10-K

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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, 2011
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.)
2 ELIZABETH DRIVE 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 ý    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, 2011 was $1,914,498,773.

         As of February 15, 2012 there were 31,448,089 common shares outstanding.

Documents Incorporated by Reference

         Portions of the definitive Proxy Statement for the 2012 Annual Meeting of Shareholders to be filed with the Securities and Exchange Commission on or before April 29, 2012 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, 2011

INDEX

PART I
Item 1.	Business	2
Item 1A.	Risk Factors	23
Item 1B.	Unresolved Staff Comments	38
Item 2.	Properties	38
Item 3.	Legal Proceedings	38
Item 4.	Mine Safety Disclosures	38
PART II
Item 5.	Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	39
Item 6.	Selected Financial Data	41
Item 7.	Management's Discussion and Analysis of Financial Condition and Results of Operations	42
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	54
Item 8.	Financial Statements and Supplementary Data	55
Item 9.	Changes in and Disagreements With Accountants on Accounting and Financial Disclosure	55
Item 9A.	Controls and Procedures	55
Item 9B.	Other Information	56
PART III
Item 10.	Directors, Executive Officers and Corporate Governance	57
Item 11.	Executive Compensation	57
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	57
Item 13.	Certain Relationships and Related Transactions and Director Independence	57
Item 14.	Principal Accountant Fees and Services	57
PART IV
Item 15.	Exhibits and Financial Statement Schedules	58
	Signatures	60

PART I

Item 1.    Business

Our Company

        We design and develop high performance integrated circuits (ICs), modules, subsystems and instrumentation for technically demanding radio frequency (RF) microwave and millimeterwave applications. As a result of our 27 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, subsystems and instrumentation 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 telecommunications 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, subsystems and instrumentation 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, subsystems and instrumentation 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

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semiconductor products. Additionally, they select vendors that have strong manufacturing and product fulfillment capabilities and can meet short delivery lead time requirements.

        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.

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        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 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, subsystems and instruments 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 34 product lines;

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diverse customer base, 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, subsystems and instruments 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 system, 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, subsystems and instrumentation that perform a variety of functions across the RF, microwave and millimeterwave frequency bands. At December 31, 2011, we had more than 980 standard products which may be categorized for descriptive purposes into 34 functional product lines:

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amplifiers

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attenuators

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automatic gain control

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broadband time delays

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clocks and timing

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comparators

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crosspoint switches

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data converters

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DC power conditioning

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DC power management

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dielectric resonator oscillators

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filters-tunable

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frequency dividers and detectors

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frequency multipliers

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high speed digital logic

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IF signal processing

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interface

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limiting amplifiers

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mixers and converters

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modulators and demodulators

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multiplexer / demultiplexer (mux / demux)

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optical modulator drivers

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passives

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phase locked loops

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phase locked loops with integrated voltage controlled oscillators

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phase shifters

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power detectors

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sensors

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signal generators/instrumentation

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successive detection logarithmic video amplifiers

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switches

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transimpedance amplifiers

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variable gain amplifiers

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voltage controlled oscillators and phase locked oscillators

        We offer our products in a wide variety of packaging formats, as well as in modules, subsystems and instrumentation, 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 2011, six in 2010, and four in 2009. We introduced 82 new standard products in 2011, 122 in 2010, and 83 in 2009, and also added custom products in comparable numbers during those years.

        Diverse customer base, markets and applications.    The diversity of our customers, markets and applications provides us with multiple long-term growth opportunities. In 2011, we sold our products to approximately 3,000 commercial and U.S. government customers for use in a variety of applications and markets worldwide. Our principal 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 3G and 4G base stations and repeaters
	•	E911 and GPS location systems
Fiber Optic	•	communications infrastructure
	•	fiber optic test equipment
	•	network data communications equipment
Microwave and Millimeterwave Communications	•	high and low capacity point-to-point and point-to-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, 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.

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        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, digital and mixed-signal ICs, modules, subsystems and instrumentation used in technically challenging RF, microwave and millimeterwave and fiber optic communications applications. We offer a broad range of radio frequency integrated circuits (RFICs), MMICs, MCMs, subsystems and instruments that perform a variety of signal processing functions and that operate across the RF, microwave, millimeterwave and visible light frequency spectrum. Our products are used in a wide range of wired and wireless communications applications, such as cellular 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 also offer products designed for use in fiber optic communications systems and in high speed data/voice/video/networking applications.

        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 980 standard products across 34 product lines. 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 supplier. The standard products listed on our website 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 on our website 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 whom they were developed.

Our IC 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:

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Amplifiers.    Amplifiers boost the gain, or power, of a signal. We offer a broad line of amplifiers, including:

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gain blocks and drivers used throughout the receiver and transmitter sections to boost signal level;

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

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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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wideband (distributed) 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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Attenuators.    Attenuators are used to reduce the power of a 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 attenuators is classified into two types:

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digital attenuators that provide control of the signal in response to a digital logic input and deliver preprogrammed levels of attenuation according to the digital input; and

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

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Automatic gain control.    Automatic gain control (AGC) is a control technique employed in almost every transceiver. The average output signal of a transceiver is fed back to adjust the gain to an appropriate level for a range of input signal levels. An AGC circuit uses a controller which can adjust the gain of the signal chain inversely proportionally to the error between desired and measured output signal amplitude or power. An AGC circuit usually requires three separate, discrete ICs; a variable gain amplifier, a controller, and power level sensor. Typical applications for these products include microwave radio, cellular repeater/boosters, military radios, VSAT, test equipment, sensors and WiMAX/LTE/4G systems.

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Broadband time delays.    Broadband time delays provide a highly accurate and stable time delay for signals that are transmitted through them. The desired delay is controlled by either an analog or digital voltage and may be varied over a specified range. These devices also feature internal circuitry to minimize delay variations with temperature changes or power supply changes. Our broadband time delay products are optimized for the synchronization of clock and data signals or for timing compensation in optical communication and high speed data networking systems.

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Clocks and timing.    Clocks and timing products are vitally important in the generation and synchronization of signals in digital and RF/microwave systems to facilitate communication between the various system nodes. These synchronization signals often take the form of a clock signal which is a very stable, repeating pattern of 1s and 0s. Each node in the system operates

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with this common clock signal in order to achieve synchronization. Our portfolio of clocks and timing products is classified into two types:

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clock distribution products ensure that each section of the system receives a good, stable copy of the primary reference clock; and

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clock generators produce primary signal references, and are therefore central to many communication systems.

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Comparators.    Comparators are devices that constantly monitor 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. Our comparator types include clocked, latched and window.

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Crosspoint switches.    Crosspoint switches are used for routing high speed signals across data and voice communications equipment backplanes. These devices are specified as N×M, with the first number (N) representing the number of inputs and the last number (M) representing the number of output crosspoints. Any input signal may be routed from a given input port to any combination of output ports based on the appropriate condition of the control signals. Our crosspoint switch products are optimized for driving and receiving high speed signals and are ideal for 10 GbE, 16G fibre channel and high speed data and wideband video network applications.

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

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analog-to-digital converters (ADCs) convert analog input voltages to a digital number which is proportional to the magnitude of the input voltage. Our standard ADC portfolio includes high performance, low power ADCs with up to 8 individual channels, and ultra high speed ADC products with best in class linearity and low power consumption. Our ADCs are designed to meet the requirement of the most demanding high performance signal processing applications; and

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track-and-hold (T/H) amplifiers that sample a continuously varying analog signal and convert it in a sequence of constant levels to eliminate signal variations for signal processing and conversion. Our T/H products are designed to provide significant improvement in bandwidth and performance to wideband sampled signal systems.

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DC power conditioning.    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 integrated circuits. Our power conditioner products are optimized for frequency generation applications and provide up to four independent regulated outputs with excellent power supply rejection ratio (PSRR).

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DC power management.    A power management device provides appropriately regulated and filtered DC power supply voltages and currents to integrated circuits. The DC voltage and current outputs of the power management device are controlled within narrow limits regardless of variations in the main power supplied to it. Our active bias controller is a complete biasing and monitoring solution and may be paired with many of our Class-A regime MMIC amplifiers as well as those of our competitors, used in boosting the gain of a signal.

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Dielectric resonator oscillators.    An oscillator is a device that produces a 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

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optimized for military, test equipment and industrial/medical equipment applications, and are characterized by their low phase noise, low temperature drift and robust packaging.

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Filters-tunable.    Tunable filters provide variable bandwidth across a frequency range and are used in radio receivers, transmitters, test instrumentation, military, space and industrial applications to remove unwanted mixer image signals or undesirable local oscillator harmonics, or may be used for baseband anti-alias protection. We offer four types of tunable filters:

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band pass filters that offer user-selectable pass band frequencies and cover the frequency spectrum from 1.0 to 37.0 GHz;

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band reject filters that offer a user-selectable cutoff frequency and cover frequency bands from 0.1 to 25 GHz;

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low pass filters that offer a user-selectable cutoff frequency and cover frequency bands from DC to 7.6 GHz; and

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dual programmable low pass filters that are 6^th order, fully calibrated and offer programmable bandwidth from 3.5 to 50.0 MHz.

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Frequency dividers and detectors.    Frequency dividers, also called prescalers, and phase-frequency detectors are used in frequency generation circuits, to help process and distribute the carrier frequency of the system. We offer a full range of frequency dividers and phase-frequency detectors. Our frequency dividers and detectors are used in military, space and commercial systems where very low noise is required or where a wide range of frequencies need to be processed by one subsystem. Our dividers and detectors include:

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dividers (prescaler) and counter 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;

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

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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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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 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, 3, 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 input signal power level while utilizing no DC power, to deliver a signal that is two times the input frequency.

•

High speed digital logic.    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 with data rates of 13, 26 and 40 Gb/s, which makes them suitable for OC-48, OC-192 and OC-768 applications. These products include functions such as clock distribution, clock dividers, fanout buffers, flip-flops, XOR and NAND logic gates, NRZ to RZ converters, and selectors.

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•

IF signal processing.    In a receiver, intermediate frequency (IF) signal processing involves the amplification and filtering of the desired signal after down conversion and prior to analog-to-digital conversion. In a transmitter, it involves the amplification and filtering of the desired signal after digital-to-analog conversion and before upconversion to the RF or microwave frequency. Our IF signal IC products include:

•

dual differential programmable low pass filters that support arbitrary bandwidths from 3.5 MHz to 50 MHz, with very high accuracy; and

•

dual, differential digitally programmable, baseband variable gain amplifiers that provide discrete gain level changes over a 40 dB range and high linearity performance.

•

Interface.    Interface products are used in the digital or analog control of integrated circuits. Our interface devices convert 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.

•

Limiting amplifiers.    Limiting amplifiers increase the gain of a digital signal, and have the feature of adding more gain to low level signals, and less gain to high level signals. Our limiting amplifier products are optimized for fiber optic communications and feature low jitter and high data rate capability.

•

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 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:

•

mixers in a variety of types including single, double & triple balanced mixers, sub-harmonic mixers, high IP3 mixers and I/Q mixers and image reject mixers, each utilizing our proprietary transformer circuit technology; and

•

converters including downconverter RFICs, I/Q downconverters / receivers, I/Q upconverters / transmitters and sub-harmonic, 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.

•

Modulators and demodulators.    Modulators are used in radio transmitters to combine a digital information signal with an analog carrier signal generated by a local oscillator (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 modulator and demodulator products include:

•

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

•

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

•

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

•

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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•

Multiplexer / demultiplexer (Mux / Demux).    A multiplexer takes several separate parallel digital data streams as its input and combines them together into a serial data stream of a higher data rate. This allows multiple data streams to be carried from one place to another over one physical link, which saves power, cost and printed circuit board area. At the receiving end of the data link a complementary demultiplexer performs the reverse operation, taking a serial digital data bit stream at a higher rate as its input, and then breaking this data rate stream back down into several separate parallel lower data rate bit streams as its output. Our multiplexer and demultiplexer products support analog or digital signals that operate at speeds of up to 45 Gb/s, which makes them suitable for OC-192 and OC-768 applications.

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Optical modulator drivers.    Optical modulator drivers are ultra-wideband amplifiers that are optimized for driving laser modulators used in high speed fiber optic and time domain applications. Modulator driver amplifiers are optimized for operating with the serial random high-speed digital signals. Our modulator drivers are ideal for 10G, 40G and 100G fiber optic applications both for short reach datacenter and long-haul for high performance voltage outputs with excellent eye diagram quality. Our optical modulator driver family features very low power, low jitter, high SNR and high data rate capability.

•

Passives.    Our passive product line consists of fixed attenuators that 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.

•

Phase locked loops.    PLL integrated circuits are used in conjunction with oscillators in 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 for the test and measurement, military and space markets.

•

Phase locked loops with integrated voltage controlled oscillators.    A PLL with integrated VCO produces an RF, microwave or millimeterwave frequency. Our PLL with integrated VCO products combine a fully integrated, low noise VCO, with an advanced PLL integrated circuit. Our single-band, tri-band and wideband PLL with integrated VCO products are optimized for RF and microwave signal generation applications, and exhibit low phase noise, low spurious products, low jitter and flexible programming capabilities.

•

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

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digital phase shifters provide discrete phase shift changes in response to a digital logic input, often in a combination of small and large phase steps.

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Power detectors.    Power detectors convert power levels of an RF, microwave or millimeterwave signal to linear or logarithmic DC voltages that can be measured by simple digital circuitry.

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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, we offer single chip sensors that are used for range detection in multiple military and commercial applications.

•

Successive detection logarithmic video amplifiers (SDLVAs).    SDLVAs are a specialized form of power detector that operate by processing signals with much wider bandwidths, exhibiting a flatter frequency response and providing a faster response to transient signals.

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Switches.    Switches are used to route 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 switch products provide the following functionality:

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

•

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;

•

single pole double throw switches that offer a single input and two outputs, while providing digital control, wide bandwidth, and low loss;

•

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

•

single pole single throw switches that offer a single input and a single output while providing digital control and high isolation or failsafe operation.

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Transimpedance amplifiers.    Transimpedance amplifiers are used between devices which have very different levels of impedance or resistance. Our transimpedance amplifier provides a differential output voltage that is proportional to the current at its input, and is optimized for photodiode and fiber optic data communication applications.

•

Variable gain amplifiers.    Variable gain amplifiers (VGAs) boost the gain or power of a signal and have the feature of allowing the user to set the gain or power to a specific level. Our analog and digital variable gain amplifiers utilize linear amplifiers, high performance attenuators, and flexible driver interface circuitry.

•

Voltage controlled oscillators and phase locked oscillators (VCOs and PLOs).    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. Our self-contained VCOs integrate all necessary circuitry on a single chip, so that no external components are required. We offer three types of MMIC oscillators:

•

phase locked oscillators that offer integrated phase lock loop (PLL) functionality for the VSAT market;

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narrow band VCOs that offer narrower frequency tuning and lower phase noise performance for microwave radio, test and measurement, military and space; and

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wideband VCOs that offer octave tuning bandwidth for the test & measurement and military markets.

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Modules, subsystems and instrumentation

        Our highly integrated custom and standard 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:

•

Signal generators / instrumentation consist of a family of synthesized signal generators which are used by our customers in engineering, production and reliability screening applications. Our synthesized signal generators operate at frequencies up to 70 GHz, and are designed to exhibit low phase noise, low spurious emissions, and high output power.

•

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

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

•

telecom and test equipment modules, such as our phase locked oscillator modules used in fiber optic test systems.

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.

        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.

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        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 designs.

        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 eight design centers, including our two primary design centers in Chelmsford, Massachusetts, and additional facilities in Cairo, Egypt; Colorado Springs, Colorado; Istanbul, Turkey; Ottawa, Ontario, Canada; Roanoke, Virginia; and Trondheim, Norway.

        As part of our research and development strategy, we have and may continue to license intellectual property from third parties. For example, we use integrated circuit design and background intellectual property that we licensed from Northrop Grumman Space Technology sector in 2007 and from IBM in 2010 to further expand our millimeterwave products.

        We continuously develop products using our own specifications, guided by input from our customers and market analysis, that combine technological innovation and general application. Our

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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 technical support staff in the United States, Canada, China, Finland, Germany, India, Japan, Korea, Norway, Sweden, Turkey, 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 selection guide both in print and e-media. 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 foundries are Cobham, CREE, Global Communications Semiconductors, IBM, Tower/Jazz Semiconductor, Northrop 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.

        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,

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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 manufacturing 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 hermetic 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 9001:2008 certified. The ISO 9001:2008 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 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 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

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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.

        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, 2011, we had 469 full-time employees, compared with 402 full-time employees at December 31, 2010. 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, other vice president-level officers and directors.

Name	Age		Position
Stephen G. Daly		46	Chairman of the Board, President and Chief Executive Officer
William W. Boecke		60	Vice President, Chief Financial Officer and Treasurer
Everett N. Cole III		50	Vice President of Hybrid Manufacturing(1)
William D. Hannabach		49	Vice President of Global Operations
Norman G. Hildreth, Jr.		48	Vice President
Dong Hyun (Thomas) Hwang		48	Vice President of Sales
Brian J. Jablonski		52	Vice President of Operations(1)
Michael A. Olson		51	Vice President
Antonio Visconti		51	Vice President
Ernest L. Godshalk		66	Director(2)
Rick D. Hess		58	Director(3)
Adrienne M. Markham		60	Director(4)
Brian P. McAloon		61	Director(5)
Cosmo S. Trapani		73	Director(6)
Franklin Weigold		73	Director(7)

(1)

Our Vice President of Hybrid Manufacturing and Vice President of Operations are not executive officers. They are included pursuant to Item 401(c) of Regulation S-K as persons who are expected to make significant contributions to our business.

(2)

Chairman of the Audit Committee and member of the Compensation Committee

(3)

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

(4)

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

(5)

Member of the Compensation and Nominating and Corporate Governance Committees

(6)

Member of the Audit and Compensation Committees

(7)

Lead Director and member of the Nominating and Corporate Governance Committee. 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 Chief Executive Officer, 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.

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        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 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

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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.

        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.

        Antonio Visconti has served as Vice President since October 2011, managing research and development engineering. From 2010 to 2011, Mr. Visconti served as Business Director in Maxim Integrated Product's Precision Control Group. From 2008 to 2011 he served as the CEO and Founder of ACZENT, Inc, a provider of analog solutions. From 2002 to 2008 he served as the Vice President and General Manager of National Semiconductor's Data Conversion division. Mr. Visconti has over 22 years experience in the semiconductor industry. Mr. Visconti received his degree in Electronic Engineering from the University of Naples in Italy.

        Ernest L. Godshalk has served as a member of our board of directors since 2008. 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 GT Advanced Technologies, 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 Vice President of Superconductors at American Superconductor Corporation, a provider of proprietary technologies and solutions for the electrical power infrastructure industry. From 2006 to 2010, he was 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.

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        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 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. 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.

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         Uncertain prospects for the global economy could adversely affect our business, results of operations and financial condition.

        We are unable to predict the future of the global economy, and there is no certainty that our business will grow in the long term. These uncertainties, including uncertainties related to the current sovereign debt crisis in certain countries in Europe, affect businesses such as ours in a number of ways, making it difficult to accurately forecast and plan our future business activities. Uncertain 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 uncertain economic conditions continue or deteriorate, we may recognize charges relating to restructuring costs or the impairment of assets. These uncertainties could have a material adverse impact on our business, our ability to achieve targeted results of operations and our financial condition.

         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. 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;

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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 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;

•

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.

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         As a fabless company, we depend on third-party foundries to manufacture semiconductor wafers that are critical to our products, which makes us susceptible to supply shortages or loss of supply, price fluctuations and quality risks that could adversely affect our operating results.

        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, TowerJazz in California, Northrop Grumman in California, Telefunken Semiconductors in Germany, TriQuint Semiconductor in Oregon and Texas, TSMC in Washington and 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. We generally have not had long term supply agreements with our foundries. Our agreements with our foundries fix the prices at which we purchase wafers from them, typically for periods of one or two years.

        Our reliance on third-party foundries involves a number of risks. These include uncertainties as to availability of manufacturing capacity, 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. In addition to wafers, we also purchase a number of other key components and services from sole source suppliers or a limited number of suppliers, which exposes us to similar risks. For example, we 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 encapsulated packages.

        The ability of our suppliers to meet our requirements could be impaired or interrupted by constraints on their manufacturing capacity or by a variety of other factors beyond their control, such as earthquakes or other natural phenomena, labor strikes or shortages or political unrest. One supplier of wafers that are used in a significant number of our products has, in the past, experienced financial difficulties. 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 to us.

        The number of foundries that can provide the advanced gallium arsenide, or GaAs, processes that currently account for most of our wafer purchases is limited. Growth in global demand for RF components, particularly for use in smart phones and other mobile devices, has led to higher utilization at many GaAs foundries, and at least one of our foundries has recently experienced capacity constraints that have affected its operations. Several of our foundries, including TriQuint Semiconductor, UMS and (to a lesser extent) Northrop Grumman, also compete with us in the business of developing and selling semiconductor ICs, which could affect their willingness to continue to supply us or others with foundry services or otherwise result in their having objectives that conflict with ours. As a result of these or other factors, one or more of our foundries or other suppliers could in the future be unable to, or elect not to, make available to us adequate manufacturing capacity to meet our requirements, extend their lead times or seek to increase the prices of materials we purchase from them as their contracts with us expire. If any of these events were to occur, our operations could be adversely affected.

         We are in the process of transitioning away from one of our principal foundry suppliers, which creates uncertainties that could affect our business, revenues, profitability and financial condition.

        In the first half of 2011, we were advised by one of our foundries, from which we source a substantial portion of our GaAs wafers, that it does not intend to renew its wafer supply agreement with us when it expires in June 2015. Given this change and resulting uncertainty regarding the availability of future supply, we are reducing our use of this foundry for new products, and, over time, intend to reduce and eliminate our wafer purchases from this foundry. We have been working with the foundry to manage this transition with the goal of maintaining adequate supplies of the affected products over their natural life cycles, which are typically five to ten years. We have increased, and will

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continue to increase our purchases of raw materials inventory from this foundry in order to support the products which have the longest life cycles, which will consume cash and could expose us to increased risk of inventory write-offs. At December 31, 2011, our raw material inventory includes $12.9 million representing advance purchases of wafers from this foundry. During this transition, we could experience adverse reactions from customers and the productivity of our new product development efforts has been, and may continue to be, adversely affected as we divert engineering resources in order to translate certain existing products to other foundries. Further, products translated to other foundries could have inferior performance, production yields or costs. If any of these events were to occur to a significant degree, our business, revenues, profitability and financial condition could be adversely affected.

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

        The recent market downturn reduced demand in the semiconductor industry as well as numerous other industries, which adversely affected our bookings and revenue in 2011. 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, and the semiconductor industry generally, are in a period of weak demand. We experienced recent negative growth and our business is currently impacted by another downturn. This downturn in the electronic systems industry is expected to further adversely impact our revenue and harm our business, financial condition and results of operations.

         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 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, subsystems and instrumentation 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, subsystems and instrumentation will depend on various factors, including our ability to:

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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.

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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.

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 2008 has ranged from a low of 70.1% to a high of 74.8%, including sequential, quarterly variations as high as 2.8 percentage points. 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, charges for excess or obsolescent inventory, 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 and test subcontractors that supply us with critical materials and services, that are beyond our control. Our margins may also be adversely affected by the transition away from one of our principal foundry suppliers discussed above. 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.

         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. 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.

        We have from time to time been the subject of litigation alleging that sales by us of our products infringe patents held by such third parties. We have also from time to time received letters asserting that we infringe patents held by third parties that have not resulted in litigation. We have incurred significant costs in investigating and defending these actions and claims, 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.

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         Operations at our Chelmsford, Massachusetts facilities 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, sales, marketing and administrative functions, as well as most of our research and development and product design activities, are carried out at our headquarters facility in Chelmsford, Massachusetts, while final assembly of our module and subsystem-level products, and final testing for our products, are carried out at our separate manufacturing facility, also located nearby in Chelmsford, Massachusetts. These activities 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 these facilities. Although we seek to mitigate these risks by maintaining business interruption insurance, this insurance would not be adequate 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 may be subject to information technology system failures, network disruptions and breaches in data security.

        Information technology system failures, network disruptions and breaches of data security could disrupt our operations by causing delays or cancellation of customer orders, impeding the manufacture or shipment of products, preventing the processing of transactions and interfering with the accurate reporting of our financial results. They could also result in the unintentional disclosure of confidential information about our company, or our intellectual property, or with respect to our customers and employees. While we have and continue to take steps to address these concerns by network security and internal control measures, there can be no assurance that a system failure or data security breach will not have a material adverse effect on our financial condition or operating results.

         We may not be able to effectively manage the challenges associated with global business expansion, including the need to make improvements in our infrastructure and systems, and any failure by us to manage these challenges could harm our business and operating results.

        Our recent expansion of our headcount and operations have placed additional demands on our management and other resources. To accommodate any future growth, we must continue to expand and upgrade our operational and financial systems, procedures and controls, and improve our enterprise resource planning (ERP) and other internal management systems. We purchased an additional facility in Chelmsford, Massachusetts, to which we relocated a portion of our managerial, engineering, sales and administrative functions in January 2011. These projects and other planned improvements to our facilities and our operational, financial and management information systems require substantial managerial and financial resources, and our efforts in this regard may not be successful. The implementation of new or upgraded management information systems is a complex and costly process that involves numerous risks, and there can be no assurance that the upgrade of our ERP system will operate free of errors, or that the upgrade will provide the expected benefits. Any failure of the new system to function as expected that is not detected by our system of internal control over financial reporting could result in errors in our financial reporting, which could be material, or cause delays in reporting results in accordance with our regulatory requirements. We are expanding internationally, including our recent acquisition of Arctic Silicon Devices in Norway and the opening of our new design center in Egypt, which requires significant attention and resources to effectively manage geographically dispersed operations.

        We have initiated a long-term global expansion project. This project has many goals, including optimizing how we execute our growing international business. When complete, our new corporate

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structure will enable us to better service our international customers and better manage our global suppliers. We believe this effort will have significant long-term benefits, including improving customer satisfaction, reducing manufacturing cost and cycle times and lowering our financial risk. In 2012, we have established a new office in Ireland which will serve as our international headquarters.

        In general, if we fail to adequately manage our global business expansion, or to improve our operational, financial and management information systems in a timely and effective manner, our business and results of operations could be materially adversely affected.

         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.

         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

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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 of 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. Revenue derived from our 10 largest customers as a percentage of our annual revenue was 43.2% in 2011, 36.5% in 2010 and 31.9% in 2009. During 2011 and 2010, Boeing accounted for 16% and 11%, respectively of our total sales. No single customer accounted for more than 10% of our total revenue in 2009. 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 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.

         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. Our access to advanced semiconductor process technologies for new product development may be adversely affected by the transition away from one of our principal foundry suppliers discussed above. 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 customer location, was 54.8%, 55.1% and 57.3% in 2011, 2010 and 2009, 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 Turkey, Canada, Norway and Egypt. In 2012, we are establishing an international headquarters in Ireland as part of our global expansion project. We have in the past relied on, and

30

expect to continue to rely on, suppliers, manufacturers and subcontractors located in countries other than the United States, including France, Germany, Malaysia, the Philippines, Korea and Taiwan. 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;

•

changes in our effective tax rate due to the outcome of future tax audits or examinations;

•

managing our global expansion project;

•

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 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.

         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 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

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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 attract and retain 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.

        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.

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

        Our 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 generally seek certification of these 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 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.

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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.

        We have previously made, and may in the future pursue, acquisitions of and investments in new businesses, products and technologies, or we may acquire other operations that expand our current capabilities. Acquisitions and investments 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 business, product or technology. For example, if we identify an acquisition or investment candidate, we may not be able to successfully negotiate or finance the transaction 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 be unable to commercialize the acquired technology in time to capitalize on available market opportunities, or may find that the acquisition is not complementary to our existing business. 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 and investments, we may issue equity securities, incur debt or assume contingent liabilities. Additionally, acquisitions could result in increased amortization expenses and, to the extent such acquisitions are not successful, write-downs of acquired assets, which would adversely affect our profitability.

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

        Although our products are used in a variety of markets, our future growth depends to a significant extent on the success of our principal 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 markets, cellular infrastructure, microwave and millimeterwave communications and military, represented 76.8%, 81.1% and 79.3% of our annual revenue in 2011, 2010 and 2009, respectively. Given the current economic climate, the rate at which our principal 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 and material that may be used for military or intelligence applications by a foreign person. Our export compliance procedures and classification of our products are subject to review from time to time by the relevant government authorities. Our failure to comply with these laws, or failure to properly classify our products for purposes of 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.

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        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 these contracts are long-term agreements 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 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

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electronic equipment financially responsible for specified collection, recycling, treatment and disposal of past and future covered products. Further, current or future social and environmental issues or regulations, such as proposed regulations that may require disclosure by us and other manufacturers of the sourcing of certain minerals from the Democratic Republic of the Congo and its adjoining countries could oblige us to eliminate environmentally sensitive materials from our products, restrict the supply of resources used in production or increase our costs. 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.

         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, and an opinion of our independent registered public accounting firm, on the effectiveness of our internal control over financial reporting. Our management 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.

        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.

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        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 103,000 square foot building that we own. We also own a 71,000 square foot building in Chelmsford, Massachusetts, where we perform final assembly of our module and subsystem-level products, and final testing of our products. We occupy leased premises of approximately 1,600 square feet for our design center in Cairo, Egypt; 13,000 square feet for our design center in Colorado Springs, Colorado; 8,000 square feet for our design center in Istanbul, Turkey; 7,000 square feet for our design center in Ottawa, Ontario, Canada; 3,500 square feet for our design center in Roanoke, Virginia and 1,700 square feet for our design center in Trondheim, Norway. We also occupy approximately 1,000 square feet or less for each of our sales offices in China, Finland, 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.

Item 3.    Legal Proceedings

        None.

Item 4.    Mine Safety Disclosures

        Not applicable.

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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,
	2011				2010
	High		Low		High		Low
First Quarter	$	67.55	$	55.92	$	44.90	$	36.38
Second Quarter		65.44		56.34		52.73		41.95
Third Quarter		64.48		47.42		49.85		41.97
Fourth Quarter		55.73		45.69		63.24		47.07

        As of December 31, 2011, our common stock was held by approximately 475 shareholders of record.

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, 2011, we made no repurchases of our common stock under the program.

        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 5 YEAR CUMULATIVE TOTAL RETURN*
Among Hittite Microwave Corporation, the NASDAQ Composite Index,
and the PHLX Semiconductor Index

*

$100 invested on 12/31/06 in stock or index, including reinvestment of dividends.
Fiscal year ending December 31.

	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		3/10		6/10		9/10		12/10		3/11		6/11		9/11		12/11
Hittite Microwave Corporation		100.00		124.29		132.21		136.60		147.77		115.78		110.21		103.96		91.15		96.53		107.52		113.80		126.14		136.05		138.43		147.43		188.86		197.31		191.55		150.68		152.78
NASDAQ Composite		100.00		100.13		108.27		112.81		110.26		94.60		95.18		85.25		65.65		63.60		76.45		88.68		95.19		100.69		88.93		100.10		112.10		117.77		117.60		102.34		110.81
PHLX Semiconductor		100.00		97.37		110.27		113.81		107.88		91.82		94.87		78.93		60.06		65.09		72.49		89.21		97.21		100.28		89.94		92.64		109.11		111.78		110.34		97.37		107.58

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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,
	2011		2010			2009		2008			2007
	(in thousands, except per share data)
Consolidated Statement of Operations Data:
Revenue	$	264,108	$	244,256		$	162,990	$	180,251		$	156,412
Cost of revenue		69,935		62,617			45,239		51,556			45,363
Gross profit		194,173		181,639			117,751		128,695			111,049
Operating expenses:
Research and development		38,899		31,467			22,971		24,438			18,546
Sales and marketing		22,047		19,420			15,034		15,988			13,313
General and administrative		12,078		11,568			9,737		8,347			7,316
Total operating expenses		73,024		62,455			47,742		48,773			39,175
Income from operations		121,149		119,184			70,009		79,922			71,874
Interest income		172		134			394		3,420			5,474
Other income (expense), net		430		(72	)		2		(343	)		74
Income before income taxes		121,751		119,246			70,405		82,999			77,422
Provision for income taxes		37,063		42,215			24,232		29,157			26,184
Net income	$	84,688	$	77,031		$	46,173	$	53,842		$	51,238
Earnings per share:
Basic	$	2.81	$	2.60		$	1.57	$	1.77		$	1.67
Diluted	$	2.77	$	2.56		$	1.55	$	1.74		$	1.64
Weighted average shares outstanding:
Basic		30,178		29,584			29,380		30,473			30,630
Diluted		30,586		30,135			29,850		30,955			31,263

	As of December 31,
	2011		2010		2009		2008		2007
	(in thousands)
Consolidated Balance Sheet Data:
Cash and cash equivalents	$	353,667	$	295,490	$	220,477	$	180,856	$	65,735
Short-term available-for-sale investments		—		—		—		—		99,007
Working capital		424,166		344,045		255,372		216,894		192,530
Total assets		488,565		405,509		292,693		255,084		234,495
Stockholders' equity		469,432		375,752		274,149		236,929		216,293

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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 27-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, subsystems and instrumentation. 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, and began to focus on expanding our international business. We currently have sales and technical support staff in Canada, China, Finland, Germany, India, Japan, Korea, Norway, Sweden, Turkey and the United Kingdom, to complement our United States offices. In 2011, we derived 54.8% 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 completed our initial public offering of common stock.

•

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.

•

In June 2010, we entered into an agreement to license certain millimeterwave technology from IBM at a cost of $6.6 million.

•

In January 2011, we acquired Arctic Silicon Devices, a developer of advanced mixed-signal IC technology, located in Trondheim, Norway, for approximately $11.0 million in cash.

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•

In September 2011, we opened design centers in Cairo, Egypt and Roanoke, Virginia.

•

As of December 31, 2011, we offer more than 980 standard products in our catalog and many more custom products, which may be categorized for descriptive purposes into 34 functional 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 selection guide 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.

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

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        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, related occupancy and equipment costs and amortization of certain intangible assets. 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, fixed assets, intangible assets, stock-based compensation, income taxes, 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. Effective January 1, 2010 we adopted new guidance for arrangements that involve multiple elements, which is applicable to arrangements originating or materially modified after such date. This guidance eliminates the residual method of revenue allocation, and requires that we use our best estimate of selling price to allocate arrangement consideration between the deliverables in cases where neither vendor-specific objective evidence nor third-party evidence is available. For multiple element arrangements not subject to the new guidance 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, which historically have been immaterial, are recorded as a reduction to revenue. A portion of our sales are made to a distributor under an agreement that provides for product return privileges. As a result, we defer recognition of such revenue until the product is resold by the distributor.

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        Revenue from contracts with the United States government, government prime contractors and some commercial customers, under which we may design, develop, manufacture, or modify complex aerospace or electronic equipment or provide related services, is generally recorded on a percentage of completion basis using either units delivered or costs incurred as the measurement basis for 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. This difficulty will increase in the near term, as we ramp up purchases of raw materials from one of our principal foundries in order to ensure adequate supplies of affected products that have long product lives. At December 31, 2011, our raw material inventory includes $12.9 million representing advance purchases of wafers from this foundry.

        We recorded expense of $2.0 million, $1.5 million and $2.0 million in 2011, 2010 and 2009, 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.

        Goodwill.    We test goodwill for impairment at least annually at the reporting unit level. In September 2011, the FASB issued new guidance which provides an entity the option to perform a qualitative assessment to determine whether it is more-likely-than-not that the fair value of a reporting unit is less than its carrying amount prior to performing the two-step goodwill impairment test. If this is the case, the two-step goodwill impairment test is required. If it is more-likely-than-not that the fair value of a reporting is greater than its carrying amount, the two-step goodwill impairment test is not required. The Company adopted this guidance as of the fourth quarter of 2011.

        If the two-step goodwill impairment test is required, first, the fair value of each reporting unit is compared to its book value. If the fair value of the reporting unit is less than its book value, the Company performs a hypothetical purchase price allocation based on the reporting unit's fair value to determine the fair value of the reporting unit's goodwill. Fair value is determined using a combination of present value techniques and market prices of comparable businesses.

        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

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

        Stock-based compensation.    We measure compensation cost related to stock-based awards 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 and restricted stock units is determined based on the excess of the quoted price of our common stock on the date of grant over the exercise price, if any, of the restricted stock and restricted stock units. We did not grant any stock options in 2011, 2010 or 2009. Estimating the amount of share-based payments that will ultimately either vest or be forfeited requires judgment. We consider many factors when estimating expected forfeitures, including the type of the award, vesting terms, employee group, and historical experience. Actual results, and future changes in estimates, may differ substantially from our current estimates. See Note 14 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

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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 15 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 to the global economic downturn and related credit crisis that affected us along with the entire semiconductor industry. In 2010, our revenue increased 49.9% to $244.3 million and in 2011 increased 8.1% to $264.1 million. However, 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. During 2010 and 2011, we increased spending to support our growth. Going forward, 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.

        Gross margin.    One of our objectives is to maximize our gross margin, which is our gross profit expressed as a percentage of our revenue. Our gross margins were 73.5% in 2011, 74.4% in 2010 and 72.2% in 2009. 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 and by pricing, including fluctuations in the relative proportion of high volume orders, on which we offer higher discounts. 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. 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, charges for excess or obsolescent inventory, 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.

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        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 markets. Our customers' requested lead times have in general become shorter. 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, 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 conditions.

        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 43.2% in 2011, 36.5% in 2010 and 31.9% in 2009. One customer, Boeing, comprised 16% of our revenue in 2011 and 11% in 2010. No single customer exceeded 10% of our total revenue in 2009. 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.

        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 a significant competitive advantage and have contributed significantly to our revenue growth. Our product development strategy emphasizes internally funded research and development, as well as the acquisition of products and technologies through business combinations and licensing arrangements. As a result of these efforts, we introduced 82 new standard catalog products in 2011, 122 in 2010 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

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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, 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. Revenue derived from our three largest markets, cellular infrastructure, microwave and millimeterwave communications and military, represented 76.8%, 81.1% and 79.3% of our annual revenue in 2011, 2010 and 2009, 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 markets and the range of applications that our products address.

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:

	Year Ended December 31,
	2011		2010			2009
	(in thousands)
Revenue	$	264,108	$	244,256		$	162,990
Cost of revenue		69,935		62,617			45,239
Gross profit		194,173		181,639			117,751
Operating expenses:
Research and development		38,899		31,467			22,971
Sales and marketing		22,047		19,420			15,034
General and administrative		12,078		11,568			9,737
Total operating expenses		73,024		62,455			47,742
Income from operations		121,149		119,184			70,009
Interest income		172		134			394
Other income (expense), net		430		(72	)		2
Income before income taxes		121,751		119,246			70,405
Provision for income taxes		37,063		42,215			24,232
Net income	$	84,688	$	77,031		$	46,173

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	Year Ended December 31,
	2011			2010			2009
Revenue		100.0	%		100.0	%		100.0	%
Cost of revenue		26.5			25.6			27.8
Gross profit		73.5			74.4			72.2
Operating expenses:
Research and development		14.7			12.9			14.1
Sales and marketing		8.3			8.0			9.2
General and administrative		4.6			4.7			6.0
Total operating expenses		27.6			25.6			29.3
Income from operations		45.9			48.8			43.0
Interest income		0.1			0.1			0.2
Other income (expense), net		0.1			(0.1	)		0.0
Income before income taxes		46.1			48.8			43.2
Provision for income taxes		14.0			17.3			14.9
Net income		32.1	%		31.5	%		28.3	%

Comparison of Year Ended December 31, 2011 to Year Ended December 31, 2010

        Revenue    Our revenue increased $19.9 million, or 8.1%, to $264.1 million in 2011, from $244.3 million in 2010. Revenue from sales to customers outside the United States accounted for 54.8% of our total revenue in 2011, compared with 55.1% in 2010. Our revenue increase was primarily attributable to increased sales to the test and measurement and military markets in comparison to the corresponding period of 2010. The growth in sales to the test and measurement market was primarily due to the increased breadth of our product offerings and the increased market acceptance of products we introduced in prior years. The increase in sales to the military market was primarily due to shipments under a production order for microwave subsystems that we announced in February 2009, which was completed in the fourth quarter of 2011.

        Gross margin.    Our gross margin was 73.5% in 2011, compared with 74.4% in 2010. The decrease in gross margin was primarily attributable to unfavorable changes in pricing and, to a lesser extent, manufacturing costs, partially offset by a favorable change in product mix. The change in manufacturing costs was primarily due to an increase in the charge for excess and obsolescent inventory of $0.5 million in 2011.

        Research and development expense.    Our research and development expense increased $7.4 million, or 23.6%, to $38.9 million in 2011, and represented 14.7% of our revenue, compared with $31.5 million, or 12.9% of our revenue, in 2010. The increase in our research and development expense was attributable to a $4.8 million increase in personnel costs, a $1.0 million increase in equipment costs, a $0.8 million increase in depreciation and amortization, a $0.7 million increase in occupancy costs, a $0.7 million increase in travel and a $0.6 million increase in supplies and materials and other costs. The increase in personnel costs was primarily due to the growth of our engineering organization, including the acquisition of Arctic Silicon Devices in January 2011. These increases were partially offset by a $1.2 million increase in funding earned from various foreign government research and development incentive programs.

        Sales and marketing expense.    Our sales and marketing expense increased $2.6 million, or 13.5%, to $22.0 million in 2011, and represented 8.3% of our revenue, compared with $19.4 million, or 8.0% of our revenue, in 2010. The increase in our sales and marketing expense was primarily attributable to a $1.6 million increase in personnel costs, a $0.4 million increase in travel costs, a $0.4 million increase

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in professional fees and a $0.2 million increase in occupancy costs and other costs. The increase in personnel costs related primarily to the growth of our worldwide direct sales and marketing organization.

        General and administrative expense.    Our general and administrative expense increased $0.5 million, or 4.4%, to $12.1 million in 2011, and represented 4.6% of our revenue, compared with $11.6 million, or 4.7% of our revenue, in 2010. The increase in our general and administrative expense was primarily attributable to a $0.7 million increase in personnel costs and a $0.3 million increase in occupancy costs, partially offset by a $0.5 million decrease in professional fees and other costs.

        Interest income.    In 2011, our interest income was $0.2 million compared with $0.1 million in the corresponding period of 2010. Interest income in both periods reflects the low effective yields that are available due to the current market conditions.

        Other income (expense), net.    In 2011, our other income, net was $0.4 million compared with other expense, net of $0.1 million in the corresponding period of 2010. The change was primarily due to net foreign currency gains reflecting the appreciation of the U.S. dollar relative to most of the currencies of the countries where we operate.

        Provision for income taxes.    Our provision for income taxes decreased $5.2 million to $37.1 million in 2011, from $42.2 million in 2010, representing an effective tax rate of 30.4% and 35.4% in 2011 and 2010, respectively. The effective tax rate decreased primarily due to a $3.7 million benefit related to the resolution of the U.S. Internal Revenue Service's examination of our fiscal 2005 through 2007 income tax returns and the related decrease in ASC 740-10 reserves for uncertain tax positions. The effective tax rates differ from the federal and state statutory tax rates primarily due to the impact of the resolution of the U.S. tax examination and federal and state tax credits and incentives provided for under the American Jobs Creation Act of 2004, offset by the impact of non-deductible stock-based compensation. We expect our effective tax rate to increase in 2012 during the initial stages of our global expansion project.

Comparison of Year Ended December 31, 2010 to Year Ended December 31, 2009

        Revenue.    Our revenue increased $81.3 million, or 49.9%, to $244.3 million in 2010, from $163.0 million in 2009. Revenue from sales to customers outside the United States accounted for 55.1% of our total revenue in 2010, compared with 57.3% in 2009. Our revenue increase was primarily attributable to increased sales to the microwave and millimeterwave communications, military and test and measurement markets in comparison to the corresponding period of 2009. The growth was primarily due to a recovery from the global economic downturn and related credit crisis, which adversely affected our business in 2009, as well as the increased breadth of our product offerings and the increased market acceptance of the products we introduced in prior years. The increase in sales to the military market was due in part to revenue from the production order for microwave subsystems that we announced in February 2009.

        Gross margin.    Our gross margin was 74.4% in 2010, compared with 72.2% in 2009. The increase in gross margin was primarily attributable to a favorable change in product mix, partially offset by unfavorable pricing.

        Research and development expense.    Our research and development expense increased $8.5 million, or 37.0%, to $31.5 million in 2010, and represented 12.9% of our revenue, compared with $23.0 million, or 14.1% of our revenue, in 2009. The increase in our research and development expense was attributable to a $5.4 million increase in personnel costs, a $0.6 million increase in engineering material costs, a $0.7 million increase in intangible asset amortization, a $0.7 million increase in information technology costs, a $0.4 million increase in occupancy costs and a $0.7 million net increase

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in other costs. The increase in personnel and other costs in 2010 related primarily to the growth of our engineering organization and increased spending on other discretionary expenses, some of which had been suspended in 2009, as well as an increase in equity compensation expense.

        Sales and marketing expense.    Our sales and marketing expense increased $4.4 million, or 29.2%, to $19.4 million in 2010, and represented 8.0% of our revenue, compared with $15.0 million, or 9.2% of our revenue, in 2009. The increase in our sales and marketing expense was primarily attributable to a $1.5 million increase in personnel costs, a $1.6 million increase in third party commissions, due to our increase in revenue, a $0.3 million increase in travel costs, a $0.2 million increase in intangible asset amortization and a $0.8 million net increase in other costs. The increase in personnel and other costs in 2010 related primarily to the growth of our worldwide direct sales and marketing organization and increased spending on other discretionary expenses, some of which had been suspended in 2009.

        General and administrative expense.    Our general and administrative expense increased $1.8 million, or 18.8%, to $11.6 million in 2010, and represented 4.7% of our revenue, compared with $9.7 million, or 6.0% of our revenue, in 2009. The increase in our general and administrative expense was primarily attributable to a $1.8 million increase in personnel costs, due to the growth of our organization and an increase in equity compensation expense, as well as a $0.4 million increase in professional fees, partially offset by a $0.4 million decrease in bad debt expense.

        Interest income.    Our interest income decreased $0.3 million to $0.1 million, compared with $0.4 million in 2009, 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 increased $18.0 million to $42.2 million in 2010, compared with $24.2 million in 2009, representing an effective tax rate of 35.4% and 34.4% in 2010 and 2009, respectively. The effective tax rate increased primarily as a result of a decrease in research and development tax credits and an increase in non-deductible stock-based compensation, partially offset by an increase in tax benefits from manufacturing activities. The effective tax rates differ from the federal and state statutory tax rates primarily due to the impact of federal and state tax credits and incentives provided for under the American Jobs Creation Act of 2004, offset by the impact of non-deductible stock-based compensation.

Liquidity and Capital Resources

        As of December 31, 2011, we held $353.7 million of cash and cash equivalents. Cash provided by our operations was $81.0 million in 2011, of which the principal components were our net income of $84.7 million and non-cash charges of $24.3 million, partially offset by a net increase in operating assets and liabilities of $25.4 million and a net increase in deferred taxes of $2.6 million. The net increase in operating assets and liabilities includes an increase in accounts receivable of $1.5 million, related to the timing of customer invoices, an increase in inventory of $17.3 million, related to our increase in revenue and advanced purchases of raw materials made in connection with our transition from one of our foundries, a decrease in deferred revenue and customer advances of $7.7 million, due to product shipments under contracts with advanced billings, a net decrease in income taxes payable of $0.8 million, due to the timing of tax payments, and a net decrease in other operating assets and liabilities of $0.1 million. These increases were partially offset by an increase in accounts payable and accrued expenses of $2.0 million, due to the growth of our business and the timing of disbursements.

        We invested $11.3 million in the purchase of property and capital equipment in 2011 primarily related to building renovations, production tooling and production test equipment. On January 14, 2011, we acquired all of the outstanding stock of Arctic Silicon Devices, for $10.4 million in cash and the assumption of a $232,000 note payable that was repaid during 2011.

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        During 2011, we retained 52,175 shares in connection with the vesting of restricted stock to cover employee tax withholdings of $2.8 million paid by us. In addition, we received $0.8 million from the exercise of stock options and $1.4 million from the excess 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 2,010,000 shares for $64.1 million, including 89,664 shares purchased for $3.6 million in 2010. We did not repurchase any shares during 2011. 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, 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. Our customers' requested delivery lead times have in general become shorter. 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, 2011, our backlog was $67.4 million, compared to $74.5 million at December 31, 2010.

Recent Accounting Pronouncements

        In April 2010, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2010-17, "Milestone Method of Revenue Recognition," which amends Accounting Standards Codification (ASC) 605. ASU 2010-17 provides guidance for determining when the milestone method of revenue recognition is appropriate and how this method should be applied, and specifies related disclosure requirements. We adopted ASU 2010-17 effective January 1, 2011. Such adoption did not have a material effect on our financial position or results of operations.

        In December 2010, the FASB issued ASU 2010-29, "Disclosure of Supplementary Pro Forma Information for Business Combinations (a consensus of the EITF)." ASU 2010-29 clarifies that when presenting comparative financial statements, an entity should disclose revenue and earnings of the combined entity as though the business combination(s) that occurred during the current year had occurred as of the beginning of the comparable prior annual reporting period only, and expands the related disclosure requirements. We adopted ASU 2010-29 effective January 1, 2011 and have applied it to business combinations for which the acquisition date is subsequent to that date. Such adoption did not have a material effect on our financial position or results of operations.

        In May 2011, the FASB issued ASU 2011-04, "Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRS." ASU 2011-04 results in

53

common fair value measurement and disclosure requirements in U.S. GAAP and IFRS. Consequently, the amendments change the wording used to describe many of the requirements in U.S. GAAP for measuring fair value and for disclosing information about fair value measurements. ASU 2011-04 will be effective for us on January 1, 2012. We do not believe that the adoption of ASU 2011-04 will have a material effect on our financial condition or results of operations.

        In June 2011, the FASB issued ASU 2011-05, "Presentation of Comprehensive Income." ASU 2011-05 requires an entity to present the total of comprehensive income, the components of net income, and the components of other comprehensive income either in a single continuous statement of comprehensive income, or in two separate but consecutive statements. ASU 2011-05 eliminates the option to present components of other comprehensive income as part of the statement of equity. ASU 2011-05 will be effective for us on January 1, 2012. We do not believe that the adoption of ASU 2011-05 will have a material effect on our financial condition or results of operations.

        In September 2011, the FASB issued ASU 2011-08, "Testing Goodwill for Impairment." ASU 2011-08 permits an entity to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test. ASU 2011-08 will be effective for us on January 1, 2012. Early adoption is permitted and we adopted the standard in the fourth quarter of 2011. The adoption of ASU 2011-08 did not have a material effect on our financial condition or results of operations.

Contractual Obligations

        At December 31, 2011, 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	$	2,681	$	1,278	$	1,247	$	156	$	—

        As of December 31, 2011, the total amount of net unrecognized tax benefits for uncertain tax positions and the accrual for the related interest was $2.6 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 these unrecognized tax benefits, 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 of

54

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 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 Annual Report on Form 10-K.

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, 2011. 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, 2011, 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, 2011 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, 2011, our internal control over financial reporting was effective.

55

        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.

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, 2011, 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.

56

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 2012 Annual Meeting of Shareholders to be filed with the Securities and Exchange Commission not later than April 29, 2012 (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.

57

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, 2011 and 2010

•

Consolidated Statements of Operations for the Years Ended December 31, 2011, 2010 and 2009

•

Consolidated Statements of Stockholders' Equity and Comprehensive Income for the Years Ended December 31, 2011, 2010 and 2009

•

Consolidated Statements of Cash Flows for the Years Ended December 31, 2011, 2010 and 2009

•

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.
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).
*10.30	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).

58

*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 (incorporated by reference to Exhibit 10.31 to our Annual Report on Form 10-K for the year ended December 31, 2009).
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
101	The following materials from the Hittite Microwave Corporation Annual Report on Form 10-K for the year ended December 31, 2011, formatted in Extensible Business Reporting Language (XBRL): (i) Consolidated Balance Sheets as of December 31, 2011 and December 31, 2010; (ii) Consolidated Statements of Operations for the years ended December 31, 2011, December 31, 2010 and December 31, 2009; (iii) Consolidated Statements of Stockholders' Equity and Comprehensive Income for the years ended December 31, 2011, December 31, 2010 and December 31, 2009; (iv) Consolidated Statements of Cash Flows for the years ended December 31, 2011, December 31, 2010 and December 31, 2009; and (v) Notes to Consolidated Financial Statements

*

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.

59

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 24th day of February, 2012.

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 24, 2012
/s/ WILLIAM W. BOECKE William W. Boecke	Vice President, Chief Financial Officer and Treasurer (Principal Financial and Accounting Officer)	February 24, 2012
/s/ ERNEST L. GODSHALK Ernest L. Godshalk	Director	February 24, 2012
/s/ RICK D. HESS Rick D. Hess	Director	February 24, 2012
/s/ ADRIENNE M. MARKHAM Adrienne M. Markham	Director	February 24, 2012
/s/ BRIAN P. MCALOON Brian P. McAloon	Director	February 24, 2012
/s/ COSMO S. TRAPANI Cosmo S. Trapani	Director	February 24, 2012
/s/ FRANKLIN WEIGOLD Franklin Weigold	Director	February 24, 2012

60

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, 2011 and 2010		F-3
Consolidated Statements of Operations for the Years Ended December 31, 2011, 2010 and 2009		F-4
Consolidated Statements of Stockholders' Equity and Comprehensive Income for the Years Ended December 31, 2011, 2010 and 2009		F-5
Consolidated Statements of Cash Flows for the Years Ended December 31, 2011, 2010 and 2009		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, 2011 and December 31, 2010, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2011 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, 2011, 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 24, 2012

F-2

HITTITE MICROWAVE CORPORATION

CONSOLIDATED BALANCE SHEETS

(in thousands, except per share data)

	December 31,
	2011			2010
Assets
Current assets:
Cash and cash equivalents	$	353,667		$	295,490
Accounts receivable, net of allowance for doubtful accounts of $334		35,686			34,534
Inventories		38,460			23,219
Income taxes receivable		488			3,914
Prepaid expenses and other current assets		2,063			1,333
Deferred taxes		10,296			8,178
Total current assets		440,660			366,668
Property and equipment, net		32,550			29,470
Deferred taxes		466			—
Other assets		14,889			9,371
Total assets	$	488,565		$	405,509
Liabilities and stockholders' equity
Current liabilities:
Accounts payable	$	3,146		$	3,228
Accrued commissions		1,619			1,639
Accrued payroll and benefits		3,286			2,589
Accrued other expenses		5,945			4,945
Customer advances		684			454
Deferred revenue		1,814			9,768
Total current liabilities		16,494			22,623
Long-term income taxes payable		2,639			6,845
Deferred taxes		—			289
Total liabilities		19,133			29,757
Commitments and contingencies (Note 10)
Stockholders' equity:
Preferred stock, $.01 par value: 5,000 shares authorized; no shares issued or outstanding at December 31, 2011 and 2010		—			—
Common stock, $.01 par value: 200,000 shares authorized; 31,448 and 31,253 shares issued and outstanding at December 31, 2011 and 2010, respectively		314			312
Additional paid-in capital		174,093			161,407
Accumulated other comprehensive income (loss)		(1,046	)		(162	)
Retained earnings		296,071			214,195
Total stockholders' equity		469,432			375,752
Total liabilities and stockholders' equity	$	488,565		$	405,509

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,
	2011		2010			2009
Revenue	$	264,108	$	244,256		$	162,990
Cost of revenue		69,935		62,617			45,239
Gross profit		194,173		181,639			117,751
Operating expenses:
Research and development		38,899		31,467			22,971
Sales and marketing		22,047		19,420			15,034
General and administrative		12,078		11,568			9,737
Total operating expenses		73,024		62,455			47,742
Income from operations		121,149		119,184			70,009
Interest income		172		134			394
Other income (expense), net		430		(72	)		2
Income before income taxes		121,751		119,246			70,405
Provision for income taxes		37,063		42,215			24,232
Net income	$	84,688	$	77,031		$	46,173
Earnings per share:
Basic	$	2.81	$	2.60		$	1.57
Diluted	$	2.77	$	2.56		$	1.55
Weighted average shares outstanding:
Basic		30,178		29,584			29,380
Diluted		30,586		30,135			29,850

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, 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		(612	)		(6	)								(19,196	)		(19,202	)
Payment of withholding taxes in connection with vesting of restricted stock		(11	)		—									(422	)		(422	)
Comprehensive income																			$	46,363
Balance, December 31, 2009		30,209			302			131,750			117			141,980			274,149
Exercise of stock options		824			8			13,408									13,416
Foreign currency translation											(279	)					(279	)	$	(279	)
Stock-based compensation expense								8,912									8,912
Net income														77,031			77,031			77,031
Excess income tax benefit related to stock-based compensation plans								7,340									7,340
Issuance of restricted common stock under stock plan, net of forfeitures		332			3			(3	)								—
Purchase of Company common stock		(90	)		(1	)								(3,579	)		(3,580	)
Payment of withholding taxes in connection with vesting of restricted stock		(22	)		—									(1,237	)		(1,237	)
Comprehensive income																			$	76,752
Balance, December 31, 2010		31,253			312			161,407			(162	)		214,195			375,752
Exercise of stock options		52			1			773									774
Foreign currency translation											(884	)					(884	)	$	(884	)
Stock-based compensation expense								10,502									10,502
Net income														84,688			84,688			84,688
Excess income tax benefit related to stock-based compensation plans								1,413									1,413
Issuance of restricted common stock under stock plan, net of forfeitures		195			2			(2	)								—
Payment of withholding taxes in connection with vesting of restricted stock		(52	)		(1	)								(2,812	)		(2,813	)
Comprehensive income																			$	83,804
Balance, December 31, 2011		31,448		$	314		$	174,093		$	(1,046	)	$	296,071		$	469,432

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,
	2011			2010			2009
Cash flows from operating activities:
Net income	$	84,688		$	77,031		$	46,173
Adjustments to reconcile net income to net cash provided by operating activities, net of the effects from the acquisition:
Depreciation		7,413			6,247			5,368
Amortization		4,293			2,309			1,437
Provision for doubtful accounts		35			—			352
Provision for excess or obsolete inventory		2,070			1,518			1,988
Deferred taxes		(2,558	)		(463	)		(1,602	)
Stock-based compensation		10,502			8,912			6,492
Changes in operating assets and liabilities:
Accounts receivable		(1,527	)		(16,728	)		9,421
Inventories		(17,271	)		(5,173	)		(7,570	)
Other assets		(95	)		404			147
Deferred revenue and customer advances		(7,725	)		6,207			545
Accounts payable		(94	)		1,596			(1,146	)
Accrued expenses		2,092			1,990			(645	)
Income taxes		(784	)		(3,261	)		1,482
Net cash provided by operating activities		81,039			80,589			62,442
Cash flows from investing activities:
Purchases of property and equipment		(11,317	)		(14,737	)		(7,302	)
Purchase of intangible assets		—			(6,580	)		—
Acquisition, net of cash acquired		(10,421	)		—			—
Net cash used in investing activities		(21,738	)		(21,317	)		(7,302	)
Cash flows from financing activities:
Repayment of note payable assumed in acquisition		(232	)		—			—
Purchase of Company common stock		—			(3,580	)		(19,202	)
Proceeds from exercise of stock options		774			13,416			3,167
Payment of withholding taxes in connection with vesting of restricted stock		(2,813	)		(1,237	)		(422	)
Excess income tax benefit related to stock-based compensation plans		1,413			7,340			822
Net cash provided by (used in) financing activities		(858	)		15,939			(15,635	)
Effect of exchange rate changes on cash and cash equivalents		(266	)		(198	)		116
Net increase in cash and cash equivalents		58,177			75,013			39,621
Cash and cash equivalents, beginning of year		295,490			220,477			180,856
Cash and cash equivalents, end of year	$	353,667		$	295,490		$	220,477
Supplemental cash flow information:
Cash paid for taxes	$	38,461		$	38,524		$	23,502

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, subsystems and instrumentation for technically demanding radio frequency, microwave and millimeterwave applications. The Company's products are used in a variety of applications and 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 owns two buildings in Chelmsford, Massachusetts, which house its corporate headquarters, manufacturing facility and two design centers. In addition, the Company operates design centers and has sales and technical support staff in Canada, Colorado, Egypt, Norway, Turkey and Virginia, and has sales offices in China, Finland, Germany, India, Japan, Korea, Sweden and the United Kingdom.

        In 2012, the Company has established a new office in Ireland which will serve as the Company's international headquarters.

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. Effective January 1, 2010 the Company adopted new guidance, for arrangements that involve multiple elements, which is applicable to arrangements originating or materially modified after such date. This guidance eliminates the residual method of revenue allocation, and requires that the vendor use its best estimate of selling price to allocate arrangement consideration between the deliverables in cases where neither vendor-specific objective evidence nor third-party evidence is available. For multiple element arrangements not subject to the new guidance, 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, which have historically been immaterial and are recorded as

F-7

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 either units delivered or costs incurred as the measurement basis for 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.

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, 2008	$	234
Provision		352
Utilization		(252	)
Balance at December 31, 2009		334
Provision		—
Utilization		—
Balance at December 31, 2010		334
Provision		35
Utilization		(35	)
Balance at December 31, 2011	$	334

Inventories

        Inventory is stated at the lower of cost (first-in, first-out method) or market value and includes materials, labor, subcontractor costs 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 increased due to subsequent changes in demand forecasts.

F-8

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

Balance at December 31, 2008	$	3,675
Provision		1,988
Utilization		(484	)
Balance at December 31, 2009		5,179
Provision		1,518
Utilization		(905	)
Balance at December 31, 2010		5,792
Provision		2,070
Utilization		(563	)
Balance at December 31, 2011	$	7,299

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 thirty 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.

Goodwill and Long-Lived Assets

        Goodwill is carried at cost, and totaled $4,524,000 at December 31, 2011 and $289,000 at December 31, 2010. The Company operates in a single reporting unit. In September 2011, the FASB issued new guidance which provides an entity with the option to perform a qualitative assessment to determine whether it is more-likely-than-not that the fair value of a reporting unit is less than its carrying amount. If an entity determines this is the case, it is required to perform the two-step goodwill impairment test to identify potential goodwill impairment and measure the amount of goodwill impairment loss to be recognized. If an entity determines that it is more-likely-than-not that the fair value of a reporting is greater than its carrying amount, the two-step goodwill impairment test is not required. This new guidance is effective for fiscal years beginning after December 15, 2011 with early adoption permitted. The Company adopted this guidance as of the fourth quarter of 2011.

        Applying this new accounting guidance, the Company performed a qualitative assessment of its reporting unit and determined that is was not more-likely-than-not that the fair value of its reporting unit was less than its carrying amount. As a result, the two-step goodwill impairment test was not required in 2011.

        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, principally 3-5 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.

F-9

        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.

Accounting for Stock-Based Compensation

        The Company measures compensation cost related to stock-based awards 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 Company considers many factors when estimating expected forfeitures, including the type of the award, employee group, and historical experience. The fair value of restricted stock and restricted stock units 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, if any, of the restricted stock and restricted stock units. The fair value of stock options is determined using the Black-Scholes valuation model. The Company did not grant any stock options in 2011, 2010 or 2009.

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 loss consists of the following:

	December 31,
	2011			2010
	(in thousands)
Foreign currency translation	$	(1,046	)	$	(162	)

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.

F-10

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, 2011 and 2010, 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 43.2% in 2011, 36.5% in 2010 and 31.9% in 2009. One customer comprised 16% of our revenue in 2011 and 11% in 2010. No customer accounted for more than 10% of total revenue in 2009.

        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. Receivables from one customer accounted for 20% and 15% of the Company's outstanding accounts receivable balance at December 31, 2011 and 2010, respectively.

        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 2011, 2010 and 2009, the Company incurred $935,000, $1,257,000 and $3,754,000, 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.

3.     Recent Accounting Pronouncements

        In April 2010, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2010-17, "Milestone Method of Revenue Recognition," which amends Accounting

F-11

Standards Codification (ASC) 605. ASU 2010-17 provides guidance for determining when the milestone method of revenue recognition is appropriate and how this method should be applied, and specifies related disclosure requirements. The Company adopted ASU 2010-17 effective January 1, 2011. Such adoption did not have a material effect on the Company's financial position or results of operations.

        In December 2010, the FASB issued ASU 2010-29, "Disclosure of Supplementary Pro Forma Information for Business Combinations (a consensus of the EITF)." ASU 2010-29 clarifies that when presenting comparative financial statements, an entity should disclose revenue and earnings of the combined entity as though the business combination(s) that occurred during the current year had occurred as of the beginning of the comparable prior annual reporting period only, and expands the related disclosure requirements. The Company adopted ASU 2010-29 effective January 1, 2011, and has applied it to business combinations for which the acquisition date is subsequent to that date. Such adoption did not have a material effect on the Company's financial position or results of operations.

        In May 2011, the FASB issued ASU 2011-04, "Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRS." ASU 2011-04 results in common fair value measurement and disclosure requirements in U.S. GAAP and IFRS. Consequently, the amendments change the wording used to describe many of the requirements in U.S. GAAP for measuring fair value and for disclosing information about fair value measurements. ASU 2011-04 will be effective for the Company on January 1, 2012. The Company does not believe that the adoption of ASU 2011-04 will have a material effect on its financial condition or results of operations.

        In June 2011, the FASB issued ASU 2011-05, "Presentation of Comprehensive Income." ASU 2011-05 requires an entity to present the total of comprehensive income, the components of net income, and the components of other comprehensive income either in a single continuous statement of comprehensive income, or in two separate but consecutive statements. ASU 2011-05 eliminates the option to present components of other comprehensive income as part of the statement of equity. ASU 2011-05 will be effective for the Company on January 1, 2012. The Company does not believe that the adoption of ASU 2011-05 will have a material effect on its financial condition or results of operations.

        In September 2011, the FASB issued ASU 2011-08, "Testing Goodwill for Impairment." ASU 2011-08 permits an entity to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test. ASU 2011-08 will be effective for the Company on January 1, 2012. Early adoption is permitted and the Company adopted the standard in the fourth quarter of 2011. The adoption did not have a material effect on its financial condition or results of operations.

4.     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.

F-12

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, 2011								December 31, 2010
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
	(in thousands)
Money market funds	$	309,382	$	—	$	—	$	309,382	$	264,308	$	—	$	—	$	264,308

5.     Accounts Receivable

        Accounts receivable consist of the following:

	December 31,
	2011		2010
	(in thousands)
Commercial:
Billed	$	28,126	$	27,541
U.S. government and government prime contractors:
Billed		7,194		5,593
Unbilled		562		1,559
Retainage		138		175
		36,020		34,868
Less: Allowance for doubtful accounts		334		334
Net accounts receivable	$	35,686	$	34,534

6.     Inventories

        Net inventories consist of the following:

	December 31,
	2011		2010
	(in thousands)
Raw materials	$	20,453	$	8,067
Work in process		5,783		7,798
Finished goods		12,224		7,354
	$	38,460	$	23,219

        In the first half of 2011, the Company was advised by one of its foundries that the foundry does not intend to renew its wafer supply agreement with the Company when it expires in June 2015. Given this change and resulting uncertainty regarding the availability of future supply, the Company is reducing its use of this foundry for new products, and, over time, intends to reduce and eliminate wafer purchases from this foundry. The Company is working with the foundry to manage this transition with the goal of maintaining adequate supplies of the affected products over their natural life cycles, which are typically five to ten years. The Company has increased purchases of raw materials inventory from this foundry in order to support the products which have the longest life cycles. At December 31, 2011, raw material inventory includes $12,900,000 representing advance purchases of wafers from this foundry.

7.     Acquisition

        On January 14, 2011, the Company acquired all of the outstanding stock of Arctic Silicon Devices (ASD), a privately held company, for $10,421,000 in cash and the assumption of a $232,000 note payable that was repaid during 2011. ASD is a developer of advanced mixed-signal, integrated circuit technology, located in Trondheim, Norway. The acquisition provides the Company with new IC design and integration capability and a new product line of analog-to-digital converters.

F-13

        The assets and liabilities of ASD were recorded at their fair values as of the acquisition date, as follows (in thousands):

Current assets	$	174
Other assets		369
Software		900
Completed technology		5,300
Goodwill		4,236
Current liabilities		(326	)
Note payable		(232	)
Total purchase price, net of cash and cash equivalents acquired	$	10,421

        The completed technology will be amortized to cost of revenue over its estimated useful life of 5 years. The software will be amortized to research and development expense over its estimated useful life of 3 years. Goodwill arising from the acquisition will not be deductible for tax purposes.

        ASD's operating results have been included in the Company's results of operations from the acquisition date, and were not material. Pro forma results are not provided as ASD's results of operations were not material. Acquisition costs were not material.

8.     Property and Equipment

        Property and equipment consist of the following:

	December 31,
	2011		2010
	(in thousands)
Land and building	$	18,009	$	15,812
Machinery and equipment		52,691		46,296
Furniture and fixtures		1,146		716
Leasehold improvements		159		162
		72,005		62,986
Less: Accumulated depreciation and amortization		39,455		33,516
Net property and equipment	$	32,550	$	29,470

        Depreciation and amortization expense related to the Company's property and equipment was $7,413,000, $6,247,000 and $5,368,000 in 2011, 2010 and 2009, respectively.

9.     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.

        On June 30, 2010, the Company entered into an agreement to license from IBM certain millimeterwave technology, at a cost of $6,580,000.

F-14

        The Company's intangible assets, all of which related to these two agreements and the acquisition of ASD, are included in other assets in the accompanying consolidate balance sheets, and consist of the following:

	December 31, 2011						December 31, 2010
	Gross Carrying Amount		Accumulated Amortization		Net		Gross Carrying Amount		Accumulated Amortization		Net
	(in thousands)
Licensed technology	$	15,092	$	5,617	$	9,475	$	8,891	$	2,402	$	6,489
Non-compete agreement		2,800		2,333		467		2,800		1,773		1,027
Customer relationships		1,969		1,707		262		1,969		1,193		776
Total intangible assets	$	19,861	$	9,657	$	10,204	$	13,660	$	5,368	$	8,292

        The Company's intangible assets are being amortized over their original estimated useful lives, principally 3-5 years. Amortization expense associated with these assets was $4,289,000, $2,301,000 and $1,416,000 in 2011, 2010 and 2009, respectively. The accompanying consolidated statements of operations for 2011, 2010 and 2009 reflect such amortization as $1,076,000, $1,076,000 and $874,000 of sales and marketing expense, $1,556,000, $540,000 and $542,000 of cost of revenue and $1,657,000, $685,000 and $0 of research and development expense, respectively. Based on the current amount of intangible assets subject to amortization, amortization expense is estimated to be $3,910,000, $2,564,000, $2,108,000, $1,578,000 and $44,000 for 2012, 2013, 2014, 2015 and 2016, respectively.

10.   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, 2011 (in thousands):

2012	$	1,278
2013		705
2014		376
2015		166
2016		156
Later years		—
	$	2,681

        Rental expense during 2011, 2010 and 2009 was $1,288,000, $1,147,000 and $1,013,000, 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 these indemnification obligations is minimal. Accordingly, the Company has no liabilities recorded for these indemnity agreements as of December 31, 2011 and 2010.

F-15

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 Company's warranty accrual and related expense were immaterial to the Company's financial position and results of operations for the periods presented herein.

Intellectual Property Claims

        In recent years there has been significant litigation involving intellectual property rights in many technology-based industries, including the Company's. 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.

        The Company has from time to time been the subject of litigation alleging that sales by the Company of its products infringe patents held by such third parties. Two such actions were settled in April 2010 and December 2010, respectively, under terms that were not material to the Company. In addition, the Company has from time to time received letters asserting that it infringes patents held by third parties that have not resulted in litigation. The Company has incurred significant costs in investigating and defending intellectual property claims, and there can be no assurance that 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. 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 its foundries and customers, damage its 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.

11.   Defined Contribution Plan

        The Company has established a defined contribution plan under the provisions of Section 401(k) of the Internal Revenue Code for its U.S. employees. The Company may make matching contributions, and may also provide discretionary contributions. During January 2009, 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 January 2010, the Company resumed its matching program, and matched 50% of participants' contributions up to 10% of compensation in both 2011 and 2010. In 2011, 2010 and 2009, employer contributions were $994,000, $958,000 and $96,000, respectively. The Company also has retirement plans at non-U.S. locations under similar terms. Employer contributions to those non-U.S. plans were immaterial to the periods presented herein.

F-16

12.   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 2011, the Company did not repurchase any shares of common stock. During 2010, the Company repurchased 89,664 shares of its common stock for $3,580,000. During 2009, the Company repurchased 612,166 shares of its common stock for $19,202,000. 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.

13.   Earnings Per Share

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

	2011		2010		2009
	(in thousands, except per share data)
Basic earnings per share
Net income	$	84,688	$	77,031	$	46,173
Weighted average common shares outstanding		30,178		29,584		29,380
Basic earnings per share	$	2.81	$	2.60	$	1.57
Diluted earnings per share
Net income	$	84,688	$	77,031	$	46,173
Weighted average common shares outstanding		30,178		29,584		29,380
Dilutive effect of stock options and restricted stock		408		551		470
Adjusted weighted average shares—diluted		30,586		30,135		29,850
Diluted earnings per share	$	2.77	$	2.56	$	1.55

        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 excess 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.

F-17

14.   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, restricted stock units, unrestricted stock awards, performance share awards and stock appreciation rights. Each restricted stock unit represents the contingent right to receive one share of the Company's common stock. 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 authorized, 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, 2011 is 6,559,000, representing the maximum number of shares of common stock that may be issued under the 2005 Plan.

        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, restricted stock and restricted stock units currently outstanding under both plans vest over a period of four or five years. No stock options were granted in 2011, 2010 or 2009.

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

	2011		2010		2009
Cost of revenue	$	2,246	$	1,924	$	1,630
Research and development		4,309		3,403		2,046
Sales and marketing		1,330		1,118		1,072
General and administrative		2,617		2,467		1,744
Stock-based compensation expense	$	10,502	$	8,912	$	6,492

        All stock-based compensation cost for 2011 related to restricted stock and restricted stock units. Stock-based compensation cost for 2010 includes $1,212,000 related to stock options and $7,700,000 related to restricted stock. Stock-based compensation cost for 2009 includes $2,077,000 related to stock options and $4,415,000 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.

F-18

        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, 2010		118,783		$	16.09
Options granted		—			—
Options exercised		(52,075	)		14.86
Options forfeited / cancelled		—			—
Outstanding at December 31, 2011		66,708			17.06		3.45	$	2,156,000
Exercisable at December 31, 2011		66,708			17.06		3.45		2,156,000
Vested or expected to vest at December 31, 2011		66,708			17.06		3.45		2,156,000

        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 $2,176,000, $26,367,000 and $5,599,000 during 2011, 2010 and 2009, respectively. As of December 31, 2011, all compensation cost related to outstanding stock options has been recognized.

        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, 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
Granted		356,960			51.53
Vested		(94,755	)		30.29
Forfeited		(24,484	)		39.24
Nonvested at December 31, 2010		1,151,896			40.45
Granted		225,750			54.13
Vested		(221,842	)		33.98
Forfeited		(30,779	)		43.24
Nonvested at December 31, 2011		1,125,025			44.40

        As of December 31, 2011, total compensation cost not yet recognized related to restricted stock awards was $30,297,000, which is expected to be recognized over a weighted-average period of 3.2 years.

F-19

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

	Number of Shares			Weighted Average Grant Date Fair Value
Nonvested at December 31, 2010		—		$	—
Granted		32,284			62.86
Vested		—			—
Forfeited		(1,734	)		62.81
Nonvested at December 31, 2011		30,550			62.87

        As of December 31, 2011, total compensation cost not yet recognized related to restricted stock units was $1,238,000, which is expected to be recognized over a weighted-average period of 4.1 years.

15.   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,
	2011			2010
	(in thousands)
Current deferred tax assets:
Inventory reserve	$	2,730		$	2,166
Reserve for bad debts		125			125
Sales return reserve		439			529
Accrued vacation		428			434
Deferred revenue		178			128
Stock-based compensation		5,239			4,272
Accrued commissions		311			363
Prepaid expenses		(180	)		(247	)
Other		1,026			408
Total current deferred tax assets	$	10,296		$	8,178
Long-term deferred tax assets (liabilities):
Depreciation and amortization	$	(2,772	)	$	(488	)
Net operating loss carryforward		2,941			—
Other		297			199
Total long-term deferred tax assets (liabilities)	$	466		$	(289	)

        At December 31, 2011, the Company has aggregate net operating loss carryforwards in Norway of approximately $10,500,000 which can be carried forward indefinitely.

F-20

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

	2011			2010			2009
	(in thousands)
Current:
Federal	$	34,971		$	37,761		$	24,021
State		3,990			4,491			2,111
Foreign		349			202			(119	)
Deferred:
Federal		(752	)		(298	)		(1,501	)
State		(237	)		59			(280	)
Foreign		(1,258	)		—			—
	$	37,063		$	42,215		$	24,232

        In 2011, 2010 and 2009 domestic income before taxes was $122,812,000, $115,757,000 and $69,250,000, respectively, and foreign (loss) income before taxes was $(1,061,000), $3,489,000 and $1,155,000, respectively.

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

	2011			2010			2009
Statutory rate		35.0	%		35.0	%		35.0	%
State taxes		2.7			2.5			2.3
Domestic production activities deduction		(2.6	)		(1.8	)		(1.3	)
Research and development credits		(0.3	)		(0.3	)		(1.0	)
Foreign income tax benefit		(0.3	)		(0.9	)		(0.7	)
Tax audit and examination settlements		(3.2	)		(0.0	)		(0.0	)
Other		(0.9	)		0.9			0.1
		30.4	%		35.4	%		34.4	%

        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 $1,413,000, $7,340,000 and $822,000 in 2011, 2010 and 2009, 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, 2011, U.S. income taxes were not provided on a cumulative total of $10,418,000 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.

F-21

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

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
Additions based on tax positions related to the current year		1,618
Additions for tax positions of prior years		153
Settlements		(1,114	)
Balance at December 31, 2010		5,856
Additions based on tax positions related to the current year		357
Reductions for tax positions of prior years		(3,717	)
Settlements		(159	)
Balance at December 31, 2011	$	2,337

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

        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 2011, 2010 and 2009, and there was no material accrual for interest or penalties as of December 31, 2011 or December 31, 2010.

        The major tax jurisdictions that remain subject to examination are: U.S. Federal 2008-2010; U.S. states 2003-2010; and Germany 2006-2010. In the fourth quarter of 2011, the U.S. Internal Revenue Service (IRS) completed an audit of the Company's consolidated federal income tax return for the tax years 2005-2007. As a result, the Company recognized a favorable tax benefit of $3.7 million. The Company is currently under examination by the IRS for 2008-2010. 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.

16.   Segment, Major Customers and Geographic Information

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

        Revenue from one customer accounted for 16% and 11% of total revenue in 2011 and 2010 respectively. No customer accounted for more than 10% of total revenue in 2009.

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

	2011		2010		2009
	(in thousands)
United States	$	119,314	$	109,570	$	69,566
International		144,794		134,686		93,424
Total revenue	$	264,108	$	244,256	$	162,990

        Revenue from China represented 19%, 17% and 22% of total revenue in 2011, 2010 and 2009, respectively.

F-22

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

17.   Selected Quarterly Financial Data (Unaudited)

2011:	First Quarter		Second Quarter		Third Quarter		Fourth Quarter
	(in thousands, except per share data)
Revenue	$	67,241	$	68,510	$	68,135	$	60,222
Gross profit		49,080		49,809		50,740		44,544
Net income		20,178		20,845		22,424		21,241
Basic earnings per share		0.67		0.69		0.74		0.70
Diluted earnings per share		0.66		0.68		0.73		0.69

2010:	First Quarter		Second Quarter		Third Quarter		Fourth Quarter
	(in thousands, except per share data)
Revenue	$	54,193	$	60,314	$	64,166	$	65,583
Gross profit		39,772		45,108		47,879		48,880
Net income		16,119		19,159		20,835		20,918
Basic earnings per share		0.55		0.65		0.70		0.70
Diluted earnings per share		0.54		0.64		0.69		0.69

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 «First_Name» «Last_Name» (the “Grantee”), a restricted stock award (the “Award”), pursuant to the Company’s 2005 Stock Incentive Plan (the “Plan”), of «Shares» 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-fourth (25%) of the total number of Shares shall become Vested Shares on each anniversary of the vesting date of «Vesting_Date» (the “Vesting Date”), such that all of the Shares shall be Vested Shares on the fourth anniversary of the Vesting Date.

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.

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.

2

(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:

“THE SHARES OF STOCK EVIDENCED BY THIS CERTIFICATE ARE SUBJECT TO AND ARE TRANSFERABLE ONLY IN ACCORDANCE WITH THAT CERTAIN RESTRICTED STOCK AGREEMENT DATED «VESTING_DATE».  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

3

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:

«Vesting_Date»
	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: «First_Name» «Last_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-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
Hittite Microwave India Pvt. Ltd.	India
Hittite Microwave Holding LLC	Delaware
HMC Netherlands, C.V.	Netherlands
Arctic Silicon Devices AS	Norway
Hittite Microwave Egypt LLC	Egypt
Hittite Microwave Global Limited	Ireland
Hittite Microwave International Limited	Ireland

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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 24, 2012 relating to the financial statements and the effectiveness of internal control over financial reporting, which appears in this Form 10-K.

/s/ PricewaterhouseCoopers LLP

Boston, Massachusetts
February 24, 2012

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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 24, 2012 /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 24, 2012 /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, 2011, 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 24, 2012 /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, 2011, 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 24, 2012 /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

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Summary of Significant Accounting Policies (Details 2)	12 Months Ended
	Dec. 31, 2011 year
Machinery and equipment
Property and Equipment
Estimated useful life, low end of range (in years)	3
Estimated useful life, high end of range (in years)	5
Furniture and fixtures
Property and Equipment
Estimated useful life (in years)	5
Building, building improvements and related specialty assets
Property and Equipment
Estimated useful life, low end of range (in years)	7
Estimated useful life, high end of range (in years)	30

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Stock-Based Compensation Plans (Details 5) (USD $)	12 Months Ended
	Dec. 31, 2011 year	Dec. 31, 2010	Dec. 31, 2009
Restricted stock
Number of Shares
Nonvested at the beginning of the year (in shares)	1,151,896	914,175	673,258
Granted (in shares)	225,750	356,960	315,294
Vested (in shares)	(221,842)	(94,755)	(57,287)
Forfeited (in shares)	(30,779)	(24,484)	(17,090)
Nonvested at the end of the year (in shares)	1,125,025	1,151,896	914,175
Weighted Average Grant Date Fair Value
Nonvested at the beginning of the year (in dollars per share)	$ 40.45	$ 35.04	$ 33.19
Granted (in dollars per share)	$ 54.13	$ 51.53	$ 39.34
Vested (in dollars per share)	$ 33.98	$ 30.29	$ 36.24
Forfeited (in dollars per share)	$ 43.24	$ 39.24	$ 37.27
Nonvested at the end of the year (in dollars per share)	$ 44.40	$ 40.45	$ 35.04
Compensation cost not yet recognized	$ 30,297,000
Compensation cost to be recognized, weighted-average period (in years)	3.2
Restricted stock units
Number of Shares
Granted (in shares)	32,284
Forfeited (in shares)	(1,734)
Nonvested at the end of the year (in shares)	30,550
Weighted Average Grant Date Fair Value
Granted (in dollars per share)	$ 62.86
Forfeited (in dollars per share)	$ 62.81
Nonvested at the end of the year (in dollars per share)	$ 62.87
Compensation cost not yet recognized	$ 1,238,000
Compensation cost to be recognized, weighted-average period (in years)	4.1

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Defined Contribution Plan (Details) (USD $)	1 Months Ended	12 Months Ended
	Jan. 31, 2009	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Defined Contribution Plan
Employer's matching contribution up to 10 percent of participant contributions (as a percent)	100.00%	50.00%	50.00%
Maximum percentage of participant contributions eligible for employer contribution match	10.00%	10.00%	10.00%
Employer contributions		$ 994,000	$ 958,000	$ 96,000

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Income Taxes (Details) (USD $)	Dec. 31, 2011	Dec. 31, 2010
Current deferred tax assets:
Inventory reserve	$ 2,730,000	$ 2,166,000
Reserve for bad debts	125,000	125,000
Sales return reserve	439,000	529,000
Accrued vacation	428,000	434,000
Deferred revenue	178,000	128,000
Stock-based compensation	5,239,000	4,272,000
Accrued Commission	311,000	363,000
Prepaid expenses	(180,000)	(247,000)
Other	1,026,000	408,000
Total current deferred tax assets	10,296,000	8,178,000
Long-term deferred tax assets (liabilities):
Depreciation and amortization	(2,772,000)	(488,000)
Net operating loss carryforward	2,941,000
Other	297,000	199,000
Total long-term deferred tax assets (liabilities)	(466,000)	289,000
Net operating loss carryforwards in Norway	$ 10,500,000

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Intangible Assets (Details) (USD $)	12 Months Ended
	Dec. 31, 2011 year agreement	Dec. 31, 2010	Dec. 31, 2009	Dec. 31, 2011 Sales and marketing expense	Dec. 31, 2010 Sales and marketing expense	Dec. 31, 2009 Sales and marketing expense	Dec. 31, 2011 Cost of revenue	Dec. 31, 2010 Cost of revenue	Dec. 31, 2009 Cost of revenue	Dec. 31, 2011 Research and development	Dec. 31, 2010 Research and development	Dec. 31, 2009 Research and development	Dec. 31, 2011 Licensed technology	Dec. 31, 2010 Licensed technology	Dec. 31, 2011 Non-compete agreement	Dec. 31, 2010 Non-compete agreement	Dec. 31, 2011 Customer relationships	Dec. 31, 2010 Customer relationships	Oct. 17, 2007 Northrop Grumman Space Technology	Jun. 30, 2010 IBM Licensed technology
Intangible Assets
Number of agreements entered in relation to intangible assets	2
Intangible Assets
Acquisition of Intangible Assets																			$ 7,080,000	$ 6,580,000
Gross Carrying Amount	19,861,000	13,660,000											15,092,000	8,891,000	2,800,000	2,800,000	1,969,000	1,969,000
Accumulated Amortization	9,657,000	5,368,000											5,617,000	2,402,000	2,333,000	1,773,000	1,707,000	1,193,000
Net	10,204,000	8,292,000											9,475,000	6,489,000	467,000	1,027,000	262,000	776,000
Estimated useful life, low end of range (in years)	3
Estimated useful life, high end of range (in years)	5
Amortization expense associated with intangible assets	4,289,000	2,301,000	1,416,000	1,076,000	1,076,000	874,000	1,556,000	540,000	542,000	1,657,000	685,000	0
Estimated amortization expense
2012	3,910,000
2013	2,564,000
2014	2,108,000
2015	1,578,000
2016	$ 44,000

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Earnings Per Share (Tables)

12 Months Ended

Dec. 31, 2011

Earnings Per Share

Earnings per Share

	2011		2010		2009
	(in thousands, except per share data)
Basic earnings per share
Net income	$	84,688	$	77,031	$	46,173
Weighted average common shares outstanding		30,178		29,584		29,380
Basic earnings per share	$	2.81	$	2.60	$	1.57
Diluted earnings per share
Net income	$	84,688	$	77,031	$	46,173
Weighted average common shares outstanding		30,178		29,584		29,380
Dilutive effect of stock options and restricted stock		408		551		470
Adjusted weighted average shares—diluted		30,586		30,135		29,850
Diluted earnings per share	$	2.77	$	2.56	$	1.55

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Income Taxes (Details 3) (USD $)	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Reconciliation of effective income tax rate
Statutory rate (as a percent)	35.00%	35.00%	35.00%
State taxes (as a percent)	2.70%	2.50%	2.30%
Domestic production activities deduction (as a percent)	(2.60%)	(1.80%)	(1.30%)
Research and development credits (as a percent)	(0.30%)	(0.30%)	(1.00%)
Foreign income tax benefit (as a percent)	(0.30%)	(0.90%)	(0.70%)
Tax audit and examination settlements (as a percent)	(3.20%)
Other (as a percent)	(0.90%)	0.90%	0.10%
Effective tax rate (as a percent)	30.40%	35.40%	34.40%
Income tax benefit related to stock-based compensation plans	$ 1,413,000	$ 7,340,000	$ 822,000
Undistributed earnings of foreign subsidiaries	$ 10,418,000

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Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2011

Summary of Significant Accounting Policies

Schedule of allowance for doubtful accounts

Balance at December 31, 2008	$	234
Provision		352
Utilization		(252	)
Balance at December 31, 2009		334
Provision		—
Utilization		—
Balance at December 31, 2010		334
Provision		35
Utilization		(35	)
Balance at December 31, 2011	$	334

Schedule of inventory reserve

Balance at December 31, 2008	$	3,675
Provision		1,988
Utilization		(484	)
Balance at December 31, 2009		5,179
Provision		1,518
Utilization		(905	)
Balance at December 31, 2010		5,792
Provision		2,070
Utilization		(563	)
Balance at December 31, 2011	$	7,299

Schedule of accumulated other comprehensive loss

	December 31,
	2011			2010
	(in thousands)
Foreign currency translation	$	(1,046	)	$	(162	)

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Earnings Per Share (Details) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended								12 Months Ended
	Dec. 31, 2011	Sep. 30, 2011	Jun. 30, 2011	Mar. 31, 2011	Dec. 31, 2010	Sep. 30, 2010	Jun. 30, 2010	Mar. 31, 2010	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Basic earnings per share
Net income	$ 21,241	$ 22,424	$ 20,845	$ 20,178	$ 20,918	$ 20,835	$ 19,159	$ 16,119	$ 84,688	$ 77,031	$ 46,173
Weighted average common shares outstanding (in shares)									30,178	29,584	29,380
Basic earnings per share (in dollars per share)	$ 0.70	$ 0.74	$ 0.69	$ 0.67	$ 0.70	$ 0.70	$ 0.65	$ 0.55	$ 2.81	$ 2.60	$ 1.57
Diluted earnings per share
Net income	$ 21,241	$ 22,424	$ 20,845	$ 20,178	$ 20,918	$ 20,835	$ 19,159	$ 16,119	$ 84,688	$ 77,031	$ 46,173
Weighted average common shares outstanding (in shares)									30,178	29,584	29,380
Dilutive effect of stock options and restricted stock (in shares)									408	551	470
Adjusted weighted average shares diluted (in shares)									30,586	30,135	29,850
Diluted earnings per share (in dollars per share)	$ 0.69	$ 0.73	$ 0.68	$ 0.66	$ 0.69	$ 0.69	$ 0.64	$ 0.54	$ 2.77	$ 2.56	$ 1.55

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Accounts Receivable (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2011	Dec. 31, 2010
Accounts receivable
Gross accounts receivable	$ 36,020	$ 34,868
Less: Allowance for doubtful accounts	334	334
Net accounts receivable	35,686	34,534
Commercial
Accounts receivable
Billed	28,126	27,541
U.S. government and government prime contractors
Accounts receivable
Billed	7,194	5,593
Unbilled	562	1,559
Retainage	$ 138	$ 175

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Selected Quarterly Financial Data (Unaudited) (Tables)

12 Months Ended

Dec. 31, 2011

Selected Quarterly Financial Data (Unaudited)

Schedule of selected quarterly financial information

2011:	First Quarter		Second Quarter		Third Quarter		Fourth Quarter
	(in thousands, except per share data)
Revenue	$	67,241	$	68,510	$	68,135	$	60,222
Gross profit		49,080		49,809		50,740		44,544
Net income		20,178		20,845		22,424		21,241
Basic earnings per share		0.67		0.69		0.74		0.70
Diluted earnings per share		0.66		0.68		0.73		0.69

2010:	First Quarter		Second Quarter		Third Quarter		Fourth Quarter
	(in thousands, except per share data)
Revenue	$	54,193	$	60,314	$	64,166	$	65,583
Gross profit		39,772		45,108		47,879		48,880
Net income		16,119		19,159		20,835		20,918
Basic earnings per share		0.55		0.65		0.70		0.70
Diluted earnings per share		0.54		0.64		0.69		0.69

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Stock-Based Compensation Plans (Details 2) (USD $)	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Stock-based compensation
Stock-based compensation expense	$ 10,502,000	$ 8,912,000	$ 6,492,000
Stock options
Stock-based compensation
Stock-based compensation expense		1,212,000	2,077,000
Restricted stock
Stock-based compensation
Stock-based compensation expense		7,700,000	4,415,000
Cost of revenue
Stock-based compensation
Stock-based compensation expense	2,246,000	1,924,000	1,630,000
Research and development
Stock-based compensation
Stock-based compensation expense	4,309,000	3,403,000	2,046,000
Sales and marketing expense
Stock-based compensation
Stock-based compensation expense	1,330,000	1,118,000	1,072,000
General and administrative
Stock-based compensation
Stock-based compensation expense	$ 2,617,000	$ 2,467,000	$ 1,744,000

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Commitments and Contingencies (Details) (USD $)	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Lease Arrangements
2012	$ 1,278,000
2013	705,000
2014	376,000
2015	166,000
2016	156,000
Total	2,681,000
Rental expense	$ 1,288,000	$ 1,147,000	$ 1,013,000

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Recent Accounting Pronouncements

12 Months Ended

Dec. 31, 2011

Recent Accounting Pronouncements

Recent Accounting Pronouncements

3.     Recent Accounting Pronouncements

        In April 2010, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2010-17, "Milestone Method of Revenue Recognition," which amends Accounting Standards Codification (ASC) 605. ASU 2010-17 provides guidance for determining when the milestone method of revenue recognition is appropriate and how this method should be applied, and specifies related disclosure requirements. The Company adopted ASU 2010-17 effective January 1, 2011. Such adoption did not have a material effect on the Company's financial position or results of operations.

        In December 2010, the FASB issued ASU 2010-29, "Disclosure of Supplementary Pro Forma Information for Business Combinations (a consensus of the EITF)." ASU 2010-29 clarifies that when presenting comparative financial statements, an entity should disclose revenue and earnings of the combined entity as though the business combination(s) that occurred during the current year had occurred as of the beginning of the comparable prior annual reporting period only, and expands the related disclosure requirements. The Company adopted ASU 2010-29 effective January 1, 2011, and has applied it to business combinations for which the acquisition date is subsequent to that date. Such adoption did not have a material effect on the Company's financial position or results of operations.

        In May 2011, the FASB issued ASU 2011-04, "Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRS." ASU 2011-04 results in common fair value measurement and disclosure requirements in U.S. GAAP and IFRS. Consequently, the amendments change the wording used to describe many of the requirements in U.S. GAAP for measuring fair value and for disclosing information about fair value measurements. ASU 2011-04 will be effective for the Company on January 1, 2012. The Company does not believe that the adoption of ASU 2011-04 will have a material effect on its financial condition or results of operations.

        In June 2011, the FASB issued ASU 2011-05, "Presentation of Comprehensive Income." ASU 2011-05 requires an entity to present the total of comprehensive income, the components of net income, and the components of other comprehensive income either in a single continuous statement of comprehensive income, or in two separate but consecutive statements. ASU 2011-05 eliminates the option to present components of other comprehensive income as part of the statement of equity. ASU 2011-05 will be effective for the Company on January 1, 2012. The Company does not believe that the adoption of ASU 2011-05 will have a material effect on its financial condition or results of operations.

        In September 2011, the FASB issued ASU 2011-08, "Testing Goodwill for Impairment." ASU 2011-08 permits an entity to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test. ASU 2011-08 will be effective for the Company on January 1, 2012. Early adoption is permitted and the Company adopted the standard in the fourth quarter of 2011. The adoption did not have a material effect on its financial condition or results of operations.

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Inventories (Details) (USD $)	Dec. 31, 2011	Dec. 31, 2010
Inventories
Raw materials	$ 20,453,000	$ 8,067,000
Work in process	5,783,000	7,798,000
Finished goods	12,224,000	7,354,000
Total	38,460,000	23,219,000
Advance wafer purchases	$ 12,900,000

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Acquisition (Tables)

12 Months Ended

Dec. 31, 2011

Acquisition

Schedule of Acquisition

Current assets	$	174
Other assets		369
Software		900
Completed technology		5,300
Goodwill		4,236
Current liabilities		(326	)
Note payable		(232	)
Total purchase price, net of cash and cash equivalents acquired	$	10,421

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Inventories (Tables)

12 Months Ended

Dec. 31, 2011

Inventories

Schedule of inventories

	December 31,
	2011		2010
	(in thousands)
Raw materials	$	20,453	$	8,067
Work in process		5,783		7,798
Finished goods		12,224		7,354
	$	38,460	$	23,219

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Income Taxes (Details 2) (USD $)	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Current:
Federal	$ 34,971,000	$ 37,761,000	$ 24,021,000
State	3,990,000	4,491,000	2,111,000
Foreign	349,000	202,000	(119,000)
Deferred:
Federal	(752,000)	(298,000)	(1,501,000)
State	(237,000)	59,000	(280,000)
Foreign	(1,258,000)
Total provision for income taxes	37,063,000	42,215,000	24,232,000
Domestic income before taxes	122,812,000	115,757,000	69,250,000
Foreign (loss) income before taxes	$ (1,061,000)	$ 3,489,000	$ 1,155,000

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Acquisition (Details) (Arctic Silicon Devices (ASD), USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2011 year	Jan. 14, 2011
Schedule of Purchase Price Allocation
Current assets		$ 174
Other assets		369
Goodwill		4,236
Current liabilities		(326)
Note payable		(232)
Total purchase price, net of cash and cash equivalents acquired		10,421
Software
Schedule of Purchase Price Allocation
Intangible assets		900
Intangible assets estimated useful life (in years)	3
Completed Technology
Schedule of Purchase Price Allocation
Intangible assets		$ 5,300
Intangible assets estimated useful life (in years)	5

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Property and Equipment (Tables)

12 Months Ended

Dec. 31, 2011

Property and Equipment

Schedule of property and equipment

	December 31,
	2011		2010
	(in thousands)
Land and building	$	18,009	$	15,812
Machinery and equipment		52,691		46,296
Furniture and fixtures		1,146		716
Leasehold improvements		159		162
		72,005		62,986
Less: Accumulated depreciation and amortization		39,455		33,516
Net property and equipment	$	32,550	$	29,470

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Intangible Assets (Tables)

12 Months Ended

Dec. 31, 2011

Intangible Assets

Schedule of intangible assets

	December 31, 2011						December 31, 2010
	Gross Carrying Amount		Accumulated Amortization		Net		Gross Carrying Amount		Accumulated Amortization		Net
	(in thousands)
Licensed technology	$	15,092	$	5,617	$	9,475	$	8,891	$	2,402	$	6,489
Non-compete agreement		2,800		2,333		467		2,800		1,773		1,027
Customer relationships		1,969		1,707		262		1,969		1,193		776
Total intangible assets	$	19,861	$	9,657	$	10,204	$	13,660	$	5,368	$	8,292

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Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2011

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

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. Effective January 1, 2010 the Company adopted new guidance, for arrangements that involve multiple elements, which is applicable to arrangements originating or materially modified after such date. This guidance eliminates the residual method of revenue allocation, and requires that the vendor use its best estimate of selling price to allocate arrangement consideration between the deliverables in cases where neither vendor-specific objective evidence nor third-party evidence is available. For multiple element arrangements not subject to the new guidance, 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, which have historically been 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 either units delivered or costs incurred as the measurement basis for 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.

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, 2008	$	234
Provision		352
Utilization		(252	)
Balance at December 31, 2009		334
Provision		—
Utilization		—
Balance at December 31, 2010		334
Provision		35
Utilization		(35	)
Balance at December 31, 2011	$	334

Inventories

        Inventory is stated at the lower of cost (first-in, first-out method) or market value and includes materials, labor, subcontractor costs 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 increased due to subsequent changes in demand forecasts.

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

Balance at December 31, 2008	$	3,675
Provision		1,988
Utilization		(484	)
Balance at December 31, 2009		5,179
Provision		1,518
Utilization		(905	)
Balance at December 31, 2010		5,792
Provision		2,070
Utilization		(563	)
Balance at December 31, 2011	$	7,299

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 thirty 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.

Goodwill and Long-Lived Assets

        Goodwill is carried at cost, and totaled $4,524,000 at December 31, 2011 and $289,000 at December 31, 2010. The Company operates in a single reporting unit. In September 2011, the FASB issued new guidance which provides an entity with the option to perform a qualitative assessment to determine whether it is more-likely-than-not that the fair value of a reporting unit is less than its carrying amount. If an entity determines this is the case, it is required to perform the two-step goodwill impairment test to identify potential goodwill impairment and measure the amount of goodwill impairment loss to be recognized. If an entity determines that it is more-likely-than-not that the fair value of a reporting is greater than its carrying amount, the two-step goodwill impairment test is not required. This new guidance is effective for fiscal years beginning after December 15, 2011 with early adoption permitted. The Company adopted this guidance as of the fourth quarter of 2011.

        Applying this new accounting guidance, the Company performed a qualitative assessment of its reporting unit and determined that is was not more-likely-than-not that the fair value of its reporting unit was less than its carrying amount. As a result, the two-step goodwill impairment test was not required in 2011.

        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, principally 3-5 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.

Accounting for Stock-Based Compensation

        The Company measures compensation cost related to stock-based awards 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 Company considers many factors when estimating expected forfeitures, including the type of the award, employee group, and historical experience. The fair value of restricted stock and restricted stock units 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, if any, of the restricted stock and restricted stock units. The fair value of stock options is determined using the Black-Scholes valuation model. The Company did not grant any stock options in 2011, 2010 or 2009.

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 loss consists of the following:

	December 31,
	2011			2010
	(in thousands)
Foreign currency translation	$	(1,046	)	$	(162	)

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.

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, 2011 and 2010, 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 43.2% in 2011, 36.5% in 2010 and 31.9% in 2009. One customer comprised 16% of our revenue in 2011 and 11% in 2010. No customer accounted for more than 10% of total revenue in 2009.

        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. Receivables from one customer accounted for 20% and 15% of the Company's outstanding accounts receivable balance at December 31, 2011 and 2010, respectively.

        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 2011, 2010 and 2009, the Company incurred $935,000, $1,257,000 and $3,754,000, 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.

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Commitments and Contingencies (Tables)

12 Months Ended

Dec. 31, 2011

Commitments and Contingencies.

Schedule of future minimum rental payments for operating leases

The following table summarizes future minimum rental payments under these leases as of December 31, 2011 (in thousands):

2012	$	1,278
2013		705
2014		376
2015		166
2016		156
Later years		—
	$	2,681

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Summary of Significant Accounting Policies (Details 3) (USD $)	12 Months Ended
	Dec. 31, 2011 year	Dec. 31, 2010	Dec. 31, 2009
Long-Lived Assets
Goodwill	$ 4,524,000	$ 289,000
Minimum estimated useful life of intangible assets (in years)	3
Maximum estimated useful life of intangible assets (in years)	5
Comprehensive Income
Foreign currency translation	(1,046,000)	(162,000)
Research and Development
Costs incurred for research and development contracts on behalf of customers	$ 935,000	$ 1,257,000	$ 3,754,000
Revenues | Minimum
Concentration of risk
Percentage of concentration of risk by single customer			10.00%
Revenues | Customer concentration
Concentration of risk
Number of customers concentration risk	10	10	10
Major customer percentage	43.20%	36.50%	31.90%
Revenues | Customer concentration | Major customer 1
Concentration of risk
Major customer percentage	16.00%	11.00%
Accounts Receivables | Customer concentration | Major customer 1
Concentration of risk
Major customer percentage	20.00%	15.00%

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Stock-Based Compensation Plans (Details 3) (Stock options, USD $)	12 Months Ended
	Dec. 31, 2011 year	Dec. 31, 2010	Dec. 31, 2009
Stock options
Stock options, Shares
Outstanding at the beginning of the period (in shares)	118,783
Options exercised (in shares)	(52,075)
Outstanding at the end of the period (in shares)	66,708	118,783
Exercisable at the end of the period (in shares)	66,708
Vested or expected to vest at the end the period (in shares)	66,708
Stock options, Weighted-Average Exercise Price
Outstanding at the beginning of the period (in dollars per share)	$ 16.09
Options exercised (in dollars per share)	$ 14.86
Outstanding at the end of the year (in dollars per share)	$ 17.06	$ 16.09
Exercisable at the end of the period (in dollars per share)	$ 17.06
Vested or expected to vest at the end the period (in dollars per share)	$ 17.06
Stock options, Weighted Average Remaining Contractual Life
Outstanding at the end the period (in years)	3.45
Exercisable at the end of the period (in years)	3.45
Vested or expected to vest at the end of the period (in years)	3.45
Stock options, Aggregate Intrinsic Value
Outstanding at the end of the period (in dollars)	$ 2,156,000
Exercisable at the end of the period (in dollars)	2,156,000
Vested or expected to vest at the end of the period (in dollars)	2,156,000
Intrinsic value of stock options exercised	$ 2,176,000	$ 26,367,000	$ 5,599,000

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CONSOLIDATED BALANCE SHEETS (USD $) In Thousands, unless otherwise specified	Dec. 31, 2011	Dec. 31, 2010
Current assets:
Cash and cash equivalents	$ 353,667	$ 295,490
Accounts receivable, net of allowance for doubtful accounts of $334	35,686	34,534
Inventories	38,460	23,219
Income taxes receivable	488	3,914
Prepaid expenses and other current assets	2,063	1,333
Deferred taxes	10,296	8,178
Total current assets	440,660	366,668
Property and equipment, net	32,550	29,470
Deferred taxes	466
Other assets	14,889	9,371
Total assets	488,565	405,509
Current liabilities:
Accounts payable	3,146	3,228
Accrued commissions	1,619	1,639
Accrued payroll and benefits	3,286	2,589
Accrued other expenses	5,945	4,945
Customer advances	684	454
Deferred revenue	1,814	9,768
Total current liabilities	16,494	22,623
Long-term income taxes payable	2,639	6,845
Deferred taxes		289
Total liabilities	19,133	29,757
Commitments and contingencies (Note 10)
Stockholders' equity:
Preferred stock, $.01 par value: 5,000 shares authorized; no shares issued or outstanding at December 31, 2011 and 2010
Common stock, $.01 par value: 200,000 shares authorized; 31,448 and 31,253 shares issued and outstanding at December 31, 2011 and 2010, respectively	314	312
Additional paid-in capital	174,093	161,407
Accumulated other comprehensive income (loss)	(1,046)	(162)
Retained earnings	296,071	214,195
Total stockholders' equity	469,432	375,752
Total liabilities and stockholders' equity	$ 488,565	$ 405,509

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Property and Equipment (Details) (USD $)	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Property and Equipment
Gross property and equipment	$ 72,005,000	$ 62,986,000
Less: Accumulated depreciation and amortization	39,455,000	33,516,000
Net property and equipment	32,550,000	29,470,000
Depreciation and amortization expense	7,413,000	6,247,000	5,368,000
Land and building
Property and Equipment
Gross property and equipment	18,009,000	15,812,000
Machinery and equipment
Property and Equipment
Gross property and equipment	52,691,000	46,296,000
Furniture and fixtures
Property and Equipment
Gross property and equipment	1,146,000	716,000
Leasehold improvements
Property and Equipment
Gross property and equipment	$ 159,000	$ 162,000

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CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Cash flows from operating activities:
Net income	$ 84,688,000	$ 77,031,000	$ 46,173,000
Adjustments to reconcile net income to net cash provided by operating activities, net of the effects from the acquisition:
Depreciation	7,413,000	6,247,000	5,368,000
Amortization	4,293,000	2,309,000	1,437,000
Provision for doubtful accounts	35,000		352,000
Provision for excess or obsolete inventory	2,070,000	1,518,000	1,988,000
Deferred taxes	(2,558,000)	(463,000)	(1,602,000)
Stock-based compensation	10,502,000	8,912,000	6,492,000
Changes in operating assets and liabilities:
Accounts receivable	(1,527,000)	(16,728,000)	9,421,000
Inventories	(17,271,000)	(5,173,000)	(7,570,000)
Other assets	(95,000)	404,000	147,000
Deferred revenue and customer advances	(7,725,000)	6,207,000	545,000
Accounts payable	(94,000)	1,596,000	(1,146,000)
Accrued expenses	2,092,000	1,990,000	(645,000)
Income taxes	(784,000)	(3,261,000)	1,482,000
Net cash provided by operating activities	81,039,000	80,589,000	62,442,000
Cash flows from investing activities:
Purchases of property and equipment	(11,317,000)	(14,737,000)	(7,302,000)
Purchase of intangible assets		(6,580,000)
Acquisition, net of cash acquired	(10,421,000)
Net cash used in investing activities	(21,738,000)	(21,317,000)	(7,302,000)
Cash flows from financing activities:
Repayment of note payable assumed in acquisition	(232,000)
Purchase of Company common stock		(3,580,000)	(19,202,000)
Proceeds from exercise of stock options	774,000	13,416,000	3,167,000
Payment of withholding taxes in connection with vesting of restricted stock	(2,813,000)	(1,237,000)	(422,000)
Excess income tax benefit related to stock-based compensation plans	1,413,000	7,340,000	822,000
Net cash provided by (used in) financing activities	(858,000)	15,939,000	(15,635,000)
Effect of exchange rate changes on cash and cash equivalents	(266,000)	(198,000)	116,000
Net increase in cash and cash equivalents	58,177,000	75,013,000	39,621,000
Cash and cash equivalents, beginning of year	295,490,000	220,477,000	180,856,000
Cash and cash equivalents, end of year	353,667,000	295,490,000	220,477,000
Supplemental cash flow information:
Cash paid for taxes	$ 38,461,000	$ 38,524,000	$ 23,502,000

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Segment, Major Customers and Geographic Information (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended								12 Months Ended
	Dec. 31, 2011	Sep. 30, 2011	Jun. 30, 2011	Mar. 31, 2011	Dec. 31, 2010	Sep. 30, 2010	Jun. 30, 2010	Mar. 31, 2010	Dec. 31, 2011 ReportableSegment	Dec. 31, 2010	Dec. 31, 2009
Segment, Major Customers and Geographic Information
Number of reportable segments									1
Major Customer Disclosure
Number of Major Customers for which Revenue Percentage Disclosed											1
Total revenue	$ 60,222	$ 68,135	$ 68,510	$ 67,241	$ 65,583	$ 64,166	$ 60,314	$ 54,193	$ 264,108	$ 244,256	$ 162,990
Revenues | Minimum
Major Customer Disclosure
Percentage required for determination as a major customer											10.00%
Revenues | Customer concentration
Major Customer Disclosure
Concentration percentage	43.20%				36.50%				43.20%	36.50%	31.90%
Revenues | Customer concentration | Major Customer 1
Major Customer Disclosure
Concentration percentage	16.00%				11.00%				16.00%	11.00%
United States
Major Customer Disclosure
Total revenue									119,314	109,570	69,566
International
Major Customer Disclosure
Number of Major Customers for which Revenue Percentage Disclosed	1				1				1	1
Total revenue									$ 144,794	$ 134,686	$ 93,424
China | Revenues | Geographic concentration
Major Customer Disclosure
Concentration percentage	19.00%				17.00%				19.00%	17.00%	22.00%

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Income Taxes (Tables)

12 Months Ended

Dec. 31, 2011

Income Taxes

Schedule of components of deferred tax assets and liabilities

	December 31,
	2011			2010
	(in thousands)
Current deferred tax assets:
Inventory reserve	$	2,730		$	2,166
Reserve for bad debts		125			125
Sales return reserve		439			529
Accrued vacation		428			434
Deferred revenue		178			128
Stock-based compensation		5,239			4,272
Accrued commissions		311			363
Prepaid expenses		(180	)		(247	)
Other		1,026			408
Total current deferred tax assets	$	10,296		$	8,178
Long-term deferred tax assets (liabilities):
Depreciation and amortization	$	(2,772	)	$	(488	)
Net operating loss carryforward		2,941			—
Other		297			199
Total long-term deferred tax assets (liabilities)	$	466		$	(289	)

Schedule of components of provision for income taxes

	2011			2010			2009
	(in thousands)
Current:
Federal	$	34,971		$	37,761		$	24,021
State		3,990			4,491			2,111
Foreign		349			202			(119	)
Deferred:
Federal		(752	)		(298	)		(1,501	)
State		(237	)		59			(280	)
Foreign		(1,258	)		—			—
	$	37,063		$	42,215		$	24,232

Schedule of effective tax rate differences from the federal statutory tax rate

	2011			2010			2009
Statutory rate		35.0	%		35.0	%		35.0	%
State taxes		2.7			2.5			2.3
Domestic production activities deduction		(2.6	)		(1.8	)		(1.3	)
Research and development credits		(0.3	)		(0.3	)		(1.0	)
Foreign income tax benefit		(0.3	)		(0.9	)		(0.7	)
Tax audit and examination settlements		(3.2	)		(0.0	)		(0.0	)
Other		(0.9	)		0.9			0.1
		30.4	%		35.4	%		34.4	%

Schedule of unrecognized tax benefits

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
Additions based on tax positions related to the current year		1,618
Additions for tax positions of prior years		153
Settlements		(1,114	)
Balance at December 31, 2010		5,856
Additions based on tax positions related to the current year		357
Reductions for tax positions of prior years		(3,717	)
Settlements		(159	)
Balance at December 31, 2011	$	2,337

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Segment, Major Customers and Geographic Information

12 Months Ended

Dec. 31, 2011

Segment, Major Customers and Geographic Information

Segment, Major Customers and Geographic Information

16.   Segment, Major Customers and Geographic Information

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

        Revenue from one customer accounted for 16% and 11% of total revenue in 2011 and 2010 respectively. No customer accounted for more than 10% of total revenue in 2009.

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

	2011		2010		2009
	(in thousands)
United States	$	119,314	$	109,570	$	69,566
International		144,794		134,686		93,424
Total revenue	$	264,108	$	244,256	$	162,990

        Revenue from China represented 19%, 17% and 22% of total revenue in 2011, 2010 and 2009, respectively.

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

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Segment, Major Customers and Geographic Information (Tables)

12 Months Ended

Dec. 31, 2011

Segment, Major Customers and Geographic Information

Schedule of entity's revenue by geographic region

	2011		2010		2009
	(in thousands)
United States	$	119,314	$	109,570	$	69,566
International		144,794		134,686		93,424
Total revenue	$	264,108	$	244,256	$	162,990

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Summary of Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2011

Summary of Significant Accounting Policies

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. Effective January 1, 2010 the Company adopted new guidance, for arrangements that involve multiple elements, which is applicable to arrangements originating or materially modified after such date. This guidance eliminates the residual method of revenue allocation, and requires that the vendor use its best estimate of selling price to allocate arrangement consideration between the deliverables in cases where neither vendor-specific objective evidence nor third-party evidence is available. For multiple element arrangements not subject to the new guidance, 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, which have historically been 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 either units delivered or costs incurred as the measurement basis for 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.

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, 2008	$	234
Provision		352
Utilization		(252	)
Balance at December 31, 2009		334
Provision		—
Utilization		—
Balance at December 31, 2010		334
Provision		35
Utilization		(35	)
Balance at December 31, 2011	$	334

Inventories

Inventory is stated at the lower of cost (first-in, first-out method) or market value and includes materials, labor, subcontractor costs 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 increased due to subsequent changes in demand forecasts.

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

Balance at December 31, 2008	$	3,675
Provision		1,988
Utilization		(484	)
Balance at December 31, 2009		5,179
Provision		1,518
Utilization		(905	)
Balance at December 31, 2010		5,792
Provision		2,070
Utilization		(563	)
Balance at December 31, 2011	$	7,299

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 thirty 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.

Goodwill and Long-Lived Assets

Goodwill is carried at cost, and totaled $4,524,000 at December 31, 2011 and $289,000 at December 31, 2010. The Company operates in a single reporting unit. In September 2011, the FASB issued new guidance which provides an entity with the option to perform a qualitative assessment to determine whether it is more-likely-than-not that the fair value of a reporting unit is less than its carrying amount. If an entity determines this is the case, it is required to perform the two-step goodwill impairment test to identify potential goodwill impairment and measure the amount of goodwill impairment loss to be recognized. If an entity determines that it is more-likely-than-not that the fair value of a reporting is greater than its carrying amount, the two-step goodwill impairment test is not required. This new guidance is effective for fiscal years beginning after December 15, 2011 with early adoption permitted. The Company adopted this guidance as of the fourth quarter of 2011.

        Applying this new accounting guidance, the Company performed a qualitative assessment of its reporting unit and determined that is was not more-likely-than-not that the fair value of its reporting unit was less than its carrying amount. As a result, the two-step goodwill impairment test was not required in 2011.

        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, principally 3-5 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.

Accounting for Stock-Based Compensation

The Company measures compensation cost related to stock-based awards 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 Company considers many factors when estimating expected forfeitures, including the type of the award, employee group, and historical experience. The fair value of restricted stock and restricted stock units 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, if any, of the restricted stock and restricted stock units. The fair value of stock options is determined using the Black-Scholes valuation model. The Company did not grant any stock options in 2011, 2010 or 2009.

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 loss consists of the following:

	December 31,
	2011			2010
	(in thousands)
Foreign currency translation	$	(1,046	)	$	(162	)

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.

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, 2011 and 2010, 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 43.2% in 2011, 36.5% in 2010 and 31.9% in 2009. One customer comprised 16% of our revenue in 2011 and 11% in 2010. No customer accounted for more than 10% of total revenue in 2009.

        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. Receivables from one customer accounted for 20% and 15% of the Company's outstanding accounts receivable balance at December 31, 2011 and 2010, respectively.

        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 2011, 2010 and 2009, the Company incurred $935,000, $1,257,000 and $3,754,000, 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.

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Nature of the Business

12 Months Ended

Dec. 31, 2011

Nature of the Business

Nature of the Business

1.     Nature of the Business

        Hittite Microwave Corporation (the "Company") designs and develops high performance integrated circuits, modules, subsystems and instrumentation for technically demanding radio frequency, microwave and millimeterwave applications. The Company's products are used in a variety of applications and 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 owns two buildings in Chelmsford, Massachusetts, which house its corporate headquarters, manufacturing facility and two design centers. In addition, the Company operates design centers and has sales and technical support staff in Canada, Colorado, Egypt, Norway, Turkey and Virginia, and has sales offices in China, Finland, Germany, India, Japan, Korea, Sweden and the United Kingdom.

        In 2012, the Company has established a new office in Ireland which will serve as the Company's international headquarters.

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CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) In Thousands, except Per Share data, unless otherwise specified	Dec. 31, 2011	Dec. 31, 2010
CONSOLIDATED BALANCE SHEETS
Accounts receivable, allowance for doubtful accounts (in dollars)	$ 334	$ 334
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized	5,000	5,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized	200,000	200,000
Common stock, shares issued	31,448	31,253
Common stock, shares outstanding	31,448	31,253

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Defined Contribution Plan

12 Months Ended

Dec. 31, 2011

Defined Contribution Plan

Defined Contribution Plan

11.   Defined Contribution Plan

        The Company has established a defined contribution plan under the provisions of Section 401(k) of the Internal Revenue Code for its U.S. employees. The Company may make matching contributions, and may also provide discretionary contributions. During January 2009, 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 January 2010, the Company resumed its matching program, and matched 50% of participants' contributions up to 10% of compensation in both 2011 and 2010. In 2011, 2010 and 2009, employer contributions were $994,000, $958,000 and $96,000, respectively. The Company also has retirement plans at non-U.S. locations under similar terms. Employer contributions to those non-U.S. plans were immaterial to the periods presented herein.

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Document and Entity Information (USD $)	12 Months Ended
	Dec. 31, 2011	Feb. 15, 2012	Jun. 30, 2011
Document and Entity Information
Entity Registrant Name	HITTITE MICROWAVE CORP
Entity Central Index Key	0001130866
Document Type	10-K
Document Period End Date	Dec. 31, 2011
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Public Float			$ 1,914,498,773
Entity Common Stock, Shares Outstanding		31,448,089
Document Fiscal Year Focus	2011
Document Fiscal Period Focus	FY

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Stockholders' Equity

12 Months Ended

Dec. 31, 2011

Stockholders' Equity

Stockholders' Equity

12.   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 2011, the Company did not repurchase any shares of common stock. During 2010, the Company repurchased 89,664 shares of its common stock for $3,580,000. During 2009, the Company repurchased 612,166 shares of its common stock for $19,202,000. 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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CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) In Thousands, except Per Share data, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Revenue	$ 264,108	$ 244,256	$ 162,990
Cost of revenue	69,935	62,617	45,239
Gross profit	194,173	181,639	117,751
Operating expenses:
Research and development	38,899	31,467	22,971
Sales and marketing	22,047	19,420	15,034
General and administrative	12,078	11,568	9,737
Total operating expenses	73,024	62,455	47,742
Income from operations	121,149	119,184	70,009
Interest income	172	134	394
Other income (expense), net	430	(72)	2
Income before income taxes	121,751	119,246	70,405
Provision for income taxes	37,063	42,215	24,232
Net income	$ 84,688	$ 77,031	$ 46,173
Earnings per share:
Basic (in dollars per share)	$ 2.81	$ 2.60	$ 1.57
Diluted (in dollars per share)	$ 2.77	$ 2.56	$ 1.55
Weighted average shares outstanding:
Basic (in shares)	30,178	29,584	29,380
Diluted (in shares)	30,586	30,135	29,850

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Inventories

12 Months Ended

Dec. 31, 2011

Inventories

Inventories

6.     Inventories

        Net inventories consist of the following:

	December 31,
	2011		2010
	(in thousands)
Raw materials	$	20,453	$	8,067
Work in process		5,783		7,798
Finished goods		12,224		7,354
	$	38,460	$	23,219

        In the first half of 2011, the Company was advised by one of its foundries that the foundry does not intend to renew its wafer supply agreement with the Company when it expires in June 2015. Given this change and resulting uncertainty regarding the availability of future supply, the Company is reducing its use of this foundry for new products, and, over time, intends to reduce or eliminate wafer purchases from this foundry. The Company is working with the foundry to manage this transition with the goal of maintaining adequate supplies of the affected products over their natural life cycles, which are typically five to ten years. The Company has increased purchases of raw materials inventory from this foundry in order to support the products which have the longest life cycles. At December 31, 2011, raw material inventory includes $12,900,000 representing advance purchases of wafers from this foundry.

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Accounts Receivable

12 Months Ended

Dec. 31, 2011

Accounts Receivable

Accounts Receivable

5.     Accounts Receivable

        Accounts receivable consist of the following:

	December 31,
	2011		2010
	(in thousands)
Commercial:
Billed	$	28,126	$	27,541
U.S. government and government prime contractors:
Billed		7,194		5,593
Unbilled		562		1,559
Retainage		138		175
		36,020		34,868
Less: Allowance for doubtful accounts		334		334
Net accounts receivable	$	35,686	$	34,534

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Selected Quarterly Financial Data (Unaudited)

12 Months Ended

Dec. 31, 2011

Selected Quarterly Financial Data (Unaudited)

Selected Quarterly Financial Data (Unaudited)

17.   Selected Quarterly Financial Data (Unaudited)

2011:	First Quarter		Second Quarter		Third Quarter		Fourth Quarter
	(in thousands, except per share data)
Revenue	$	67,241	$	68,510	$	68,135	$	60,222
Gross profit		49,080		49,809		50,740		44,544
Net income		20,178		20,845		22,424		21,241
Basic earnings per share		0.67		0.69		0.74		0.70
Diluted earnings per share		0.66		0.68		0.73		0.69

2010:	First Quarter		Second Quarter		Third Quarter		Fourth Quarter
	(in thousands, except per share data)
Revenue	$	54,193	$	60,314	$	64,166	$	65,583
Gross profit		39,772		45,108		47,879		48,880
Net income		16,119		19,159		20,835		20,918
Basic earnings per share		0.55		0.65		0.70		0.70
Diluted earnings per share		0.54		0.64		0.69		0.69

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Earnings Per Share

12 Months Ended

Dec. 31, 2011

Earnings Per Share

Earnings Per Share

13.   Earnings Per Share

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

	2011		2010		2009
	(in thousands, except per share data)
Basic earnings per share
Net income	$	84,688	$	77,031	$	46,173
Weighted average common shares outstanding		30,178		29,584		29,380
Basic earnings per share	$	2.81	$	2.60	$	1.57
Diluted earnings per share
Net income	$	84,688	$	77,031	$	46,173
Weighted average common shares outstanding		30,178		29,584		29,380
Dilutive effect of stock options and restricted stock		408		551		470
Adjusted weighted average shares—diluted		30,586		30,135		29,850
Diluted earnings per share	$	2.77	$	2.56	$	1.55

        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 excess 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.

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Intangible Assets

12 Months Ended

Dec. 31, 2011

Intangible Assets

Intangible Assets

9.     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.

        On June 30, 2010, the Company entered into an agreement to license from IBM certain millimeterwave technology, at a cost of $6,580,000.

        The Company's intangible assets, all of which related to these two agreements and the acquisition of ASD, are included in other assets in the accompanying consolidate balance sheets, and consist of the following:

	December 31, 2011						December 31, 2010
	Gross Carrying Amount		Accumulated Amortization		Net		Gross Carrying Amount		Accumulated Amortization		Net
	(in thousands)
Licensed technology	$	15,092	$	5,617	$	9,475	$	8,891	$	2,402	$	6,489
Non-compete agreement		2,800		2,333		467		2,800		1,773		1,027
Customer relationships		1,969		1,707		262		1,969		1,193		776
Total intangible assets	$	19,861	$	9,657	$	10,204	$	13,660	$	5,368	$	8,292

        The Company's intangible assets are being amortized over their original estimated useful lives, principally 3-5 years. Amortization expense associated with these assets was $4,289,000, $2,301,000 and $1,416,000 in 2011, 2010 and 2009, respectively. The accompanying consolidated statements of operations for 2011, 2010 and 2009 reflect such amortization as $1,076,000, $1,076,000 and $874,000 of sales and marketing expense, $1,556,000, $540,000 and $542,000 of cost of revenue and $1,657,000, $685,000 and $0 of research and development expense, respectively. Based on the current amount of intangible assets subject to amortization, amortization expense is estimated to be $3,910,000, $2,564,000, $2,108,000, $1,578,000 and $44,000 for 2012, 2013, 2014, 2015 and 2016, respectively.

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Selected Quarterly Financial Data (Unaudited) (Details) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended								12 Months Ended
	Dec. 31, 2011	Sep. 30, 2011	Jun. 30, 2011	Mar. 31, 2011	Dec. 31, 2010	Sep. 30, 2010	Jun. 30, 2010	Mar. 31, 2010	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Selected Quarterly Financial Data (Unaudited)
Revenue	$ 60,222	$ 68,135	$ 68,510	$ 67,241	$ 65,583	$ 64,166	$ 60,314	$ 54,193	$ 264,108	$ 244,256	$ 162,990
Gross profit	44,544	50,740	49,809	49,080	48,880	47,879	45,108	39,772	194,173	181,639	117,751
Net income	$ 21,241	$ 22,424	$ 20,845	$ 20,178	$ 20,918	$ 20,835	$ 19,159	$ 16,119	$ 84,688	$ 77,031	$ 46,173
Basic earnings per share (in dollars per share)	$ 0.70	$ 0.74	$ 0.69	$ 0.67	$ 0.70	$ 0.70	$ 0.65	$ 0.55	$ 2.81	$ 2.60	$ 1.57
Diluted earnings per share (in dollars per share)	$ 0.69	$ 0.73	$ 0.68	$ 0.66	$ 0.69	$ 0.69	$ 0.64	$ 0.54	$ 2.77	$ 2.56	$ 1.55

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Acquisition

12 Months Ended

Dec. 31, 2011

Acquisition

Acquisition

7.     Acquisition

        On January 14, 2011, the Company acquired all of the outstanding stock of Arctic Silicon Devices (ASD), a privately held company, for $10,421,000 in cash and the assumption of a $232,000 note payable that was repaid during 2011. ASD is a developer of advanced mixed-signal, integrated circuit technology, located in Trondheim, Norway. The acquisition provides the Company with new IC design and integration capability and a new product line of analog-to-digital converters.

        The assets and liabilities of ASD were recorded at their fair values as of the acquisition date, as follows (in thousands):

Current assets	$	174
Other assets		369
Software		900
Completed technology		5,300
Goodwill		4,236
Current liabilities		(326	)
Note payable		(232	)
Total purchase price, net of cash and cash equivalents acquired	$	10,421

        The completed technology will be amortized to cost of revenue over its estimated useful life of 5 years. The software will be amortized to research and development expense over its estimated useful life of 3 years. Goodwill arising from the acquisition will not be deductible for tax purposes.

        ASD's operating results have been included in the Company's results of operations from the acquisition date, and were not material. Pro forma results are not provided as ASD's results of operations were not material. Acquisition costs were not material.

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Property and Equipment

12 Months Ended

Dec. 31, 2011

Property and Equipment

Property and Equipment

8.     Property and Equipment

        Property and equipment consist of the following:

	December 31,
	2011		2010
	(in thousands)
Land and building	$	18,009	$	15,812
Machinery and equipment		52,691		46,296
Furniture and fixtures		1,146		716
Leasehold improvements		159		162
		72,005		62,986
Less: Accumulated depreciation and amortization		39,455		33,516
Net property and equipment	$	32,550	$	29,470

        Depreciation and amortization expense related to the Company's property and equipment was $7,413,000, $6,247,000 and $5,368,000 in 2011, 2010 and 2009, respectively.

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Commitments and Contingencies

12 Months Ended

Dec. 31, 2011

Commitments and Contingencies.

Commitments and Contingencies

10.   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, 2011 (in thousands):

2012	$	1,278
2013		705
2014		376
2015		166
2016		156
Later years		—
	$	2,681

        Rental expense during 2011, 2010 and 2009 was $1,288,000, $1,147,000 and $1,013,000, 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 these indemnification obligations is minimal. Accordingly, the Company has no liabilities recorded for these indemnity agreements as of December 31, 2011 and 2010.

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 Company's warranty accrual and related expense were immaterial to the Company's financial position and results of operations for the periods presented herein.

Intellectual Property Claims

        In recent years there has been significant litigation involving intellectual property rights in many technology-based industries, including the Company's. 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.

        The Company has from time to time been the subject of litigation alleging that sales by the Company of its products infringe patents held by such third parties. Two such actions were settled in April 2010 and December 2010, respectively, under terms that were not material to the Company. In addition, the Company has from time to time received letters asserting that it infringes patents held by third parties that have not resulted in litigation. The Company has incurred significant costs in investigating and defending intellectual property claims, and there can be no assurance that 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. 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 its foundries and customers, damage its 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.

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Stock-Based Compensation Plans (Tables)

12 Months Ended

Dec. 31, 2011

Stock-Based Compensation Plans

Summary of stock-based compensation

	2011		2010		2009
Cost of revenue	$	2,246	$	1,924	$	1,630
Research and development		4,309		3,403		2,046
Sales and marketing		1,330		1,118		1,072
General and administrative		2,617		2,467		1,744
Stock-based compensation expense	$	10,502	$	8,912	$	6,492

Schedule of stock option activity

	Shares			Weighted Average Exercise Price per Share		Weighted Average Remaining Contractual Life (in years)		Aggregate Intrinsic Value
Outstanding at December 31, 2010		118,783		$	16.09
Options granted		—			—
Options exercised		(52,075	)		14.86
Options forfeited / cancelled		—			—
Outstanding at December 31, 2011		66,708			17.06		3.45	$	2,156,000
Exercisable at December 31, 2011		66,708			17.06		3.45		2,156,000
Vested or expected to vest at December 31, 2011		66,708			17.06		3.45		2,156,000

Schedule of nonvested restricted stock activity

	Number of Shares			Weighted Average Grant Date Fair Value
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
Granted		356,960			51.53
Vested		(94,755	)		30.29
Forfeited		(24,484	)		39.24
Nonvested at December 31, 2010		1,151,896			40.45
Granted		225,750			54.13
Vested		(221,842	)		33.98
Forfeited		(30,779	)		43.24
Nonvested at December 31, 2011		1,125,025			44.40

Schedule of nonvested restricted stock units activity

	Number of Shares			Weighted Average Grant Date Fair Value
Nonvested at December 31, 2010		—		$	—
Granted		32,284			62.86
Vested		—			—
Forfeited		(1,734	)		62.81
Nonvested at December 31, 2011		30,550			62.87

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Stock-Based Compensation Plans (Details)	12 Months Ended
	Dec. 31, 2011
1996 Plan
Share-Based Compensation Plans
Number of shares which the entity was authorized to grant	3,748,000
Maximum term of options (in years)	P10Y
2005 Plan
Share-Based Compensation Plans
Number of shares which the entity was initially authorized to grant	4,216,500
Number of shares which the entity was authorized to grant	6,559,000
Number of anniversaries from Plan effective date upon which additional shares may be authorized	5
Maximum additional number of shares authorized to be issued	468,500
Minimum number of shares authorized to be issued	0
2005 Plan - Stock Options
Share-Based Compensation Plans
Maximum term of options (in years)	P10Y
Vesting period one (in years)	4 years
Vesting period two (in years)	5 years
Restricted stock units
Share-Based Compensation Plans
Number of shares of common stock to be received as contingent right	1

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Income Taxes

12 Months Ended

Dec. 31, 2011

Income Taxes

Income Taxes

15.   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,
	2011			2010
	(in thousands)
Current deferred tax assets:
Inventory reserve	$	2,730		$	2,166
Reserve for bad debts		125			125
Sales return reserve		439			529
Accrued vacation		428			434
Deferred revenue		178			128
Stock-based compensation		5,239			4,272
Accrued commissions		311			363
Prepaid expenses		(180	)		(247	)
Other		1,026			408
Total current deferred tax assets	$	10,296		$	8,178
Long-term deferred tax assets (liabilities):
Depreciation and amortization	$	(2,772	)	$	(488	)
Net operating loss carryforward		2,941			—
Other		297			199
Total long-term deferred tax assets (liabilities)	$	466		$	(289	)

        At December 31, 2011, the Company has aggregate net operating loss carryforwards in Norway of approximately $10,500,000 which can be carried forward indefinitely.

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

	2011			2010			2009
	(in thousands)
Current:
Federal	$	34,971		$	37,761		$	24,021
State		3,990			4,491			2,111
Foreign		349			202			(119	)
Deferred:
Federal		(752	)		(298	)		(1,501	)
State		(237	)		59			(280	)
Foreign		(1,258	)		—			—
	$	37,063		$	42,215		$	24,232

        In 2011, 2010 and 2009 domestic income before taxes was $122,812,000, $115,757,000 and $69,250,000, respectively, and foreign (loss) income before taxes was $(1,061,000), $3,489,000 and $1,155,000, respectively.

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

	2011			2010			2009
Statutory rate		35.0	%		35.0	%		35.0	%
State taxes		2.7			2.5			2.3
Domestic production activities deduction		(2.6	)		(1.8	)		(1.3	)
Research and development credits		(0.3	)		(0.3	)		(1.0	)
Foreign income tax benefit		(0.3	)		(0.9	)		(0.7	)
Tax audit and examination settlements		(3.2	)		(0.0	)		(0.0	)
Other		(0.9	)		0.9			0.1
		30.4	%		35.4	%		34.4	%

        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 $1,413,000, $7,340,000 and $822,000 in 2011, 2010 and 2009, 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, 2011, U.S. income taxes were not provided on a cumulative total of $10,418,000 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.

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

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
Additions based on tax positions related to the current year		1,618
Additions for tax positions of prior years		153
Settlements		(1,114	)
Balance at December 31, 2010		5,856
Additions based on tax positions related to the current year		357
Reductions for tax positions of prior years		(3,717	)
Settlements		(159	)
Balance at December 31, 2011	$	2,337

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

        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 2011, 2010 and 2009, and there was no material accrual for interest or penalties as of December 31, 2011 or December 31, 2010.

        The major tax jurisdictions that remain subject to examination are: U.S. Federal 2008-2010; U.S. states 2003-2010; and Germany 2006-2010. In the fourth quarter of 2011, the U.S. Internal Revenue Service (IRS) completed an audit of the Company's consolidated federal income tax return for the tax years 2005-2007. As a result, the Company recognized a favorable tax benefit of $3.7 million. The Company is currently under examination by the IRS for 2008-2010. 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.

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Fair Value of Financial Instruments (Tables)

12 Months Ended

Dec. 31, 2011

Fair Value of Financial Instruments

Fair Value of financial Assets and Liabilities

	December 31, 2011								December 31, 2010
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
	(in thousands)
Money market funds	$	309,382	$	—	$	—	$	309,382	$	264,308	$	—	$	—	$	264,308

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Stockholders' Equity (Details) (USD $)	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Stockholders' Equity
Voting rights of each common stockholder	1
Preferred stock, shares authorized (in shares)	5,000,000	5,000,000
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares repurchased (in shares)		89,664	612,166
Purchase of Company common stock		$ 3,580,000	$ 19,202,000

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Fair Value of Financial Instruments (Details) (Recurring basis, USD $) In Thousands, unless otherwise specified	Dec. 31, 2011	Dec. 31, 2010
Level 1
Fair value of financial instruments
Money market funds	$ 309,382	$ 264,308
Total
Fair value of financial instruments
Money market funds	$ 309,382	$ 264,308

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CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY AND COMPREHENSIVE INCOME (USD $)	Total	Common Stock	Additional Paid-in Capital	Accumulated Other Comprehensive Income (Loss)	Retained Earnings	Comprehensive Income
Balance at Dec. 31, 2008	$ 236,929,000	$ 303,000	$ 121,274,000	$ (73,000)	$ 115,425,000
Balance (in shares) at Dec. 31, 2008		30,291,000
Increase (Decrease) in Stockholders' Equity
Exercise of stock options	3,167,000	2,000	3,165,000
Exercise of stock options (in shares)		243,000
Foreign currency translation	190,000			190,000		190,000
Stock-based compensation expense	6,492,000		6,492,000
Net income	46,173,000				46,173,000	46,173,000
Excess income tax benefit related to stock-based compensation plans	822,000		822,000
Issuance of restricted common stock under stock plan, net of forfeitures		3,000	(3,000)
Issuance of restricted common stock under stock plan, net of forfeitures (in shares)		298,000
Purchase of Company common stock	(19,202,000)	(6,000)			(19,196,000)
Common stock, shares repurchased (in shares)	612,166	612,166
Payment of withholding taxes in connection with vesting of restricted stock	(422,000)				(422,000)
Payment of withholding taxes in connection with vesting of restricted stock (in shares)		(11,000)
Comprehensive income						46,363,000
Balance at Dec. 31, 2009	274,149,000	302,000	131,750,000	117,000	141,980,000
Balance (in shares) at Dec. 31, 2009		30,209,000
Increase (Decrease) in Stockholders' Equity
Exercise of stock options	13,416,000	8,000	13,408,000
Exercise of stock options (in shares)		824,000
Foreign currency translation	(279,000)			(279,000)		(279,000)
Stock-based compensation expense	8,912,000		8,912,000
Net income	77,031,000				77,031,000	77,031,000
Excess income tax benefit related to stock-based compensation plans	7,340,000		7,340,000
Issuance of restricted common stock under stock plan, net of forfeitures		3,000	(3,000)
Issuance of restricted common stock under stock plan, net of forfeitures (in shares)		332,000
Purchase of Company common stock	(3,580,000)	(1,000)			(3,579,000)
Common stock, shares repurchased (in shares)	89,664	89,664
Payment of withholding taxes in connection with vesting of restricted stock	(1,237,000)				(1,237,000)
Payment of withholding taxes in connection with vesting of restricted stock (in shares)		(22,000)
Comprehensive income						76,752,000
Balance at Dec. 31, 2010	375,752,000	312,000	161,407,000	(162,000)	214,195,000
Balance (in shares) at Dec. 31, 2010		31,253,000
Increase (Decrease) in Stockholders' Equity
Exercise of stock options	774,000	1,000	773,000
Exercise of stock options (in shares)		52,000
Foreign currency translation	(884,000)			(884,000)		(884,000)
Stock-based compensation expense	10,502,000		10,502,000
Net income	84,688,000				84,688,000	84,688,000
Excess income tax benefit related to stock-based compensation plans	1,413,000		1,413,000
Issuance of restricted common stock under stock plan, net of forfeitures		2,000	(2,000)
Issuance of restricted common stock under stock plan, net of forfeitures (in shares)		195,000
Payment of withholding taxes in connection with vesting of restricted stock	(2,813,000)	(1,000)			(2,812,000)
Payment of withholding taxes in connection with vesting of restricted stock (in shares)		(52,000)
Comprehensive income						83,804,000
Balance at Dec. 31, 2011	$ 469,432,000	$ 314,000	$ 174,093,000	$ (1,046,000)	$ 296,071,000
Balance (in shares) at Dec. 31, 2011		31,448,000

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Fair Value of Financial Instruments

12 Months Ended

Dec. 31, 2011

Fair Value of Financial Instruments

Fair Value of Financial Instruments

4.     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, 2011								December 31, 2010
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
	(in thousands)
Money market funds	$	309,382	$	—	$	—	$	309,382	$	264,308	$	—	$	—	$	264,308

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Income Taxes (Details 4) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Reconciliation of unrecognized tax benefits
Beginning balance	$ 5,856	$ 5,199	$ 4,180
Additions based on tax positions related to the current year	357	1,618	786
Additions for tax positions of prior years		153	400
Reductions for tax positions of prior years	(3,717)		(167)
Settlements	(159)	(1,114)
Ending balance	$ 2,337	$ 5,856	$ 5,199

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Accounts Receivable (Tables)

12 Months Ended

Dec. 31, 2011

Accounts Receivable

Schedule of account receivables

	December 31,
	2011		2010
	(in thousands)
Commercial:
Billed	$	28,126	$	27,541
U.S. government and government prime contractors:
Billed		7,194		5,593
Unbilled		562		1,559
Retainage		138		175
		36,020		34,868
Less: Allowance for doubtful accounts		334		334
Net accounts receivable	$	35,686	$	34,534

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Summary of Significant Accounting Policies (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Summary of Significant Accounting Policies
Maximum term of original maturity to classify instruments as cash and cash equivalents (in months)	3
Allowance for Doubtful Accounts
Movement in allowance and reserve
Balance at the beginning of the period	$ 334		$ 234
Provision	35		352
Utilization	(35)		(252)
Balance at the end of the period	334		334
Inventories
Movement in allowance and reserve
Balance at the beginning of the period	5,792	5,179	3,675
Provision	2,070	1,518	1,988
Utilization	(563)	(905)	(484)
Balance at the end of the period	$ 7,299	$ 5,792	$ 5,179

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Stock-Based Compensation Plans

12 Months Ended

Dec. 31, 2011

Stock-Based Compensation Plans

Stock-Based Compensation Plans

14.   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, restricted stock units, unrestricted stock awards, performance share awards and stock appreciation rights. Each restricted stock unit represents the contingent right to receive one share of the Company's common stock. 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 authorized, 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, 2011 is 6,559,000, representing the maximum number of shares of common stock that may be issued under the 2005 Plan.

        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, restricted stock and restricted stock units currently outstanding under both plans vest over a period of four or five years. No stock options were granted in 2011, 2010 or 2009.

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

	2011		2010		2009
Cost of revenue	$	2,246	$	1,924	$	1,630
Research and development		4,309		3,403		2,046
Sales and marketing		1,330		1,118		1,072
General and administrative		2,617		2,467		1,744
Stock-based compensation expense	$	10,502	$	8,912	$	6,492

        All stock-based compensation cost for 2011 related to restricted stock and restricted stock units. Stock-based compensation cost for 2010 includes $1,212,000 related to stock options and $7,700,000 related to restricted stock. Stock-based compensation cost for 2009 includes $2,077,000 related to stock options and $4,415,000 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, 2010		118,783		$	16.09
Options granted		—			—
Options exercised		(52,075	)		14.86
Options forfeited / cancelled		—			—
Outstanding at December 31, 2011		66,708			17.06		3.45	$	2,156,000
Exercisable at December 31, 2011		66,708			17.06		3.45		2,156,000
Vested or expected to vest at December 31, 2011		66,708			17.06		3.45		2,156,000

        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 $2,176,000, $26,367,000 and $5,599,000 during 2011, 2010 and 2009, respectively. As of December 31, 2011, all compensation cost related to outstanding stock options has been recognized.

        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, 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
Granted		356,960			51.53
Vested		(94,755	)		30.29
Forfeited		(24,484	)		39.24
Nonvested at December 31, 2010		1,151,896			40.45
Granted		225,750			54.13
Vested		(221,842	)		33.98
Forfeited		(30,779	)		43.24
Nonvested at December 31, 2011		1,125,025			44.40

        As of December 31, 2011, total compensation cost not yet recognized related to restricted stock awards was $30,297,000, which is expected to be recognized over a weighted-average period of 3.2 years.

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

	Number of Shares			Weighted Average Grant Date Fair Value
Nonvested at December 31, 2010		—		$	—
Granted		32,284			62.86
Vested		—			—
Forfeited		(1,734	)		62.81
Nonvested at December 31, 2011		30,550			62.87

        As of December 31, 2011, total compensation cost not yet recognized related to restricted stock units was $1,238,000, which is expected to be recognized over a weighted-average period of 4.1 years.