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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934

For the Quarter Ended May 4, 2008
Commission File Number: 333-137664

Avago Technologies Finance Pte. Ltd.

(Translation of registrant’s name into English)

Republic of Singapore

(Jurisdiction of incorporation or organization)

1 Yishun Avenue 7
Singapore 768923
Tel: (65) 6755-7888

(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:

þ Form 20-F o Form 40-F

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): o

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): o

Indicate by check mark whether the registrant by furnishing the information contained in this Form, the registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934: o Yes þ No

If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): Not applicable.

FINANCIAL INFORMATION

Condensed Consolidated Financial Statements — Unaudited

AVAGO TECHNOLOGIES FINANCE PTE. LTD.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS — UNAUDITED
(IN MILLIONS)


	Quarter Ended						Six Months Ended
	May 4, 2008			April 30, 2007			May 4, 2008			April 30, 2007
Net revenue	$	411		$	380		$	813		$	755
Costs and expenses:
Cost of products sold:
Cost of products sold		237			229			467			464
Amortization of intangible assets		14			15			28			30
Restructuring charges		1			1			2			15

Total cost of products sold		252			245			497			509
Research and development		62			51			128			101
Selling, general and administrative		48			47			98			104
Amortization of intangible assets		7			7			14			14
Restructuring charges		1			3			3			11

Total costs and expenses		370			353			740			739
Income from operations		41			27			73			16
Interest expense		(20	)		(28	)		(45	)		(57	)
Loss on extinguishment of debt		—			(10	)		(10	)		(10	)
Other income, net		1			5			2			6

Income (loss) from continuing operations before income taxes		22			(6	)		20			(45	)
Provision for income taxes		4			—			7			3

Income (loss) from continuing operations		18			(6	)		13			(48	)
Income (loss) from and gain on discontinued operations, net of income taxes		(1	)		10			8			58

Net income	$	17		$	4		$	21		$	10

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

AVAGO TECHNOLOGIES FINANCE PTE. LTD.
CONDENSED CONSOLIDATED BALANCE SHEETS — UNAUDITED
(IN MILLIONS, EXCEPT SHARE AMOUNTS)


	May 4,			October 31,
	2008			2007 (1)
ASSETS

Current assets:
Cash and cash equivalents	$	83		$	309
Trade accounts receivable, net		213			218
Inventory		166			140
Assets of discontinued operation		—			25
Other current assets		32			25

Total current assets		494			717
Property, plant and equipment, net		289			292
Goodwill		156			122
Intangible assets, net		752			777
Other long-term assets		50			43

Total assets	$	1,741		$	1,951


LIABILITIES AND SHAREHOLDER’S EQUITY

Current liabilities:
Accounts payable	$	154		$	194
Employee compensation and benefits		54			56
Accrued interest		31			34
Capital lease obligations — current		2			2
Other current liabilities		26			44

Total current liabilities		267			330

Long-term liabilities:
Long-term debt		705			903
Capital lease obligations — non-current		5			4
Other long-term liabilities		60			30

Total liabilities		1,037			1,267

Commitments and contingencies (Note 13)

Shareholder’s equity:
Ordinary shares, no par value; 210,460,262 shares issued and outstanding on May 4, 2008 and October 31, 2007		1,074			1,066
Accumulated deficit		(374	)		(386	)
Accumulated other comprehensive income		4			4

Total shareholder’s equity		704			684

Total liabilities and shareholder’s equity	$	1,741		$	1,951


(1)		Amounts as of October 31, 2007 have been derived from audited financial statements as of that date.

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

AVAGO TECHNOLOGIES FINANCE PTE. LTD.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS — UNAUDITED
(IN MILLIONS)


	Six Months Ended
	May 4, 2008			April 30, 2007
Cash flows from operating activities:
Net income	$	21		$	10

Adjustments to reconcile net income to net cash (used in) provided by operating activities:
Depreciation and amortization		77			89
Amortization of debt issuance costs		2			2
Gain on discontinued operations		(9	)		(58	)
Loss on extinguishment of debt		5			10
Loss on sale of property, plant and equipment		—			2
Share-based compensation		9			13
Changes in assets and liabilities, net of acquisition and dispositions:
Trade accounts receivable		9			(19	)
Inventory		(25	)		26
Accounts payable		(41	)		(39	)
Employee compensation and benefits		(2	)		(21	)
Other current assets and current liabilities		(32	)		(56	)
Other long-term assets and long-term liabilities		16			9

Net cash (used in) provided by operating activities		30			(32	)


Cash flows from investing activities:
Purchase of property, plant and equipment		(28	)		(19	)
Acquisitions and investment, net of cash acquired		(46	)		—
Purchase of intangible assets		(6	)		—
Proceeds from sale of discontinued operations		25			65

Net cash (used in) provided by investing activities		(55	)		46


Cash flows from financing activities:
Debt repayments		(200	)		(85	)
Cash settlement of equity awards		(1	)		—
Payment on capital lease obligation		—			(1	)

Net cash used in financing activities		(201	)		(86	)


Net decrease in cash and cash equivalents		(226	)		(72	)
Cash and cash equivalents at the beginning of period		309			272

Cash and cash equivalents at end of period	$	83		$	200

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

AVAGO TECHNOLOGIES FINANCE PTE. LTD.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1. Overview and Basis of Presentation

Overview

Avago Technologies Finance Pte. Ltd. (“we,” the “Company,” “Avago Finance” or “Successor”) was organized under the laws of the Republic of Singapore in September 2005. We are the successor to the Semiconductor Products Group business segment (“SPG” or “Predecessor”) of Agilent Technologies, Inc. (“Agilent”). On December 1, 2005, we acquired substantially all of the assets of SPG from Agilent for $2.7 billion (the “SPG Acquisition”).

Avago Finance is a wholly owned subsidiary of Avago Technologies Holding Pte. Ltd. (“Holdings”), which is wholly owned by Avago Technologies Limited (“Parent”). All three of these companies were formed for the purpose of facilitating the SPG Acquisition and are collectively referred to as the “Holding Companies.”

We are a global supplier of analog interface components for communications, industrial and consumer applications. Our operations are primarily fabless, which means that we rely on independent foundries and third-party contractors to perform most manufacturing, assembly and test functions. This strategy allows us to focus on designing, developing and marketing our products and significantly reduces the amount of capital we need to invest in manufacturing products. We serve four primary target markets: wireless communications, wired infrastructure, industrial/automotive electronics and computing peripherals.

Basis of Presentation

Fiscal Periods

We adopted a 52- or 53-week fiscal year beginning with our fiscal year 2008. Our fiscal year will end on the Sunday closest to October 31. Our first quarter for fiscal 2008 ended on February 3, 2008, the second quarter ended on May 4, 2008, and the third and fourth quarters will end on August 3, 2008 and November 2, 2008, respectively.

Information

The unaudited condensed consolidated financial statements include the accounts of Avago Finance and all of its subsidiaries and are prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Intercompany transactions and balances have been eliminated in consolidation.

Interim information presented in the unaudited condensed consolidated financial statements has been prepared by management and, in the opinion of management, includes all adjustments of a normal recurring nature that are necessary for the fair statement of the financial position, results of operations and cash flows for the periods shown, and is in accordance with GAAP. These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes for the fiscal year ended October 31, 2007 included in our Form 20-F filed with the Securities and Exchange Commission (“SEC”) on December 13, 2007, as amended on February 29, 2008 (the “Form 20-F”).

The operating results for the quarter and six months ended May 4, 2008 are not necessarily indicative of the results that may be expected for the year ending November 2, 2008 or for any other future period. The balance sheet as of October 31, 2007 is derived from the audited financial statements as of that date.

Use of estimates. The preparation of financial statements in conformity with GAAP requires management to make estimates, judgments 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 revenues and expenses during the reporting period. Actual results could differ from those estimates, and such differences could affect the results of operations reported in future periods.

Taxes on income. We account for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date.

We record net deferred tax assets to the extent we believe these assets will more likely than not be realized. In making such determination, we consider all available positive and negative evidence, including scheduled reversals of deferred tax liabilities,

projected future taxable income, tax planning strategies and recent financial operations. In the event we were to determine that we would be able to realize our deferred income tax assets in the future in excess of their net recorded amount, we would make an adjustment to the valuation allowance which would reduce the provision for income taxes. Likewise, if we determine that we would not be able to realize all or part of our net deferred tax assets, an adjustment would be charged to earnings in the period such determination is made.

In July 2006, the Financial Accounting Standards Board (“FASB”) issued Financial Interpretation (“FIN”) No. 48, “Accounting for Uncertainty in Income Taxes,” which clarifies the accounting for uncertainty in income taxes recognized in the financial statements in accordance with Statement of Financial Accounting Standards (“SFAS”) No. 109, “Accounting for Income Taxes.” FIN No. 48 provides that a tax benefit from an uncertain tax position may be recognized when it is more likely than not that the position will be sustained upon examination, including resolutions of any related appeals or litigation processes, based on the technical merits. Income tax positions must meet a more-likely-than-not recognition threshold at the effective date to be recognized upon the adoption of FIN No. 48 and in subsequent periods. This interpretation also provides guidance on measurement, derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. FIN No. 48 is effective for fiscal years beginning after December 15, 2006 and as a result, was effective for us on November 1, 2007. See Note 9. “Income Taxes” for additional information, including the effects of adoption on our unaudited condensed consolidated financial statements.

Concentrations of credit risk and significant customers. Credit risk with respect to accounts receivable is generally diversified due to the large number of entities comprising our customer base and their dispersion across many different industries and geographies. We perform ongoing credit evaluations of our customers’ financial conditions, and require collateral, such as letters of credit and bank guarantees, in certain circumstances.

During the quarter ended May 4, 2008 none of our customers accounted for 10% or more of our total revenue. During the six months ended May 4, 2008, two of our customers each accounted for 10% of our total revenue. During the quarter ended April 30, 2007, two of our customers accounted for 15% and 10%, respectively, of our total revenue. During the six months ended April 30, 2007, two of our customers accounted for 14% and 10%, respectively, of our total revenue. As of May 4, 2008, one of our customers accounted for 12 % of our net accounts receivable. As of October 31, 2007, two of our customers, respectively, accounted for 15% and 11% of our net accounts receivable.

Warranty. We accrue for the estimated costs of product warranties at the time revenue is recognized. Product warranty costs are estimated based upon historical experience and specific identification of the products requirements, which may fluctuate based on product mix.

The following table summarizes the changes in accrued warranty (in millions):


Balance as of October 31, 2007	$	—
Charged to cost of products sold		4

Balance as of May 4, 2008 - included in other current liabilities	$	4

The changes to the six months ended April 30, 2007 were not significant.

Earnings per share. Because we only have one shareholder (Holdings) and no common shares trading in a public market, information on earnings (loss) per share is not meaningful and has not been presented.

Recent Accounting Pronouncements

In April 2008, the FASB has issued FASB Staff Position (FSP) No. FAS 142-3, Determination of the Useful Life of Intangible Assets. The final FSP amends the factors that should be considered in developing renewal or extension assumptions used to determine the useful life of a recognized intangible asset under SFAS No. 142, Goodwill and Other Intangible Assets. The FSP is intended to improve the consistency between the useful life of an intangible asset determined under SFAS No. 142 and the period of expected cash flows used to measure the fair value of the asset under SFAS No. 141(revised 2007), Business Combinations, and other US generally accepted accounting principles (GAAP). The FSP is effective for financial statements issued for fiscal years beginning after December 15, 2008, and interim periods within those fiscal years. Early adoption is prohibited. We are currently assessing the impact that this FSP will have on our results of operations and financial position.

In March 2008, the FASB issued SFAS No. 161, “Disclosures about Derivative Instruments and Hedging Activities, an amendment of FASB Statement No. 133", which requires additional disclosures about the objectives of using derivative instruments, the method by which the derivative instruments and related hedged items are accounted for under SFAS No.133 and its related interpretations, and the effect of derivative instruments and related hedged items on financial position, financial performance, and cash flows. SFAS 161 also requires disclosure of the fair values of derivative instruments and their gains and losses in a tabular format. SFAS 161 is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008, with

early adoption encouraged. We are currently assessing the impact that the adoption of SFAS 161 will have on our financial statement disclosures.

In February 2008, the FASB issued FSP FAS 157-2. This FSP delays the effective date of SFAS No. 157, “Fair Value Measurements” by one year for nonfinancial assets and nonfinancial liabilities that are recognized or disclosed at fair value in the financial statements on a nonrecurring basis. The delay gives the FASB and constituents additional time to consider the effect of various implementation issues that have arisen, or that may arise, from the application of SFAS No. 157 to these assets and liabilities. For items covered by the FSP, SFAS No. 157 will not go into effect until fiscal years beginning after November 15, 2008 and interim periods within those fiscal years. We are currently assessing the impact that this FSP will have on our results of operations and financial position.

In February 2008, the FASB issued FSP FAS 157-1. This FSP amends SFAS No. 157 to exclude SFAS No. 13, “Accounting for Leases”, and its related interpretive accounting pronouncements that address leasing transactions. The FASB decided to exclude leasing transactions covered by SFAS No. 13 in order to allow it to more broadly consider the use of fair value measurements for these transactions as part of its project to comprehensively reconsider the accounting for leasing transactions. FSP FAS 157 is effective for fiscal years beginning after November 15, 2007 and will be applied prospectively. We are currently assessing the impact that this FSP will have on our results of operations and financial position.

In December 2007, the FASB issued SFAS No. 141 (revised 2007), “Business Combinations.” SFAS No. 141R will significantly change current practices regarding business combinations. Among the more significant changes, SFAS No. 141R expands the definition of a business and a business combination; requires the acquirer to recognize the assets acquired, liabilities assumed and noncontrolling interests (including goodwill), measured at fair value at the acquisition date; requires acquisition-related expenses and restructuring costs to be recognized separately from the business combination; requires assets acquired and liabilities assumed from contractual and non-contractual contingencies to be recognized at their acquisition-date fair values with subsequent changes recognized in earnings; and requires in-process research and development to be capitalized at fair value as an indefinite-lived intangible asset. SFAS No. 141R is effective for us beginning in fiscal year 2010. We are currently assessing the impact that SFAS No. 141R will have on our results of operations and financial position.

In December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in Consolidated Financial Statements—an amendment of ARB No. 51.” SFAS No. 160 will change the accounting and reporting for minority interests, reporting them as equity separate from the parent entity’s equity, as well as requiring expanded disclosures. SFAS No. 160 is effective for us for fiscal year 2010. We are currently assessing the impact that SFAS No. 160 will have on our results of operations and financial position.

In February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities—Including an amendment of FASB Statement No. 115.” SFAS No. 159 allows companies to choose, at specified election dates, to measure eligible financial assets and liabilities at fair value that are not otherwise required to be measured at fair value. Unrealized gains and losses shall be reported on items for which the fair value option has been elected in earnings at each subsequent reporting date. SFAS No. 159 also establishes presentation and disclosure requirements. SFAS No. 159 is effective for fiscal years beginning after November 15, 2007 and will be applied prospectively. We are currently evaluating the impact of this new pronouncement and the related impact on our financial statements.

In September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements.” SFAS No. 157 defines fair value, establishes a framework for measuring fair value in U.S. GAAP, and expands disclosures about fair value measurements. SFAS No. 157 applies under other accounting pronouncements that require or permit fair value measurements, the FASB having previously concluded in those accounting pronouncements that fair value is the relevant measurement attribute. Accordingly, SFAS No. 157 does not require any new fair value measurements. SFAS No 157 is effective for fiscal years beginning after November 15, 2007 and will be applied prospectively. We are currently assessing the impact of the adoption of this Statement.

2. Inventory

Inventory consists of the following (in millions):


	May 4,		October 31,
	2008		2007
Finished goods	$	56	$	44
Work-in-process		89		78
Raw materials		21		18

Total inventory	$	166	$	140

Acquisitions

During the first quarter of fiscal 2008, we completed the acquisition of an unrelated privately-held manufacturer of motion control encoders for $29 million (net of cash acquired of $2 million) plus $9 million repayment of existing debt. The purchase price was allocated to the acquired net assets based on preliminary estimates of fair values as follows: total assets of $51 million, including intangible assets of $11 million, goodwill of $27 million, and total liabilities of $11 million (which includes a $2 million loan secured by land and building in Italy). The intangible assets are being amortized over their useful lives ranging from 1 to 7 years.

During the second quarter of fiscal 2008, we completed the acquisition of an unrelated private developer of low-power wireless devices for $6 million. The initial purchase consideration of $6 million was allocated to the acquired net assets based on preliminary estimates of fair values as follows: total assets of $7 million (primarily goodwill), and total liabilities of $1 million. In connection with the acquisition, we agreed to pay certain additional amounts in cash contingent upon the achievement of certain development, product, or other milestones, and upon the continued employment with the Company of certain employees of the acquired entity. As of May 4, 2008, we may be required to recognize future compensation expense pursuant to these agreements of up to $2 million relating to this acquisition.

The unaudited condensed consolidated financial statements include the results of operations commencing as of the acquisition date. Pro forma results of operations for the acquisitions completed during the six months ended May 4, 2008 have not been presented because the effects of the acquisitions, individually or in the aggregate, were not material to our financial results.

During the second quarter of fiscal 2008, we made an investment of $2 million in a privately held company. This investment is accounted for under the cost method. This investment is included on the balance sheet in other long-term assets. We record at cost non-marketable investments where we do not have the ability to exercise significant influence or control and periodically review them for impairment.

4. Goodwill

The following table summarizes the changes in goodwill (in millions):


Balance as of October 31, 2007	$	122
Acquisitions		34

Balance as of May 4, 2008	$	156

5. Intangible Assets

The components of amortizable purchased intangibles as of May 4, 2008 and October 31, 2007 are shown in the table below (in millions):


	Gross Carrying		Accumulated
	Amount		Amortization			Net Book Value
As of May 4, 2008:
Purchased technology	$	720	$	(145	)	$	575
Customer and distributor relationships		241		(64	)		177
Order backlog		29		(29	)		—
Other		2		(2	)		—

Total	$	992	$	(240	)	$	752

As of October 31, 2007:
Purchased technology	$	714	$	(117	)	$	597
Customer and distributor relationships		230		(50	)		180
Order backlog		29		(29	)		—
Other		2		(2	)		—

Total	$	975	$	(198	)	$	777

Amortization of intangible assets included in continuing operations was $21 million and $22 million for the quarters ended May 4, 2008 and April 30, 2007, respectively, and $42 million and $44 million for the six months ended May 4, 2008 and April 30, 2007, respectively.

During the quarter ended February 3, 2008, we also acquired $6 million of intangible assets from a third party with weighted-average amortization period of 18 years.

Based on the amount of intangible assets subject to amortization at May 4, 2008, the expected amortization expense for each of the next five fiscal years and thereafter is as follows (in millions):


Fiscal Year	Amount
2008 (remaining)	$	43
2009		78
2010		77
2011		75
2012		75
2013		74
Thereafter		330

	$	752

The weighted average amortization periods remaining by intangible asset category at May 4, 2008 were as follows:


	Years
Amortizable intangible assets:
Purchased technology		11.0
Customer and distributor relationships		9.3

6. Senior Credit Facilities and Borrowings

Senior Credit Facilities

We have a revolving senior secured credit facility in the amount of $375 million which includes capacity available for letters of credit and for borrowings and is available to us and certain of our subsidiaries in U.S. dollars and other currencies. As of May 4, 2008, we had no borrowing amounts outstanding under the revolving credit facility, although we had $16 million of letters of credit outstanding under the facility, which reduces the amount available under the revolving credit facility on a dollar-for-dollar basis.

We were in compliance with all financial and non-financial covenants relating to the senior secured credit facilities as of May 4, 2008.

Senior Notes and Senior Subordinated Notes

In connection with the SPG Acquisition, we completed a private placement of $1,000 million principal amount of unsecured debt consisting of (i) $500 million principal amount of 10^1/8% senior notes due December 1, 2013 (the “Senior Fixed Rate Notes”), (ii) $250 million principal amount of senior floating rate notes due June 1, 2013 (the “Senior Floating Rate Notes” and, together with the Senior Fixed Rate Notes, the “Senior Notes”), and (iii) $250 million principal amount of 11^7/8% senior subordinated notes due December 1, 2015 (the “Senior Subordinated Notes”). The Senior Notes and the Senior Subordinated Notes are collectively referred to as the “notes.” We received proceeds of $966 million, net of $34 million of related transaction expenses in the year ended October 31, 2006. Such transaction expenses are deferred as debt issuance costs and are being amortized over the life of the loans as incremental interest expense. The rate for the Senior Floating Rate Notes was 8.58% at May 4, 2008.

During fiscal 2007, we completed a “Modified Dutch Auction” tender offer and repurchased $77 million in principal amounts of the Senior Fixed Rate Notes and paid $7 million in early tender premium, plus accrued interest, resulting in a loss on extinguishment of debt of $10 million, which consisted of $7 million early tender premium, $2 million write-off of debt issuance costs and less than $1 million legal fees and other related expenses. Additionally, we repurchased $20 million in principal amounts of the Senior Fixed Rate Notes from the open market, resulting in a loss on extinguishment of debt of $2 million.

During the quarter ended February 3, 2008, we redeemed $200 million in principal amount of the Senior Floating Rate Notes. We redeemed the Senior Floating Rate Notes at 2% premium of the principal amount, plus accrued interest, resulting in a loss on extinguishment of debt of $10 million, which consisted of the $4 million premium, and a $6 million write-off of debt issuance costs and other related expenses.

Other Borrowing

In connection with an acquisition in the first quarter of fiscal 2008, we assumed a $2 million loan secured by land and building

located in Italy. The loan has a variable interest rate (currently at 5.69%) and is payable in equal quarterly installments until fiscal year 2022. See also Note 3. “Acquisitions”.

7. Restructuring Charges

In the first quarter of 2007, we expanded the use of outsourced providers in our manufacturing operations. In connection with this strategy, we introduced several severance programs to reduce our workforce, primarily in our major locations in Asia. As a result, during the six months ended May 4, 2008 and April 30, 2007, we incurred total restructuring charges of $5 million and $26 million, respectively, predominantly representing one-time employee termination benefits.

The significant activity within and components of the restructuring charges during the six-month ended May 4, 2008 are as follows (in millions):


	Employee
	Termination			Excess
	Costs			Lease			Total
Balance as of October 31, 2007	$	5		$	—		$	5
Charges to cost of products sold		2			—			2
Charges to research and development		1			—			1
Charges to selling, general and administrative		1			1			2
Cash payments		(9	)		(1	)		(10	)

Accrued restructuring as of May 4, 2008	$	—		$	—		$	—

8. Share-Based Compensation

Effective November 1, 2006 (fiscal year 2007), we adopted the provisions of SFAS No. 123R, “Share-Based Payment.” SFAS No. 123R establishes GAAP for share-based awards issued for employee services. Under SFAS No. 123R, share-based compensation cost is measured at grant date, based on the fair value of the award, and is recognized as an expense over the employee’s requisite service period. We previously applied Accounting Principles Board (“APB”) Opinion No. 25, “Accounting for Stock Issued to Employees,” and related interpretations and provided the required pro forma disclosures of SFAS No. 123, “Accounting for Stock-Based Compensation.”

We adopted SFAS No. 123R using the prospective transition method. Under this method, the provisions of SFAS No. 123R apply to all awards granted or modified after the date of adoption. For share-based awards granted after November 1, 2006, we recognized compensation expense based on the estimated grant date fair value method required under SFAS No. 123R, using the Black-Scholes valuation model with a straight-line amortization method. As SFAS No. 123R requires that share-based compensation expense be based on awards that are ultimately expected to vest, estimated share-based compensation for such awards for the quarters and six months ended May 4, 2008 and April 30, 2007 has been reduced for estimated forfeitures. For outstanding share-based awards granted before November 1, 2006, which were originally accounted under the provisions of APB No. 25 and the minimum value method for pro forma disclosures of SFAS No. 123, we continue to account for any portion of such awards under the originally applied accounting principles. As a result, performance-based awards granted before November 1, 2006 are subject to variable accounting until such options are vested, forfeited, modified or cancelled. Variable accounting requires us to value the variable options at the end of each accounting period based upon the then current market price of the underlying common stock. Accordingly, our share-based compensation is subject to significant fluctuation based on changes in the fair value of our common stock.

The impact on our results for share-based compensation was as follows (in millions):


	Quarter Ended				Six Months Ended
	May 4,		April 30,		May 4,		April 30,
	2008		2007		2008		2007
Cost of products sold	$	—	$	—	$	—	$	1
Research and development		—		—		1		—
Selling, general and administrative		2		3		8		12

Total share-based compensation expense	$	2	$	3	$	9	$	13

The weighted-average assumptions utilized for our Black-Scholes valuation model were as follows:


	Quarter Ended						Six Months Ended
	May 4, 2008			April 30, 2007			May 4, 2008			April 30, 2007
Risk-free interest rate		2.9	%		4.6	%		3.2	%		4.6	%
Dividend yield		0.0	%		0.0	%		0.0	%		0.0	%
Volatility		44.0	%		47.0	%		44.0	%		48.0	%
Expected term (in years)		6.5			6.5			6.5			6.5

The dividend yield of zero is based on the fact that we have no present intention to pay cash dividends. Expected volatility is based on the combination of historical volatility of guideline publicly traded companies over the period commensurate with the expected life of the options and the implied volatility of guideline publicly traded companies from traded options with a term of 180 days or greater measured over the last three months. The risk-free interest rate is derived from the average U.S. Treasury Strips rate during the period, which approximates the rate in effect at the time of grant. The expected life calculation is based on the simplified method of estimating expected life outlined by the SEC in the Staff Accounting Bulletin No. 110.

Based on the above assumptions, the weighted-average fair values of the options granted under the share option plans for the quarters ended May 4, 2008 and April 30, 2007 was $4.88 and $5.41, respectively, and $4.91 and $5.02 for the six months ended May 4, 2008 and April 30, 2007, respectively.

Based on our historical experience of pre-vesting option cancellations, we have assumed an annualized forfeiture rate of 15% for our options. Under the true-up provisions of SFAS No. 123R, we will record additional expense if actual forfeitures are lower than we estimated, and will record a recovery of prior expense if actual forfeitures are higher than we estimated.

Total compensation cost of options granted but not yet vested, as of May 4, 2008, was $25 million, which is expected to be recognized over the weighted average period of 3 years.

A summary of award activity is described as follows (in millions, except per-share amounts and contractual life):


	Awards Outstanding
									Weighted-
							Weighted-		Average
	Awards						Average		Remaining		Aggregate
	Available for			Number			Exercise Price		Contractual Life		Intrinsic
	Grant			Outstanding			Per Share		(in years)		Value
Outstanding as of October 31, 2007		6			20		$	6.07
Granted		(3	)		3			10.22
Cancelled		3			(3	)		5.54

Outstanding as of May 4, 2008		6			20			6.64		7.80	$	72

Vested as of May 4, 2008					6			5.24		7.03		32
Vested and expected to vest as of May 4, 2008					15			6.41		7.68		57

The following table summarizes significant ranges of outstanding and exercisable awards as of May 4, 2008 (in millions, except exercise price amounts and contractual life):


	Awards Outstanding						Awards Exercisable
			Weighted-
			Average		Weighted-				Weighted-
			Remaining		Average				Average
	Number		Contractual		Exercise Price		Number		Exercise Price
Exercise Prices	Outstanding		Life (in years)		Per Share		Exercisable		Per Share
$ 1.25		1		4.41	$	1.25		—	$	1.25
5.00		12		7.24		5.00		5		5.00
6.48		1		8.30		6.48		—		6.48
10.22		6		9.09		10.22		1		10.22

Total		20		7.80		6.64		6		5.24

9. Income Taxes

We adopted the provisions of FIN No. 48 on November 1, 2007. As a result of the implementation of FIN No. 48, our total unrecognized tax benefit was approximately $22 million at date of adoption, for which we recognized approximately a $10 million increase in the liability for unrecognized tax benefits, which was accounted for as an increase to the November 1, 2007 balance of accumulated deficit of approximately $8 million and an increase to deferred tax assets of $2 million.

We recognize interest and penalties related to unrecognized tax benefits within the income tax expense line in the accompanying consolidated statement of operations. Accrued interest and penalties are included within the related tax liability line in the consolidated balance sheet.

During the years ended October 31, 2007 and 2006, we did not recognize an accrual for penalties and interest. Upon adoption of FIN No. 48 on November 1, 2007, we increased our accrual for interest and penalties to approximately $1 million, which was also accounted for as an increase to the November 1, 2007 balance of accumulated deficit. There were no significant changes to this amount during the first half of fiscal 2008.

The federal, state, and foreign net operating loss carryforwards per the income tax returns filed included uncertain tax positions taken in prior years. Due to the application of FIN No. 48, they are larger than the net operating loss deferred tax asset recognized for financial statement purposes.

Included in the balance of unrecognized tax benefits at November 1, 2007 are approximately $17 million of tax benefits that, if recognized, would affect the effective tax rate. Also included in the balance of unrecognized tax benefits at November 1, 2007 are approximately $5 million of tax benefits that, if recognized, would result in adjustments to other tax accounts, primarily deferred taxes. There were no significant changes to the unrecognized tax benefits during the first half of fiscal 2008.

Although timing of the resolution and/or closure on audits is highly uncertain, we do not believe it is reasonably possible that the unrecognized tax benefits would materially change in the next 12 months.

We are subject to taxation in Singapore and various foreign jurisdictions. Our fiscal 2006 and onward is subject to examination by the tax authorities.

For the quarter ended May 4, 2008, we recorded an estimated income tax provision of $4 million in continuing operations compared to $0 million for the quarter ended April 30, 2007. For the six months ended May 4, 2008, we recorded an estimated income tax provision of $7 million in continuing operations compared to $3 million for the six months ended April 30, 2007.

We plan to maintain a full valuation allowance in jurisdictions with net losses until sufficient positive evidence exists to support the reversal of valuation allowances.

10. Discontinued Operations

Infra-red Operation

minimum purchase commitment of non infra-red products over the next three years. This transaction closed in January 2008 resulting in a gain of $3 million, which was reported within income from and gain on discontinued operations in the condensed consolidated statement of operations. The transaction is subject to certain post closing adjustments in accordance with the agreement. In addition, during the quarter ended May 4, 2008, we notified Lite-On that we have received the necessary local regulatory approvals and requested that Lite-On fulfill its obligation to render payment of the $2 million.

The following table represents the significant assets of the infra-red operation that were sold as of the closing date of the transaction (in millions):


Assets:
Inventory	$	4
Property, plant and equipment, net		1
Intangible assets, net		21

Total assets of discontinued operation		26

The following table summarizes the results of operations of the infra-red operation, included in discontinued operations in our unaudited condensed consolidated statements of operations for the quarters and six months ended May 4, 2008 and April 30, 2007 (in millions):


	Quarter Ended						Six Months Ended
	May 4,			April 30,			May 4,			April 30,
	2008			2007			2008			2007
Net revenue	$	—		$	6		$	4		$	15
Costs, expenses and other income, net		(1	)		(6	)		(5	)		(15	)
Gain on sale of operation		—			—			3			—

Income and gain from discontinued operations, net of taxes	$	(1	)	$	—		$	2		$	—

During the six months ended May 4, 2008, we also recorded a $6 million gain on discontinued operations, net of taxes, relating to an earn-out payment received relating to our image sensor operation that was sold during the six months ended April 30, 2007.

11. Related-Party Transactions

We recorded $1 million of expenses for each of the quarters ended May 4, 2008 and April 30, 2007 and $3 million of expenses for each of the six months ended May 4, 2008 and April 30, 2007, respectively, for ongoing consulting and management advisory services provided by Kohlberg Kravis Roberts & Co. (“KKR”) and Silver Lake Partners (“Silver Lake”). Additionally we paid KKR and Silver Lake a total of $1 million in advisory fees, which were charged to gain on sale of discontinued operations during the six months ended April 30, 2007, in connection with the divestiture of the image sensor operation (see Note 10. “Discontinued Operations”).

We recorded $0 million of charges for each of the quarters ended May 4, 2008 and April 30, 2007 and $1 million of charges for each of the six months ended May 4, 2008 and April 30, 2007, respectively, in connection with variable accounting related to the option to purchase 800,000 ordinary shares of Parent granted to Capstone Consulting, a company affiliated with KKR.

Mr. Michael Marks, a member of our board of directors until July 31, 2007, was the Chief Executive Officer of Flextronics International Ltd. (“Flextronics”) until December 2005 and remains chairman of the board of Flextronics. Mr. James A. Davidson, a member of our board of directors, also serves as a director of Flextronics. In the ordinary course of business, we continue to sell products to Flextronics, which during the quarters ended May 4, 2008 and April 30, 2007 accounted for $37 million of revenue from continuing operations for each period, and during the six months ended May 4, 2008 and April 30, 2007 accounted for $80 million and $77 million of revenue from continuing operations, respectively. Trade accounts receivable due from Flextronics as of May 4, 2008 and October 31, 2007 were $25 million and $23 million, respectively.

Mr. John R. Joyce, a director, also serves as a director of Hewlett-Packard Company effective July 2007. In the ordinary course of business, we continue to sell to Hewlett-Packard Company, which in the quarters ended May 4, 2008 and April 30, 2007 accounted for $9 million and $5 million of revenues from continuing operations, respectively, and accounted for $14 million and $10 million of revenues from continuing operations for the six months ended May 4, 2008 and April 30, 2007, respectively. Trade accounts receivable due from Hewlett-Packard Company as of May 4, 2008 and October 31, 2007 were $5 million and $7 million, respectively. We also use Hewlett-Packard Company as a service provider for information technology services. For the quarters ended May 4, 2008 and April 30, 2007, operating expenses included $8 million and $9 million, respectively, for services provided by Hewlett-Packard Company. For the six months ended May 4, 2008 and April 30, 2007, operating expenses included $17 million and $22 million, respectively, for services provided by Hewlett-Packard Company.

12. Segment Information

SFAS No. 131, “Disclosures about Segments of an Enterprise and Related Information,” establishes standards for the way public business enterprises report information about operating segments in annual consolidated financial statements and requires that those enterprises report selected information about operating segments in interim consolidated financial reports. SFAS No. 131 also establishes standards for related disclosures about products and services, geographic areas and major customers. We have concluded that we have one reportable segment based on the following factors: sales of semiconductors represents our only material source of revenue; substantially all products offered incorporate analog functionality and are manufactured under similar manufacturing processes; we use an integrated approach in developing our products in that discrete technologies developed are frequently integrated across many of our products; we use a common order fulfillment process and similar distribution approach for our products; and broad distributor networks are typically utilized while large accounts are serviced by a direct sales force. Our Chief Executive Officer has been identified as the Chief Operating Decision Maker as defined by SFAS No. 131.

The following table presents net revenue and long-lived asset information based on geographic region. Net revenue is based on the shipment destination and long-lived assets are based on the physical location of the assets (in millions):


	Malaysia and		United		Rest of the
	Singapore		States		World		Total
Net revenue:
Quarter ended May 4, 2008	$	79	$	80	$	252	$	411
Quarter ended April 30, 2007		59		62		259		380
Six months ended May 4, 2008	$	157	$	155	$	501		813
Six months ended April 30, 2007		128		129		498		755
Long-lived assets:
As of May 4, 2008		97		134		58		289
As of October 31, 2007		140		135		17		292

13. Commitments and Contingencies

Commitments

Purchase Commitments. At May 4, 2008, we had unconditional purchase obligations of $30 million for fiscal year 2008 and none thereafter. These unconditional purchase obligations include agreements to purchase inventories that are enforceable and legally binding on us and that specify all significant terms, including fixed or minimum quantities to be purchased, fixed, minimum or variable price provisions and the approximate timing of the transaction. Purchase obligations exclude agreements that are cancelable without penalty.

Long-Term Debt. At May 4, 2008, we had debt obligations of $705 million. Estimated future interest expense payments related to debt obligations at May 4, 2008 were $38 million for the remainder of fiscal 2008, $77 million each for fiscal 2009 to fiscal 2011, $75 million for 2012, $73 million for 2013 and $65 million thereafter. Estimated future interest expense payments include interest payments on our outstanding notes, assuming the same rate on the Senior Floating Rates Notes as was in effect on May 4, 2008, commitment fees and letter of credit fees.

There were no other substantial changes to our contractual commitments during the first half of fiscal 2008.

Other Indemnifications

As is customary in our industry and as provided for in local law in the United States and other jurisdictions, many of our standard contracts provide remedies to our customers and others with whom we enter into contracts, such as defense, settlement, or payment of judgment for intellectual property claims related to the use of our products. From time to time, we indemnify customers, as well as our suppliers, contractors, lessors, lessees, companies that purchase our businesses or assets and others with whom we enter into contracts, against combinations of loss, expense or liability arising from various triggering events related to the sale and the use of our products, the use of their goods and services, the use of facilities and the state of our owned facilities, the state of the assets and businesses that we sell and other matters covered by such contracts, usually up to a specified maximum amount. We also from time to time provide protection to these parties against claims related to undiscovered liabilities, additional product liability or environmental obligations. In addition, we also enter into customary indemnification arrangements with buyers in connection with business dispositions. In our experience, claims made under such indemnifications are rare and the associated estimated fair value of the liability is not material.

14. Subsequent Events

In May 2008 we received an earn-out payment of $25 million from Marvell International Technology Ltd relating to the sale of our Printer ASICs Business in February 2006.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis supplement the management’s discussion and analysis with respect to the fiscal year ended October 31, 2007 and the related audited financial statements included in our Form 20-F filed with the Securities and Exchange Commission (“SEC”) on December 13, 2007 as amended on February 29, 2008 (the “Form 20-F”).

Forward-Looking Statements

The following discussion and analysis include historical and certain forward-looking information that should be read in conjunction with the accompanying unaudited condensed consolidated financial statements and the footnotes thereto. This discussion and analysis may contain predictions, estimates and other forward-looking statements that involve a number of risks and uncertainties, including those discussed under “Risk Factors” in our Form 20-F. These forward looking statements address our expected future business and financial performance, and are based on current expectations, estimates, forecasts and projections of future Company or industry performance based on management’s judgment, beliefs, current trends and market conditions and involve risks and uncertainties that may cause actual results to differ materially from those contained in the forward-looking statements. Accordingly, we caution you not to place undue reliance on these statements. These statements include those related to our products, product sales, expenses, liquidity, cash flow, growth rates and restructuring efforts. For example, there can be no assurance that our product sales efforts, revenues or expenses will meet any expectations or follow any trend(s), or that our ability to compete effectively will be successful or yield preferred results. Important factors that could cause actual results to differ materially from our expectations are disclosed under “Risk Factors” in our Form 20-F and elsewhere in this report. We undertake no intent or obligation to publicly update or revise any of these forward-looking statements, whether as a result of new information, future events or otherwise. This caution is made under the safe harbor provisions of Section 21E of the Securities Exchange Act of 1934, as amended (“Exchange Act”).

Overview

All of the financial statements included in this report are presented in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and expressed in U.S. dollars unless otherwise noted.

Acquisitions

During the first quarter of fiscal 2008, we completed the acquisition of an unrelated privately-held manufacturer of motion control encoders for $29 million (net of cash acquired of $2 million) plus $9 million repayment of existing debt . The purchase price was allocated to the acquired net assets based on preliminary estimates of fair values as follows: total assets of $51 million, including intangible assets of $11 million, goodwill of $27 million, and total liabilities of $11 million (which includes a $2 million loan secured by land and building in Italy). The intangible assets are being amortized over their useful lives ranging from 1 to 7 years.

Disposition

In October 2007, we entered into a definitive agreement to sell our infra-red operations to Lite-On Technology Corporation (“Lite-On”) for $19 million in cash, $2 million payable upon receipt of local regulatory approvals (such approvals were received on February 19, 2008), and the right to receive guaranteed cost reductions or rebates based on our future purchases of non infra-red products from Lite-On (which we recorded as an asset based on the estimated fair values of the future cost reductions or rebates). Under the agreement, we also agreed to a minimum purchase commitment of non infra-red products over the next three years. This transaction closed in January 2008 resulting in a gain of $3 million, which was reported within income from and gain on discontinued operations in the condensed consolidated statement of operations. The transaction is subject to certain post closing adjustments in accordance with the agreement. In addition, during the quarter ended May 4, 2008, we notified Lite-On that we have received the necessary local regulatory approvals and requested that Lite-On fulfill its obligation to render payment of the $2 million.

Critical Accounting Policies and Estimates

Our discussion and analysis of our financial condition and the results of operations are based on our unaudited condensed consolidated financial statements that have been prepared in accordance with GAAP. The preparation of financial statements in accordance with GAAP requires us 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. We base our estimates and assumptions on current facts, historical experience and various other factors that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by us may differ materially and adversely from our estimates. Our critical accounting policies are those that affect our historical financial statements materially and involve difficult, subjective or complex judgments by management. Those policies include revenue recognition, valuation of long-lived assets, intangible assets and goodwill, inventory valuation, accounting for income taxes and share-based compensation.

There have been no significant changes in our critical accounting policies during the quarter and six months ended May 4, 2008 compared to what was previously disclosed in “Critical Accounting Policies and Estimates” in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our Form 20-F, other than the adoption of Financial Interpretation (“FIN”) No. 48, “Accounting for Uncertainty in Income Taxes” as discussed further in Note 9. “Income Taxes” to the unaudited condensed consolidated financial statements.

Share-Based Compensation

Effective November 1, 2006 (fiscal year 2007), we adopted the provisions of Statement of Financial Accounting Standards (“SFAS”) No. 123R, “Share-Based Payment.” SFAS No. 123R establishes GAAP for share-based awards issued for employee services. Under SFAS No. 123R, share-based compensation cost is measured at grant date, based on the fair value of the award, and is recognized as an expense over the employee’s requisite service period. We previously applied Accounting Principles Board (“APB”) Opinion No. 25, “Accounting for Stock Issued to Employees,” and related interpretations and provided the required pro forma disclosures of SFAS No. 123, “Accounting for Stock-Based Compensation.”

We adopted SFAS No. 123R using the prospective transition method. Under this method, the provisions of SFAS No. 123R apply to all awards granted or modified after the date of adoption. For share-based awards granted after November 1, 2006, we recognized compensation expense based on the estimated grant date fair value method required under SFAS No. 123R, using Black-Scholes valuation with straight-line amortization method. Since SFAS No. 123R requires that share-based compensation expense be based on awards that are ultimately expected to vest, estimated share-based compensation for such awards for the quarters and six months ended May 4, 2008 and April 30, 2007 has been reduced for estimated forfeitures. For outstanding share-based awards granted before November 1, 2006, which were originally accounted under the provisions of APB No. 25 and the minimum value method for pro forma disclosures of SFAS No. 123, we continue to account for any portion of such awards under the originally applied accounting principles. As a result, performance-based awards granted before November 1, 2006 are subject to variable accounting until such options are vested, forfeited, modified or cancelled. Variable accounting requires us to value the variable options at the end of each accounting period based upon the then current market price of the underlying common stock. Accordingly, our share-based compensation is subject to significant fluctuation based on changes in the fair value of our common stock.

For the quarters ended May 4, 2008 and April 30, 2007, we recorded a total charge of $2 million and $3 million, respectively, and for the six months ended May 4, 2008 and April 30, 2007, we recorded a total charge of $9 million and $13 million, respectively, of employee and non-employee share-based compensation, recorded as cost of products sold, research and development and sales, general and administrative expenses, as appropriate.

The weighted-average assumptions utilized for our Black-Scholes valuation model for the quarters and six months ended May 4, 2008 and April 30, 2007 are as follows:


	Quarter Ended						Six Months Ended
	May 4, 2008			April 30, 2007			May 4, 2008			April 30, 2007
Risk-free interest rate		2.9	%		4.6	%		3.2	%		4.6	%
Dividend yield		0.0	%		0.0	%		0.0	%		0.0	%
Volatility		44.0	%		47.0	%		44.0	%		48.0	%
Expected term (in years)		6.5			6.5			6.5			6.5

Results from Continuing Operations

Quarter and Six Months Ended May 4, 2008 Compared to Quarter and Six Months Ended April 30, 2007

The following tables set forth the results of operations for the Company for the quarters and six months ended May 4, 2008 and April 30, 2007.


	Quarter Ended						Quarter Ended
	May 4, 2008			April 30, 2007			May 4, 2008			April 30, 2007
	(In millions)						As a percentage of net revenue
Statement of Operations Data:
Net revenue	$	411		$	380			100	%		100	%
Costs and expenses:
Cost of products sold:
Cost of products sold		237			229			58	%		60	%
Amortization of intangible assets		14			15			3	%		4	%
Restructuring charges		1			1			0	%		0	%

Total cost of products sold		252			245			61	%		64	%
Research and development		62			51			15	%		13	%
Selling, general and administrative		48			47			12	%		12	%
Amortization of intangible assets		7			7			2	%		2	%
Restructuring charges		1			3			0	%		1	%

Total costs and expenses		370			353			90	%		92	%

Income from operations		41			27			10	%		8	%
Interest expense		(20	)		(28	)		(5	)%		(8	)%
Loss on extinguishment of debt		—			(10	)		0	%		(3	)%
Other income, net		1			5			0	%		1	%

Income (loss) from continuing operations before taxes		22			(6	)		5	%		(2	)%
Provision for income taxes		4			—			1	%		0	%

Income (loss) from continuing operations		18			(6	)		4	%		(2	)%
Income (loss) from and gain on discontinued operations, net of income taxes		(1	)		10			(0	)%		3	%

Net income	$	17		$	4			4	%		1	%


	Six Months Ended						Six Months Ended
	May 4, 2008			April 30, 2007			May 4, 2008			April 30, 2007
	(In millions)						As a percentage of net revenue
Statement of Operations Data:
Net revenue	$	813		$	755			100	%		100	%

Costs and expenses:
Cost of products sold:
Cost of products sold		467			464			58	%		61	%
Amortization of intangible assets		28			30			3	%		4	%
Restructuring charges		2			15			0	%		2	%

Total cost of products sold		497			509			61	%		67	%
Research and development		128			101			16	%		13	%
Selling, general and administrative		98			104			12	%		14	%
Amortization of intangible assets		14			14			2	%		2	%
Restructuring charges		3			11			0	%		2	%

Total costs and expenses		740			739			91	%		98	%

Income from operations		73			16			9	%		2	%
Interest expense		(45	)		(57	)		(6	)%		(8	)%
Loss on extinguishment of debt		(10	)		(10	)		(1	)%		(1	)%
Other income, net		2			6			0	%		1	%

Income (loss) from continuing operations before taxes		20			(45	)		2	%		(6	)%
Provision for income taxes		7			3			1	%		0	%

Income (loss) from continuing operations		13			(48	)		1	%		(6	)%
Income from and gain on discontinued operations, net of income taxes		8			58			1	%		7	%

Net income	$	21		$	10			2	%		1	%

Net revenue. Substantially all of our net revenue is derived from sales of semiconductor components incorporated into electronic products. We serve four primary target markets: wireless communications, wired infrastructure, industrial/automotive electronics and computing peripherals. We sell our products primarily through our direct sales force. We also utilize distributors for a portion of our business.

Net revenue was $411 million for the quarter ended May 4, 2008, compared to $380 million for the quarter ended April 30, 2007, an increase of $31 million or 8%. This increase was primarily attributable to a favorable mix of products in the wireless communications market, as well as strong growth in fiber optics for broadband in the wired infrastructure market. This was offset by lower net revenue in the computing peripherals market due to an increasingly competitive environment in printer encoders and low-end navigation sensors.

Net revenue was $813 million for the six months ended May 4, 2008, compared to $755 million for the six months ended April 30, 2007, an increase of $58 million or 8%. This increase was primarily attributable to a favorable mix of products targeted at the wireless communications and the wired infrastructure markets.

Cost of products sold. Our cost of products sold consists primarily of the cost of semiconductor wafers and other materials, and the cost of assembly and test. Cost of products sold also includes personnel costs and overhead related to our manufacturing operations, including share-based compensation, and related occupancy, computer services and equipment costs, manufacturing quality, order fulfillment, warranty and inventory adjustments, including write-downs for inventory obsolescence and other manufacturing expenses.

Total cost of products sold (which includes amortization of manufacturing-related intangible assets and restructuring charges) was $252 million for the quarter ended May 4, 2008, compared to $245 million for the quarter ended April 30, 2007, a increase of $7 million or 3%. As a percentage of net revenue, total cost of products sold decreased to 61% for the quarter ended May 4, 2008 from 64% for the quarter ended April 30, 2007. Cost of products sold (excluding amortization of manufacturing-related intangible assets and restructuring charges) increased by $8 million, which was in line with the increase in revenue and favorable product mix, offset by higher warranty costs.

Total cost of products sold (which includes amortization of manufacturing-related intangible assets and restructuring charges) was $497 million for the six months ended May 4, 2008, compared to $509 million for the six months ended April 30, 2007, a decrease of $12 million or 2%. As a percentage of net revenue, cost of products sold decreased to 61% for the six months ended May 4, 2008 from 67% for the six months ended April 30, 2007. During the six months ended April 30, 2007, we incurred $15 million of restructuring charges within cost of products sold as compared to $2 million for the six months ended May 4, 2008. This decrease was partially offset by an increase in other cost of products sold due to increase in revenue and favorable product mix.

Research and development. Research and development expense consists primarily of personnel costs for our engineers engaged in the design, development and technical support of our products and technologies. These expenses also include project material costs, third-party fees paid to consultants, prototype development expenses, allocated facilities costs and other corporate expenses and computer services costs related to supporting computer tools used in the engineering and design process.

Research and development expense was $62 million for the quarter ended May 4, 2008, compared to $51 million for the quarter ended April 30, 2007, an increase of $11 million or 22%. As a percentage of net revenue, research and development expenses increased from 13% to 15%. Research and development expense was $128 million for the six months ended May 4, 2008, compared to $101 million for the six months ended April 30, 2007, an increase of $27 million or 27%. As a percentage of net revenue, research and development expenses increased from 13% to 16%. Higher research and development expense for both the quarter and six months ended May 4, 2008 was due to redeployment of technical resources to focus on product development, as well as higher project material expenditures.

Selling, general and administrative. Our sales and marketing expense consists primarily of compensation and associated costs for sales and marketing personnel, including share-based compensation, sales commissions paid to our independent sales representatives, costs of advertising, trade shows, corporate marketing, promotion, travel related to our sales and marketing operations, related occupancy and equipment costs and other marketing costs. Our general and administrative expense consists primarily of compensation and associated costs for executive management, finance, human resources and other administrative personnel, outside professional fees, allocated facilities costs and other corporate expenses.

Selling, general and administrative expense was $48 million for the quarter ended May 4, 2008, compared to $47 million for the quarter ended April 30, 2007, an increase of $1 million or 2%. As a percentage of net revenue, selling, general and administrative expense remained flat at 12%.

Selling, general and administrative expense was $98 million for the six months ended May 4, 2008, compared to $104 million for the six months ended April 30, 2007, a decrease of $6 million or 6%. As a percentage of net revenue, selling, general and administrative expense decreased from 14% to 12%. The decrease in selling, general and administrative expense for the six months ended May 4, 2008 was driven by restructuring actions taken in the past twelve months.

Amortization of intangible assets. We recorded additional intangible assets primarily in connection with our acquisitions. These intangible assets are being amortized over their estimated useful lives of nine months to 20 years.

Amortization of intangible assets charged to operating expenses was $7 million for each of the quarters ended May 4, 2008 and April 30, 2007. Amortization of intangible assets charged to operating expenses was $14 million for each of the six months ended May 4, 2008 and April 30, 2007.

Restructuring charges. During the quarter ended May 4, 2008, we incurred total restructuring charges of $2 million, predominantly representing one-time employee termination benefits, compared to $4 million for the quarter ended April 30, 2007. During the six months ended May 4, 2008, we incurred total restructuring charges of $5 million, predominantly representing one-time employee termination benefits, compared to $26 million for the six months ended April 30, 2007. See Note 7. ”Restructuring Charges” to the unaudited condensed consolidated financial statements.

Interest expense. In connection with the SPG Acquisition, we incurred substantial indebtedness. Although this debt has been significantly reduced or repurchased, principally through net proceeds derived from the divestitures of our storage business and printer ASICs business and cash flows generated from operations, the interest expense relating to this debt has adversely affected, and will continue to adversely affect, our earnings.

Interest expense was $20 million for the quarter ended May 4, 2008, compared to $28 million for the quarter ended April 30, 2007, which represents a decrease of $8 million or 29%. For the six months ended May 4, 2008, interest expense was $45 million compared to $57 million for the six months ended April 30, 2007. The decrease is primarily due to our bond redemption and bond repurchases made in the past twelve months. We presently estimate that the cash portion of our interest expense for the fiscal year ending November 2, 2008 will be $82 million, subject to possible increase or decrease due to change in interest rates applicable to our variable rate indebtedness.

Loss on extinguishment of debt. During the quarter ended February 3, 2008, we redeemed $200 million of our Senior Floating Rate Notes. The redemption of these Senior Floating Rate Notes resulted in a loss on extinguishment of debt of $10 million. Additionally, during the quarter ended April 30, 2007, we completed a “Modified Dutch Auction” tender offer and repurchased $77 million in principal amounts of the Senior Fixed Rate notes. The repurchase of these Senior Fixed Rate Notes resulted in a loss on extinguishment of debt of $10 million. See Note 6. “Senior Credit Facilities and Borrowings” to the unaudited condensed consolidated financial statements.

Other income, net. Other income, net includes interest income, foreign currency gain (loss) and other miscellaneous items. Other income, net was $1 million and $2 million for the quarter and six months ended May 4, 2008, respectively, and $5 million and $6 million for quarter and six months ended April 30, 2007, respectively.

Provision for income taxes. We recorded income tax expense of $4 million and $0 million for the quarters ended May 4, 2008 and April 30, 2007, respectively, and $7 million and $3 million for the six months ended May 4, 2008 and April 30, 2007, respectively.

Liquidity and Capital Resources

Our short-term and long-term liquidity requirements primarily arise from: (i) interest and principal payments related to our debt obligations, (ii) working capital requirements and (iii) capital expenditures.

We expect our cash flows from operations, combined with availability under our revolving credit facility, to provide sufficient liquidity to fund our current obligations, projected working capital requirements and capital spending for the next 12 months.

Our ability to service our indebtedness will depend on our ability to generate cash in the future. Given our high level of debt and related debt service requirements, we may not have sufficient cash available to meet any large unanticipated liquidity requirements, other than from available borrowings, if any, under our revolving credit facility. As a result, we may not retain a sufficient amount of cash to finance growth opportunities, including acquisitions, or unanticipated capital expenditures. If we do not have sufficient cash for these purposes, our financial condition and our business could suffer.

Cash Flows for the Six Months Ended May 4, 2008 and April 30, 2007

Net cash provided by operations during the six months ended May 4, 2008 was $30 million. The net cash provided by operations was primarily due to net income of $21 million and non-cash charges of $84 million, offset by changes in operating assets and liabilities of $75 million. Non-cash charges for the six months ended May 4, 2008 include $79 million for depreciation and amortization, $9 million in share-based compensation and $5 million loss on extinguishment of debt, offset by a $9 million gain on discontinued operations. Significant changes in operating assets and liabilities from October 31, 2007 include an increase in inventory and other current assets and current liabilities of $25 million and $32 million, respectively, due to increases in net revenue, as well as a decrease in accounts payable of $41 million, as a result of the timing of disbursements.

We used $32 million in cash in operations during the six months ended April 30, 2007. The net cash used in operations was primarily due to changes in operating assets and liabilities of $100 million, offset by net income of $10 million and by non-cash charges of $58 million. Non-cash charges for the six months ended April 30, 2007 include $91 million for depreciation and amortization, $13 million in share-based compensation and $10 million loss on extinguishment of debt, offset by a $58 million gain from the divestiture of the image sensor operation and the printer ASICs Business. Significant changes in operating assets and liabilities from October 31, 2006 include an increase in accounts receivable of $19 million, a decrease in accounts payable and other current assets and current liabilities of $39 million and $56 million, respectively, due primarily to the timing of payments (including $21 million of payment in legal settlement), as well as a decrease in employee compensation and benefits accruals of $21 million as the result of disbursements related to our employee benefit programs. These uses of cash are partially offset by decreases from October 31, 2006 in inventory and other long-term assets and liabilities of $26 million and $9 million, respectively.

Net cash used in investing activities for the six months ended May 4, 2008 was $55 million. The net cash used in investing activities was principally due to acquisitions and investment of $46 million, and purchases of property, plant and equipment of $28 million, offset by net proceeds received from the sale of the infra-red operation and the earn-out payment received from the sale of the image sensor operation which totaled $25 million. Net cash provided by investing activities for the six months ended April 30, 2007 was $46 million, which was primarily due to net proceeds from the sale of the image sensor operation of $55 million and earn-out payment in connection with the sale of our printer ASICs business of $10 million, offset by purchases of property, plant and equipment of $19 million.

Net cash used in financing activities for the six months ended May 4, 2008 was $201 million, comprised mainly of the redemption of Senior Floating Rate Notes of $200 million. Net cash used in financing activities for the six months ended April 30, 2007 was $86 million and related primarily to the repurchase of Senior Fixed Rate Notes of $85 million.

Indebtedness

We have a substantial amount of indebtedness. As of May 4, 2008, we had $712 million outstanding in aggregate indebtedness and capital lease obligations, with an additional $375 million of borrowing capacity available under our revolving credit facility (including outstanding letters of credit of $16 million at May 4, 2008, which reduce the amount available under our revolving credit facility on a dollar-for-dollar basis). Our liquidity requirements are significant, primarily due to debt service requirements.

During fiscal 2007, we repurchased $77 million in principal amounts of the Senior Fixed Rate Notes and paid $7 million in early tender premium, plus accrued interest, resulting in a loss on extinguishment of debt of $10 million, which consisted of $7 million early tender premium, $2 million write-off of debt issuance costs and less than $1 million legal fees and other related expenses. Additionally, we repurchased $20 million in principal amounts of the Senior Fixed Rate Notes from the open market, resulting in a loss on extinguishment of debt of $2 million.

During the quarter ended February 3, 2008, we redeemed $200 million in principal amounts of the Senior Floating Rate Notes. We redeemed the Senior Floating Rate Notes at 2% premium of the principal amount, plus accrued interest, resulting in a loss on extinguishment of debt of $10 million, which consisted of the $4 million premium and a $6 million write-off of debt issuance costs and other related expenses.

Contractual Commitments

At May 4, 2008, we had unconditional purchase obligations of $30 million for fiscal year 2008 and none thereafter. These unconditional purchase obligations include agreements to purchase goods or services that are enforceable and legally binding on us and that specify all significant terms, including fixed or minimum quantities to be purchased, fixed, minimum or variable price provisions and the approximate timing of the transaction. Purchase obligations exclude agreements that are cancelable without penalty.

There were no other substantial changes to our contractual commitments in the first half of fiscal 2008.

Off-Balance Sheet Arrangements

We had no material off-balance sheet arrangements at May 4, 2008 as defined in Item 303(a)(4)(ii) of SEC Regulation S-K.

New Accounting Pronouncements

In July 2006, the FASB issued FIN No. 48, “Accounting for Uncertainty in Income Taxes,” which clarifies the accounting for uncertainty in income taxes recognized in the financial statements in accordance with SFAS No. 109, “Accounting for Income Taxes.” FIN No. 48 provides that a tax benefit from an uncertain tax position may be recognized when it is more likely than not that the position will be sustained upon examination, including resolutions of any related appeals or litigation processes, based on the technical merits. Income tax positions must meet a more-likely-than-not recognition threshold at the effective date to be recognized upon the adoption of FIN No. 48 and in subsequent periods. This interpretation also provides guidance on measurement, derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. FIN No. 48 is effective for fiscal years beginning after December 15, 2006 and as a result, was effective for us on November 1, 2007. See Note 9. “Income Taxes” to the unaudited condensed consolidated financial statements for additional information, including the effects of the adoption.

Quantitative and Qualitative Disclosures About Market Risk

Investment and Interest Rate Risk

At May 4, 2008, we had $50 million of debt outstanding under the Senior Floating Rate Notes which is based on a floating rate index. A 0.125% change in interest rates would increase the annual interest expense on the floating rate indebtedness by $0.1 million.

At May 4, 2008, the carrying value of our cash and cash equivalents approximated their fair value and represented approximately 97% of our total cash portfolio, which was held primarily in bank deposits and money market funds. We held no direct investments in auction rate securities, collateralized debt obligations, structured investment vehicles or mortgage-backed securities.

Currency Exchange Rates

Our revenues, costs and expenses and monetary assets and liabilities are exposed to changes in currency exchange rates as a result of our global operating and financing activities. To mitigate the exposures resulting from the changes in the exchange rates of

these currencies, we enter into foreign exchange forward contracts. These contracts are designated at inception as hedges of the related foreign currency exposures, which include committed and anticipated transactions that are denominated in currencies other than the functional currency of the subsidiary which had the exposure. Our hedging contracts generally mature within three to six months. We do not use derivative financial instruments for speculative or trading purposes. As of May 4, 2008, the fair value of all our outstanding forward contracts was immaterial.

Controls and Procedures

(a) Evaluation of Disclosure Controls and Procedures. As required by SEC Rule 15d-15(b), our management, with the participation of our Chief Executive Officer (or “CEO”) and Chief Financial Officer (or “CFO”), evaluated the effectiveness of our disclosure controls and procedures as of May 4, 2008. We maintain disclosure controls and procedures that are intended to ensure that the information required to be disclosed in our Exchange Act filings is properly and timely recorded, processed, summarized and reported. In designing and evaluating our disclosure controls and procedures, our management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their desired control objectives, and our management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on this evaluation, our CEO and CFO concluded that, as of May 4, 2008, our disclosure controls and procedures were effective at the reasonable assurance level.

(b) Changes in Internal Controls Over Financial Reporting. Not applicable.

OTHER INFORMATION

Legal Proceedings

From time to time, we are involved in litigation that we believe is of the type common to companies engaged in our line of business, including commercial disputes and employment issues. As of the date of this filing, we are not involved in any pending legal proceedings that we believe would likely have a material adverse effect on our financial condition, results of operations or cash flows. However, certain pending disputes involve claims by third parties that our activities infringe their patent, copyright, trademark or other intellectual property rights. These claims generally involve the demand by a third party that we cease the manufacture, use or sale of the allegedly infringing products, processes or technologies and/or pay substantial damages or royalties for past, present and future use of the allegedly infringing intellectual property. Such claims that our products or processes infringe or misappropriate any such third party intellectual property rights (including claims arising through our contractual indemnification of our customers) often involve highly complex, technical issues, the outcome of which is inherently uncertain. In addition, regardless of the merit or resolution of such claims, complex intellectual property litigation is generally costly and diverts the efforts and attention of our management and technical personnel.

Risk Factors

In addition to the other information set forth in this report, you should carefully consider the factors discussed in “Risk Factors” included in our Form 20-F which have not materially changed. Those risks, which could materially affect our business, financial condition or future results, are not the only risks we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results.

Unregistered Sales of Equity Securities and Use of Proceeds

Not Applicable.

Defaults Upon Senior Securities

Not Applicable.

Submission of Matters to a Vote of Security Holders

Not Applicable.

Other Information

Not Applicable.

Exhibits

None.


	AVAGO TECHNOLOGIES FINANCE PTE. LTD.
	By:	/s/ Mercedes Johnson
		Mercedes Johnson
		Chief Financial Officer

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	Page
FINANCIAL INFORMATION		3
Condensed Consolidated Financial Statements — Unaudited		3
Management’s Discussion and Analysis of Financial Condition and Results of Operations		16
Quantitative and Qualitative Disclosures about Market Risk		23
Controls and Procedures		24
OTHER INFORMATION		24
Legal Proceedings		24
Risk Factors		24
Unregistered Sales of Equity Securities and Use of Proceeds		24
Default Upon Senior Securities		24
Submission of Matters to a Vote of Security Holders		24
Other Information		24
Exhibits		24
SIGNATURES