weighted-average period of 0.6 years.

        The accompanying consolidated statements of cash flows reflect as a financing cash inflow the excess tax benefit associated with the exercise of stock options of $822,000, $1,009,000 and $1,830,000 for 2009, 2008 and 2007, respectively.

        The following table summarizes information about the Company's stock options outstanding at December 31, 2009:

								Options Exercisable
Range of Exercise Prices		Number Outstanding		Weighted Average Life (Years)		Weighted Average Exercise Price		Number Exercisable		Weighted Average Exercise Price
$	5.34		84,848		1.32	$	5.34		84,848	$	5.34
	17.00		798,045		5.55		17.00		164,354		17.00
	20.40		37,964		5.66		20.40		11,179		20.40
	24.65		25,000		5.95		24.65		8,332		24.65
			945,857		5.20		16.29		268,713		13.70

        Information related to restricted stock granted by the Company is as follows:

	Number of Shares			Weighted Average Grant Date Fair Value
Nonvested at December 31, 2006		270,619		$	30.70
Granted		117,830			43.03
Vested		(3,099	)		30.87
Forfeited		(25,093	)		29.08
Nonvested at December 31, 2007		360,257			34.85
Granted		363,000			30.92
Vested		(36,768	)		25.66
Forfeited		(13,231	)		37.52
Nonvested at December 31, 2008		673,258			33.19
Granted		315,294			39.34
Vested		(57,287	)		36.24
Forfeited		(17,090	)		37.27
Nonvested at December 31, 2009		914,175			35.04

        As of December 31, 2009, total compensation cost not yet recognized related to restricted stock awards was $20,753,000, which is expected to be recognized over a weighted-average period of 4.0 years.

F-20

12.   Income Taxes

        Deferred income taxes reflect the net effect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and income tax purposes. Deferred tax assets and liabilities consist of the following;

			December 31,
			2009			2008
			(in thousands)
Current deferred tax assets:
	Inventory reserve		$	1,937		$	1,375
	Reserve for bad debts			125			118
	Sales return reserve			375			346
	Accrued vacation			352			344
	Deferred revenue			158			197
	Stock-based compensation			4,891			3,662
	Accrued commissions			166			252
	Prepaid expenses			(212	)		(315	)
	Other			154			227
		Total current deferred tax assets	$	7,946		$	6,206
Long-term deferred tax liabilities:
	Depreciation and amortization		$	(824	)	$	(620	)
	Other			305			239
Total long-term deferred tax liabilities			$	(519	)	$	(381	)

        The components of the provision for income taxes are as follows:

		2009			2008			2007
		(in thousands)
Current:
	Federal	$	24,021		$	28,005		$	23,761
	State		2,111			2,387			2,732
	Foreign		(119	)		465			526
Deferred:
	Federal		(1,501	)		(1,544	)		(1,279	)
	State		(280	)		(156	)		444
		$	24,232		$	29,157		$	26,184

        In 2009, 2008 and 2007 domestic income before taxes was $69,250,000, $81,575,000 and $75,887,000, respectively, and foreign income before taxes was $1,155,000, $1,424,000 and $1,535,000, respectively.

F-21

        The Company's effective tax rates differ from the federal statutory tax rate as follows:

	2009			2008			2007
Statutory rate		35.0	%		35.0	%		35.0	%
Tax-exempt interest income		(0.1	)		(1.0	)		(1.8	)
Domestic production activities deduction		(1.3	)		(0.8	)		(1.8	)
State taxes		2.3			2.5			2.7
Research and development credits		(1.0	)		(0.4	)		(0.2	)
Foreign income tax benefit		(0.7	)		(0.1	)		—
Other		0.2			(0.1	)		(0.1	)
		34.4	%		35.1	%		33.8	%

        The Company receives a tax deduction related to the exercise of nonqualified stock options and the vesting of stock awards granted under its stock plans. To the extent this deduction is greater than the grant date fair value of the award, such difference is recorded as an increase in additional paid-in capital, rather than as a reduction to the provision for income taxes. This tax benefit totaled $822,000, $1,009,000 and $1,830,000 in 2009, 2008 and 2007, respectively.

        The Company provides United States income taxes on the earnings of foreign subsidiaries unless the subsidiaries' earnings are considered permanently reinvested outside the United States. As of December 31, 2009, U.S. income taxes were not provided on a cumulative total of $5,961,000 of undistributed earnings for certain foreign subsidiaries, as these earnings are considered permanently reinvested in operations outside the United States. If these earnings were to be repatriated, the Company would be subject to additional United States income taxes, subject to an adjustment for foreign tax credits.

        As a result of the adoption of new accounting guidance for uncertain tax positions, included in ASC 740, the Company recognized a $152,000 net increase in unrecognized tax benefits which, as required, was accounted for as a reduction to the January 1, 2007 balance of retained earnings.

        Activity related to unrecognized tax benefits was as follows (in thousands):

Balance at January 1, 2007		$	2,207
	Additions based on tax positions related to the current year		549
	Additions for tax positions of prior years		620
	Reductions for tax positions of prior years		(5	)
	Lapse of statute of limitations		(7	)
	Settlements		(184	)
Balance at December 31, 2007			3,180
	Additions based on tax positions related to the current year		799
	Additions for tax positions of prior years		736
	Reductions for tax positions of prior years		(263	)
	Lapse of statute of limitations		(272	)
Balance at December 31, 2008			4,180
	Additions based on tax positions related to the current year		786
	Additions for tax positions of prior years		400
	Reductions for tax positions of prior years		(167	)
Balance at December 31, 2009		$	5,199

        Substantially all of the Company's unrecognized tax benefits, if recognized, would be recorded as a decrease to the provision for income taxes.

F-22

        The Company includes any interest and penalties related to uncertain tax positions as a component of the provision for income taxes. No material amount of such expense was recognized during 2009, 2008 or 2007, and there was no material accrual for interest or penalties as of December 31, 2009 or December 31, 2008.

        The major tax jurisdictions that remain subject to examination are: U.S. Federal 2005-2008; U.S. states 2003-2008; and Germany 2004-2008. The Company is currently under examination by the U.S. Internal Revenue Service for 2005-2007. Based on such factors as the outcome of tax examinations and the expiration of the statute of limitations for specific jurisdictions, it is reasonably possible that the unrecognized tax benefits for tax positions taken on previously filed tax returns will materially change in the next 12 months, although it is not possible to estimate the impact of any such potential change.

13.   Segment, Major Customers and Geographic Information

        The Company operates in one reportable segment: the design and development of integrated circuits, modules, and subsystems.

        No customer accounted for more than 10% of total revenue in 2009, 2008 or 2007. It is impracticable for the Company to report its revenue by product or product line.

        The following table summarizes the Company's revenue by geographic region, based on the location to which the product was shipped:

	2009		2008		2007
	(in thousands)
United States	$	69,566	$	73,364	$	68,190
International		93,424		106,887		88,222
Total revenue	$	162,990	$	180,251	$	156,412

        Revenue from China represented 22%, 19% and 17% of total revenue in 2009, 2008 and 2007, respectively.

        Long-lived assets consist primarily of property and equipment and are principally located in the United States for all periods presented.

14.   Selected Quarterly Financial Data (Unaudited)

2009:	First Quarter		Second Quarter		Third Quarter		Fourth Quarter
	(in thousands, except per share data)
Revenue	$	38,195	$	39,673	$	41,469	$	43,653
Gross profit		27,326		27,927		29,846		32,652
Net income		10,185		10,586		11,985		13,417
Basic earnings per share		0.35		0.36		0.41		0.46
Diluted earnings per share		0.34		0.35		0.40		0.45

2008:	First Quarter		Second Quarter		Third Quarter		Fourth Quarter
	(in thousands, except per share data)
Revenue	$	43,292	$	45,038	$	45,528	$	46,393
Gross profit		30,357		31,889		33,024		33,425
Net income		13,050		13,462		13,698		13,632
Basic earnings per share		0.42		0.44		0.45		0.46
Diluted earnings per share		0.42		0.43		0.44		0.45

F-23

EX-10.2

EXHIBIT 10.2

HITTITE MICROWAVE CORPORATION

EMPLOYEE’S RESTRICTED STOCK AGREEMENT

1. Restricted Stock Award.  Hittite Microwave Corporation (the “Company”) has granted to [                              ] (the “Grantee”), a restricted stock award (the “Award”), pursuant to the Company’s 2005 Stock Incentive Plan (the “Plan”), of [      ] shares (the “Shares”) of common stock, $0.01 par value (“Common Stock”), of the Company, subject to the terms and conditions of this Agreement and the Plan.  Except where the context otherwise requires, the term “Company” shall include the parent and all present and future subsidiaries of the Company as defined in Sections 424(e) and 424(f) of the Internal Revenue Code of 1986, as amended or replaced from time to time (the “Code”). Capitalized terms used and not otherwise defined herein shall have the meanings ascribed to them in the Plan.

2. Forfeitable Shares and Vested Shares.  All Shares shall be deemed to be “Forfeitable Shares” until the Company’s right of forfeiture, described in Section 4, below, has expired (and the Grantee’s right to retain such shares has accrued) in accordance with the vesting schedule set forth in Section 3.  Forfeitable Shares shall be subject to forfeiture as described in Section 4, below.  “Vested Shares” are Shares held by the Grantee as to which the Company’s right of forfeiture has expired (and the Grantee’s right to retain has accrued) based on the stock vesting schedule.  All certificates representing Forfeitable Shares shall remain in the possession of the Company until such shares become Vested Shares in accordance with the terms of this Agreement.

3. Vested Shares; Vesting Schedule.  The Company’s right of Forfeiture shall expire and the Shares shall become Vested Shares in accordance with the following schedule:

(a) One-third (33 1/3%) of the total number of Shares shall become Vested Shares on the third anniversary of the vesting date of [                          ] (the “Vesting Date”); and

(b) The remaining Shares shall become Vested Shares on the fifth anniversary of the Vesting Date; provided that

(c) in the event of a Change in Control of the Company, as defined in the Plan, the vesting of this Award shall be automatically be accelerated, contingent upon, and effective immediately prior to, the consummation of the transaction constituting such Change in Control, such that (i) the number of Shares subject to this Award that are Vested Shares shall be equal to the number of Shares that would have been vested as of the date of consummation of the Change in Control if the vesting schedule of this Award had provided for vesting in 60 equal monthly installments, commencing on the first month anniversary of the Vesting Date, and on the corresponding day of each of the next 59 months (the “Modified Vesting Schedule”), and (ii) this Award shall thereafter

continue to vest in accordance with the Modified Vesting Schedule.

4. Forfeiture of Shares.

4.1 Forfeiture.  If for any reason the Grantee ceases to be employed by the Company (including, without limitation, by reason of the Grantee’s voluntary resignation or the Company’s dismissal of the Grantee for any reason, with or without cause) then all Shares which as of the date of such termination of employment constitute Forfeitable Shares shall be forfeited to the Company without payment of any consideration by the Company.  There shall be no further accruals under the vesting schedule, and no further Forfeitable Shares shall become Vested Shares, from and after the date of any such termination of employment.

4.2 Death or Disability.  In the event of the death or Disability of the Grantee, the vesting of the Shares under the Vesting Schedule shall be automatically accelerated so that all Shares become Vested Shares, effective as of the date of death or Disability. The Committee shall have sole authority and discretion to determine whether the Grantee’s employment has been terminated by reason of Disability.

4.3  Normal Retirement.  In the event of the normal retirement of the Grantee, then the vesting of the Shares shall be automatically accelerated so that all Shares become Vested Shares, effective as of the date of retirement.  The Committee shall have sole authority and discretion to determine whether the Grantee’s employment has been terminated by reason of normal retirement.

4.4 Forfeiture of Forfeitable Shares.  The Grantee’s rights in all Forfeitable Shares shall terminate automatically on the date of the Grantee’s termination of employment, and the Company may thereupon cancel the certificate or certificates representing such Forfeitable Shares on its books.  In the event that the certificates then being retained by the Company under this Agreement also represent other shares of Common Stock not being forfeited to the Company, the Company shall issue to the Grantee replacement certificates for such other shares.

4.5 Nontransferability of Shares.  No Shares may be transferred, assigned, pledged or hypothecated in any way (whether by operation of law or otherwise) or otherwise disposed of prior to their becoming Vested Shares.  Upon any attempt to transfer, assign, pledge, hypothecate or otherwise dispose of any Forfeitable Shares, or upon the levy of any attachment or similar process upon Forfeitable Shares, the Company shall have a right of Forfeiture with respect to such Forfeitable Shares. Notwithstanding the foregoing, the Grantee may transfer any Shares either during his or her lifetime or on death by will or intestacy to one or more members of his or her immediate family or to a trust the beneficiaries of which are exclusively the undersigned and/or a member or members of his or her immediate family; provided, however, that prior to any such transfer each transferee shall execute an agreement, satisfactory to the Company, pursuant to which each transferee shall agree to receive and hold such Shares subject to the provisions hereof (including, without limitation, the Company’s right of forfeiture with respect to any Shares so transferred that constitute Forfeitable Shares), and there shall be no further transfer except in accordance with the provisions hereof.  For the purposes of this paragraph, “immediate family” shall mean spouse, lineal descendent, father, mother, brother or sister of the transferor.

2

5. No Special Employment Rights.  Nothing contained in the Plan or this Agreement shall confer upon the Grantee any right with respect to the continuation of his or her employment by the Company or interfere in any way with the right of the Company at any time to terminate such employment or to increase or decrease the Grantee’s compensation.

6. Rights as a Shareholder.  The Grantee shall have the rights of a shareholder with respect to all of the Forfeitable Shares and the Vested Shares held by the Grantee (including, without limitation, any rights to vote and to receive dividends or non-cash distributions with respect to such shares) unless and until the Company exercises its right of Forfeiture as to any or all of the Forfeitable Shares in accordance with Section 4.

7. Availability of Tax Election: Withholding.

(a)  Grantee acknowledges that the Company has advised the Grantee of the possibility of making an election under Section 83(b) of the Code with respect to the Award of the Shares and has recommended that the Grantee consult a qualified tax advisor regarding the desirability of making such an election in light of the Grantee’s individual circumstances.

(b)  Grantee shall, no later than the date as of which the value of any Shares first becomes includable in the gross income of the Grantee for Federal income tax purposes, pay to the Company, or make arrangements satisfactory to the Committee regarding payment of any Federal, state, local and/or payroll taxes of any kind required by law to be withheld with respect to such income.  The Company and its Affiliates shall, to the extent permitted by law, have the right to deduct any such taxes from any payment of any kind otherwise due to the participant.

(c)  Grantee may elect to have such tax withholding obligation satisfied, in whole or in part, by (i) authorizing the Company to withhold from the Shares a number of shares with an aggregate Fair Market Value (as defined in the Plan, and determined of the date the withholding is effected) that would satisfy the withholding amount due with respect to such Award, or (ii) delivering to the Company a number of Shares with an aggregate Fair Market Value (as of the date the withholding is effected) that would satisfy the withholding amount due.

8. Miscellaneous.

8.1 By accepting this Award, Grantee agrees that, if so requested by the Company or by the underwriters managing any underwritten offering of the Company’s securities, the recipient will not, without the prior written consent of the Company or such underwriters, as the case may be, sell, make any short sale of, loan, grant any option for the purchase of, or otherwise dispose of any shares subject to any such Award during the Lock-up Period, as defined below. The “Lock-Up Period” shall mean a period of time not exceeding 180 days or, if greater, such number of days as shall have been agreed to by each director and executive officer of the Company in a substantially similar lock-up agreement by which each such director and executive officer is bound. If requested by the Company or such underwriters, the Grantee will enter into an agreement with such underwriters consistent with the foregoing.

8.2 Any certificate representing Shares shall be subject to a legend in substantially the following form:

3

“THE SHARES OF STOCK EVIDENCED BY THIS CERTIFICATE ARE SUBJECT TO AND ARE TRANSFERABLE ONLY IN ACCORDANCE WITH THAT CERTAIN RESTRICTED STOCK AGREEMENT DATED [                          ].  ANY ATTEMPTED TRANSFER OF THE SHARES OF STOCK EVIDENCED BY THIS CERTIFICATE IN VIOLATION OF SUCH AGREEMENT SHALL BE NULL AND VOID AND WITHOUT EFFECT.  A COPY OF THE AGREEMENT MAY BE OBTAINED FREE OF CHARGE FROM THE SECRETARY OF THE COMPANY.”

8.3 Grantee hereby agrees to execute and deliver to the Secretary of the Company a stock power (endorsed in blank) hereto covering this Award and authorizes the Secretary to deliver to the Company for cancellation any and all Shares that are forfeited or withheld under the provisions of this Agreement.

8.4 Except as provided herein, this Agreement may not be amended or otherwise modified unless evidenced in writing and signed by the Company and the Grantee.

8.5 All notices under this Agreement shall be mailed or delivered by hand to the parties at their respective addresses set forth beneath their names below or at such other address as may be designated in writing by either of the parties to one another.

8.6 This Agreement shall be governed by and construed in accordance with the laws of The Commonwealth of Massachusetts, without regard to its principles of conflicts of laws.

8.7 This Agreement is and shall be subject in every respect to the provisions of the Plan, as amended from time to time, which is incorporated herein by reference and made a part hereof.

8.8 This Agreement is executed in two (2) counterpart originals, one (1) to be retained by the Grantee and one (1) to be retained by the Company.

Date of Grant:
	HITTITE MICROWAVE CORPORATION
	By:
	Title: President and Chief Executive Officer

4

GRANTEE’S ACCEPTANCE

The undersigned hereby accepts the grant of the Restricted Stock Award described in this Agreement and agrees to the terms and conditions thereof.  The undersigned hereby acknowledges receipt of a copy of the Company’s 2005 Stock Incentive Plan.

GRANTEE

Name:

Address:

Social Security Number:

STOCK POWER

FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers to the Company a total of                              shares of the Common Stock of the Company represented by stock certificate number         to be delivered herewith, and does hereby irrevocably constitute and appoint                                              as attorney to transfer said shares on the books of the Company with full power of substitution in the premises.

Dated:
	Name:

5

EX-10.25

EXHIBIT 10.25

Hittite Microwave Corporation

Non-Employee Director Compensation Plan

Directors who are our employees receive no separate compensation for their services as directors. Our non-employee directors receive cash fees and equity-based compensation in the form of awards under our 2005 Stock Incentive Plan, as follows:

·each non-employee director receives an annual cash fee in the amount of $15,000;

·our lead director receives an additional cash fee in the amount of $20,000;

·the chairperson of each of our board committees receives an additional cash fee as follows: audit committee chair, $10,000; compensation committee chair, $8,000; and nominating committee chair, $8,000; and

·each other member of a board committee receives an additional annual cash fee of $8,000.

The cash fees described above are paid quarterly in arrears. Non-employee directors are also reimbursed upon request for travel and other out-of-pocket expenses incurred in connection with their attendance at meetings of the board and of committees on which they serve.

In addition, each non-employee director who is first elected to the board or who is elected to an additional one-year term at any annual meeting of stockholders, will upon such election receive a restricted stock award of a number of shares of our common stock, fixed on the date of grant, that has a fair value on the date of grant equal to $61,500. Each such restricted stock award will vest on the earlier of the first anniversary of the date of grant or the date of the next annual meeting of stockholders, subject to partial acceleration in the event of a change in control.

EX-10.31

EXHIBIT 10.31

NONCOMPETE AGREEMENT

(Senior Employee)

This NONCOMPETE AGREEMENT (the “AGREEMENT”), made as of the [     ] day of December, 2009, is entered into between Hittite Microwave Corporation, a Delaware corporation with offices at 20 Alpha Road, Chelmsford, MA 01824 (the “COMPANY”) and [                    ], an individual residing at [                       ] (the “Employee”).

RECITALS:

A.The Employee is a key employee of the Company.

B.The Company has agreed to increase the Employee’s annual rate of salary from $[       ] to $[       ].

C.The Employee’s execution of this Agreement is a condition to the Company’s increase in his annual rate of salary.

NOW, THEREFORE, in consideration of the mutual covenants and promises contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

1.NON-COMPETITION COVENANTS.

(a)NON-COMPETITION COVENANTS. The Employee agrees that he will not, during the Non-Competition Period (as hereinafter defined), directly or indirectly:

(i)as owner, employee, officer, director, partner, sales representative, agent, stockholder, capital investor, lessor, consultant or advisor, either alone or in association with others (other than as a holder of not more than one percent of the outstanding shares of any series or class of securities of a company, which securities of such class or series are publicly traded in the securities markets), develop, design, produce, market, sell or render (or assist any other person or entity in developing, designing, producing, marketing, selling or rendering), products or services which are competitive with the Business of the Company (as hereinafter defined) anywhere in the world;

(ii)solicit, divert or take away, or attempt to solicit, divert or take away, the business or patronage of any of the customers, prospective customers or referral sources of the Company with whom the Company has had a relationship during the period of the Employee’s employment by the Company; or

(iii)recruit, solicit or hire any employee of the Company, or induce or attempt to induce any employee of the Company to terminate his or her employment with, or otherwise cease his or her relationship with, the Company.

(b)DEFINITIONS. For the purposes of this Section 1, the following terms shall have the respective meanings indicated below:

(i)“NON-COMPETITION PERIOD” shall mean the period during which the Employee is employed by the Company and the one-year period commencing on the last day of the Employee’s employment by the Company, regardless of whether the Employee’s termination was at the election of the Company, with or without cause, or at the election of the Employee, with or without good reason.

(ii)“BUSINESS OF THE COMPANY” shall mean the development, manufacture, marketing and/or distribution of monolithic microwave integrated circuits and assemblies for RF, microwave and millimeter wave applications or other products or services which the Company sells, has under development or which are subject to active planning at any time during the term of the Employee’s employment with the Company.

2.INJUNCTIVE AND OTHER EQUITABLE RELIEF.

(a)The Employee consents and agrees that if he violates any of the provisions of Section 1 hereof, the Company shall be entitled, in addition to any other remedies it may have at law, to the remedies of injunction, specific performance and other equitable relief for a breach by the Employee of Section 1 of this Agreement. This Section 2(a) shall not, however, be construed as a waiver of any of the rights which the Company may have for damages or otherwise.

(b)Any waiver by the Company of a breach of any provision of Section 1 hereof shall not operate or be construed as a waiver of any subsequent breach of such provision or any other provision hereof.

(c)The Employee agrees that each provision of Section 1 shall be treated as a separate and independent clause, and the unenforceability of any one clause shall in no way impair the enforceability of the other clauses herein. Moreover, if one or more of the provisions contained in Section 1 shall for any reason be held to be excessively broad as to scope, activity or subject so as to be unenforceable at law, such provision or provisions shall be construed by the appropriate judicial body by limiting and reducing it or them so as to be enforceable to the maximum extent compatible with the applicable law as it shall then appear.

3.OTHER AGREEMENTS. The Employee represents and warrants that his performance of all the terms of this Agreement and as an employee of the Company does not and will not breach any other agreement by which he is bound.

4.NOTICES. All notices required or permitted under this Agreement shall be in writing and shall be deemed effective upon personal delivery or upon deposit in the United States Post Office, by registered or certified mail, postage prepaid, addressed to the other party at the address shown above, or at such other address or addresses as either party shall designate to the other in accordance with this Section 4.

5.NOT A CONTRACT OF EMPLOYMENT. Employee understands that this Agreement does not constitute a contract of employment or give Employee rights to employment or continued employment by the Company.

6.ENTIRE AGREEMENT. This Agreement constitutes the entire agreement between the parties and supersedes all prior agreements and understandings, whether written or oral, relating to the subject matter of this Agreement.

7.AMENDMENT. This Agreement may be amended or modified only by a written instrument executed by both the Company and the Employee.

8.GOVERNING LAW. This Agreement shall be construed, interpreted and enforced in accordance with the laws of The Commonwealth of Massachusetts, without regard to its choice of law principles. Employee hereby consents to (a) service of process, and to be sued, in The Commonwealth of Massachusetts and (b) to the jurisdiction of the courts of The Commonwealth of Massachusetts and the United States District Court for the District of Massachusetts, as well as to the jurisdiction of all courts to which an appeal may be taken from such courts, for the purpose of any suit, action or other proceeding arising out of any of Employee’s obligations hereunder, and Employee expressly waives any and all objections he or she may have as to venue in any such courts.

9.SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and inure to the benefit of both parties and their respective successors and assigns, including any corporation with which or into which the Company may be merged or which may succeed to its assets or business, provided, however, that the obligations of the Employee are personal and shall not be assigned by him.

10.MISCELLANEOUS.

(a)No delay or omission by the Company in exercising any right under this Agreement shall operate as a waiver of that or any other right. A waiver or consent given by the Company on any one occasion shall be effective only in that instance and shall not be construed as a bar or waiver of any right on any other occasion.

(b)The captions of the sections of this Agreement are for convenience of reference only and in no way define, limit or affect the scope or substance of any section of this Agreement.

(c)This Agreement shall be interpreted in such a manner as to be effective and valid under applicable law, but if any provision hereof shall be prohibited or invalid under any such law, such provision shall be ineffective to the extent of such prohibition

or invalidity, without invalidating or nullifying the remainder of such provision or any other provisions of this Agreement. If any one or more of the provisions contained in this Agreement shall for any reason be held to be excessively broad as to duration, geographical scope, activity or subject, such provisions shall be construed by limiting and reducing it so as to be enforceable to the maximum extent permitted by applicable law.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year set forth above.

HITTITE MICROWAVE CORPORATION
By:
	Name:
	Title: President
EMPLOYEE
Name:

EX-21.1

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Exhibit 21.1

SUBSIDIARIES OF HITTITE MICROWAVE CORPORATION

Name of Subsidiary	Jurisdiction of Incorporation or Organization
Hittite Microwave Europe Limited	United Kingdom
Hittite Microwave Deutschland GmbH	Germany
Hittite Microwave Asia Co., Limited	Korea
Hittite Microwave Co. Limited	China
Hittite Microwave Canada Inc.	Canada
Hittite Microwave Nordic AB	Sweden
Hittite Microdalga Sanayi Ve Ticaret Ltd. Sirketi	Turkey
Hittite Microwave Security Corporation	Massachusetts
Hittite KK	Japan
Hittite Microwave Malaysia SDN.BHD	Malaysia

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SUBSIDIARIES OF HITTITE MICROWAVE CORPORATION

EX-23.1

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Exhibit 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

        We hereby consent to the incorporation by reference in the Registration Statement on Form S-8 (No. 333-126800) of Hittite Microwave Corporation of our report dated February 26, 2010 relating to the consolidated financial statements and the effectiveness of internal control over financial reporting, which appears in this Form 10-K.

/s/ PricewaterhouseCoopers LLP

Boston, Massachusetts
February 26, 2010

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Exhibit 23.1

EX-31.1

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Exhibit 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

I, Stephen G. Daly, certify that:

1.

I have reviewed this report on Form 10-K of Hittite Microwave 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 report.

3.

Based on my knowledge, the financial statements, and other financial information included in this 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 we 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 that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting.

5.

The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of 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 control 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.

Date: February 26, 2010 /s/ STEPHEN G. DALY
Stephen G. Daly
President and Chief Executive Officer

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Exhibit 31.1

EX-31.2

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Exhibit 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

I, William W. Boecke, certify that:

1.

I have reviewed this report on Form 10-K of Hittite Microwave 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 report.

3.

Based on my knowledge, the financial statements, and other financial information included in this 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 we 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 that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting.

5.

The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of 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 control 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.

Date: February 26, 2010 /s/ WILLIAM W. BOECKE
William W. Boecke
Chief Financial Officer

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Exhibit 31.2

EX-32.1

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Exhibit 32.1

CERTIFICATION PURSUANT TO
18 U. S. C. SECTION 1350
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

        In connection with the Annual Report of Hittite Microwave Corporation (the "Company") on Form 10-K for the period ended December 31, 2009, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Stephen G. Daly, Chief Executive Officer of the Company, certify, to my best knowledge and belief, pursuant to 18 U.S.C. §1350, adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that:

(1)

the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and



(2)

the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: February 26, 2010 /s/ STEPHEN G. DALY
Stephen G. Daly
Chief Executive Officer

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to Hittite Microwave Corporation and will be retained by Hittite Microwave Corporation and furnished to the Securities and Exchange Commission or its staff upon request.

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Exhibit 32.1

EX-32.2

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Exhibit 32.2

CERTIFICATION PURSUANT TO
18 U. S. C. SECTION 1350
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

        In connection with the Annual Report of Hittite Microwave Corporation (the "Company") on Form 10-K for the period ended December 31, 2009, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, William W. Boecke, Chief Financial Officer of the Company, certify, to my best knowledge and belief, pursuant to 18 U.S.C. §1350, adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that:

(1)

the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and



(2)

the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: February 26, 2010 /s/ WILLIAM W. BOECKE
William W. Boecke
Chief Financial Officer

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to Hittite Microwave Corporation and will be retained by Hittite Microwave Corporation and furnished to the Securities and Exchange Commission or its staff upon request.

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Exhibit 32.2