10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

x Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the Quarterly Period Ended January 1, 2012

or

¨ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from              to             

Commission File No. 0-08866

MICROSEMI CORPORATION

(Exact name of registrant as specified in its charter)

Delaware	95-2110371
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

One Enterprise, Aliso Viejo, California	92656
(Address of principal executive offices)	(Zip Code)

(949) 380-6100

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding twelve 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  x    No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every interactive data file required to be submitted and posted pursuant to Rule 405 of Regulation S-T (section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  x    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

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

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

The number of shares of the issuer’s Common Stock, $0.20 par value, outstanding on January 24, 2012 was 87,467,223.

Table of Contents

			Page
Reference
PART I.		FINANCIAL INFORMATION
	ITEM 1.	Financial Statements
		Unaudited Condensed Consolidated Balance Sheets as of January 1, 2012 and October 2, 2011		6
		Unaudited Condensed Consolidated Income Statements for the Quarters Ended January 1, 2012 and January 2, 2011		7
		Unaudited Condensed Consolidated Statements of Cash Flows for the Quarters Ended January 1, 2012 and January 2, 2011		8
		Notes to Unaudited Condensed Consolidated Financial Statements		9
	ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		20
	ITEM 3.	Quantitative and Qualitative Disclosures about Market Risk		31
	ITEM 4.	Controls and Procedures		32
PART II.		OTHER INFORMATION
	ITEM 1.	Legal Proceedings		32
	ITEM 1A.	Risk Factors		32
	ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds		46
	ITEM 3.	Defaults upon Senior Securities		46
	ITEM 4.	Mine Safety Disclosures		46
	ITEM 5.	Other Information		46
	ITEM 6.	Exhibits		47

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IMPORTANT FACTORS RELATED TO FORWARD-LOOKING STATEMENTS AND ASSOCIATED RISKS

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the federal securities laws. Any statements that do not relate to historical or current facts or matters are forward-looking statements. You can identify some of the forward-looking statements by the use of forward-looking words, such as “can,” “may,” “will,” “could,” “should,” “project,” “believe,” “anticipate,” “expect,” “plan,” “estimate,” “forecast,” “potential,” “intend,” “maintain,” “continue” and variations of these words and comparable words. In addition, all of the information herein that does not state a historical fact is forward-looking, including any statement or implication about an estimate or a judgment, or an expectation as to a future time, future result or other future circumstance. Statements concerning current conditions may also be forward-looking if they imply a continuation of current conditions. Examples of forward-looking statements in this Quarterly Report on Form 10-Q include, but are not limited to, statements concerning:

• expectations that we will be able to successfully integrate acquired companies and personnel with our existing operations;

• expectations that plant consolidations will result in anticipated cost savings without unanticipated costs or expenses;

• demand, growth and sales expectations for our products;

• expectations regarding tax exposures and future tax rates and ability to realize deferred tax assets;

• expectations regarding competitive conditions;

• new market opportunities and emerging applications for our products;

• the uncertainty of litigation, the costs and expenses of litigation, and the potential material adverse effect litigation could have on our business and results of operations;

• beliefs that our customers will not cancel orders or terminate or renegotiate their purchasing relationships with us;

• expectation that we will not suffer production delays as a result of a supplier’s inability to supply parts;

• the effect of events such as natural disasters and related disruptions on our operations, including, without limitation, the impact of recent flooding in Thailand and the Company’s recovery plans with respect to its facilities in Thailand;

• beliefs that we stock adequate supplies of all materials;

• beliefs that we will be able to successfully resolve any disputes and other business matters as anticipated;

• beliefs that we will be able to meet our operating cash and capital commitment requirements in the foreseeable future;

• critical accounting estimates;

• expectations regarding our financial and operating results;

• expectations regarding our liquidity and capital resources, including our loan covenants;

• expectations regarding our performance and competitive position in future periods; and

• expectations regarding our outlook for our end markets.

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Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from the results that the forward-looking statements suggest. You are urged to carefully review the disclosures we make in this report concerning risks and other factors that may affect our business and operating results, including those made under the heading “Item 1A. RISK FACTORS” included below in this Quarterly Report on Form 10-Q, as well as in our other reports filed with the Securities and Exchange Commission (“SEC”). Forward-looking statements are not a guarantee of future performance and should not be regarded as a representation by us or any other person that all of our estimates will necessarily prove correct or that all of our objectives or plans will necessarily be achieved. You are cautioned, therefore, not to place undue reliance on these forward-looking statements, which are made only as of the date of this report. We do not intend, and undertake no obligation, to update or revise the forward-looking statements to reflect events or circumstances after the date of this report, whether as a result of new information, future events or otherwise.

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PART I—FINANCIAL INFORMATION

Item 1. FINANCIAL STATEMENTS

The unaudited condensed consolidated income statements for the quarter ended January 1, 2012 of Microsemi Corporation and its subsidiaries (which we herein sometimes refer to collectively as “Microsemi,” “the Company,” “we,” “our,” “ours” or “us”), the unaudited condensed consolidated statement of cash flows for the quarter ended January 1, 2012, and the comparative unaudited condensed consolidated financial information for the corresponding period of the prior year, together with the unaudited balance sheets as of January 1, 2012 and October 2, 2011, are included herein.

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MICROSEMI CORPORATION AND SUBSIDIARIES

Unaudited Condensed Consolidated Balance Sheets

(amounts in thousands, except per share data)

	January 1, 2012		October 2, 2011
ASSETS
Current assets:
Cash and cash equivalents	$	133,470	$	266,631
Accounts receivable, net of allowance for doubtful accounts of $2,058 and $2,149 at January 1, 2012 and October 2, 2011, respectively		139,283		110,908
Inventories		164,786		140,827
Deferred income taxes		43,424		43,424
Other current assets		20,423		16,100
Total current assets		501,386		577,890
Property and equipment, net		99,527		89,922
Goodwill		781,917		491,079
Other intangible assets, net		466,926		281,689
Other assets		42,056		29,893
TOTAL ASSETS	$	1,891,812	$	1,470,473
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	55,426	$	48,561
Accrued liabilities		104,585		101,078
Current maturity of long-term liabilities		8,500		4,050
Total current liabilities		168,511		153,689
Credit facility		790,000		357,384
Deferred income taxes		32,798		34,285
Other long term liabilities		43,886		33,008
Stockholders’ equity:
Preferred stock, $1.00 par value; authorized 1,000 shares; none issued		—		—
Common stock, $0.20 par value; authorized 250,000; issued and outstanding 87,445 and 86,806 at January 1, 2012 and October 2, 2011, respectively		17,489		17,361
Capital in excess of par value of common stock		621,792		612,517
Retained earnings		216,841		261,443
Accumulated other comprehensive income		495		786
Total stockholders’ equity		856,617		892,107
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	1,891,812	$	1,470,473

The accompanying notes are an integral part of these statements.

6

MICROSEMI CORPORATION AND SUBSIDIARIES

Unaudited Condensed Consolidated Income Statements

(amounts in thousands, except per share data)

	Quarter Ended
	January 1, 2012			January 2, 2011
Net sales	$	240,920		$	184,351
Cost of sales		115,184			89,322
Gross profit		125,736			95,029
Operating expenses:
Selling, general and administrative		54,716			46,330
Research and development		39,601			23,971
Amortization of intangible assets		24,862			12,071
Restructuring and severance charges		7,225			6,334
Total operating expenses		126,404			88,706
Operating income (loss)		(668	)		6,323
Other income (expense):
Interest income		141			102
Interest expense		(11,980	)		(3,256	)
Other income (expense), net		(32,404	)		(17,950	)
Total other expense		(44,243	)		(21,104	)
Loss before income taxes		(44,911	)		(14,781	)
Benefit for income taxes		(309	)		(13,485	)
NET LOSS	$	(44,602	)	$	(1,296	)
Earnings (loss) per share:
Basic	$	(0.52	)	$	(0.02	)
Diluted	$	(0.52	)	$	(0.02	)
Common and common equivalent shares outstanding:
Basic		85,217			82,716
Diluted		85,217			82,716

The accompanying notes are an integral part of these statements.

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MICROSEMI CORPORATION AND SUBSIDIARIES

Unaudited Condensed Consolidated Statements of Cash Flows

(amounts in thousands)

	Quarter Ended
	January 1, 2012			January 2, 2011
Cash flows from operating activities:
Net loss	$	(44,602	)	$	(1,296	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization		33,316			19,946
Provision for doubtful accounts		(91	)		300
Settlement of foreign currency forward		(3,701	)		—
Loss on disposition of assets		1,893			—
Deferred income taxes		(509	)		(522	)
Charge for stock based compensation		7,531			7,278
Excess tax benefits-stock awards		(362	)		(2,088	)
Effect of fair value option on credit facility issuance and refinancing costs		28,031			13,424
Change in assets and liabilities (net of acquisitions):
Accounts receivable		(10,304	)		2,766
Inventories		5,709			(2,076	)
Other current assets		33,792			(13,007	)
Other assets		(6,813	)		130
Accounts payable		(607	)		(5,438	)
Accrued liabilities		(44,076	)		(15,008	)
Other long-term liabilities		19,642			5,215
Net cash provided by operating activities		18,849			9,624
Cash flows from investing activities:
Purchases of property and equipment		(12,446	)		(5,746	)
Settlement of foreign currency forward		3,701			—
Payments for acquisitions, net of cash acquired		(540,285	)		(380,979	)
Net cash used in investing activities		(549,030	)		(386,725	)
Cash flows from financing activities:
Repayments of credit facility		(51,600	)		(50,000	)
Credit facility issuance costs		(31,031	)		(13,424	)
Proceeds from credit facility		849,600			425,000
Extinguishment of debt		(372,188	)		—
Excess tax benefit from stock awards		362			2,088
Exercise of stock options		1,877			16,906
Net cash provided by financing activities		397,020			380,570
Net increase (decrease) in cash and cash equivalents		(133,161	)		3,469
Cash and cash equivalents at beginning of year		266,631			199,950
Cash and cash equivalents at end of year	$	133,470		$	203,419

The accompanying notes are an integral part of these statements.

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MICROSEMI CORPORATION AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1. PRESENTATION OF FINANCIAL INFORMATION

The unaudited condensed consolidated financial statements include the accounts of Microsemi Corporation and its subsidiaries. Intercompany transactions have been eliminated in consolidation.

The consolidated financial information furnished herein is unaudited, but in the opinion of our management, includes all adjustments (all of which are normal or recurring adjustments) necessary for a fair statement of the results of operations for the periods indicated. The results of operations for the most recently reported quarter of the current fiscal year are not necessarily indicative of the results to be expected for the full year.

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q, and therefore do not include all information and note disclosures necessary for a fair presentation of consolidated financial position, results of operations and cash flows in conformity with United States generally accepted accounting principles. The unaudited consolidated financial statements and notes must be read in conjunction with the consolidated financial statements and notes thereto in our Annual Report on Form 10-K for the fiscal year ended October 2, 2011.

The unaudited consolidated financial statements have been prepared in accordance with United States generally accepted accounting principles, which require us to make estimates and assumptions that may materially affect the reported amounts of assets and liabilities at the date of the unaudited consolidated financial statements and revenues and expenses during the periods reported. Actual results could differ materially from those estimates. Information with respect to our critical accounting policies that we believe could have the most significant effect on our reported results and require subjective or complex judgments is contained in the notes to the consolidated financial statements in our Annual Report on Form 10-K for the fiscal year ended October 2, 2011. In referencing a year, we are referring to the fiscal year ended on the Sunday closest to September 30.

Fair Value of Financial Assets and Liabilities

Accounting Standards Codification (“ASC”) 825 permits entities to elect the fair value option for certain financial assets and financial liabilities. For financial assets or financial liabilities for which an entity elects the fair value option, ASC 825 requires that the entity record the financial asset or financial liability at fair value rather than at historical cost with changes in fair value recorded in the income statement. ASC 825-25 requires that upfront costs and fees related to items for which the fair value option is elected shall be recognized in earnings as incurred and not deferred. As further discussed in Note 14, we elected the fair value option in accounting for the term loan balance outstanding as of October 2, 2011, but following the extinguishment of the term loan in conjunction with our acquisition of Zarlink Semiconductor, Inc., we did not elect the fair value option for the term loan balance outstanding as of January 1, 2012.

Measurement Period for the Acquisition of Actel Corporation

During the first quarter of 2012, we closed the measurement period for the acquisition of Actel Corporation that occurred in the prior year first quarter. We completed our evaluation of income tax-related information regarding facts and circumstances that existed as of the acquisition date. In accordance with ASC 805-10, we retrospectively adjusted the preliminary amounts previously reported and are now reporting the final amounts. In the balance sheet as of October 2, 2011, we have reflected a retrospective adjustment of $1.3 million that increased non-current deferred tax assets and retained earnings. This retrospective adjustment will be reflected in the income statement for the second quarter of 2011.

2. ACQUISITION

During the quarter ended January 1, 2012, we completed our acquisition of Zarlink Semiconductor, Inc. (“Zarlink”) through a wholly-owned subsidiary. Following the expiration of the previously announced offers for all of the issued and outstanding common shares (“Zarlink Shares”) and 6% unsecured, subordinated convertible debentures maturing September 30, 2012 (“Zarlink Debentures” and together with the Zarlink Shares, the “Zarlink Securities”) of Zarlink, we acquired all remaining Zarlink Shares and Zarlink Debentures through compulsory acquisitions under, respectively, the Canada Business Corporations Act and the trust indenture governing the Zarlink Debentures. Zarlink delivers world-leading, mixed-signal chip technologies for a broad range of communication and medical applications. Its core capabilities include timing solutions that manage time-sensitive communication applications over wireless and wired networks, line circuits supporting high-quality voice services

9

over cable and broadband connections, and ultra low-power radios enabling new wireless medical devices and therapies. Serving the world’s largest original equipment manufacturers, Zarlink’s highly integrated chip solutions help customers simplify design, lower costs and reach market quickly. We sometimes refer to this division herein as “Microsemi – CMPG.”

The fair value of the identified intangible assets for the Zarlink acquisition was estimated by performing a discounted cash flow analysis using the “income” approach. This method includes a forecast of direct revenues and costs associated with the respective intangible assets and charges for economic returns on tangible and intangible assets utilized in cash flow generation. Net cash flows attributable to the identified intangible assets were discounted to their present value at a rate commensurate with the perceived risk. The projected cash flow assumptions considered contractual relationships, customer attrition, eventual development of new technologies and market competition.

The useful lives of completed technology rights are based on the number of years in which net cash flows have been projected. The useful life of backlog is estimated based upon the fulfillment period. The useful lives of customer relationships are estimated based upon the length of the relationships currently in place, historical attrition patterns and natural growth and diversification of other potential customers. The useful life of a trade name was estimated based on the period in which a benefit could be ascribed to the identified trade names.

Assumptions used in forecasting cash flows for each of the identified intangible assets included consideration of the following:

• Historical performance including sales and profitability.

• Business prospects and industry expectations.

• Estimated economic life of asset.

• Development of new technologies.

• Acquisition of new customers.

• Attrition of existing customers.

• Obsolescence of technology over time.

Generally, the allocation of purchase prices result in an allocation to goodwill. Depending on the tax treatment of a particular acquisition, goodwill and identifiable intangible assets may not be deductible for tax purposes. The factors that contributed to a purchase price resulting in the recognition of goodwill include:

• The premium paid over market capitalization immediately prior to the merger announcement.

• Our belief that the merger will create a more diverse semiconductor company with expansive offerings which will enable us to expand our product offerings.

• Our belief that both companies are committed to improving cost structures and that our combined efforts after the merger should result in a realization of cost savings and an improvement of overall efficiencies.

The purchase price allocation described below is preliminary. A final determination of fair values of assets acquired and liabilities assumed relating to the transaction could differ from the preliminary purchase price allocation and if material differences exist they could result in retrospective revision to the purchase price allocation.

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The total estimated consideration as shown in the table below is preliminarily allocated to Zarlink’s tangible and intangible assets and liabilities based on their estimated fair values as of the date of the completion of the transaction. The preliminary estimated consideration is allocated as follows (in thousands):

Calculation of consideration:
Cash consideration for Zarlink Securities	$	623,782
Preliminary allocation of consideration:
Book value of Zarlink’s net assets		151,576
Adjustments to historical net book value:
Inventories		7,230
Other intangible assets		210,100
Deferred tax liability, net		(35,963	)
Adjustment to goodwill	$	290,839

Identifiable intangible assets and their estimated useful lives are as follows (amounts in thousands):

	Asset Amount		Weighted Average Useful Life (Years)
Completed technology	$	47,800		6
Customer relationships		144,600		6
Backlog		15,700		1
Trade name		2,000		2
	$	210,100

We utilized the straight line method of amortization for completed technology, customer relationships and trade name and the estimated fulfillment period for backlog.

Supplemental pro forma data

The following supplemental pro forma data summarizes the results of operations for the quarters ended January 1, 2012 and January 2, 2011, as if the acquisitions we completed in 2012 and 2011 were completed as of the first day of 2011. The supplemental pro forma information presented is for illustrative purposes only and is not necessarily indicative of the financial position or results of operations that would have been realized if the transactions had been completed on the dates indicated, nor is it indicative of future operating results or financial position. Net sales and earnings for the acquisitions on a standalone basis since their acquisition dates are impracticable to determine as on the acquisition date, we began to immediately integrate these acquisitions into existing operations, engineering groups, sales distribution networks and management structure. The pro forma adjustments are based upon currently available information and certain assumptions that we believe are reasonable under the circumstances.

The supplemental pro forma data reports actual operating results, adjusted to include the pro forma effect of, among others, the impact in cost of goods sold from manufacturing profit in acquired inventory, amortization expense of identified intangible assets, timing of the impact of restructuring expenses, timing of credit facility issuance costs, foregone interest income, incremental interest expense and the related tax effect of these items. Supplemental pro forma earnings for the quarter ended January 1, 2012 were adjusted to exclude $7.2 million in cost of goods sold from manufacturing profit in acquired inventory, $6.1 million in acquisition costs and $34.0 million in credit facility refinancing costs and supplemental pro forma earnings for the quarter ended January 2, 2011 were adjusted to include these items. Supplemental pro forma data is as follows (amounts in thousands, except per share data):

	Quarters Ended
	January 1, 2012			January 2, 2011
Net sales	$	247,754		$	266,746
Net loss	$	(18,258	)	$	(10,129	)
Net loss per share
Basic	$	(0.21	)	$	(0.12	)
Diluted	$	(0.21	)	$	(0.12	)

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3. INVENTORIES

Inventories are summarized as follows (amounts in thousands):

	January 1, 2012		October 2, 2011
Raw materials	$	44,868	$	40,454
Work in progress		79,141		65,190
Finished goods		40,777		35,183
	$	164,786	$	140,827

4. GOODWILL AND OTHER INTANGIBLE ASSETS, NET

Goodwill and intangible assets, net consisted of the following components (amounts in thousands):

	January 1, 2012		October 2, 2011
Non-amortizing intangible assets
Goodwill	$	781,917	$	491,079
Amortizable intangible assets, net
Completed technology	$	233,963	$	177,828
Customer relationships		213,668		95,296
Backlog		14,655		4,658
Other		4,640		3,907
	$	466,926	$	281,689

The following table summarizes our estimated future amortization expense by period (amounts in thousands):

	Less than 1 year		1-2 years		2-3 years		3-4 years		Thereafter
Amortization expense	$	96,871	$	80,837	$	74,739	$	69,667	$	144,812

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5. ACCRUED LIABILITIES

Accrued liabilities consisted of the following components (amounts in thousands):

	January 1, 2012		October 2, 2011
Payroll, bonus, accrued time off and other employee benefits	$	39,867	$	41,264
Fair value of foreign currency forward		—		11,675
Restructuring and severance		12,133		9,562
Licenses		9,082		9,636
Outside services		12,543		7,815
Interest		6,914		4,037
Warranties		2,467		2,945
Commissions		3,067		2,692
Other		18,512		11,452
	$	104,585	$	101,078

6. COMMITMENTS AND CONTINGENCIES

In Broomfield, Colorado, the owner of a property located adjacent to a manufacturing facility owned by one of our subsidiaries, Microsemi Corp. – Colorado had notified the subsidiary and other parties of a claim that contaminants migrated to his property, thereby diminishing its value. In August 1995, the subsidiary, together with Coors Porcelain Company, FMC Corporation and Siemens Microelectronics, Inc. (former owners of the manufacturing facility), agreed to settle the claim and to indemnify the owner of the adjacent property for remediation costs. Although tricholorethylene and other contaminants previously used by former owners at the facility are present in soil and groundwater on the subsidiary’s property, we vigorously contest any assertion that the subsidiary caused the contamination. In November 1998, we signed an agreement with the three former owners of this facility whereby they have 1) reimbursed us for $0.5 million of past costs, 2) assumed responsibility for 90% of all future clean-up costs, and 3) promised to indemnify and protect us against any and all third-party claims relating to the contamination of the facility. An Integrated Corrective Action Plan was submitted to the State of Colorado. Sampling and management plans were prepared for the Colorado Department of Public Health & Environment. State and local agencies in Colorado are reviewing current data and considering study and cleanup options. The most recent forecast estimated that the total project cost, up to the year 2020, would be approximately $5.3 million; accordingly, we recorded a one-time charge of $0.5 million for this project in 2003. There has not been any significant development since September 28, 2003.

We are generally self-insured for losses and liabilities related to workers’ compensation and employer’s liability insurance. Accrued workers’ compensation liability was $1.6 million and $1.5 million at January 1, 2012 and October 2, 2011, respectively. Our self-insurance accruals are based on estimates and, while we believe that the amounts accrued are adequate, the ultimate claims may be in excess of the amounts provided.

On December 8, 2010, Intellectual Ventures I LLC and Intellectual Ventures II LLC filed a complaint in the United States District Court for the District of Delaware (the “Complaint”) against Altera Corporation, Microsemi, and Lattice Semiconductor Corporation. On February 15, 2011, the plaintiffs filed an amended complaint adding Xilinx, Inc. as a defendant. The complaint alleges, inter alia, that programmable logic devices manufactured and sold by our subsidiary Microsemi – SoC infringe United States Patent Numbers 5,687,325, 6,260,087 and 6,272,646 assigned to Intellectual Ventures II LLC, and seeks damages and other relief at law or in equity as the court deems appropriate. We have responded to the complaint. On April 26, 2011, the defendants filed a motion to transfer the case to the United States District Court for the Northern District of California. On August 8, 2011, the defendants filed a motion to stay the litigation pending conclusion of reexamination of the patents-in-suit by the United States Patent & Trademark Office. The Court has not yet decided the motion to transfer or motion to stay. Discovery has not yet commenced and no trial date has been set. While material losses are reasonably possible, currently, we cannot reasonably estimate the amount of any loss in the event of an unfavorable outcome.

We are also involved in other pending litigation matters arising out of the normal conduct of our business, including litigation relating to acquisitions, employment matters, commercial transactions, contracts, environmental matters and matters related to compliance with governmental regulations. The aggregate amount of monetary liability or financial impact with respect to these matters is subject to many uncertainties and is therefore not currently reasonably estimable. In the opinion of management, the final outcome of these matters, if they are adverse, will not have a material adverse effect on our financial position, results of operations or cash flows. However, there can be no assurance with respect to such result, and monetary liability or financial impact on us from these litigation matters could differ materially from those projected.

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7. COMPREHENSIVE INCOME

Comprehensive income is defined as the change in equity (net assets) of a business enterprise during the period from transactions and other events and circumstances from non-owner sources. Our comprehensive income (loss) consisted of net income (loss) and the change of the cumulative foreign currency translation. Accumulated other comprehensive income consisted of the cumulative foreign currency translation adjustment.

Total comprehensive loss was calculated as follows (amounts in thousands):

	Quarter Ended
	January 1, 2012			January 2, 2011
Net loss	$	(44,602	)	$	(1,296	)
Translation adjustment		(291	)		(28	)
Comprehensive loss	$	(44,893	)	$	(1,324	)

8. EARNINGS PER SHARE

Basic earnings per share have been computed based upon the weighted average number of common shares outstanding during the respective periods. Diluted earnings per share have been computed, when the result is dilutive, using the treasury stock method for stock awards outstanding during the respective periods. Earnings per share (“EPS”) for the respective periods were calculated as follows (amounts in thousands, except per share data):

	Quarter Ended
	January 1, 2012			January 2, 2011
BASIC
Net loss	$	(44,602	)	$	(1,296	)
Weighted-average common shares outstanding for basic		85,217			82,716
Basic earnings (loss) per share	$	(0.52	)	$	(0.02	)
DILUTED
Net loss	$	(44,602	)	$	(1,296	)
Weighted-average common shares outstanding for basic		85,217			82,716
Dilutive effect of stock awards		—			—
Weighted-average common shares outstanding on a diluted basis		85,217			82,716
Diluted earnings (loss) per share	$	(0.52	)	$	(0.02	)

All stock awards of 11,829,000 and 13,997,000 for the quarters ended January 1, 2012 and January 2, 2011, respectively, were excluded from the computation of diluted EPS as we incurred net losses in both periods.

9. RECENTLY ISSUED ACCOUNTING STANDARDS

In January 2010, the FASB issued ASU No. 2010-06, that requires new fair value disclosures pertaining to significant transfers in and out of Level 1 and Level 2 fair value measurements and the reasons for the transfers and activity. For Level 3 fair value measurements, purchases, sales, issuances and settlements must be reported on a gross basis. Further, additional disclosures are required by class of assets or liabilities, as well as inputs used to measure fair value and valuation techniques. ASU No. 2010-06 is effective for interim and annual reporting periods beginning after December 15, 2009 (our second quarter of fiscal year 2010), except for the disclosures about purchases, sales, issuances and settlements on a gross basis, which is effective for fiscal years beginning after December 15, 2010 (our fiscal year 2012). The adoption of this ASU did not result in a material impact on our consolidated financial position, results of operations or cash flows.

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In June 2011, the FASB issued ASU No. 2011-05, that updates the presentation of comprehensive income such that an entity has the option 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 No. 2011-05 is effective for public entities for fiscal years, and interim periods within those years, beginning after December 15, 2011 (the second quarter of our fiscal year 2012). The provisions of this standard only affect the presentation of comprehensive income and will not materially impact our consolidated financial position, results of operations or cash flows. In December 2011, the FASB issued ASU No. 2011-12 that effectively defers the changes in ASU No. 2011-05 related to the presentation of reclassification adjustments out of accumulated other comprehensive income. We are currently evaluating the disclosures required under these ASUs.

In December 2011, the FASB issued ASU No. 2011-11, the objective of which is to provide additional disclosures on the effect or potential effect of rights of setoff associated with an entity’s recognized assets and recognized liabilities within the scope of the update. The update primarily impacts financial instruments and derivatives subject to a master netting arrangement or similar agreement. ASU No. 2011-11 is effective for annual reporting periods beginning on or after January 1, 2013, and interim periods within those annual periods (the first quarter of our fiscal year 2015). We are currently evaluating the disclosures required under this ASU.

10. STOCK-BASED COMPENSATION AND EMPLOYEE BENEFIT PLANS

In January 2012, our stockholders approved an amendment to the Microsemi Corporation 2008 Performance Incentive Plan (the “2008 Plan”). The amendment a) increased the share limit by an additional 14.5 million shares so that the new aggregate share limit for the 2008 Plan is 28.5 million shares; b) extended the plan term to December 5, 2021; c) increased the number of shares counted against the share limit for every one share issued in connection with a “Full-Value Award to 2.41; d) terminates the evergreen provision in the original plan; and e) extends the Performance-Based Award feature through the first annual meeting of stockholders that occurs in calendar year 2017. Awards authorized by the 2008 Plan include options, stock appreciation rights, restricted stock, stock bonuses, stock units, performance share awards, and other cash- or share-based awards. The shares issued under the 2008 Plan may be newly issued or shares held by the Company as treasury stock. The maximum term of a stock option grant or a stock appreciation right grant is six years.

Awards granted or assumed, weighted-average exercise price, weighted-average fair value and weighted-average assumptions used in the calculation of compensation expense are as follows:

Quarter Ended	# of Awards		Per Award				Risk Free Rate			Expected Dividend Yield			Expected Life (Years)		Expected Volatility
			Exercise Price		Fair Value
January 1, 2012
Restricted shares		523,800			$	16.27
Performance stock units		350,000			$	17.77
January 2, 2011
Restricted shares		1,686,311			$	20.96
Stock options and share appreciation rights		3,012,245	$	13.88	$	7.12		0.2	%		0.0	%		1.1		41.9	%

In connection with the acquisition of Actel Corporation in 2011, we assumed Actel stock options, stock appreciation rights and restricted stock units and converted them to Microsemi awards in accordance with the merger agreement. In the quarters ended January 1, 2012 and January 2, 2011, stock-based compensation expense decreased operating income by $7.5 million and $7.3 million, respectively.

Compensation expense for stock options and stock appreciation rights was calculated based on the grant or assumption date using the Black-Scholes pricing model. All stock appreciation rights we have granted or assumed are stock-settled. Stock options and stock appreciation rights are granted at exercise prices equal to the closing price of our common stock on the date of grant. Assumed stock options and stock appreciation rights are granted at exercise prices determined in accordance with the acquisition agreement. Expected life was estimated based on historical exercise data that was stratified between members of the Board of Directors, executive employees and all other recipients. Expected volatility was estimated based on historical volatility using equally weighted daily price observations over a period approximately equal to the expected life of each

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option. The risk free interest rate is based on the implied yield currently available on U.S. Treasury securities with an equivalent remaining term. No dividends are expected to be paid. Restricted stock awards and units are granted to employees with compensation expense determined based on the closing price of our common stock on the date of grant. Stock awards are subject to forfeiture if a participant does not meet length of service requirements.

Performance stock units are subject to performance-based vesting requirements and are reported at target levels in the preceding table. These performance-based awards will generally vest based on the Company’s growth in net sales and earnings per share (subject to certain adjustments) for fiscal years 2012 and 2013 in comparison with the growth in net sales and adjusted earnings per share over the same period for a peer group selected by the Compensation Committee. Half of each performance-based award opportunity will be subject to the growth in net sales metric for the performance period and half will be subject to the growth in earnings per share metric for the performance period. None of the units related to a particular metric will vest if the Company’s performance ranking using that metric is lower than the 30^th percentile relative to the peer group for the performance period, and the maximum number of units related to a particular metric that will vest is capped at 200% of the “target” number of units subject to the award related to that metric (half the total target number of units subject to the total performance-based award). This maximum vesting level will be achieved only if the Company’s performance ranking using that metric is equal to or greater than the 95^th percentile relative to the peer group for the performance period. The “target” number of units subject to an award related to a particular metric (half the total target number of units subject to the total performance-based award) will vest only if the Company’s performance ranking using that metric is at the 70^th percentile of the peer group for the performance period. Thirty percent of the target number of units may vest based on performance for fiscal 2012, with the majority of each award subject to the long-term two year performance period (fiscal years 2012 and 2013).

11. SEGMENT INFORMATION

We manage our business on the basis of one reportable segment, as a manufacturer of semiconductors in different geographic areas, including the United States, Europe and Asia. We derive revenue from sales of our high-performance analog/mixed-signal integrated circuits and power and high-reliability individual component semiconductors. These products include individual components as well as integrated circuit solutions that enhance customer designs by improving performance, reliability and battery optimization, reducing size or protecting circuits. The principal markets that we serve include Defense & Security, Aerospace, Enterprise & Communications and Industrial, Medical & Alternative Energy. We evaluate sales by end-market based on our understanding of end market uses of our products.

Net sales by the originating geographic area and by estimated end market are as follows (amounts in thousands):

	Quarter Ended
	January 1, 2012		January 2, 2011
United States	$	169,487	$	112,459
Europe		33,228		30,689
Asia		38,205		41,203
Total	$	240,920	$	184,351
Defense & Security		69,115	$	69,843
Aerospace		49,123		45,071
Enterprise & Communications		75,124		33,636
Industrial, Medical & Alternative Energy		47,558		35,801
Total	$	240,920	$	184,351

Tangible long lived assets by geographic area are as follows (amounts in thousands):

	January 1,     2012		October 2,     2011
United States	$	77,561	$	69,647
Europe		14,602		12,632
Asia		7,364		7,643
Total	$	99,527	$	89,922

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12. INCOME TAXES

For the quarters ended January 1, 2012 and January 2, 2011, we recorded an income tax benefit of $0.3 million on $44.9 million of pre-tax loss and an income tax benefit of $13.5 million on $14.8 million of pre-tax loss, respectively. Our effective income tax rate depends on various factors, such as tax legislation, the ratio of domestic and international pre-tax income, valuation allowances on both U.S. and foreign deferred tax assets and the effectiveness of our tax planning strategies. The effective tax rate for each of the quarters ended January 1, 2012 and January 2, 2011 was the combined calculated tax expenses and benefits for various jurisdictions.

We had gross unrecognized tax benefits including interest and penalties of approximately $39.7 million and $36.6 million related to various U.S. and foreign jurisdictions at January 1, 2012 and October 2, 2011, respectively. These amounts include approximately $4.5 million and $4.2 million of interest and penalties at January 1, 2012 and October 2, 2011, respectively. Unrecognized tax benefits of approximately $37.0 million and $34.0 million at January 1, 2012 and October 2, 2011, respectively, would impact the effective tax rate if recognized. We are unaware of any position for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly increase or decrease within the next twelve months. However, based on federal and state statute expirations in various jurisdictions, we anticipate a decrease in the unrecognized tax benefits of approximately $11.6 million within the next twelve months.

We file U.S., state, and foreign income tax returns in jurisdictions with varying statutes of limitations. The 2007 through 2011 tax years generally remain subject to examination by federal tax authorities, by most state tax authorities and in significant foreign jurisdictions. Each quarter, we reassess our uncertain tax positions for additional unrecognized tax benefits, interest and penalties, and deletions due to statute expirations.

We establish liabilities for possible assessments by tax authorities resulting from known tax exposures including, but not limited to, international tax issues and certain tax credits. We are currently undergoing an Internal Revenue Service examination as well as certain state examinations. There have been no significant proposed adjustments to date. We do not expect the results of any tax audits would have a material impact on our financial position or results of operations.

13. RESTRUCTURING AND SEVERANCE CHARGES

In 2009, we approved consolidation plans that resulted in the closure of our manufacturing facility in Scottsdale, Arizona (“Scottsdale”), which ceased production during the quarter ended April 3, 2011. The Scottsdale facility occupied a 135,000 square foot leased facility. Employee severance is expected to be paid through 2013. Contract termination costs relate primarily to remaining obligations under facility and equipment leases and are expected to be paid through 2016. The following table reflects the restructuring activities for the Scottsdale facility and the accrued liabilities in the consolidated balance sheets at the dates below (amounts in thousands):

	Employee Severance			Contract Termination Costs			Total
Balance at October 2, 2011	$	355		$	6,482		$	6,837
Cash expenditures		(159	)		(365	)		(524	)
Balance at January 1, 2012	$	196		$	6,117		$	6,313

At October 2, 2011, we had recorded severance accruals of $2.7 million from reductions in force at our various facilities other than Scottsdale. We recorded additional provisions, primarily related to activities at Microsemi – CMPG, for severance and retention payments totaling $7.2 million for the quarter ended January 1, 2012. Severance covered approximately 200 individuals in manufacturing, engineering and sales. Substantially all accrued amounts are expected to be paid within twelve months.

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The following table reflects the restructuring activities and the accrued liabilities in the consolidated balance sheets at the dates below (amounts in thousands):

	Employee Severance
Balance at October 2, 2011	$	2,724
Provisions		7,225
Cash expenditures		(2,741	)
Other non-cash settlement		(1,388	)
Balance at January 1, 2012	$	5,820

14. CREDIT AGREEMENT AND RELATED INSTRUMENTS

Credit Agreement

In connection with the acquisition of Zarlink in the quarter ended January 1, 2012, we entered into Amendment No. 2 to our Credit Agreement dated as of November 2, 2010 with Morgan Stanley Senior Funding, Inc. (“MSSF”), Morgan Stanley & Co. Incorporated, East West Bank, Raymond James Bank, FSB and the lenders referred to therein, as amended by Amendment No. 1 to the Credit Agreement, dated as of March 2, 2011 (as amended, the “Amended and Restated Credit Agreement”). We accounted for the amendment as a debt extinguishment and recorded $34.0 million in debt extinguishment costs in other income (expense) in accordance with ASC 470-50. Pursuant to the Amended and Restated Credit Agreement, MSSF has provided $850.0 senior secured lien credit facilities, consisting of a term loan facility in an aggregate principal amount of $800.0 million and a revolving credit facility in an aggregate principal amount of $50.0 million. We accounted for the amendment as a debt extinguishment and recorded $34.0 million in debt issuance and extinguishment costs in other income (expense) in accordance with ASC 470-50.

Under the Amended and Restated Credit Agreement, the current applicable margin on revolving loans and swingline loans determined at the Base Rate is 3.00% to 3.75% and revolving loans and swingline loans determined at the Eurodollar Rate is 4.00% to 4.75%, depending on Microsemi’s consolidated leverage ratio. For term loans, the current applicable margin on term loans determined at the Base Rate is 3.50% and on term loans determined at the Eurodollar Rate is 4.50%. The “Base Rate” is defined as a rate per annum equal to the greatest of (a) the prime rate, (b)  ¹/2 of 1% per annum above the federal funds effective rate, (c) the one-month Eurodollar Rate plus 1%, and (d) in the case of any term loans, 2.25%. The “Eurodollar Rate” is defined as (a) the rate per annum offered for deposits of dollars for the applicable interest period that appears on Reuters Screen LIBOR01 Page as of 11:00 A.M., London, England time, two (2) business days prior to the first day of such interest period or (b) if no such offered rate exists, such rate will be the rate of interest per annum as determined by the administrative agent (rounded upwards, if necessary, to the nearest  ¹/100 of 1%) at which deposits of dollars in immediately available funds are offered at 11:00 A.M., London, England time, two (2) business days prior to the first day in the applicable interest period by major financial institutions reasonably satisfactory to the administrative agent in the London interbank market for such interest period and for an amount equal or comparable to the principal amount of the loans to be borrowed, converted or continued as Eurodollar Rate loans on such date of determination. In the case of term loans, the Eurodollar Rate will not be lower than 1.25%. The principal amount outstanding under our term loan facility is a LIBOR-based loan and is subject to an interest rate of 5.75% as of January 1, 2012.

As of January 1, 2012, we had $798.0 million borrowed under the term loan facility and no direct borrowings and $0.4 million in letters of credit outstanding under the revolving facility. As of October 2, 2011, we had $372.2 million borrowed under the term loan facility and no direct borrowings and $0.4 million in letters of credit outstanding under the revolving facility. The amended term loan facility matures on February 2, 2017 and requires minimum principal payments of $2.0 million per quarter or $8.0 million per year.

Pursuant to the Amended and Restated Credit Agreement, Microsemi can request, at any time and from time to time, the establishment of one or more term loan and/or revolving credit facilities with commitments in an aggregate amount not to exceed $200.0 million.

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Microsemi paid upfront fees or original issue discount equal to 2.00% of the term loan facility and an amendment fee on the revolving facility of 0.25%. Additionally, Microsemi expects to pay an undrawn commitment fee ranging from 0.25% to 0.625% depending on Microsemi’s consolidated leverage ratio, on the unused portion of the revolving facility. If any letters of credit are issued, then Microsemi expects to pay a fronting fee equal to 0.25% per annum of the aggregate face amount of each letter of credit and a participation fee on all outstanding letters of credit at a per annum rate equal to the margin then in effect with respect to Eurodollar Rate-based loans on the face amount of such letter of credit.

The Amended and Restated Credit Agreement includes financial covenants requiring a maximum leverage ratio and minimum fixed charge coverage ratio and also contains other customary affirmative and negative covenants and events of default. We were in compliance with all financial covenants as of January 1, 2012.

Fair Value Option

We elected the fair value option in accounting for the term loan balance outstanding as of October 2, 2011. We classified term loan balances currently outstanding under our Credit Agreement as Level 2 where valuations are based on 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 data for substantially the full term of the assets or liabilities. Our valuation was based on market quotes provided to us by MSSF.

We determined the fair value of the outstanding term loan balance as of January 2, 2011 to be $378.8 million compared to a par value of $375.0 million, and as such, recorded expense of $3.8 million in other income (expense), net, during the quarter then ended. In addition, upon election of the fair value option in the quarter ended January 2, 2011, we were required to immediately expense up front debt issuance costs of $13.4 million that we recorded in other income (expense), net.

We determined the fair value of the term loan balance as of October 2, 2011 to be $361.0 million compared to a par value of $372.2 million, a difference of $11.2 million. Subsequent to entering into Amendment No. 2 to the credit agreement, we did not elect the fair value option on term loan balances and are reporting the $798.0 million outstanding at par. As we extinguished the existing $372.2 million term loan balance at par, we recorded an expense of $11.2 million in other income (expense), net, in the quarter ended January 1, 2012.

Interest Rate Swap Agreements

In connection with the Credit Agreement, we entered into interest rate swap agreements for the purpose of minimizing the variability of cash flows in the interest rate payments of our variable rate borrowings. The cash flows received under the interest rate swap agreements are expected to offset the change in cash flows associated with LIBOR rate borrowings between the effective and maturity dates of the swaps. Our three swap agreements have notional amounts, fixed rates and initial terms as follows: $24.0 million at 1.49% for two years, $121.0 million at 1.83% for three years and $24.0 million at 2.21% for four years. We classified interest rate swap balances as Level 2 fair value measurements. We determined the fair value of our interest rate swap agreements based on mid-market valuations reported to us by RJ Capital Services, Inc., the counterparty to the swap agreements. Related to these interest rate swap agreements, we recorded a current liability of $0.1 million and a long-term liability of $3.0 million as of January 1, 2012 and a $2.8 million long-term liability as of October 2 2011. We reflected the change in fair value of the swaps through other income (expense), net, and for the quarters ended January 1, 2012 and January 2, 2011, we recorded expense of $0.3 million and 0.7 million, respectively.

Foreign Currency Forward

In connection with the acquisition of Zarlink, we entered into a foreign currency forward agreement in the fourth quarter of 2011 to minimize our foreign currency risk associated with the transaction that we funded in Canadian Dollars (“CAD”). We agreed to purchase CAD 623.0 million for $608.2 million that settled in October 2011. We classified interest rate forward balances as Level 1 fair value measurements where there are quoted prices in active markets for identical instruments. We determined the fair value of our foreign currency forward agreement based on a corresponding quote from Morgan Stanley Capital Services LLC, the counterparty to the forward transaction. As the forward currency forward contract did not qualify for hedge accounting, we reflected the change in fair value of the swap through other income (expense), net. At October 2, 2011, we recorded a current liability and corresponding expense of $11.7 million for the change in fair value. During the quarter ended January 1, 2012, we recorded income of $15.4 million related to the settlement of this forward.

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15. SUBSEQUENT EVENT

In January 2012, we acquired the telecom clock generation, synchronization, packet timing and synthesis business from Maxim Integrated Products, Inc. for an estimated $44.0 million in cash. We expect to report a preliminary allocation of the estimated purchase consideration in the Quarterly Report on Form 10-Q for our second fiscal quarter of 2012.

As described in Note 10, our stockholders approved an amendment to the Microsemi Corporation 2008 Performance Incentive Plan.

Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This Quarterly Report on Form 10-Q includes current beliefs, expectations and other forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from the results contemplated by these forward-looking statements due to certain factors, including those discussed in Part II, Item 1A, “Risk Factors” and elsewhere in this Quarterly Report. This “Management’s Discussion and Analysis of Financial Condition and Results of Operations” (“MD&A”) and the accompanying unaudited consolidated financial statements and notes thereto must be read in conjunction with the MD&A and the consolidated financial statements and notes thereto in our Annual Report on Form 10-K for the fiscal year ended October 2, 2011.

OVERVIEW

We are a leading designer, manufacturer and marketer of high-performance analog and mixed-signal semiconductor solutions differentiated by power, security, reliability and performance. Our semiconductors manage and control or regulate power, protect against transient voltage spikes and transmit, receive and amplify signals. We offer one of the industry’s most comprehensive portfolios of semiconductor technology. Our products include high-performance, high-reliability radio frequency (RF) and power components, analog and RF integrated circuits (ICs), standard and customizable system-on-chip solutions (SoCs/cSoCs), and mixed-signal and radiation-tolerant field programmable gate arrays (“FPGAs”). We also offer subsystems and modules that include application-specific power modules and Power-over-Ethernet (“PoE”) midspans.

Our products include individual components as well as IC solutions that enhance customer designs by improving performance, reliability and battery optimization, reducing size or protecting circuits. The principal end markets that we serve include Defense & Security, Aerospace, Enterprise & Communications and Industrial, Medical & Alternative Energy.

Power management generally refers to a class of standard linear integrated circuits (“SLICs”) that perform voltage regulation and reference in most electronic systems. The definition of power management has broadened in recent years to encompass other devices and modules, often application-specific standard products (“ASSPs”), which address particular aspects of power management, such as audio or display related ICs. This business is composed of both a core platform of traditional SLICs, such as low dropout regulators (“LDOs”) and pulse width modulators (“PWMs”), and differentiated ASSPs such as backlight inverters, audio amplification ICs and small computer standard interface terminators. Our IC products are used in data storage, wireless local area network (“LAN”), automobiles, telecommunications, test instruments, defense and aerospace equipment, high-quality sound reproduction and data transfer equipment.

Our individual component semiconductor products include silicon rectifiers, zener diodes, low leakage and high voltage diodes, temperature compensated zener diodes, transistors, subminiature high power transient suppressor diodes and pin diodes used in magnetic resonance imaging (“MRI”) machines. We also manufacture semiconductors for commercial applications, such as automatic surge protectors, transient suppressor diodes used for telephone applications and switching diodes used in computer systems. A partial list of these products includes: implantable cardioverter defibrillator and heart pacer switching, charging and transient shock protector diodes, low leakage diodes, transistors used in jet aircraft engines and high performance test equipment, high temperature diodes used in oil drilling sensing elements operating at 200 degrees centigrade, temperature compensated zener or rectifier diodes used in missile systems and power transistors.

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We have implemented a growth strategy through continuous innovation complemented by strategic acquisitions to strengthen our product and technology portfolio with the intent of broadening our customer base and increasing our technology footprint in customers’ end designs in high-value, high barrier-to-entry markets where power matters, security is non-negotiable, and reliability is vital. This allows us to offer an increased value proposition, gather a larger portion of the bill of materials, and engage with customers as a strategic partner as opposed to a socket provider. We believe this strategy strengthens our position in the industry as it protects and grows our share within those markets with the highest barriers to entry, and increases our served available market.

Recent industry leading innovations include:

• High-efficiency PoE midspans that reduce energy consumption on network cables by as much as 50 percent;

• The world’s first single-chip, standards-compliant synchronous ethernet timing devices allowing the transmission of SyncE over optical transport network channels without the need for additional rate conversion phased locked loops;

• Breakthrough monolithic 4G RF front-end modules based on silicon germanium technology;

• A new family of DC-DC regulators for powering disk drives used in enterprise applications, based upon flexible architecture unique to Microsemi that includes patent-pending control technology.

Our growth strategy is dependent on our ability to successfully develop new technologies and products, and complemented by our ability to implement our selective acquisitions strategy. New technologies or products that we may develop may not lead to an incremental increase in revenues, and there is a risk that these new technologies or products will decrease the demand for our existing products and result in an offsetting reduction in revenues. There can be no assurance that the benefits of any acquisition will outweigh the attendant costs, and if they do not, our results of operations and stock price may be adversely affected.

The following table reflects quarterly net sales for the prior five quarters (amounts in thousands):

Quarter Ended
January 1, 2012	October 2, 2011	July 3, 2011	April 3, 2011	January 2, 2011
$240,920	$227,291	$216,722	$207,490	$184,351

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Net sales increased $56.6 million or 30.7% between the quarters ended January 1, 2012 (“Q1 2012”) and January 2, 2011 (“Q1 2011”) to $240.9 million for Q1 2012 from $184.4 million for Q1 2011. On January 26, 2012 we announced that we expect that our consolidated net sales for the second quarter of fiscal year 2012, which includes a full quarter’s contribution from Microsemi – CMPG will increase between 1 to 5 percent, sequentially.

Gross profit increased $30.7 million to $125.7 million (52.2% of net sales) for Q1 2012 from $95.0 million (51.5% of net sales) for Q1 2011 primarily as a result of contributions from the acquisition of Microsemi – CMPG. While higher than Q1 2011, gross margin in Q1 2012 declined from 57.1% reported in Q4 2011 due to additional costs incurred in response to recent flooding in Thailand, lower absorption of costs due to lower sales, overall product mix and the effect of purchase accounting entries.

In October 2011, we completed the acquisition of Microsemi – CMPG. We expect that its timing, synchronization and voice products, which complement our existing communications products, will significantly add to our consolidated net sales in 2012. We completed the acquisition of the timing, synchronization and synthesis business of Maxim Integrated Products, Inc. in January 2012 and have started to integrate this business into Microsemi – CMPG. However, uncertain macroeconomic conditions worldwide and the devastating flooding and ongoing impacts in Thailand, which shut down our operations at two subcontracted facilities, subject us to certain risks (see Part II, Item 1A, Risk Factors, “Negative or uncertain worldwide economic conditions may adversely affect our business, financial condition, cash flow and results of operations,” “The concentration of the facilities that service the semiconductor industry, including facilities of current or potential vendors or customers, makes us more susceptible to events or disasters affecting the areas in which they are most concentrated,” and “We may be unable to successfully implement our acquisitions strategy or integrate acquired companies and personnel with existing operations.”) In response to the impact of flooding at subcontractor facilities in Thailand, we implemented plans to move production to other facilities outside the affected area. We currently expect that production levels at these other facilities will compensate for the flooded facilities in Thailand and that we will have recovered from this event by the end of the second fiscal quarter of 2012.

We closed our Scottsdale facility during the second quarter of 2011. We may make further specific determinations to consolidate, close, sell or divest of additional facilities, operations or product lines, which could be announced at any time. Possible adverse consequences from current and future consolidation or disposition activities may include a loss of revenues and various accounting charges such as for workforce reduction, including severance and other termination benefits and for excess facilities, including lease termination fees, future contractual commitments to pay lease charges, facility remediation costs and moving costs to remove property and equipment from facilities. We may also be adversely impacted from inventory buildup in preparation for the transition of manufacturing, disposition costs, impairments of goodwill, a possible immediate loss of revenues, and other items in addition to normal or attendant risks and uncertainties. We may be unsuccessful in any of our current or future efforts to consolidate our business into a smaller number of facilities. Our plans to minimize or eliminate any loss of revenues during consolidation may not be achieved.

MARKETING

Our products include individual components as well as IC solutions that enhance customer designs by improving performance, reliability and battery optimization, reducing size or protecting circuits. The principal end markets that we serve include:

• Enterprise & Communications – Products in this end market include broadband power amplifiers and monolithic microwave integrated circuits (“MMICs”) targeted at 802.11 a/b/g/n/e, FPGAs, multiple-in multiple-out (“MIMO”), light emitting diode (“LED”), cold cathode fluorescent lamp (“CCFL”) controllers, visible light sensors, PWM controllers, voltage regulators, EMI/RFI filters, transient voltage suppressors and class-D audio circuits. Applications for these products include wi-max and wireless LAN devices, PoE devices, portable devices, set top box and telecom applications, monitors, and storage devices.

• Defense & Security – Products in this end market include mixed-signal analog integrated circuits, JAN, JANTX, JANTXV and JANS high-reliability semiconductors and modules including diodes, zeners, diode arrays, transient voltage suppressors, bipolar transistors, MOSFETs, insulated gate bipolar transistors (“IGBTs”), small signal analog integrated circuits, small signal transistors, relays, silicon-controlled rectifiers (“SCRs”), RF transceivers and subsystems and FPGAs. These products are utilized in a variety of applications including radar and communications, defense electronics, homeland security, threat detection, targeting and fire control and other power conversion and related systems in military platforms.

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• Aerospace – Products in this end market include offerings such as JAN, JANTX, JANTXV and JANS high-reliability semiconductors and modules and analog mixed-signal products including diodes, zeners, diode arrays, transient voltage suppressors, bipolar transistors, small signal analog integrated circuits, relays, small signal transistors, SCRs, MOSFETs, IGBTs and FPGAs. These products are utilized in a variety of applications including electronic applications for large aircraft and regional jets, commercial radar and communications, satellites, cockpit electronics, and other power conversion and related systems in space and aerospace platforms.

• Industrial, Medical & Alternative Energy – Products in this end market include MOSFETs, IGBTs, FPGAs, power modules, ultra thin bypass diodes, bridge rectifiers, and high-voltage assemblies for use in industrial equipment, semiconductor capital equipment and solar power applications. Industrial applications also include zener diodes, high-voltage diodes, MOSFETs, IGBTs, transient voltage suppressors and thyristor surge protection devices that are designed into implantable defibrillators, pacemakers and neurostimulators and PIN diode switches, dual diode modules and switched-most power supplies (“SMPS”) for use in MRI systems.

ACQUISITION

During Q1 2012, we completed our acquisition of Zarlink Semiconductor, Inc. (“Zarlink”) through a wholly-owned subsidiary. Following the expiration of the previously announced offers for all of the issued and outstanding common shares (“Zarlink Shares”) and 6% unsecured, subordinated convertible debentures maturing September 30, 2012 (“Zarlink Debentures” and together with the Zarlink Shares, the “Zarlink Securities”) of Zarlink, we acquired all remaining Zarlink Shares and Zarlink Debentures through compulsory acquisitions under, respectively, the Canada Business Corporations Act and the trust indenture governing the Zarlink Debentures. Zarlink delivers world-leading, mixed-signal chip technologies for a broad range of communication and medical applications. Its core capabilities include timing solutions that manage time-sensitive communication applications over wireless and wired networks, line circuits supporting high-quality voice services over cable and broadband connections, and ultra low-power radios enabling new wireless medical devices and therapies. Serving the world’s largest original equipment manufacturers, Zarlink’s highly integrated chip solutions help customers simplify design, lower costs and reach market quickly. We sometimes refer to this division herein as “Microsemi – CMPG.”

The fair value of the identified intangible assets was estimated for the Zarlink acquisition by performing a discounted cash flow analysis using the “income” approach. This method includes a forecast of direct revenues and costs associated with the respective intangible assets and charges for economic returns on tangible and intangible assets utilized in cash flow generation. Net cash flows attributable to the identified intangible assets were discounted to their present value at a rate commensurate with the perceived risk. The projected cash flow assumptions considered contractual relationships, customer attrition, eventual development of new technologies and market competition.

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The useful lives of completed technology rights are based on the number of years in which net cash flows have been projected. The useful life of backlog is estimated based upon the fulfillment period. The useful lives of customer relationships are estimated based upon the length of the relationships currently in place, historical attrition patterns and natural growth and diversification of other potential customers. The useful life of a trade name was estimated based on the period in which a benefit could be ascribed to the identified trade names.

Assumptions used in forecasting cash flows for each of the identified intangible assets included consideration of the following:

• Historical performance including sales and profitability.

• Business prospects and industry expectations.

• Estimated economic life of asset.

• Development of new technologies.

• Acquisition of new customers.

• Attrition of existing customers.

• Obsolescence of technology over time.

Generally, the allocation of purchase prices resulted in an allocation to goodwill. Depending on the tax treatment of a particular acquisition, goodwill and identifiable intangible assets may not be deductible for tax purposes. The factors that contributed to a purchase price resulting in the recognition of goodwill include:

• The premium paid over market capitalization immediately prior to the merger announcement.

• Our belief that the merger will create a more diverse semiconductor company with expansive offerings which will enable us to expand our product offerings.

• Our belief that both companies are committed to improving cost structures and that our combined efforts after the merger should result in a realization of cost savings and an improvement of overall efficiencies.

The purchase price allocation described below is preliminary. A final determination of fair values of assets acquired and liabilities assumed relating to the transaction could differ from the preliminary purchase price allocation and if material differences exist they could result in retrospective revision to the purchase price allocation.

The total estimated consideration as shown in the table below is preliminarily allocated to Zarlink’s tangible and intangible assets and liabilities based on their estimated fair values as of the date of the completion of the transaction. The preliminary estimated consideration is allocated as follows (in thousands):

Calculation of consideration:
Cash consideration for Zarlink Securities	$	623,782
Preliminary allocation of consideration:
Book value of Zarlink’s net assets		151,576
Adjustments to historical net book value:
Inventories		7,230
Other intangible assets		210,100
Deferred tax liability, net		(35,963	)
Adjustment to goodwill	$	290,839

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Identifiable intangible assets and their estimated useful lives are as follows (amounts in thousands):

	Asset Amount		Weighted Average Useful Life (Years)
Completed technology	$	47,800	6
Customer relationships		144,600	6
Backlog		15,700	1
Trade name		2,000	2
	$	210,100

We utilized the straight line method of amortization for completed technology, customer relationships and trade name and the estimated fulfillment period for backlog.

RESTRUCTURING AND SEVERANCE CHARGES

In 2009, we approved consolidation plans that resulted in the closure of our manufacturing facility in Scottsdale, Arizona (“Scottsdale”), which ceased production during the quarter ended April 3, 2011. The Scottsdale facility occupied a 135,000 square foot leased facility. Employee severance is expected to be paid through 2013. Contract termination costs relate primarily to remaining obligations under facility and equipment leases and are expected to be paid through 2016. The following table reflects the restructuring activities for the Scottsdale facility and the accrued liabilities in the consolidated balance sheets at the dates below (amounts in thousands):

	Employee Severance			Contract Termination Costs			Total
Balance at October 2, 2011	$	355		$	6,482		$	6,837
Cash expenditures		(159	)		(365	)		(524	)
Balance at January 1, 2012	$	196		$	6,117		$	6,313

At October 2, 2011, we had recorded severance accruals of $2.7 million from reductions in force at our various facilities other than Scottsdale. We recorded additional provisions, primarily related to activities at Microsemi – CMPG, for severance and retention payments totaling $7.2 million for the quarter ended January 1, 2012. Severance covered approximately 200 individuals in manufacturing, engineering and sales. Substantially all accrued amounts are expected to be paid within twelve months. The following table reflects the restructuring activities and the accrued liabilities in the consolidated balance sheets at the dates below (amounts in thousands):

	Employee Severance
Balance at October 2, 2011	$	2,724
Provisions		7,225
Cash expenditures		(2,741	)
Other non-cash settlement		(1,388	)
Balance at January 1, 2012	$	5,820

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RESULTS OF OPERATIONS FOR THE QUARTER ENDED JANUARY 1, 2012 COMPARED TO THE QUARTER ENDED JANUARY 2, 2011

Net sales increased $56.6 million or 30.7% between the quarters ended January 1, 2012 (“Q1 2012”) and January 2, 2011 (“Q1 2011”) to $240.9 million for Q1 2012 from $184.4 million for Q1 2011. These results included a partial quarter contribution from our acquisition of Microsemi – CMPG. Net sales by end market are based on our understanding of end market uses of our products.

An estimated breakout of net sales by end markets is approximately as follows (amounts in thousands):

	Quarter Ended
	January 1, 2012		January 2, 2011
Defense & Security	$	69,115	$	69,843
Aerospace		49,123		45,071
Enterprise & Communications		75,124		33,636
Industrial, Medical & Alternative Energy		47,558		35,801
Total	$	240,920	$	184,351

Net sales in the Defense & Security end market decreased $0.7 million to $69.1 million in Q1 2012 from $69.8 million in Q1 2011. While sales increased in this end market in Q1 2012 compared to Q1 2011, when compared to recent quarters, sales were negatively impacted by the lack of a 2012 federal budget through the first fiscal quarter and uncertainty surrounding the defense budget that was reflected in cautious procurement plans of end customers. However, a new budget is in place that we believe emphasizes intelligence, reconnaissance, surveillance and modernization programs that equate to growing electronic content. We also believe that international defense sales will increase, enabled in part by our security product offerings, and that Microsemi’s dollar content in defense programs will increase as our products move up the value chain. As such, we believe that this end market will grow in the upcoming quarter.

Net sales in the Aerospace end market increased $4.1 million to $49.1 million in Q1 2012 from $45.1 million in Q1 2011. The increase in net sales between the periods was driven primarily by demand and order rates for commercial aircraft at aircraft manufacturers and tier one suppliers, growing electronic content in current aircraft, refurbishment programs for older aircraft and demand for the high-reliability radar and avionics solutions we provide. Compared to recent quarters, sales declined primarily due to a slowdown in satellite billings. However, recent satellite order activity has been strong and we see continued growth for our commercial air products. As such, we believe that sales in this end market will grow in the upcoming quarter.

Net sales in the Enterprise & Communications end market increased $41.5 million to $75.1 million in Q1 2012 from $33.6 million in Q1 2011, primarily due to the contributions of Microsemi – CMPG. We have also experienced steady sales of our PoE offerings, RF power amplifier and DC-DC products. We believe that rapid market adoption of PoE technology, especially by enterprise customers, has increased our market share and our wireless LAN products are well accepted. We also expect additional contribution from our display products as we expect increasing support for our differentiated backlight solutions. While this is our most economically sensitive end market, based on current and expected backlog, we expect that net sales in this end market will grow in the upcoming quarter.

Net sales in the Industrial, Medical & Alternative Energy end market increased $11.8 million to $47.6 million in Q1 2012 from $35.8 million in Q1 2011, primarily due to the contributions of Microsemi – CMPG. Medical products within this end market have contributed to stable growth and we have noted growth in plasma cutting and welding applications where our high power proficiency differentiates our products. We have also increased sales through new product introductions in smart grid, wind power and general industrial product offerings. While we expect that sales of our products in many industrial applications will increase, we have noted increased channel inventory of products for solar applications. Accordingly, we expect that net sales in this end market will remain stable next quarter.

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Net sales by originating geographical area were as follows (amounts in thousands):

	Quarter Ended
	January 1, 2012		January 2, 2011
Net Sales:
United States	$	169,487	$	112,459
Europe		33,228		30,689
Asia		38,205		41,203
Total	$	240,920	$	184,351

Gross profit increased $30.7 million to $125.7 million (52.2% of net sales) for Q1 2012 from $95.0 million (51.5% of net sales) for Q1 2011 primarily as a result of contributions from the acquisition of Microsemi – CMPG. While higher than Q1 2011, gross margin in Q1 2012 declined from 57.1% reported in Q4 2011 due to additional costs incurred in response to recent flooding in Thailand, lower absorption of costs due to lower sales, overall product mix and the effect of purchase accounting entries.

Selling, general and administrative expense was $54.7 million for Q1 2012 compared to $46.3 million for Q1 2011. While selling, general and administrative expenses in 2012 were favorably impacted by restructuring and cost control measures, these expenses increased overall primarily due to the incremental costs incurred from the acquisition we added in the quarter. In connection with the relocation of one of our facilities, we received cash consideration of $7.0 million from a non-landlord third party to compensate us for relocation costs and expect to receive an additional $8.0 million in cash consideration upon the completion of the relocation. We have recorded the consideration received in selling, general and administrative costs as an offset to incremental costs incurred for the relocation. We expect selling, general and administrative expenses to decrease by $0.5 million to $1.0 million next quarter. Compared to Q1 2012, the selling, general and administrative change in the second fiscal quarter of 2012 will include the addition of Microsemi – CMPG for a full quarter, but it will be offset by savings as a result of cost controls and spending efficiencies within the company.

Research and development expense was $39.6 million for Q1 2012 compared to $24.0 million in Q1 2011. The increase was due primarily to the addition of Microsemi – CMPG. We expect research and development expense to increase by $0.3 million to $0.8 million next quarter primarily due to support of our product development efforts as we intend to continue to make product investments that deliver continued organic growth and the addition of Microsemi – CMPG for a full quarter.

Amortization of intangible assets was $24.9 million for Q1 2012 compared to $12.1 million in Q1 2011 and includes $10.8 million and $6.1 million of amortization related to acquired completed technology for Q1 2012 and Q1 2011, respectively. The increase reflects additional amortization expense related to the acquisitions completed during and after Q1 2011.

Restructuring and severance was $7.2 million in Q1 2012 compared to $6.3 million in Q1 2011. The amount recorded in the first quarter of 2012 included $6.4 million restructuring expense primarily from Microsemi – CMPG.

Interest expense was $12.0 million in Q1 2012 compared to $3.3 million in Q1 2011. The increase was due to an increase in term loan borrowings to approximately $800.0 million from $375.0 million. In addition, during Q1 2012, approximately $49.6 million was outstanding on our revolving credit facility for most of the quarter.

Other income (expense), net, was $(32.4) million in Q1 2012. We elected the fair value option in accounting for the term loan balance outstanding under our Credit Agreement through October 2, 2011 and changes in fair value of the loan balances are reflected as adjustments to the income statement. In connection with the Credit Agreement, we entered into interest rate swap agreements for the purpose of minimizing the variability of cash flows in the interest rate payments of our variable rate borrowings. In connection with the acquisition of Zarlink, we entered into a foreign currency forward agreement in the fourth quarter of 2011 to minimize our foreign currency risk associated with the transaction that we funded in Canadian Dollars (“CAD”). We reflect the change in fair value of our term loan balances, swaps and forward contract through other income or expense. We recorded income of $5.1 million in Q1 2012 related to these adjustments. During Q1 2012, we amended our credit facility and accounted for the amendment as a debt extinguishment. Accordingly, we recorded $34.0 million in debt extinguishment costs in other income (expense). Subsequent to the most recent amendment, we did not elect the fair value option on our outstanding term loan balances.

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For the quarters ended January 1, 2012 and January 2, 2011, we recorded an income tax benefit of $0.3 million on $44.9 million of pre-tax loss and an income tax benefit of $13.5 million on $14.8 million of pre-tax loss, respectively. Our effective income tax rate depends on various factors, such as tax legislation, the ratio of domestic and international pre-tax income, valuation allowances on both U.S. and foreign deferred tax assets and the effectiveness of our tax planning strategies. The effective tax rate for the quarters ended January 1, 2012 and January 2, 2011 was the combined calculated tax expenses and benefits for various jurisdictions.

CAPITAL RESOURCES AND LIQUIDITY

We had $133.5 million and $266.6 million in cash and cash equivalents at January 1, 2012 and October 2, 2011, respectively. In Q1 2012 and Q1 2011, we financed our operations with cash generated from operations.

Net cash provided by operating activities was $18.8 million for Q1 2012 and $9.6 million at Q1 2011. In Q1 2012, operating cash flow was negatively impacted by payment of $16.5 million in bonus and profit sharing, $7.2 million in transaction related costs and $3.2 million in restructuring and severance payments related primarily to Microsemi – CMPG. In Q1 2011, operating cash flow was negatively impacted by the payments of $17.0 million in acquisition related costs ($10.9 million was accrued in the fourth quarter of fiscal year 2010 or was a liability recorded by Microsemi – SoC’s at the time of acquisition) and $3.3 million in severance primarily related to Microsemi – SoC. A summary of net cash provided by operating activities for Q1 2012 and Q1 2011 are as follows (amounts in thousands):

	Q1 2012			Q1 2011
Net loss	$	(44,602	)	$	(1,296	)
Depreciation and amortization		33,316			19,946
Provision for doubtful accounts		(91	)		300
Settlement of foreign currency forward		(3,701	)		—
Gain on sales of assets		1,893			—
Stock-based compensation		7,531			7,278
Excess tax benefit—stock awards		(362	)		(2,088	)
Effect of fair value option on credit facility issuance and refinancing costs		28,031			13,424
Deferred income taxes		(509	)		(522	)
Net change in working capital accounts		(15,486	)		(32,764	)
Net change in other assets and long term liabilities		12,829			5,346
Net cash provided by operating activities	$	18,849		$	9,624

Accounts receivable increased $28.4 million to $139.3 million at January 1, 2012 from $110.9 million at October 2, 2011. The increase in accounts receivable was primarily due to higher sales, including incremental sales by Microsemi – CMPG, in Q1 2012 compared to Q4 2011.

Inventories increased $24.0 million to $164.8 million at January 1, 2012 from $140.8 million at October 2, 2011. The increase was due primarily to inventory balances at operations we acquired in the current fiscal year.

Other current assets increased $4.3 million to $20.4 million at January 1, 2012 from $16.1 million at October 2, 2011. The increase was due primarily to balances from the acquisition of Microsemi – CMPG.

Current liabilities increased $14.8 million to $168.5 million at January 1, 2012 from $153.7 million at October 2, 2011. The increase was due primarily to current liability balances at operations we acquired in the current fiscal year and an increase in current maturities of long term debt from our term loan balances.

Net cash used in investing activities was $549.0 million for Q1 2012 and $386.7 million for Q1 2011. Net cash used in investing activities in Q1 2012 consisted of $540.3 million in cash payments, net of cash acquired, for the acquisition of Zarlink, $12.4 million in purchases of property and equipment offset by $3.7 million for the settlement of foreign currency forward. In Q1 2011, net cash used in by investing activities primarily consisted of $381.0 million, net of cash acquired for the acquisition of Actel, and $5.7 million in purchases of property and equipment. In the second and third fiscal quarters of 2012, we expect to incur approximately $15.0 million in capital expenditures, net of allowances, to support the consolidation of facilities in Northern and Southern California.

Net cash provided by financing activities was $397.0 million for Q1 2012 and $380.6 million for Q1 2011. Net cash provided by financing activities in Q1 2012 primarily consisted of net borrowings of $425.8 million under our

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credit agreement and $2.2 million related to proceeds from stock awards, offset by $31.0 million in credit facility issuance and refinancing costs. In Q1 2011, net cash provided by financing activities primarily consisted of net borrowings of $375.0 million under our credit agreement and $19.0 million related to proceeds from equity awards, offset by $13.4 million in credit facility issuance costs.

In connection with the acquisition of Zarlink in the quarter ended January 1, 2012, we entered into Amendment No. 2 to our Credit Agreement dated as of November 2, 2010 with Morgan Stanley Senior Funding, Inc. (“MSSF”), Morgan Stanley & Co. Incorporated, East West Bank, Raymond James Bank, FSB and the lenders referred to therein, as amended by Amendment No. 1 to the Credit Agreement, dated as of March 2, 2011 (as amended, the “Amended and Restated Credit Agreement”). We accounted for the amendment as a debt extinguishment and recorded $34.0 million in debt extinguishment costs in other income (expense) in accordance with ASC 470-50. Pursuant to the Amended and Restated Credit Agreement, MSSF has provided $850.0 senior secured lien credit facilities, consisting of a term loan facility in an aggregate principal amount of $800.0 million and a revolving credit facility in an aggregate principal amount of $50.0 million. We accounted for the amendment as a debt extinguishment and recorded $34.0 million in debt extinguishment costs in other income (expense) in accordance with ASC 470-50.

Under the Amended and Restated Credit Agreement, the current applicable margin on revolving loans and swingline loans determined at the Base Rate is 3.00% to 3.75% and revolving loans and swingline loans determined at the Eurodollar Rate is 4.00% to 4.75%, depending on Microsemi’s consolidated leverage ratio. For term loans, the current applicable margin on term loans determined at the Base Rate is 3.50% and on term loans determined at the Eurodollar Rate is 4.50%. The “Base Rate” is defined as a rate per annum equal to the greatest of (a) the prime rate, (b)  ¹/2 of 1% per annum above the federal funds effective rate, (c) the one-month Eurodollar Rate plus 1%, and (d) in the case of any term loans, 2.25%. The “Eurodollar Rate” is defined as (a) the rate per annum offered for deposits of dollars for the applicable interest period that appears on Reuters Screen LIBOR01 Page as of 11:00 A.M., London, England time, two (2) business days prior to the first day of such interest period or (b) if no such offered rate exists, such rate will be the rate of interest per annum as determined by the administrative agent (rounded upwards, if necessary, to the nearest  ¹/100 of 1%) at which deposits of dollars in immediately available funds are offered at 11:00 A.M., London, England time, two (2) business days prior to the first day in the applicable interest period by major financial institutions reasonably satisfactory to the administrative agent in the London interbank market for such interest period and for an amount equal or comparable to the principal amount of the loans to be borrowed, converted or continued as Eurodollar Rate loans on such date of determination. In the case of term loans, the Eurodollar Rate will not be lower than 1.25%.

As of January 1, 2012, we had $798.0 million borrowed under the term loan facility and no direct borrowings and $0.4 million in letters of credit outstanding under the revolving facility. The amended term loan facility matures on February 2, 2017 and requires minimum principal payments of $2.0 million per quarter or $8.0 million per year.

Pursuant to the Amended and Restated Credit Agreement, Microsemi can request, at any time and from time to time, the establishment of one or more term loan and/or revolving credit facilities with commitments in an aggregate amount not to exceed $200.0 million.

Microsemi paid upfront fees or original issue discount equal to 2.00% of the term loan facility and an amendment fee on the revolving facility of 0.25%. Additionally, Microsemi expects to pay an undrawn commitment fee ranging from 0.25% to 0.625% depending on Microsemi’s consolidated leverage ratio, on the unused portion of the revolving facility. If any letters of credit are issued, then Microsemi expects to pay a fronting fee equal to

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0.25% per annum of the aggregate face amount of each letter of credit and a participation fee on all outstanding letters of credit at a per annum rate equal to the margin then in effect with respect to Eurodollar Rate-based loans on the face amount of such letter of credit.

The Amended and Restated Credit Agreement includes financial covenants requiring a maximum leverage ratio and minimum fixed charge coverage ratio and also contains other customary affirmative and negative covenants and events of default. We were in compliance with all financial covenants as of January 1, 2012.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

The unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States that require us to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the unaudited consolidated financial statements and revenues and expenses during the periods reported. Actual results could differ from those estimates. Information with respect to our critical accounting policies that we believe could have the most significant effect on our reported results and require subjective or complex judgments is contained in Note 1 to these unaudited consolidated financial statements, and in Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, of our Annual Report on Form 10-K for the fiscal year ended October 2, 2011.

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Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Market risk is the potential loss arising from adverse changes in credit risk, foreign currency exchange rates, interest rates or the stock market. We are exposed to various market risks, which are related to credit risks, changes in certain foreign currency exchange rates and changes in certain interest rates.

We conduct a relatively small portion of our business in a number of foreign currencies, principally the European Union Euro, British Pound, Israeli Shekel and Chinese RMB. We may receive some revenues in foreign currencies and purchase some inventory and services in foreign currencies. Accordingly, we are exposed to transaction gains and losses that could result from changes in exchange rates of foreign currencies relative to the U.S. dollar. Transactions in foreign currencies have represented a relatively small portion of our business. As a result, foreign currency fluctuations have not had a material impact historically on our revenues or results of operations. However, there can be no assurance that future fluctuations in the value of foreign currencies will not have material adverse effects on our results of operations, cash flows or financial condition. Specific to the acquisition of Zarlink, we entered into foreign currency forward agreement in the fourth quarter of 2011 to minimize our foreign currency risk associated with the transaction that we funded in Canadian Dollars. We agreed to purchase CAD 623.0 million for $608.2 million that settled in the first quarter of 2012. Other than the foregoing, we have not conducted a foreign currency hedging program thus far. We have considered and may continue to consider the adoption of a foreign currency hedging program.

We are potentially subject to concentrations of credit risk consisting principally of trade accounts receivable. Concentrations of credit risk exist because we rely on a significant portion of customers whose principal sales are to the U.S. Government. Approximately 29% of total net sales in the first quarter of 2012 were in the Defense & Security end market, with a very significant amount to customers whose principal sales are to the U.S. Government or to subcontractors whose material sales are to the U.S. Government. We, as a subcontractor, sell our products to higher-tier subcontractors or to prime contractors based upon purchase orders that usually do not contain all of the conditions included in the prime contract with the U.S. Government. However these sales are usually subject to termination and/or price renegotiations by virtue of their reference to a U.S. Government prime contract. Therefore, we believe that all of our product sales that ultimately are sold to the U.S. Government may be subject to termination, at the convenience of the U.S. Government or to price renegotiations under the Renegotiation Act. We have never experienced a material loss due to termination of a U.S Government contract. We have never had to renegotiate our price under any government contract.

As the end of the first quarter of 2012, interest under the Amended and Restated Credit Facility is, at our option, Base Rate or LIBOR, plus a margin ranging from 3.00% to 3.75% for Base Rate-based loans that are either term loans or revolving loans and ranging from 4.00% to 4.75% for LIBOR-based loans that are either term loans or revolving loans, depending on our consolidated leverage ratio. The current applicable margin on term loans determined at the Base Rate is 3.50% and term loans determined at the Eurodollar Rate by is 4.50%. The “Base Rate” is defined as a rate per annum equal to the greatest of (a) the prime rate, (b)  ¹/2 of 1% per annum above the federal funds effective rate, (c) the one-month Eurodollar Rate plus 1%, and (d) in the case of any term loans, 2.25%. The “Eurodollar Rate” is defined as (a) the rate per annum offered for deposits of dollars for the applicable interest period that appears on Reuters Screen LIBOR01 Page as of 11:00 A.M., London, England time, two (2) business days prior to the first day of such interest period or (b) if no such offered rate exists, such rate will be the rate of interest per annum as determined by the administrative agent (rounded upwards, if necessary, to the nearest  ¹/100 of 1%) at which deposits of dollars in immediately available funds are offered at 11:00 A.M., London, England time, two (2) business days prior to the first day in the applicable interest period by major financial institutions reasonably satisfactory to the administrative agent in the London interbank market for such interest period and for an amount equal or comparable to the principal amount of the loans to be borrowed, converted or continued as Eurodollar Rate loans on such date of determination. In the case of term loans, the Eurodollar Rate will not be lower than 1.25%. The principal amount outstanding under our term loan facility is a LIBOR-based loan and is subject to an interest rate of 5.75% as of January 1, 2012. A one percent increase in the variable rate of interest on the term loan facility would increase interest expense by approximately $7.8 million annually.

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We entered into interest rate swap agreements in the first quarter of 2010 for the purpose of minimizing the variability of cash flows in the interest rate payments of our variable rate borrowings. The cash flows received under the interest rate swap agreements are expected to offset the change in cash flows associated with LIBOR rate borrowings between the effective and maturity dates of the swaps. Our three swap agreements have notional amounts, fixed rates and terms as follows: $24.0 million at 1.49% for two years, $121.0 million at 1.83% for three years and $24.0 million at 2.21% for four years. We classify interest rate swap balances as Level 2 fair value measurements. We determined the fair value of our interest rate swap agreements based on mid-market valuations reported to us by RJ Capital Services, Inc., the counterparty to the swap agreements. Related to these interest rate swap agreements, we recorded a current liability of $0.1 million and a long-term liability of $3.0 million as of January 1, 2012 and a $2.8 million long-term liability as of October 2 2011. We reflected the change in fair value of the swaps through other income (expense), net, and for the quarters ended January 1, 2012 and January 2, 2011, we recorded expense of $0.3 million and 0.7 million, respectively.

Item 4. CONTROLS AND PROCEDURES

(a) Evaluation of disclosure controls and procedures.

Our Chief Executive Officer and Chief Financial Officer, with the assistance of other management, conducted an evaluation of our disclosure controls and procedures (as such term is defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended) as of the end of the period covered by this Quarterly Report. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of January 1, 2012.

(b) Changes in internal control over financial reporting.

During the first quarter of fiscal year 2012, there were no changes in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II—OTHER INFORMATION

Item 1. LEGAL PROCEEDINGS

In Part I, Item 3 of our most recent Annual Report on Form 10-K as filed with the SEC on November 23, 2011 for our fiscal year ended October 2, 2011, we reported litigation in which we are involved. During the fiscal period that is the subject of this Quarterly Report on Form 10-Q, no material changes occurred in such litigation, and there have been no other legal proceedings requiring reporting in this Quarterly Report on Form 10-Q other than as follows.

On December 8, 2010, Intellectual Ventures I LLC and Intellectual Ventures II LLC filed a complaint in the United States District Court for the District of Delaware (the “Complaint”) against Altera Corporation, Microsemi, and Lattice Semiconductor Corporation. The complaint alleges, inter alia, that programmable logic devices manufactured and sold by our subsidiary Microsemi – SoC infringe United States Patent Numbers 5,687,325, 6,260,087 and 6,272,646 assigned to Intellectual Ventures II LLC, and seeks damages and other relief at law or in equity as the court deems appropriate. We have responded to the Complaint. Currently, we cannot determine the likelihood of an unfavorable outcome.

Item 1A. RISK FACTORS

While there have been no material updates to the risk factors set forth below that constitute material changes from the risk factors previously disclosed in our Annual Report on Form 10-K as filed with the SEC on November 23, 2011, we routinely update our risk factors and for the convenience of our readers, our updated risk factors are included below in this Item 1A, and we recommend that they be read in their entirety.

Negative or uncertain worldwide economic conditions could prevent us from accurately forecasting demand for our products, which could adversely affect our operating results or market share.

Recent negative worldwide economic conditions and market instability have made it increasingly difficult for us, our customers and our suppliers to accurately forecast future product demand trends. If signs of improvement in the global economy do not progress as expected and global economic conditions worsen, our forecasts of product demand trends could

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prove to be incorrect and could cause us to produce excess products that can depress product prices, increase our inventory carrying costs and result in obsolete inventory. Alternatively, this forecasting difficulty could cause a shortage of products, or materials used in our products, that could result in an inability to satisfy demand for our products and a loss of market share.

Negative or uncertain worldwide economic conditions may adversely affect our business, financial condition, cash flow and results of operations.

Recent domestic and global economic conditions have presented unprecedented and challenging conditions reflecting continued concerns about the availability and cost of credit, downgrades and continued negative pressure on sovereign credit ratings, the mortgage market, declining real estate values, increased energy costs, decreased consumer confidence and spending and added concerns fueled by the federal government’s interventions in the financial and credit markets. These conditions have contributed to instability in both the domestic and international capital and credit markets, potentially increased the cost of credit and diminished expectations for the global economy. In addition, these conditions make it extremely difficult for our customers to accurately forecast and plan future business activities and could cause businesses to slow spending on our products, which could cause our sales to decrease or result in an extension of our sales cycles. If signs of improvement in the global economy do not progress as expected and global economic conditions worsen, our customers may have difficulties obtaining capital at adequate or historical levels to finance their ongoing business and operations, which could impair their ability to make timely payments to us. If that were to occur, we may be required to increase our allowance for doubtful accounts and our days sales outstanding would be negatively impacted. We cannot predict the timing, strength or duration of any economic slowdown or subsequent economic recovery, worldwide or within our industry. If signs of improvement in the global economy do not progress as expected and economic conditions worsen, our business, financial condition, cash flows and results of operations will be adversely affected.

We may be unable to successfully implement our acquisitions strategy or integrate acquired companies and personnel with existing operations.

We have in the past acquired a number of businesses or companies, additional product lines and assets, and we may continue to expand and diversify our operations with additional acquisitions. We may be unable to identify or complete prospective acquisitions for many reasons, including competition from other companies in the semiconductor industry and high valuations of business candidates. In addition, applicable antitrust laws and other regulations may limit our ability to acquire targets or force us to divest an acquired business, such as occurred with our attempt to acquire SEMICOA. If we are unable to identify suitable targets or complete acquisitions, our growth prospects may suffer, and we may not be able to realize sufficient scale advantages to compete effectively in all markets. To the extent that we are successful in making acquisitions, if we are unsuccessful in integrating acquired companies or product lines with existing operations, or if integration is more difficult or more costly than anticipated, we may experience disruptions that could have a material adverse effect on our business, financial condition and results of operations. In addition, the market price of our common stock could be adversely affected if the effect of any acquisitions on the Microsemi consolidated group’s financial results is dilutive or is below the market’s or financial analysts’ expectations. Some of the risks that may affect our ability to integrate or realize any anticipated benefits from acquired companies, businesses or assets include those associated with:

• unexpected losses of key employees or customers of the acquired company;

• conforming the acquired company’s standards, processes, procedures and controls with our operations;

• coordinating new product and process development;

• increasing complexity from combining recent acquisitions;

• hiring additional management and other critical personnel;

• increasing the scope, geographic diversity and complexity of our operations;

• difficulties in consolidating facilities and transferring processes and know-how;

• other difficulties in the assimilation of acquired operations, technologies or products;

• diversion of management’s attention from other business concerns; and

• adverse effects on existing business relationships with customers.

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In connection with acquisitions, we may:

• use a significant portion of our available cash;

• issue equity securities, which would dilute current stockholders’ percentage ownership;

• incur substantial debt;

• incur or assume contingent liabilities, known or unknown, including potential lawsuits, infringement actions and similar liabilities;

• incur impairment charges related to goodwill or other intangibles;

• incur large, immediate accounting write-offs; and

• face antitrust or other regulatory inquiries or actions.

There can be no assurance that the benefits of any acquisitions will outweigh the attendant costs, and if they do not, our results of operations and stock price may be adversely affected.

The concentration of the facilities that service the semiconductor industry, including facilities of current or potential vendors or customers, makes us more susceptible to events or disasters affecting the areas in which they are most concentrated.

Relevant portions of the semiconductor industry, and the facilities that serve or supply this industry, tend to be concentrated in certain areas of the world. Events such as natural disasters and related disruptions, epidemics and health advisories like those related to Sudden Acute Respiratory Syndrome, Avian Influenza or the H1N1 Virus, flooding, tsunamis, power outages and infrastructure disruptions, and civil unrest and political instability in those areas, have from time to time in the past, and may again in the future, adversely affect the semiconductor industry. In particular, events such as these could adversely impact our ability to manufacture or deliver our products and result in increased costs and a loss of revenue. Similarly, a localized risk affecting our employees or the staff of our suppliers could impair the total volume of products that we are able to manufacture, which could adversely affect our results of operations and financial condition.

In the first quarter of fiscal year 2012, severe flooding in certain regions of Thailand forced a shutdown of our operations in two subcontracted facilities in Thailand. The two Thailand facilities together can account for as much as 5% of our total quarterly revenues. In response to the impact of flooding at subcontractor facilities in Thailand, we implemented plans to move production to other facilities outside the affect area. We currently expect that production levels at these other facilities will compensate for the flooded facilities in Thailand and that we will have recovered from this event by the end of the second fiscal quarter of 2012. However, should circumstances change or we are not able to execute our recovery plans, we may experience further disruptions for the affected products that could have an adverse effect on our ability to timely deliver certain products and have a material adverse impact on our results of operations. In addition, unforeseen impacts on our customers, suppliers or subcontractors as a result of the flooding in Thailand could further affect our revenue, consolidated financial position, results of operations and cash flows.

Our operating results may fluctuate in future periods, which could cause our stock price to decline.

We have experienced, and expect to experience in future periods, fluctuations in net sales and operating results from period to period. Our projections and results may be subject to significant fluctuations as a result of a number of factors including:

• the timing of orders from and shipment of products to major customers;

• an unexpected reduction in sales to, or loss of, key customers;

• our product mix;

• changes in the prices of our products;

• manufacturing delays or interruptions;

• delays or failures in testing and processing products for defense, security and aerospace applications;

• inventory obsolescence or write-downs;

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• restructuring charges;

• variations in the cost of components for our products;

• limited availability of components that we obtain from a single or a limited number of suppliers; and

• seasonal and other fluctuations in demand for our products.

Provisions in our credit facility and our current leverage could adversely affect our consolidated financial position and our ability to operate our business.

Our credit facility requires that we comply with financial and restrictive covenants. Although we are currently in compliance with these covenants, unexpected downturns in our business may trigger certain covenants that increase our cost of borrowing, decrease the amounts available under our credit facility, or both. The current amount outstanding on our credit facility exceeds our current cash and cash equivalents balance, and we may incur additional debt in the future. Some of the risks that are associated with our leverage include the following:

• our ability to obtain additional financing in the future for acquisitions, capital expenditures, general corporate purposes or other purposes may be impaired;

• our current credit facility only permits borrowing on variable rates of interest and increases in certain benchmark interest rates will increase the cost of borrowing;

• leverage will increase our vulnerability to declining economic conditions, particularly if the decline is prolonged;

• failure to comply with any of our debt covenants may result in an event of default which, if not cured or waived, could have a material adverse effect on us;

• financial and restrictive covenants may adversely affect our ability to implement business plans, react to changes in economic conditions or benefit from changes in tax regulations;

• debt service payments will continue to have a negative impact on our cash flows; and

• prepayment terms that may discourage us from refinancing our Amended and Restated Credit Agreement or reduce the benefit of lower interest rates.

We have closed, combined, sold or disposed of certain of our operations, which in the past has reduced our sales volume and resulted in significant restructuring costs.

In September 2009, we approved consolidation plans that resulted in the closure of our manufacturing facility in Scottsdale, Arizona during the quarter ended April 3, 2011. Scottsdale represented approximately 1% of our annual net sales in fiscal year 2011 and occupied a 135,000 square foot leased facility. We face major technical challenges in regard to transferring component manufacturing between locations. Before a transfer of manufacturing, we must be finished qualifying the new facility appropriately with the U.S. government or certain customers. In addition, to mitigate the potential for manufacturing disruptions following a closure, we typically build inventory to support the transition process. While we plan generally to retain revenues and income of those operations by transferring the manufacturing elsewhere within Microsemi’s subsidiaries, our plans may change at any time based on reassessment of the alternatives and consequences. While we hope to benefit overall from increased gross margins and increased capacity utilization rates at remaining operations, the remaining operations will need to bear the corporate administrative and overhead costs, which are charges to income that had been allocated to the discontinued business units. Moreover, delays in effecting our consolidations could result in changes in the timing of realized costs savings and in greater than anticipated costs incurred to achieve the hoped for longer-range savings.

In October 2003, we announced the consolidation of the manufacturing operations of Microsemi Corp. – Santa Ana, of Santa Ana, California into some of our other facilities. The Santa Ana facility, whose manufacturing represented approximately 13% of our annual net sales in fiscal year 2004, had approximately 380 employees and occupied 123,000 square feet. In April 2005, we announced the consolidation of the high-reliability products operations of Microsemi Corp. – Colorado of Broomfield, Colorado (“Broomfield”) into some of our other facilities. Broomfield represented approximately 5% of our annual net sales in fiscal year 2009, had approximately 50 employees and occupied a 130,000 square foot owned facility.

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We may make further specific determinations to consolidate, close, sell or divest of additional facilities, operations or product lines, which could be announced at any time. Possible adverse consequences from current and future consolidation or disposition activities may include a loss of revenues and various accounting charges such as for workforce reduction, including severance and other termination benefits and for excess facilities, including lease termination fees, future contractual commitments to pay lease charges, facility remediation costs and moving costs to remove property and equipment from facilities. We may also be adversely impacted from inventory buildup in preparation for the transition of manufacturing, disposition costs, impairments of goodwill, a possible immediate loss of revenues, and other items in addition to normal or attendant risks and uncertainties. We may be unsuccessful in any of our current or future efforts to consolidate our business into a smaller number of facilities. Our plans to minimize or eliminate any loss of revenues during consolidation may not be achieved.

Unanticipated changes in our tax provisions or exposure to additional income tax liabilities could affect our financial results.

We are subject to income taxes in the United States and numerous foreign jurisdictions. Our tax liabilities are affected by the amounts we record in intercompany transactions for inventory, services, licenses, funding and other items. We are subject to ongoing tax audits in various jurisdictions. Tax authorities may disagree with our intercompany charges or other matters and assess additional taxes. We regularly assess the likely outcomes of these audits in order to determine the appropriateness of our tax provision. However, there can be no assurance that we will accurately predict the outcomes of these audits, and the actual outcomes of these audits could have a material impact on our financial condition. In addition, our effective tax rate in the future could be adversely affected by changes in the mix of earnings in countries with differing statutory tax rates, changes in the valuation of deferred tax assets and liabilities, changes in tax laws, especially tax laws related to foreign operations, and the discovery of new information in the course of our tax return preparation process. Any of these changes could affect our operating results, cash flows and financial condition.

Reliance on government contracts for a portion of our sales could have a material adverse effect on results of operations.

Some of our sales are or may be derived from customers whose principal sales are to the United States government. These sales are or may be derived from direct and indirect business with the U.S. Department of Defense and other U.S. government agencies. Future sales are subject to the uncertainties of governmental appropriations and national defense policies and priorities, constraints of the budgetary process and timing and potential changes in these policies and priorities. If we experience significant reductions or delays in procurements of our products by the U.S. government or terminations of government contracts or subcontracts, our operating results could be materially and adversely affected. Generally, the U.S. government and its contractors and subcontractors may terminate their contracts with us for cause or for convenience. We have in the past experienced one termination of a contract due to the termination of the underlying government contracts. All government contracts are also subject to price renegotiation in accordance with the U.S. Government Renegotiation Act. By reference to such contracts, all of the purchase orders we receive that are related to government contracts are subject to these possible events. There is no guarantee that we will not experience contract terminations or price renegotiations of government contracts in the future.

In addition, we are required to maintain compliance with government regulations, particularly for our facilities and products that service the defense and security markets. Maintaining compliance requires that we devote resources to matters that include training, personnel, information technology and facilities. Failure to maintain compliance may result in the loss of certifications, fines and penalties that may materially and adversely affect our operating results.

Microsemi’s aggregate net sales to the Defense & Security end market represented approximately 29% of total net sales in first quarter 2012. From time to time, we have experienced declining security- and defense-related sales, primarily as a result of contract award delays and reduced security and defense program funding. We may be unable to adequately forecast or respond to the timing of and changes to demand for security- and defense-related products. In the past, defense-related spending on programs that we participate in has increased at a rate that has been slower than expected, been delayed or declined. Our prospects for additional security- and defense-related sales may be adversely affected in a material manner by numerous events or actions outside our control.

We must commit resources to research and development, design, and production prior to receipt of purchase commitments and could lose some or all of the associated investment.

We sell products primarily pursuant to purchase orders for current delivery, rather than pursuant to long-term supply contracts. Many of these purchase orders may be revised or cancelled without penalty. As a result, we must commit resources

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to the research, design and production of products without any advance purchase commitments from customers. Any inability to sell a product after we devote significant resources to it could have a material adverse effect on our business, financial condition, results of operations and cash flows.

International operations and sales expose us to material risks and may increase the volatility of our operating results.

Net sales from international markets represent a significant portion of total net sales. Our net sales to international customers represented approximately 46% in 2011. These sales were principally to customers in Europe and Asia. Foreign sales are classified as shipments to foreign destinations. We maintain facilities or contracts with entities in several foreign countries, including Canada, Korea, Japan, China, Ireland, Thailand, the Philippines, Malaysia, France, Taiwan, Macau, Israel and India. There are risks inherent in doing business internationally, including:

• legislative or regulatory requirements and potential changes in or interpretations of requirements in the United States and in the countries in which we manufacture or sell our products;

• tax regulations and treaties and potential changes in regulations and treaties in the United States and in and between countries in which we manufacture or sell our products;

• fluctuations in income tax expense and net income due to differing statutory tax rates in various domestic and international jurisdictions;

• trade restrictions;

• uncertain interpretations of and difficulties enforcing intellectual property laws;

• availability of transportation services, including disruptions related to work stoppages, security incidents or natural events at manufacturing, shipping or receiving points or along transportation routes;

• work stoppages or disruption of local labor supply;

• communication interruptions;

• economic and political instability, including the recent uncertainty in the global financial markets;

• acts of war or terrorism, or health issues (such as Sudden Acute Respiratory Syndrome, Avian Influenza or the H1N1 Virus), which could disrupt our manufacturing and logistical activities;

• compliance with and changes in import/export regulations;

• changes in tariffs and freight rates;

• difficulties in collecting receivables and enforcing contracts generally;

• restrictions in the transfer or repatriation of funds; and

• currency exchange rate fluctuations, devaluation of foreign currencies, hard currencies shortages and exchange rate fluctuations.

International sales of our products that service the defense and security markets are subject to U.S. and local government regulations and procurement policies and practices including regulations relating to import-export control. Violations of export control regulations could result in suspension of our ability to export our products. Depending on the scope of the suspension, this could have a material effect on our ability to perform certain international contracts. In addition, failure to maintain compliance with government regulations may result in fines and penalties that may materially and adversely affect our operating results.

If political, military, transportation, health or other issues in foreign countries result in cancellations of customer orders or contribute to a general decrease in economic activity or corporate spending, or directly impact Microsemi’s marketing, manufacturing, financial and logistics functions, our consolidated results of operations and financial condition could be materially adversely affected. In addition, the laws of certain foreign countries may not protect our products, assets or intellectual property rights to the same extent as do U.S. laws. Therefore, the risk of piracy of our technology and products, which could result in a material adverse effect on our financial condition, operating results and cash flows, may be greater in those foreign countries.

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There may be unanticipated costs associated with appropriately scaling our manufacturing capacity to meet expected changes in customer demand.

We may incur unanticipated costs as we scale our manufacturing capacity to meet expected changes in customer demand. During periods of anticipated increases in customer demand, we may determine that our business will require increased manufacturing capacity on our part and on the part of certain outside foundries, assembly shops, or testing facilities for some of our integrated circuit products or other products. Expansion activities are subject to a number of risks, including:

• unavailability or late delivery of the advanced, and often customized, equipment used in the production of our specialized products;

• availability of qualified manufacturing personnel;

• delays in bringing new production equipment on-line;

• delays in supplying satisfactory designs or products to our existing customers;

• unforeseen environmental, engineering or manufacturing qualification problems relating to existing or new facilities; and

• overexpansion may result in unfavorable manufacturing variances, restructuring costs and impairments.

These and other risks may affect the ultimate cost and timing of any expansion of our capacity.

Downturns in the highly cyclical semiconductor industry have in the past adversely affected our operating results, cash flows and the value of our business, and may continue to do so in the future.

The semiconductor industry is highly cyclical and is characterized by constant technological change, rapid product obsolescence and price erosion, short product life-cycles and fluctuations in product supply and demand. During recent years we, as well as many others in our industry, have experienced significant declines in the pricing of, as well as demand for, products during the “down” portions of these cycles, which have sometimes been severe and prolonged. In the future, these downturns may prove to be as, or possibly even more, severe than past ones. Our ability to sell our products depends, in part, on continued demand in each of our diverse end markets. Each of these end markets has in the past experienced reductions in demand, and current and future downturns in any of these markets may continue to adversely affect our revenues, operating results, cash flows and financial condition.

The semiconductor business is subject to downward price pressure.

The market for our products has been characterized by declining selling prices, and we anticipate that our average selling prices will decrease in future periods, although the timing and amount of these decreases cannot be predicted with any certainty. The pricing pressure in the semiconductor industry in past years has been due to a large number of factors, many of which were not easily foreseeable, such as the Asian currency crisis, industry-wide excess manufacturing capacity, weak economic growth, the slowdown in capital spending that followed the “dot-com” collapse, the reduction in capital spending by telecom companies and satellite companies, and the effects of the tragic events of terrorism on September 11, 2001. Similar to past years, recent unfavorable economic conditions have resulted in a tightening of the credit markets. If signs of improvement in the global economy do not progress as expected and global economic conditions worsen, we may experience a decline in our average selling prices. In addition, our competitors have in the past, and may again in the future, lower prices in order to increase their market share. Continued downward price pressure in the industry may reduce our operating results and harm our financial and competitive position.

The semiconductor industry is highly competitive.

The semiconductor industry, including most of the markets in which we do business, is highly competitive. We have numerous competitors in the various markets in which we sell products. Some of our current major competitors are Freescale Semiconductor, Inc., Texas Instruments, Inc., Koninklijke Philips Electronics, ON Semiconductor Corp., Fairchild Semiconductor International, Inc., Micrel Incorporated, International Rectifier Corp., Semtech Corp., Linear Technology Corp., Maxim Integrated Products, Inc., Skyworks Solutions, Inc., Diodes, Inc., Vishay Intertechnology, Inc., O2Micro International, Ltd. and Monolithic Power Systems, Inc. Some of our competitors in developing markets are Triquint Semiconductor, Inc., RF Micro Devices, Inc., Anadigics, Inc. and Skyworks Solutions, Inc. Many of these companies are larger than we are and have greater resources than we have and may therefore be better able than we are to penetrate new markets, pursue acquisition candidates, and withstand adverse economic or market conditions. We expect intensified competition from both these existing competitors and new entrants into our markets. To the extent we are not able to compete successfully in the future, our financial condition, operating results or cash flows could be harmed.

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We may not be able to develop new technologies and products to satisfy changes in customer demand, and our competitors could develop products that decrease the demand for our products.

Rapidly changing technologies and industry standards, along with frequent new product introductions, characterize the semiconductor industry. Our financial performance depends, in part, on our ability to design, develop, manufacture, assemble, test, market and support new products and enhancements on a timely and cost-effective basis. If we are unable to continue to reduce package sizes, improve manufacturing yields and expand sales, we may not remain competitive. The competitiveness of designs that we have introduced, including integrated circuits and subsystems such as class D audio subsystems for newly-introduced home theatre DVD players supporting surround sound, power-over-ethernet, PDA backlighting subsystems, backlight control and power management solutions for the automotive notebook computer, monitors and the LCD TV market, LED driver solutions and power amplifiers for certain wireless LAN components, are subject to various risks and uncertainties that we are not able to control, including changes in customer demand and the introduction of new or superior technologies by others. Moreover, any failure by us in the future to develop new technologies or timely react to changes in existing technologies could materially delay our development of new products, which could result in product obsolescence, decreased revenues and a loss of our market share to our competitors. New technologies or products that we may develop may not lead to an incremental increase in revenues, and there is a risk that these new technologies or products will decrease the demand for our existing products and result in an offsetting reduction in revenues. In addition, products or technologies developed by others may render our products or technologies obsolete or non-competitive. A fundamental shift in technologies in our product markets could have a material adverse effect on our competitive position within the industry.

Compound semiconductor products may not successfully compete with silicon-based products.

Our choices of technologies for development and future implementation may not reflect future market demand. The production of gallium arsenide (GaAs), indium gallium phosphide (InGaP), silicon germanium (SiGe), indium gallium arsenide phosphide (InGaAsP) or silicon carbide (SiC) integrated circuits is more costly than the production of silicon circuits, and we believe it will continue to be more costly in the future. The costs differ because of higher costs of raw materials, lower production yields and higher unit costs associated with lower production volumes. Silicon semiconductor technologies are widely used in process technologies for integrated circuits, and these technologies continue to improve in performance. As a result, we must offer compound semiconductor products that provide vastly superior performance to that of silicon for specific applications in order for our products to be competitive with silicon products. If we do not offer compound semiconductor products that provide sufficiently superior performance to offset the cost differential and otherwise successfully compete with silicon-based products, our revenues and operating results may be materially and adversely affected.

Production delays related to new compound semiconductors could adversely affect our future results.

We utilize process technology to manufacture compound semiconductors such as GaAs, InGaP, SiGe, SiC and InGaAsP primarily to manufacture semiconductor components. We are pursuing this development effort internally as well as with third party foundries. Our efforts sometimes may not result in commercially successful products. Certain of our competitors offer this capability and our customers may purchase our competitors’ products instead of ours for this reason. In addition, the third party foundries that we use may delay delivery of, or even completely fail to deliver, technology and products to us. Our business and financial prospects could be materially and adversely affected by any failure by us to timely produce these products.

We may be unable to retain our customers due in part to our inability to fulfill our customer demand and other factors.

Our ability to fulfill our customers’ demand for our products is and will continue to be dependent in part on our order volumes and long lead times with regard to our manufacturing and testing of certain high-reliability products. The lead time for manufacture and testing of high-reliability products can be many months. In response to this current demand, we have recently increased our capital expenditures for production equipment as well as increased expenses for personnel at certain manufacturing locations. We may have delays or other difficulties in regard to increasing our production and in hiring and retaining qualified personnel. In addition, we have raised prices on certain products, primarily in our Aerospace, Defense & Security and Industrial, Medical & Alternative Energy end markets. Manufacturing delays and price increases may result in our customers reducing their purchase levels with us and/or seeking alternative solutions to meet their demand. In addition, the current demand may not continue in the future. Decreased sales as a result of a loss of one or more significant customers could materially and adversely impact our business and results of operations.

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Unfavorable or uncertain conditions in certain retail markets that our OEM customers address may cause fluctuations in our rate of revenue growth or financial results.

Some of the principal markets we serve include consumer markets, such as mobile/connectivity and notebooks, monitors and LCD televisions. If domestic and global economic conditions worsen, overall consumer spending may be reduced or shifted to products other than those made by our customers, which would adversely impact demand for products in these market. Reduced sales by our customers in these end markets will adversely impact demand by our customers for our products and could also slow new product introductions by our customers and by us. Lower net sales of our products would have an adverse effect on our revenue, cash flow and results of operations.

Fluctuations in sales of high-reliability products for use in implantable defibrillators may adversely affect our financial results.

Although the market for implantable defibrillators is growing, customers in this market could reduce their reliance on outside suppliers. The implantable defibrillator market also fluctuates based on several other factors, such as product recalls and the need to secure regulatory approvals. Product recalls can from time to time accelerate sales to levels that cannot be sustained for long periods of time. The timing and qualification of new generations of products brought to market by OEMs can also result in fluctuations in order rates.

Variability of our manufacturing yields may affect our gross margins and profits.

Our manufacturing yields vary significantly among products, depending on the complexity of a particular product’s design and our experience in manufacturing that type of product. We have in the past experienced difficulties in achieving planned yields, which have adversely affected our gross margins and profits.

The fabrication of semiconductor products is a highly complex and precise process. Problems in the fabrication process can cause a substantial percentage of wafers to be rejected or numerous circuits on each wafer to be non-functional, thereby reducing yields. These difficulties include:

• defects in masks, which are used to transfer circuit patterns onto our wafers;

• impurities in the materials used;

• contamination of the manufacturing environment; and

• equipment failure.

Because a large portion of our costs of manufacturing is relatively fixed and average selling prices for our products tend to decline over time, it is critical for us to improve the number of shippable circuits per wafer and increase the production volume of wafers in order to maintain and improve our results of operations. Yield decreases can result in substantially higher unit costs, which could materially and adversely affect our operating results and have done so in the past. Moreover, our process technologies have primarily utilized standard silicon semiconductor manufacturing equipment, and production yields of compound integrated circuits have been relatively low compared with silicon circuit devices. We may be unable to continue to improve yields in the future, and we may suffer periodic yield problems, particularly during the early production of new products or introduction of new process technologies. In either case, our results of operations could be materially and adversely affected.

Some of our facilities are located near major earthquake fault lines.

Our headquarters, our major operating facilities, and certain other critical business operations are located near known major earthquake fault lines. We presently do not have earthquake insurance. We could be materially and adversely affected in the event of a major earthquake.

Delays in beginning production, implementing production techniques, resolving problems associated with technical equipment malfunctions, or issues related to government or customer qualification of facilities could adversely affect our manufacturing efficiencies and our ability to realize cost savings.

Microsemi’s consolidated manufacturing efficiency will be an important factor in our future profitability, and we may be unsuccessful in our efforts to maintain or increase our manufacturing efficiency. Our manufacturing processes, and those utilized by our third-party subcontractors, are highly complex, require advanced and costly equipment and are sometimes modified in an effort to improve yields and product performance. We have from time to time experienced difficulty in

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transitions of manufacturing processes to different facilities or adopting new manufacturing processes. As a consequence, we have at times experienced delays in product deliveries and reduced yields. Every silicon wafer fabrication facility utilizes very precise processing, and processing difficulties and reduced yields commonly occur, often as a result of contamination of the material. Reduced manufacturing yields can often result in manufacturing and shipping delays due to capacity constraints. Therefore, manufacturing problems can result in additional operating expense and delayed or lost revenues. In one instance, which occurred in fiscal year 2005, Microsemi scrapped nonconforming inventory at a cost of approximately $1 million and experienced a delay of approximately two months in realizing approximately $1.5 million of net sales. In an additional instance, which occurred in fiscal year 2004, Microsemi encountered a manufacturing problem concerning contamination in a furnace that resulted in the quarantine of approximately one million units at a cost of approximately $2 million. The identification and resolution of that manufacturing issue required four months of effort to investigate and resolve, which resulted in a concurrent delay in realizing approximately $2 million of net sales. Microsemi may experience manufacturing problems in achieving acceptable yields or experience product delivery delays in the future as a result of, among other things, upgrading existing facilities, relocating processes to different facilities, or changing its process technologies, any of which could result in a loss of future revenues or an increase in manufacturing costs.

Interruptions, delays or cost increases affecting our materials, parts, equipment or subcontractors may impair our competitive position.

Our manufacturing operations, and the outside manufacturing operations that we use increasingly, in some instances depend upon obtaining a governmental qualification of the manufacturing process, and in all instances, adequate supplies of materials including wafers, parts and equipment (including silicon, mold compounds and lead frames) on a timely basis from third parties. Some of the outside manufacturing operations we use are based in foreign countries. Our results of operations could be adversely affected if we are unable to obtain adequate supplies of materials, parts and equipment in a timely manner or if the costs of materials, parts or equipment increase significantly. From time to time, suppliers may extend lead times, limit supplies or increase prices due to capacity constraints or other factors. Although we generally use materials, parts and equipment available from multiple suppliers, we have a limited number of suppliers for some materials, parts and equipment. In addition, if signs of improvement in the global economy do not progress as expected and global economic conditions worsen, our suppliers may cease operations or be unable to obtain capital at adequate or historical levels to finance their ongoing business and operations, which could impair their ability to continue to supply us. If alternate suppliers for these materials, parts and equipment are not available, our operations could be interrupted, which would have a material adverse effect on our operating results, financial condition and cash flows.

Some of our products are manufactured, assembled and tested by third-party subcontractors, some of whom are based in foreign countries. We generally do not have any long-term agreements with these subcontractors. As a result, we may not have direct control over product delivery schedules or product quality. Outside manufacturers generally will have longer lead times for delivery of products as compared with our internal manufacturing, and therefore, when ordering from these suppliers, we will be required to make longer-term estimates of our customers’ current demand for products, and these estimates are difficult to make accurately. Also, due to the amount of time typically required to qualify assemblers and testers, we could experience delays in the shipment of our products if we are forced to find alternate third parties to assemble or test our products. Any product delivery delays in the future could have a material adverse effect on our operating results, financial condition and cash flows. Our operations and ability to satisfy customer obligations could be adversely affected if our relationships with these subcontractors were disrupted or terminated. In addition, these subcontractors must be qualified by the U.S. government or customers for high-reliability processes. Historically the Defense Supply Center Columbus (DSCC) has rarely qualified any foreign manufacturing or assembly lines for reasons of national security; therefore, our ability to move certain manufacturing offshore may be limited or delayed.

We depend on third party subcontractors in Asia for wafer fabrication, assembly and packaging of an increasing portion of our products. On a unit basis, we currently utilize third-party subcontractors for approximately 79% of our assembly and packaging requirements and 22% of our wafer fabrication. We expect that these percentages may increase due, in part, to the manufacture of our next-generation products by third party subcontractors in Asia and from activity at recently acquired operations. The packaging of our products is performed by a limited group of subcontractors and some of the raw materials included in our products are obtained from a limited group of suppliers. Disruption or termination of any of these sources could occur and such disruptions or terminations could harm our business and operating results. In the event that any of our subcontractors were to experience financial, operational, production or quality assurance difficulties resulting in a reduction or interruption in supply to us, our operating results could suffer until alternate qualified subcontractors, if any, were to become available and active. In addition, because we rely on third-party subcontractors to perform certain key operational functions, we may be unable to directly control our product delivery schedules and quality assurance. The cost of product replacements or returns and other warranty matters in connection with qualify assurance problems caused by third party subcontractors could materially adversely affect us.

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Fixed costs may reduce operating results if our sales fall below expectations.

Our expense levels are based, in part, on our expectations for future sales. Many of our expenses, particularly those relating to capital equipment and manufacturing overhead, are relatively fixed. We might be unable to reduce spending quickly enough to compensate for reductions in sales. Accordingly, shortfalls in sales could materially and adversely affect our operating results. This challenge could be made even more difficult if lead times between orders and shipments are shortening.

Failure to manage consolidation of operations effectively could adversely affect our margins and earnings.

Our ability to successfully offer and sell our products requires effective planning and management processes. Our consolidations and realignments of operations, and expected future growth, may place a significant strain on our management systems and resources, including our financial and managerial controls, reporting systems, procedures and information technology. In addition, we will need to continue to train and manage our workforce worldwide. Any unmet challenges in that regard could negatively affect our results of operations.

Any failure by us to protect our proprietary technologies or maintain the right to use certain technologies may negatively affect our ability to compete.

We rely heavily on our proprietary technologies. Our future success and competitive position depend in part upon our ability to obtain or maintain protection of certain proprietary technologies used in our principal products. We do not have significant patent protection on many aspects of our technology. The protection of some of our technology as “trade secrets” will not necessarily protect us from all uses by other persons of our technology, or their use of technology that is similar or superior to that which is embodied in our trade secrets. In addition, others may be able to independently duplicate or exceed our technology in whole or in part. In the instances in which we hold patents or patent licenses, such as with respect to some circuit components for notebook computers and LCD TVs, any patents held by us may be challenged, invalidated or circumvented, or the rights granted under any patents may not provide us with competitive advantages. Patents often provide only narrow protection and require public disclosure of information that may otherwise be subject to trade secret protection. In addition, patents eventually expire and are not renewable.

Obtaining or protecting our proprietary rights may require us to defend claims of intellectual property infringement by our competitors. We could also become subject to lawsuits in which it is alleged that we or companies we have acquired have infringed or are infringing upon the intellectual property rights of others with or without our prior awareness of the existence of those third-party rights, if any. Litigation in connection with our intellectual property, whether instituted by us or others, could be very costly and distract management and other resources from our business. We are currently involved in certain patent litigation to protect our patents and patent rights, which could cause legal costs to increase above normal levels over the next several years. It is not possible to estimate the exact amounts of these costs, but it is possible that these costs could have a negative effect on our future results.

Moreover, if any infringement, real or imagined, happens to exist, arise or is claimed in the future, we may be exposed to substantial liability for damages and may need to obtain licenses from the patent owners, discontinue or change our processes or products or expend significant resources to develop or acquire non-infringing technologies. We may not be successful in such efforts, or such licenses may not be available under reasonable terms. Any failure by us to develop or acquire non-infringing technologies or to obtain licenses on acceptable terms could have a material adverse effect on our operating results, financial condition and cash flows.

Our products may be found to be defective or hazardous and we may not have sufficient liability insurance.

There is at any time a risk that our products may be found to be defective or to contain, without the customer’s knowledge, certain prohibited hazardous chemicals after we have already shipped the products in volume, perhaps requiring a product replacement or recall. We may be subject to product returns that could impose substantial costs and have a material and adverse effect on our business, financial condition and results of operations. Our aerospace, defense, and industrial businesses in particular expose us to potential liability risks that are inherent in the manufacturing and marketing of high-reliability electronic components for critical applications. Production of many of these products is sensitive to minute impurities, which can be introduced inadvertently in manufacture. Any production mistake can result in large and unanticipated product returns, product liability and warranty liability. Environmental regulations have imposed on every major participant in the electronics industry a new burden of determining and tracking the presence and quantity of certain chemicals in the content of supplies we buy and add to our products for sale and to inform our customers about each of our finished goods’ relevant chemical contents. The management and execution of this process is very challenging, and mistakes in this information gathering process could have a material adverse effect on our business.

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We may be subject to product liability claims with respect to our products. Our product liability insurance coverage may be insufficient to pay all such claims. In addition, product liability insurance may become too costly for us to maintain or may become completely unavailable to us in the future. We may not have sufficient resources to satisfy any product liability claims not covered by insurance, which would materially and adversely affect our financial position.

Environmental liabilities could adversely impact our consolidated financial position.

Federal, state and local laws and regulations impose various restrictions and controls on the discharge of materials, chemicals and gases used in our semiconductor manufacturing processes or in our finished goods. Under recent environmental regulations, we are responsible for determining whether certain toxic metals or certain other toxic chemicals are present in any given component we purchase and in each given product we sell. These environmental regulations have required us to expend a portion of our resources and capital on relevant compliance programs. In addition, under other laws and regulations, we could be held financially responsible for remedial measures if our current or former properties are contaminated or if we send waste to a landfill or recycling facility that becomes contaminated, even if we did not cause the contamination. Also, we may be subject to additional common law claims if we release substances that damage or harm third parties. Further, future changes in environmental laws or regulations may require additional investments in capital equipment or the implementation of additional compliance programs in the future. Any failure to comply with existing or future environmental laws or regulations could subject us to significant liabilities and could have a material adverse effect on our operating results, cash flows and financial condition.

In the conduct of our manufacturing operations, we have handled and do handle materials that are considered hazardous, toxic or volatile under federal, state and local laws. The risk of accidental release of such materials cannot be completely eliminated. In addition, we operate or own facilities located on or near real property that was formerly owned and operated by others. These properties were used in ways that involved hazardous materials. Contaminants may migrate from, within or through any such property, which may give rise to claims against us. Third parties who are responsible for contamination may not have funds, or may not make funds available when needed, to pay remediation costs imposed upon us jointly with them under environmental laws and regulations.

In Broomfield, Colorado, the owner of a property located adjacent to a manufacturing facility owned by one of our subsidiaries, Microsemi Corp. – Colorado, had notified the subsidiary and other parties of a claim that contaminants migrated to his property, thereby diminishing its value. In August 1995, the subsidiary, together with Coors Porcelain Company, FMC Corporation and Siemens Microelectronics, Inc. (former owners of the manufacturing facility), agreed to settle the claim and to indemnify the owner of the adjacent property for remediation costs. Although TCE and other contaminants previously used by former owners at the facility are present in soil and groundwater on the subsidiary’s property, we vigorously contest any assertion that our subsidiary caused the contamination. In November 1998, we signed an agreement with the three former owners of this facility whereby they have 1) reimbursed us for $0.5 million of past costs, 2) assumed responsibility for 90% of all future clean-up costs, and 3) promised to indemnify and protect us against any and all third-party claims relating to the contamination of the facility. An Integrated Corrective Action Plan was submitted to the State of Colorado. Sampling and management plans were prepared for the Colorado Department of Public Health & Environment. State and local agencies in Colorado are reviewing current data and considering study and cleanup options. The most recent forecast estimated that the total project cost, up to the year 2020, would be approximately $5.3 million; accordingly, we recorded a one-time charge of $0.5 million for this project in 2003. There has not been any significant development since September 28, 2003.

Litigation could adversely impact our consolidated financial position.

We are and have been involved in various litigation matters, including from time to time, litigation relating to employment matters, commercial transactions, intellectual property matters, contracts, environmental matters and matters related to compliance with governmental regulations. Litigation is inherently uncertain and unpredictable. The potential risks and uncertainties include, but are not limited to, such factors as the costs and expenses of litigation and the time and attention required of management to attend to litigation. An unfavorable resolution of any particular legal claim or proceeding, and/or the costs and expenses incurred in connection with a legal claim or proceeding, could have a material adverse effect on our consolidated financial position or results of operations.

Our future success depends, in part, upon our ability to continue to attract and retain the services of our executive officers or other key management or technical personnel.

We could potentially lose the services of any of our senior management personnel at any time due to a variety of factors that could include, without limitation, death, incapacity, military service, personal issues, retirement, resignation or competing employers. Our ability to execute current plans could be adversely affected by such a loss. We may fail to attract and retain

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qualified technical, sales, marketing and managerial personnel required to continue to operate our business successfully. Personnel with the expertise necessary for our business are scarce and competition for personnel with proper skills is intense. Also, attrition in personnel can result from, among other things, changes related to acquisitions, retirement and disability. We may not be able to retain existing key technical, sales, marketing and managerial employees or be successful in attracting, assimilating or retaining other highly-qualified technical, sales, marketing and managerial personnel, particularly at such times in the future as we may need to fill a key position. If we are unable to continue to retain existing executive officers or other key employees or are unsuccessful in attracting new highly-qualified employees, our business, financial condition and results of operations could be materially and adversely affected.

The volatility of our stock price could affect the value of an investment in our stock and our future financial position.

The market price of our stock has fluctuated widely. Between January 1, 2012 and October 3, 2010, the market sale price of our common stock ranged between a low of $14.49 and a high of $24.96. The historic market price of our common stock may not be indicative of future market prices. We may not be able to sustain or increase the value of our common stock. The trading price of our common stock may be influenced by factors beyond our control, such as the recent unprecedented volatility of the financial markets and the current uncertainty surrounding domestic and foreign economies. Declines in the market price of our stock could adversely affect our ability to retain personnel with stock incentives, to acquire businesses or assets in exchange for stock and/or to conduct future financing activities with or involving our common stock.

We may not make the sales that are suggested by our order rates, backlog or book-to-bill ratio, and our book-to-bill ratio may be affected by product mix.

Prospective investors should not place undue reliance on our book-to-bill ratios or changes in book-to-bill ratios. We determine bookings substantially based on orders that are scheduled for delivery within 12 months. However, lead times for the release of purchase orders depend, in part, upon the scheduling practices of individual customers, and delivery times of new or non-standard products can be affected by scheduling factors and other manufacturing considerations. The rate of booking new orders can vary significantly from month to month. Customers frequently change their delivery schedules or cancel orders. We have in the past experienced long lead times for some of our products, which may have therefore resulted in orders in backlog being duplicative of other orders in backlog, which would increase backlog without resulting in additional revenues. Because of long lead times in certain products, our book-to-bill ratio may not be an indication of sales in subsequent periods. Uncertain worldwide economic conditions and market instability have also resulted in hesitance of our customers to place orders with long delivery schedules, which contributes to limited visibility into our markets.

At times, our working capital levels have risen, which adversely affects cash flow.

At times, our working capital levels have risen and the increase has adversely affected cash flow. A factor contributing to the increase in our working capital has related to acquisitions with increases in accounts receivable and inventory generally exceeding increases in accounts payable and accrued liabilities. Another factor resulting in an increase in working capital has been a buildup of inventory prior to the consolidation of our manufacturing operations. We built inventory cushions during the transition of manufacturing between facilities in order to maintain an uninterrupted supply of product. Obsolescence of any inventory has recently and could in the future result in adverse effects on our future results of operations and future revenue. In 2009, in addition to other inventory write-downs, we recorded inventory write-downs of $10.3 million for product lines that did not meet gross margin targets, products that are being migrated to newer generations, and products that service the large capital spending end markets for which demand has declined and $7.3 million for estimated inventory components that were not expected to be used by the closure date of our Scottsdale facility and that cannot be used by other manufacturing facilities. During the quarter ended April 3, 2011, we recorded a charge of $8.4 million for the write-off of bridging inventory and an additional $8.2 million for the write-off of medical inventory.

There may be some potential effects of system outages.

We face risks from electrical or telecommunications outages, computer hacking or other general system failure. We rely heavily on our internal information and communications systems and on systems or support services from third parties to manage our operations efficiently and effectively. Any of these are subject to failure. System-wide or local failures that affect our information processing could have a material adverse effect on our business, financial condition, results of operations and cash flows. In addition, a system failure or data security breach could also result in the unintentional disclosure of confidential information about us, our customers or our employees. Further, insurance coverage does not generally protect from normal wear and tear, which can affect system performance. Any applicable insurance coverage for an occurrence could prove to be inadequate. Coverage may be or become unavailable or inapplicable to any risks then prevalent. We are upgrading and integrating, and have plans to upgrade and integrate further our enterprise information systems, and these efforts may cause additional strains on personnel and system resources or may result in potential system outages.

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Our investments in securities subject us to principal, liquidity and counterparty risks that could adversely affect our financial results.

We invest cash balances in excess of projected liquidity needs primarily in money market funds. At times, we have also entered into interest rate swap and foreign currency forward contracts. While all of our investments to date are highly rated and we believe our counterparties to be highly rated, current credit market disruptions may adversely affect the value and liquidity of these investments and may affect the ability of our counterparties to fulfill their contractual obligations.

We may have increasing difficulty attracting and retaining qualified outside Board members.

The directors and management of publicly traded corporations are increasingly concerned with the extent of their personal exposure to lawsuits and shareholder claims, as well as governmental and creditor claims that may be made against them in connection with their positions with publicly-held companies. Outside directors are becoming increasingly concerned with the availability of directors’ and officers’ liability insurance to pay on a timely basis the costs incurred in defending shareholder claims. Directors’ and officers’ liability insurance is expensive and difficult to obtain. The SEC and the NASDAQ Stock Market have also imposed higher independence standards and certain special requirements on directors of public companies. Accordingly, it may become increasingly difficult to attract and retain qualified outside directors to serve on our Board.

Delaware law and our charter documents contain provisions that could discourage or prevent a potential takeover of Microsemi that might otherwise result in our stockholders receiving a premium over the market price for their shares.

Provisions of Delaware law and our certificate of incorporation and bylaws could make more difficult an acquisition of Microsemi by means of a tender offer, a proxy contest, or otherwise, and the removal of incumbent officers and directors. These provisions include:

•     Section 203 of the Delaware General Corporation Law, which prohibits a merger with a 15%-or-greater stockholder, such as a party that has completed a successful tender offer, without board approval until three years after that party became a 15%-or-greater stockholder;

•     The authorization in the certificate of incorporation of undesignated preferred stock, which could be issued without stockholder approval in a manner designed to prevent or discourage a takeover or in a way that may dilute an investment in our common stock; and

•     Certain provisions of our charter documents, including provisions eliminating the ability of stockholders to take action by written consent or call special meetings and limiting the ability of stockholders to raise matters at a meeting of stockholders without giving advance notice, may have the effect of delaying or preventing changes in control or management of Microsemi. In addition, our charter documents do not permit cumulative voting, which may make it more difficult for a third party to gain control of our Board of Directors.

Our accounting policies and estimates have a material effect on the financial results we report.

Critical accounting policies and estimates have a material effect on our calculations and estimations of amounts in our financial statements. Our operating results and balance sheets may be adversely affected either to the extent that actual results prove to be materially lower than previous accounting estimates or to the extent that accounting estimates are revised adversely. We base our critical accounting policies, including our policies regarding revenue recognition, reserves for returns, rebates, price protections, and bad debt and inventory valuation, on various estimates and subjective judgments that we may make from time to time. The judgments made can significantly affect net income and our balance sheets. We are required to make significant judgments concerning inventory, and whether it becomes obsolete or excess, and concerning impairments of long-lived assets and of goodwill. Our judgments, estimates and assumptions are subject to change at any time. In addition, our accounting policies may change at any time as a result of changes in generally accepted accounting principles as they apply to us or changes in other circumstances affecting us. Changes in accounting policy have affected and could further affect, in each case materially and adversely, our results of operations or financial position.

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If, in the future, we conclude that our internal control over financial reporting is not effective, investors could lose confidence in the reliability of our financial statements, which could result in a decrease in the value of our common stock.

As directed by Section 404 of the Sarbanes-Oxley Act of 2002, the SEC adopted rules requiring public companies to include a report of management on the companies’ internal control over financial reporting in their annual reports on Form 10-K, including an assessment by management of the effectiveness of the filing company’s internal control over financial reporting. In addition, the independent registered public accounting firm auditing a public company’s financial statements must attest to the effectiveness of the company’s internal control over financial reporting. There is a risk that in the future we may identify internal control deficiencies that suggest that our controls are no longer effective. This could result in an adverse reaction in the financial markets due to a loss of confidence in the reliability of our financial statements, which could cause the market price of our common stock to decline and make it more difficult for us to finance our operations.

Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Inapplicable

Item 3. DEFAULTS UPON SENIOR SECURITIES

Inapplicable

Item 4. MINE SAFETY DISCLOSURES

Inapplicable

Item 5. OTHER INFORMATION

Inapplicable

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Item 6. EXHIBITS

Exhibit No.	Description
2.1	Support Agreement, dated September 21, 2011, by and among 0916753 B.C. ULC, Microsemi Corporation and Zarlink Semiconductor Inc. (incorporated by reference to Exhibit 1.2 to Amendment No. 3 to the Registrant’s Schedule 14D-1F as filed with the Commission on September 26, 2011)
3.1	Amended and Restated Certificate of Incorporation of Microsemi Corporation (incorporated by reference to Exhibit 3.1 to the Registrant’s Quarterly Report on Form 10-Q (File No. 0-08866) as filed with the Commission on February 10, 2011)
3.2	Second Amended and Restated Bylaws of Microsemi Corporation (incorporated by reference to Exhibit 3.2 to the Registrant’s Annual Report on Form 10-K (File No. 0-08866) as filed with the Commission on November 23, 2011)
10.1	Amendment No. 2 to Credit Agreement, dated as of October 13, 2011, by and among Microsemi Corporation, Morgan Stanley Senior Funding, Inc., Morgan Stanley & Co. LLC and the lenders referred to therein (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K (File No. 0-08866) as filed with the Commission on October 19, 2011)
10.2	Microsemi Corporation 2008 Performance Incentive Plan, as amended (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K (File No. 0-08866) as filed with the Commission on February 6, 2012)
10.3	Form of Notice of Performance Stock Unit Award†
10.4	Microsemi Corporation Fiscal 2012 Executive Non-Equity Incentive Plan†
31.1	Certification of Chief Executive Officer Pursuant to Securities Exchange Act Rules 13a-14(a) and 15d-14(a) as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, dated February 8, 2012†
31.2	Certification of Chief Financial Officer Pursuant to Securities Exchange Act Rules 13a-14(a) and 15d-14(a) as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, dated February 8, 2012†
32	Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, dated February 8, 2012†
101	The following financial statements are from Microsemi Corporation’s Report on Form 10-Q for the quarter ended January 1, 2012, formatted in XBRL (eXtensible Business Reporting Language): (i) Unaudited Consolidated Balance Sheets; (ii) Unaudited Consolidated Income Statements; (iii) Unaudited Consolidated Statements of Cash Flows; and (iv) Notes to Unaudited Consolidated Financial Statements.†

† Filed with this Report.

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SIGNATURES

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

	MICROSEMI CORPORATION
DATED: February 8, 2012	By:	/S/    JOHN W. HOHENER
		John W. Hohener
		Executive Vice President, Chief Financial Officer,
		Secretary and Treasurer
		(Principal Financial and Accounting Officer and duly authorized to sign on behalf of the Registrant)

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EXHIBIT INDEX

Exhibit No.	Description
2.1	Support Agreement, dated September 21, 2011, by and among 0916753 B.C. ULC, Microsemi Corporation and Zarlink Semiconductor Inc. (incorporated by reference to Exhibit 1.2 to Amendment No. 3 to the Registrant’s Schedule 14D-1F as filed with the Commission on September 26, 2011)
3.1	Amended and Restated Certificate of Incorporation of Microsemi Corporation (incorporated by reference to Exhibit 3.1 to the Registrant’s Quarterly Report on Form 10-Q (File No. 0-08866) as filed with the Commission on February 10, 2011)
3.2	Second Amended and Restated Bylaws of Microsemi Corporation (incorporated by reference to Exhibit 3.2 to the Registrant’s Annual Report on Form 10-K (File No. 0-08866) as filed with the Commission on November 23, 2011)
10.1	Amendment No. 2 to Credit Agreement, dated as of October 13, 2011, by and among Microsemi Corporation, Morgan Stanley Senior Funding, Inc., Morgan Stanley & Co. LLC and the lenders referred to therein (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K (File No. 0-08866) as filed with the Commission on October 19, 2011)
10.2	Microsemi Corporation 2008 Performance Incentive Plan, as amended (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K (File No. 0-08866) as filed with the Commission on February 6, 2012)
10.3	Form of Notice of Performance Stock Unit Award†
10.4	Microsemi Corporation Fiscal 2012 Executive Non-Equity Incentive Plan†
31.1	Certification of Chief Executive Officer Pursuant to Securities Exchange Act Rules 13a-14(a) and 15d-14(a) as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, dated February 8, 2012†
31.2	Certification of Chief Financial Officer Pursuant to Securities Exchange Act Rules 13a-14(a) and 15d-14(a) as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, dated February 8, 2012†
32	Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, dated February 8, 2012†
101	The following financial statements are from Microsemi Corporation’s Report on Form 10-Q for the quarter ended January 1, 2012, formatted in XBRL (eXtensible Business Reporting Language): (i) Unaudited Consolidated Balance Sheets; (ii) Unaudited Consolidated Income Statements; (iii) Unaudited Consolidated Statements of Cash Flows; and (iv) Notes to Unaudited Consolidated Financial Statements.†

† Filed with this Report.

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EX-10.3

Exhibit 10.3

NOTICE OF GRANT OF PERFORMANCE STOCK UNIT AWARD

UNDER TERMS AND CONDITIONS OF 2008 PERFORMANCE INCENTIVE PLAN

Name of Grantee:
Total Target Number of Stock Units Subject to this Grant1:
	Target Number of EPS Stock Units Subject to this Grant1:
	Target Number of Revenue Stock Units Subject to this Grant1:
Date of Grant:

This Notice evidences that you have been granted an award of stock units (the “Stock Units”) of Microsemi Corporation (the “Corporation”) as to the “total target” number set forth above. Between zero percent (0%) and two hundred percent (200%) of the “total target” number of Stock Units will vest and become nonforfeitable in accordance with the performance-based vesting requirements set forth in the Terms (as defined below).

By your acceptance of the award, you agree that the award of Stock Units is granted under and governed by the terms and conditions of the Corporation’s 2008 Performance Incentive Plan (as amended from time to time, the “Plan”) and the Terms and Conditions of Performance Stock Unit Award (the “Terms”), which are attached and incorporated herein by this reference. This Notice of Grant of Performance Stock Unit Award, together with the Terms, is referred to as the “Agreement” applicable to your award. The award has been granted to you in addition to, and not in lieu of, any other form of compensation otherwise payable or to be paid to you. Capitalized terms are defined in the Plan if not defined herein or in the Terms. The Plan, the Terms, the Prospectus for the Plan and Prospectus Supplement with respect to Stock Unit awards under the Plan are currently available to view or download on MiHR on the MiStock Awards page. Alternatively, you may call the Corporation to obtain the Plan, the Terms, Prospectus and/or Prospectus Supplement at (949) 380-6100.

By accepting the Award, you agree to execute any documents and take such further actions that the Corporation may reasonably request in order to establish and/or maintain a recordkeeping account to reflect the award and/or a brokerage account to hold any shares of Common Stock that may be paid with respect to the award.

MICROSEMI CORPORATION	ACCEPTED AND AGREED BY GRANTEE
By:	By:
Name:	Name:
Title:

¹  Subject to adjustment under Section 7.1 of the Plan.

MICROSEMI CORPORATION

2008 PERFORMANCE INCENTIVE PLAN

TERMS AND CONDITIONS OF PERFORMANCE STOCK UNIT AWARD

1. General.

These Terms and Conditions of Performance Stock Unit Award (these “Terms”) apply to a particular grant of stock units under the Plan (the “Award”) if incorporated by reference in the Notice of Grant of Performance Stock Unit Award (the “Grant Notice”) corresponding to that particular grant. The recipient of the Award identified in the Grant Notice is referred to as the “Grantee.” The effective date of grant of the Award as set forth in the Grant Notice is referred to as the “Award Date.” The number of stock units covered by the Award is subject to adjustment under Section 7.1 of the Plan.

The Award was granted under and subject to the Microsemi Corporation 2008 Performance Incentive Plan (the “Plan”). Capitalized terms are defined in the Plan if not defined herein. The Award has been granted to the Grantee in addition to, and not in lieu of, any other form of compensation otherwise payable or to be paid to the Grantee. The Grant Notice and these Terms are collectively referred to as the “Agreement” applicable to the Award.

As used in the Agreement, the term “stock unit” means a non-voting unit of measurement which is deemed for bookkeeping purposes to be the equivalent to one outstanding share of the Corporation’s Common Stock solely for purposes of the Plan and this Agreement. The Stock Units shall be used solely as a device for the determination of the payment to eventually be made to the Grantee if such Stock Units vest pursuant to Section 2 of the Terms. The Stock Units shall not be treated as property or as a trust fund of any kind.

2. Vesting.

Subject to Sections 3 and 8.2 below, the percentage of the Total Target Number of Stock Units (as set forth in the Grant Notice) subject to the Award that vest will be determined based on the Corporation’s Adjusted EPS and Revenue (as such terms are defined below) for the Corporation’s 2012 and 2013 fiscal years as set forth below in this Section 2. (As set forth in the Grant Notice, fifty percent (50%) of the Total Target Number of Stock Units are referred to as the “Target Number of EPS Stock Units,” and fifty percent (50%) of the Total Target Number of Stock Units are referred to as the “Target Number of Revenue Stock Units.”) The percentage of the Target Number of EPS Stock Units subject to the Award that vest will be determined based on the Corporation’s Adjusted EPS Growth Performance Ranking for the performance period, and the percentage of the Target Number of Revenue Stock Units subject to the Award that vest will be determined based on the Corporation’s Revenue Growth Performance Ranking for the performance period.

2.1 Performance-Based Vesting. Up to thirty percent (30%) of the Target Number of EPS Stock Units subject to the Award and up to thirty percent (30%) of the Target Number of Revenue Stock Units subject to the Award will be eligible to vest based on the applicable Growth Performance Ranking of the Corporation for its 2012 fiscal year (the “FY12 Performance Period”) in accordance with the following tables:

Adjusted EPS Growth Performance Ranking for the FY12 Performance Period	Percentage of Target Number of EPS Stock Units that Vest
Lower than 30th Percentile	0%
30th Percentile	7.5%
70th Percentile or Higher	30.0%

Revenue Growth Performance Ranking for the FY12 Performance Period	Percentage of Target Number of Revenue Stock Units that Vest
Lower than 30th Percentile	0%
30th Percentile	7.5%
70th Percentile or Higher	30.0%

The percentage of the Target Number of EPS Stock Units subject to the Award and the percentage of the Target Number of Revenue Stock Units subject to the Award that will vest based on the applicable Growth Performance Ranking of the Corporation for the two-year period comprising the Corporation’s 2012 fiscal year and the Corporation’s 2013 fiscal year (the “FY12-FY13 Performance Period”) will be determined in accordance with the following tables, provided, that the number of Stock Units that vest for the FY12-FY13 Performance Period based on the tables below shall be reduced (but not below zero) by number of Stock Units that vested based on the Corporation’s performance for the FY12 Performance Period as determined above:

Adjusted EPS Growth Performance Ranking for FY12-FY13 Performance Period	Percentage of Target Number of EPS Stock Units that Vest
Lower than 30th Percentile	0%
30th Percentile	25.0%
70th Percentile	100.0%
95th Percentile or Higher	200.0%

Revenue Growth Performance Ranking for FY12-FY13 Performance Period	Percentage of Target Number of Revenue Stock Units that Vest
Lower than 30th Percentile	0%
30th Percentile	25.0%
70th Percentile	100.0%
95th Percentile or Higher	200.0%

For each of the four tables above, the applicable vesting percentage will be interpolated on a linear basis between the levels stated in the applicable table and fractional shares shall be rounded to the nearest whole share.

Any Stock Units that do not vest based on the performance requirements set forth in this Section 2 (and which have not previously vested or terminated pursuant to the terms of this Agreement) will automatically terminate as of the last day of the FY12-FY13 Performance Period. The number of Stock Units that vest based on performance as of the end of the applicable Performance Period will be determined by the Administrator following the end of the applicable Performance Period, and payment of vested Stock Units will be made as provided in Section 5 of this Agreement. Any such determination by the Administrator shall be final and binding. In all events, the maximum number of Stock Units that may vest under the Award

based on Adjusted EPS Growth Performance Ranking is two hundred percent (200%) of the Target Number of EPS Stock Units, and the maximum number of Stock Units that may vest under the Award based on Revenue Growth Performance Ranking is two hundred percent (200%) of the Target Number of Revenue Stock Units, such that the maximum number of Stock Units that may vest under the Award is two hundred percent (200%) of the Total Target Number of Stock Units.

For purposes of illustration only, assume that (1) the Total Target Number of Stock Units subject to the Award is 20,000 (so that the Target Number of EPS Stock Units is 10,000 and the Target Number of Revenue Stock Units is 10,000); (2) the Corporation’s Adjusted EPS Growth Performance Ranking for the FY12 Performance Period is at the 60^th percentile, and the Corporation’s Adjusted EPS Growth Performance Ranking for the FY12-FY13 Performance Period is at the 75^th percentile; and (3) the Corporation’s Revenue Growth Performance Ranking for the FY12 Performance Period is at the 50^th percentile, and the Corporation’s Revenue Growth Performance Ranking for the FY12-FY13 Performance Period is at the 70^th percentile. For the FY12 Performance Period, the Award would vest as to 2,438 Stock Units (or 24.375% of the Target Number of EPS Stock Units) based on the Adjusted EPS Growth Performance Ranking for that period and 1,875 Stock Units (or 18.75% of the Target Number of Revenue Stock Units) based on the Revenue Growth Performance Ranking for that period. Thus, a total of 4,313 Stock Units would vest for the FY12 Performance Period. For the FY12-FY13 Performance Period, the Award would vest, subject to reduction as provided in the next sentence, as to 12,000 Stock Units (or 120.00% of the Target Number of EPS Stock Units) based on the Adjusted EPS Growth Performance Ranking for that period and 10,000 Stock Units (or 100.00% of the Target Number of Revenue Stock Units) based on the Revenue Growth Performance Ranking for that period. That 22,000 total number of Stock Units for the FY12-FY13 Performance Period would be reduced by the 4,313 Stock Units that vested for the FY12 Performance Period. Accordingly, the Award would vest as to an additional 17,687 Stock Units for the FY12-FY13 Performance Period for a total of 22,000 vested Stock Units when both Performance Periods are taken into account.

2.2 Defined Terms.

For purposes of the Award, the following definitions will apply:

“Performance Period” means either the FY12 Performance Period or the FY12-FY13 Performance Period, as applicable.

“Adjusted EPS” means, as to a particular Company Peer Group member for a particular period, the reported earnings per share of the Company Peer Group member for that period (using the calculation, whether in accordance with Generally Accepted Accounting Principles (“GAAP”) or non-GAAP, principally used by the Company Peer Group member to publicly report its earnings per share for that period), subject to the adjustments described below. To determine Adjusted EPS, the Administrator shall adjust the reported earnings per share of each Company Peer Group member for the period to eliminate (to the extent necessary and without duplication) the impact of stock splits, reverse stock splits, and stock dividends. The Administrator’s determination of the Adjusted EPS for a Company Peer Group member and whether, and the extent to which, any such adjustment is necessary shall be final and binding.

“Adjusted EPS Growth Performance Ranking” means, as to a particular Performance Period, the ranking of the Corporation’s Adjusted EPS growth for that Performance Period relative to the Adjusted EPS growth levels for that Performance Period for the companies

(including the Corporation) comprising the Company Peer Group identified below. The Adjusted EPS Growth Performance Ranking for any particular entity within the Company Peer Group shall be determined based on the Company Peer Group member’s Adjusted EPS for the fiscal quarters of such entity that end during the applicable Performance Period, when compared with the Company Peer Group member’s Adjusted EPS for the four consecutive fiscal quarters of such entity that ended immediately prior to the applicable Performance Period, all as determined by the Administrator based on information publicly available to the Administrator at the time it makes such determination.

“Revenue” means, as to a particular Company Peer Group member for a particular period, the reported revenue of the Company Peer Group member for that period (using the calculation, whether in accordance with GAAP or non-GAAP, principally used by the Company Peer Group member to publicly report its revenue for that period). The Administrator’s determination of the Revenue for a Company Peer Group member shall be final and binding.

“Revenue Growth Performance Ranking” means, as to a particular Performance Period, the ranking of the Corporation’s Revenue growth for that Performance Period relative to the Revenue growth levels for that Performance Period for the companies (including the Corporation) comprising the Company Peer Group identified below. The Revenue Growth Performance Ranking for any particular entity within the Company Peer Group shall be determined based on the Company Peer Group member’s Revenue for the fiscal quarters of such entity that end during the applicable Performance Period, when compared with the Company Peer Group member’s Revenue for the four consecutive fiscal quarters of such entity that ended immediately prior to the applicable Performance Period, all as determined by the Administrator based on information publicly available to the Administrator at the time it makes such determination.

“Growth Performance Ranking” means either Adjusted EPS Growth Performance Ranking or Revenue Growth Performance Ranking, as applicable.

“Company Peer Group” means the Corporation and each of the following companies:

Aeroflex Holding Corporation	Maxim Integrated Products, Inc.
Amkor Technology, Inc.	Micrel, Inc.
Atmel Corporation	Microchip Technology, Inc.
AVX Corporation	MKS Instruments
Cirrus Logic, Inc.	ON Semiconductor Corporation
Cypress Semiconductor Corporation	PMC Sierra, Inc.
Diodes, Inc.	Power Integrations, Inc.
Emulex Corporation	QLogic Corporation
Fairchild Semiconductor International, Inc.	RF Micro Devices, Inc.
Integrated Device Technology, Inc.	Semtech Corporation
International Rectifier Corporation	Silicon Laboratories, Inc.
Intersil Corporation	Skyworks Solutions, Inc.
Linear Technology Corporation	TriQuint Semiconductor Inc
LSI Corporation	Vishay Intertechnology, Inc.

The Company Peer Group shall be subject to adjustment by the Administrator for changes that occur prior to the end of the applicable Performance Period as follows: In the event of a merger or other business combination of two Company Peer Group members (including, without limitation, the acquisition of one Company Peer Group member, or all or substantially all of its assets, by another Company Peer Group member), the surviving, resulting or successor entity,

as the case may be, shall continue to be treated as a member of the Company Peer Group, provided that the common stock (or similar equity security) of such entity is listed or traded on a national securities exchange as of the end of the Performance Period. In the event that the common stock (or similar equity security) of a Company Peer Group member is not listed or traded on a national securities exchange at the end of the Performance Period as a result of a merger into or acquisition by another company (including, without limitation, as a result of an acquisition of all or substantially all of the assets of such entity), such entity shall be excluded from the Company Peer Group used to determine the Corporation’s Growth Performance Ranking for that Performance Period. In the event that the common stock (or similar equity security) of a Company Peer Group member is not listed or traded on a national securities exchange at the end of the Performance Period (as a result of the delisting of such entity’s stock, the dissolution of such entity, or otherwise), other than as a result of a merger into or acquisition (including an acquisition of all or substantially all of the assets of such entity) by another company, such entity will be included as a Company Peer Group member for that Performance Period and such entity’s growth performance level for that Performance Period will be deemed to result in the ranking of the entity at the bottom of the Company Peer Group members for that Performance Period, without regard to such entity’s actual performance for that Performance Period.

2.3 Adjustments. In determining the Stock Units that vest with respect to a Performance Period, the Administrator shall not (except as otherwise expressly provided in this Agreement) adjust the Growth Performance Ranking (or related performance goals, criteria or metrics) of the Corporation or any other Company Peer Group members.

3. Effect of Termination of Employment or Services.

Except as otherwise expressly provided below in this Section 3, if the Grantee ceases to be employed by or ceases to provide services to the Corporation or one of its Subsidiaries (the date of such termination of employment or services is referred to as the Grantee’s “Severance Date”), the Grantee’s Stock Units shall terminate to the extent such units have not become vested pursuant to Section 2 or Section 8.2 hereof as of the Severance Date (regardless of the reason for such termination of employment or services, whether with or without cause, voluntarily or involuntarily).

• If, however, the Grantee’s employment with the Corporation and its Subsidiaries terminates due to the Grantee’s death or Disability prior to the last day of the FY12-FY13 Performance Period, the Stock Units shall accelerate to such extent that the Total Target Number of Stock Units subject to the Award (including any Stock Units that may have vested prior to the date of such event pursuant to Section 2 hereof with respect to the FY12 Performance Period) shall be fully vested as of the date of such event and any remaining unvested Stock Units subject to the Award (after giving effect to such acceleration, if required) shall terminate as of such event.

• If, however, the Grantee’s employment with the Corporation or one of its Subsidiaries terminates prior to the last day of the FY12-FY13 Performance Period (other than due to Grantee’s death or Disability) and, in connection with the Grantee’s Severance Date, the Grantee is entitled to accelerated vesting of his or her outstanding equity awards pursuant to the terms of any written employment, severance or similar agreement with the Corporation effect at the time of such termination, the Performance Periods then in effect with respect to the Award shall be deemed to end as of the last day of the fiscal quarter of the Corporation in which

the Severance Date occurs (subject to the provisions of Section 8.2 below should a Change in Control Event occur before the end of such shortened period), and the Award will vest as of the end of such shortened period in accordance with Section 2 with performance measured for such shortened period.

• If, however, the Grantee’s employment with the Corporation or one of its Subsidiaries terminates prior to the last day of the FY12-FY13 Performance Period (other than due to Grantee’s death or Disability, and other than a termination described in the preceding bullet point) and such termination qualifies as a Retirement, the Performance Periods then in effect with respect to the Award shall be deemed to end as of the last day of the fiscal quarter of the Corporation in which the Severance Date occurs (subject to the provisions of Section 8.2 below should a Change in Control Event occur before the end of such shortened period), each of the Target Number of EPS Stock Units and the Target Number of Revenue Stock Units subject to the Award will be pro-rated as described below, and the Award will vest as of the end of such shortened period in accordance with Section 2 with performance measured for such shortened period. In the event of such a Retirement, each of the Target Number of EPS Stock Units and the Target Number of Revenue Stock Units subject to the Award will be pro-rated as of the Grantee’s Severance Date by multiplying such Target Number of Stock Units otherwise subject to the Award by a fraction, the numerator of which is the total number of calendar days in the FY12-FY13 Performance Period that the Grantee was employed by the Corporation or one of its Subsidiaries and the denominator of which is the total number of calendar days in the FY12-FY13 Performance Period. If such a Retirement occurs after the FY12 Performance Period, the offset to any pro-rated Stock Units payable to the FY12-FY13 Performance Period for any Stock Units paid or payable for the FY12 Performance Period will be based on the actual (not pro-rated) Stock Units paid or payable for the FY12 Performance Period.

With respect to a termination of employment referred to in either of the preceding two bullet points, any remaining unvested Stock Units subject to the Award at the end of the shortened Performance Period shall terminate as of the end of such shortened period.

For the purposes of the Award, “Disability” has the meaning given to such term in Treas. Reg. Section 1.409A-3(i)(4). For purposes of the Award, “Retirement” means the Grantee’s Severance Date occurs more than ninety (90) days after the Date of Grant of the Award and, on the Severance Date, the Grantee has attained at least age 65 and has at least 10 years of service to the Corporation and/or its Subsidiaries.

If any unvested Stock Units are terminated pursuant to this Agreement, such Stock Units shall automatically terminate and be cancelled as of the applicable termination date without payment of any consideration by the Corporation and without any other action by the Grantee, or the Grantee’s beneficiary or personal representative, as the case may be.

4. Continuance of Employment/Service Required; No Employment/Service Commitment.

Except as expressly provided in Section 3 above, the vesting schedule requires continued employment or service through each applicable vesting date as a condition to the vesting of the applicable installment of the Award and the rights and benefits under this Agreement. Except as expressly provided in Section 3 above, employment or service for only a

portion of the vesting period, even if a substantial portion, will not entitle the Grantee to any proportionate vesting or avoid or mitigate a termination of rights and benefits upon or following a termination of employment or services as provided in Section 3 above or under the Plan.

Nothing contained in this Agreement or the Plan constitutes an employment or service commitment by the Corporation, affects the Grantee’s status as an employee at will who is subject to termination without cause, confers upon the Grantee any right to remain employed by or in service to the Corporation or any Subsidiary, interferes in any way with the right of the Corporation or any Subsidiary at any time to terminate such employment or services, or affects the right of the Corporation or any Subsidiary to increase or decrease the Grantee’s other compensation or benefits. Nothing in this paragraph, however, is intended to adversely affect any independent contractual right of the Grantee without his consent thereto.

5. Timing and Manner of Payment of Stock Units.

On or as soon as administratively practical following any vesting of Stock Units subject to the Award pursuant to Section 2, Section 3 or Section 8.2 hereof (and in all events not later than two and one-half months after the applicable vesting date), the Corporation shall deliver to the Grantee a number of shares of Common Stock (either by delivering one or more certificates for such shares or by entering such shares in book entry form, as determined by the Corporation in its discretion) equal (subject to adjustment pursuant to Section 7.1 of the Plan) to the number of Stock Units subject to this Award that vested on the corresponding vesting date. The Corporation’s obligation to deliver shares of Common Stock or otherwise make payment with respect to vested Stock Units is subject to the condition precedent that the Grantee or other person entitled under the Plan to receive any shares with respect to the vested Stock Units deliver to the Corporation any representations or other documents or assurances required pursuant to Section 8.1 of the Plan. The Grantee shall have no further rights with respect to any Stock Units that are so paid or that terminate pursuant to the terms hereof.

6. Dividend and Voting Rights.

6.1 Limitations on Rights Associated with Units. The Grantee shall have no rights as a stockholder of the Corporation, no dividend rights (except as expressly provided in Section 6.2 with respect to Dividend Equivalent Rights) and no voting rights, with respect to the Stock Units and any shares of Common Stock underlying or issuable in respect of such Stock Units until such shares of Common Stock are actually issued to and held of record by the Grantee. No adjustments will be made for dividends or other rights of a holder for which the record date is prior to the date of issuance of the stock certificate.

6.2 Dividend Equivalent Rights Distributions. As of any date that the Corporation pays an ordinary cash dividend on its Common Stock, the Corporation shall credit the Grantee with an additional number of Stock Units equal to (i) the per share cash dividend paid by the Corporation on its Common Stock on such date, multiplied by (ii) the Total Target Number of Stock Units (including any dividend equivalents previously credited hereunder) (with such Target Number adjusted pursuant to Section 7.1 of the Plan) subject to the Award as of the related dividend payment record date, divided by (iii) the fair market value of a share of Common Stock on the date of payment of such dividend (with the “fair market value” of such shares determined in accordance with the applicable provisions of the Plan). Any Stock Units credited pursuant to the foregoing provisions of this Section 6.2 shall be subject to the same vesting, payment and other terms, conditions and restrictions as the original Stock Units to which they relate. No crediting of Stock Units shall be made pursuant to this Section 6.2 with respect to any Stock Units which, as of such record date, have either been paid pursuant to Section 5 or terminated pursuant to the terms hereof.

7. Non-Transferability.

Neither the Award, nor any interest therein or amount or shares payable in respect thereof may be sold, assigned, transferred, pledged or otherwise disposed of, alienated or encumbered, either voluntarily or involuntarily. The transfer restrictions in the preceding sentence shall not apply to (a) transfers to the Corporation, or (b) transfers by will or the laws of descent and distribution.

8. Adjustments; Change in Control.

8.1 Adjustments. Upon the occurrence of certain events relating to the Corporation’s stock contemplated by Section 7.1 of the Plan (including, without limitation, an extraordinary cash dividend on such stock), the Administrator shall make adjustments in accordance with such section in the number of Stock Units then outstanding and the number and kind of securities that may be issued in respect of the Award. No such adjustment shall be made with respect to any ordinary cash dividend for which dividend equivalents are credited pursuant to Section 6.2. For purposes of clarity, Sections 2.2 and 2.3 control as to any adjustment of the performance goals, criteria or metrics.

8.2 Change in Control. If, at any time after the Award Date and before the last day of the FY12-FY13 Performance Period (or, in the case of a “shortened” performance period provided in Section 3, before the last day of such shortened period), a Change in Control Event occurs in which the Corporation does not survive (or does not survive as a public company in respect of its Common Stock), the Award shall accelerate to such extent that the greater of the following (after giving effect to and including any Stock Units that may have vested prior to the date of such event pursuant to Section 2 hereof) shall be fully vested as of the date of such event:

• the Total Target Number of Stock Units subject to the Award; or

• the number of Stock Units that would be payable to the Grantee if the FY12-FY13 Performance Period ended as of the last day of the fiscal quarter of the Corporation coinciding with or last preceding the date on which such Change in Control Event occurred, and the Award vested as of the end of such shortened period in accordance with Section 2 with performance measured for such shortened period;

provided, however, that the accelerated vesting otherwise provided for above in this Section 8.2 shall not apply if the Stock Units terminated or were accelerated pursuant to Section 3 prior to the occurrence of such event. For purposes of the Agreement, “Change in Control Event” means a “change in the ownership” of the Corporation, a “change in effective control” of the Corporation, or a “change in the ownership of a substantial portion of the assets” of the Corporation, within the meaning of Section 409A of the Code.

9. Tax Withholding.

Upon or in connection with the vesting of the Stock Units, the payment of dividend equivalents and/or the distribution of shares of Common Stock in respect of the Stock Units, the Corporation (or the Subsidiary last employing the Grantee) shall have the right at its option to

(a) require the Grantee to pay or provide for payment in cash of the amount of any taxes that the Corporation or the Subsidiary may be required to withhold with respect to such vesting, payment and/or distribution, or (b) deduct from any amount payable to the Participant the amount of any taxes which the Corporation or the Subsidiary may be required to withhold with respect to such vesting, payment and/or distribution. In any case where a tax is required to be withheld in connection with the delivery of shares of Common Stock under the Award Agreement, the Administrator may, in its sole discretion, direct the Corporation or the Subsidiary to reduce the number of shares to be delivered by (or otherwise reacquire) the appropriate number of whole shares or to require the sale of shares of Common Stock in respect to the Stock Units, valued at their then fair market value (with the “fair market value” of such shares determined in accordance with the applicable provisions of the Plan), to satisfy such withholding obligation at the minimum applicable withholding rates.

10. Notices.

Any notice to be given under the terms of this Agreement shall be in writing and addressed to the Corporation at its principal office to the attention of the Secretary, and to the Grantee at the Grantee’s last address reflected on the Corporation’s employment records. Any notice shall be delivered in person or shall be enclosed in a properly sealed envelope, addressed as aforesaid, registered or certified, and deposited (postage and registry or certification fee prepaid) in a post office or branch post office regularly maintained by the United States Government or a courier of internationally recognized prominence. Any such notice shall be given only when received, but if the Grantee is no longer an Eligible Person, shall be deemed to have been duly given five business days after the date mailed in accordance with the foregoing provisions of this Section 10.

11. Plan.

The Award and all rights of the Grantee under this Agreement are subject to the terms and conditions of the Plan, incorporated herein by this reference. The Grantee agrees to be bound by the terms of the Plan and this Agreement. The Grantee acknowledges having read and understanding the Plan, the Prospectus for the Plan, and this Agreement. Unless otherwise expressly provided in other sections of this Agreement, provisions of the Plan that confer discretionary authority on the Board or the Administrator do not (and shall not be deemed to) create any rights in the Grantee unless such rights are expressly set forth herein or are otherwise in the sole discretion of the Board or the Administrator so conferred by appropriate action of the Board or the Administrator under the Plan after the date hereof.

12. Entire Agreement.

This Agreement and the Plan together constitute the entire agreement and supersede all prior understandings and agreements, written or oral, of the parties hereto with respect to the subject matter hereof. The Plan may be amended pursuant to Section 8.6 of the Plan. This Agreement may be amended by the Administrator from time to time. Any such amendment must be in writing and signed by the Corporation. Any such amendment that materially and adversely affects the Grantee’s rights under this Agreement requires the consent of the Grantee in order to be effective with respect to the Award. The Corporation may, however, unilaterally waive any provision hereof in writing to the extent such waiver does not adversely affect the interests of the Grantee hereunder, but no such waiver shall operate as or be construed to be a subsequent waiver of the same provision or a waiver of any other provision hereof.

13. Limitation on Grantee’s Rights.

Participation in the Plan confers no rights or interests other than as herein provided. This Agreement creates only a contractual obligation on the part of the Corporation as to amounts payable and shall not be construed as creating a trust. Neither the Plan nor any underlying program, in and of itself, has any assets. The Grantee shall have only the rights of a general unsecured creditor of the Corporation with respect to amounts credited and benefits payable, if any, with respect to the Stock Units, and rights no greater than the right to receive the Common Stock as a general unsecured creditor with respect to Stock Units, as and when payable hereunder.

14. Counterparts.

This Agreement may be executed simultaneously in any number of counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument.

15. Section Headings.

The section headings of this Agreement are for convenience of reference only and shall not be deemed to alter or affect any provision hereof.

16. Governing Law.

This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of Delaware without regard to conflict of law principles thereunder.

17. Construction.

It is intended that the terms of the Award will not result in the imposition of any tax liability pursuant to Section 409A of the Code. It is further intended that the Award will qualify as performance-based compensation within the meaning of Section 162(m) of the Code. This Agreement shall be construed and interpreted consistent with the foregoing intents.

EX-10.4

Exhibit 10.4

MICROSEMI CORPORATION

FISCAL 2012 EXECUTIVE NON-EQUITY INCENTIVE PLAN

1. Purpose.

The purpose of this Microsemi Corporation Fiscal 2012 Executive Non-Equity Incentive Plan (this “Plan”) is to promote the success of Microsemi Corporation, a Delaware corporation, (the “Company”) by (i) compensating and rewarding participating executives with bonuses for the achievement of pre-established performance goals and (ii) motivating such executives by giving them opportunities to receive bonuses directly related to such performance. This Plan is intended to provide bonuses that qualify as performance-based compensation within the meaning of Section 162(m) of the Internal Revenue Code. This Plan is adopted under Section 5.2 of the Company’s 2008 Performance Incentive Plan, as amended (the “Performance Incentive Plan”).

2. Definitions.

“Adjusted EPS” means the Company’s non-GAAP earnings per share for the particular Performance Period as determined by the Company in accordance with its standard practices and procedures and reflected in its financial statements for the particular Performance Period, subject to the adjustments described in Section 4.7 below.

“Adjusted Revenue” means the Company’s revenue for the particular Performance Period as determined by the Company in accordance with its standard practices and procedures and reflected in its financial statements, subject to the adjustments described in Section 4.7 below.

“Applicable EPS Percentage” means, as to a particular Performance Period, a percentage determined based on the Company’s Adjusted EPS for that Performance Period, which percentage shall be (i) in the case of the First Half Performance Period, between zero percent (0%) and one hundred percent (100%) and (ii) in the case of the FY12 Performance Period, between zero percent (0%) and two hundred percent (200%).

“Applicable Revenue Percentage” means, as to a particular Performance Period, a percentage determined based on the Company’s Adjusted Revenue for that Performance Period, which percentage shall be (i) in the case of the First Half Performance Period, between zero percent (0%) and one hundred percent (100%) and (ii) in the case of the FY12 Performance Period, between zero percent (0%) and two hundred percent (200%).

“Award” means an award of an opportunity to receive a Bonus under this Plan, subject to the terms and conditions of this Plan.

“Base Salary” means the annualized rate of base salary paid to a Participant by the Company and its Subsidiaries as in effect at the then current rate (exclusive of any commissions or other actual or imputed income from any benefits or perquisites provided by the Company or a Subsidiary, but prior to any reductions for salary deferred pursuant to any deferred compensation plan or for contributions to a plan qualifying under Section 401(k) of the Code or contributions to a cafeteria plan under Section 125 of the Code).

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“Board” means the Board of Directors of the Company.

“Bonus” means the right of a Participant to receive a cash payment under this Plan.

“Code” means the Internal Revenue Code of 1986, as amended from time to time.

“Committee” means the Compensation Committee of the Board.

“Company” means Microsemi Corporation, a Delaware corporation.

“First Half Performance Period” means the first two fiscal quarters of the Company’s 2012 fiscal year.

“First Half Target Bonus” means, as to a particular Award, fifty percent (50%) of the Target Bonus for that Award.

“FY12 Performance Period” means the Company’s 2012 fiscal year.

“Participant” means a key employee (including any officer) of the Company or one of its Subsidiaries selected to participate in this Plan by the Committee.

“Payment Date” means, as to a particular Performance Period, a date as soon as practicable following the certification of the Committee’s findings under Section 4.9 for that Performance Period (and in all events not later than two and one-half months after the end of the Company’s fiscal year in which the Performance Period ends).

“Performance Goals” means the target levels of Adjusted EPS and Adjusted Revenue established by the Committee for each Performance Period used to determine the amount of Bonuses payable under this Plan.

“Performance Incentive Plan” means the Company’s 2008 Performance Incentive Plan, as amended from time to time.

“Performance Period” means either the First Half Performance Period or the FY12 Performance Period, as applicable.

“Plan” means this Microsemi Corporation Fiscal 2012 Executive Non-Equity Incentive Plan, as amended from time to time.

“Section 162(m)” means Section 162(m) of the Code, and the regulations promulgated thereunder, all as amended from time to time.

“Subsidiary” has the meaning ascribed to such term in the Performance Incentive Plan.

“Target Bonus” with respect to an Award means the amount obtained by multiplying (i) the Participant’s Base Salary, by (ii) the Target Bonus Percentage for that Award.

“Target Bonus Percentage” means the target percentage established by the Committee for an Award, as updated from time to time.

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3. Administration of the Plan.

3.1 The Committee. This Plan shall be administered by the Committee, which shall consist solely of two or more members of the Board who are “outside directors” within the meaning of Section 162(m). Action of the Committee with respect to the administration of this Plan shall be taken pursuant to a majority vote or by the unanimous written consent of its members.

3.2 Powers of the Committee. Subject to the express provisions of this Plan, the Committee shall have sole responsibility for the administration of this Plan in accordance with its terms, including without limitation the authority to (i) determine eligibility to participate in this Plan and, from those Executives determined to be eligible, the particular Executives who will receive an Award under this Plan, and (ii) establish the terms and conditions applicable to each Award. The Committee shall have the authority to construe and interpret this Plan and any agreements or other documents relating to Awards under the Plan, may adopt rules and regulations relating to the administration of this Plan, and shall exercise all other duties and powers conferred on it by this Plan.

4. Bonus Provisions.

The Bonuses (if any) payable with respect to an Award granted under this Plan shall be calculated in accordance with this Section 4.

4.1 Award Terms. The Committee shall select the Participants who will participate in this Plan and the Target Bonus Percentage for each Participant. The Committee shall also establish the Applicable EPS Percentages and the Applicable Revenue Percentages that relate to different levels of Adjusted EPS and Adjusted Revenue for each Performance Period. Participants will be eligible to receive a Bonus based on the Company’s Adjusted EPS and Adjusted Revenue for the First Half Performance Period as provided in Section 4.2 below. Participants will be eligible to receive a Bonus based on the Company’s Adjusted EPS and Adjusted Revenue for the FY12 Performance Period as provided in Section 4.3 below. For each Performance Period, each Participant’s Target Bonus (or First Half Target Bonus, as the case may be) for that Performance Period will be allocated seventy-five percent (75%) to the Company’s Adjusted EPS for the Performance Period and twenty-five percent (25%) to the Company’s Adjusted Revenue for the Performance Period.

4.2 Determination of Bonus Amounts for First Half Performance Period. Each Participant will be eligible to receive a Bonus based on the Company’s Adjusted EPS and Adjusted Revenue for the First Half Performance Period; provided, however, that any such Bonus shall be contingent upon the Company’s achieving the threshold level of Adjusted EPS for the second fiscal quarter of the Company’s 2012 fiscal year established by the Committee. If the threshold Adjusted EPS level for such fiscal quarter is not achieved, no Bonuses will be payable pursuant to this Section 4.2 (although Participants will continue to be eligible to receive Bonuses pursuant to Section 4.3). If such threshold Adjusted EPS level is achieved, a Bonus will be calculated for each Participant equal to the sum of (a) the portion of the Participant’s First Half Target Bonus allocated to the Adjusted EPS Performance Goal multiplied by the Applicable EPS Percentage for the First Half Performance Period, and (b) the portion of the Participant’s First Half Target Bonus allocated to the Adjusted Revenue Performance Goal multiplied by the Applicable Revenue Percentage for the First Half Performance Period.

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4.3 Determination of Bonus Amounts for FY12 Performance Period. Each Participant will be eligible to receive a Bonus based on the Company’s Adjusted EPS and Adjusted Revenue for the FY12 Performance Period. At the end of the FY12 Performance Period, a Bonus will be calculated for each Participant in an amount (not less than zero) equal to (a) the sum of (i) the portion of the Participant’s Target Bonus allocated to the Adjusted EPS Performance Goal multiplied by the Applicable EPS Percentage for the FY12 Performance Period, and (ii) the portion of the Participant’s Target Bonus allocated to the Adjusted Revenue Performance Goal multiplied by the Applicable Revenue Percentage for the FY12 Performance Period, less (b) the amount of any Bonus paid or payable to the Participant based on the Company’s performance for the First Half Performance Period pursuant to Section 4.2.

4.4 Committee Discretion to Reduce Bonuses. Notwithstanding the foregoing provisions, the Committee shall retain discretion to reduce (but not increase) the amount of any Bonus otherwise payable pursuant to Section 4.2 or Section 4.3 above.

4.5 Maximum Bonus. Notwithstanding any other provision of this Plan, the maximum aggregate amount that may be paid pursuant to an Award granted under this Plan to a Participant for the Performance Periods shall be the lesser of (a) two hundred percent (200%) of the Participant’s Target Bonus and (b) as provided in Section 5.2.3 of the Performance Incentive Plan, five million dollars ($5,000,000).

4.6 Termination of Employment. In the event that a Participant’s employment with the Company and its Subsidiaries terminates (regardless of the reason for such termination of employment, whether voluntarily or involuntarily, with or without cause, or due to the Participant’s death or disability) at any time prior to the Payment Date for a particular Performance Period, the Participant’s Award shall immediately terminate upon such termination of employment as to that Performance Period, and the Participant shall not be entitled to any Bonus payment in respect of such Award, unless otherwise expressly provided under a written employment, severance or similar contract between the Participant and the Company.

4.7 Adjustments; Early Termination. The Committee shall adjust the Adjusted EPS and Adjusted Revenue, as to the Performance Goals established for purposes of Awards hereunder and/or the Company’s actual performance levels for the applicable Performance Periods, to the extent (if any) it determines that the adjustment is necessary or advisable to preserve the intended incentives and benefits to reflect (1) any material corporate transaction (such as a reorganization, combination, separation, merger, acquisition, or any combination of the foregoing), or any complete or partial liquidation of the Company, (2) any change in accounting policies or practices, or (3) the effects of any special charges to the Company’s earnings. In addition, the Committee shall make adjustments to the Adjusted EPS to eliminate (to the extent necessary and without duplication) the impact of any stock splits, reverse stock splits, and stock dividends. The Committee’s determination of the Adjusted EPS and the Adjusted Revenue for each Performance Period and whether, and the extent to which, any such adjustment is necessary shall be final and binding. Notwithstanding any other provision herein, each Award shall be subject to termination in connection with certain corporate transactions as provided in Section 7.2 of the Performance Incentive Plan.

4

4.8 Committee Determination of Bonuses. The Committee has the sole discretion to determine the Performance Goals for each Award (in accordance with this Section 4), the extent to which such Performance Goals have been achieved and whether all or any portion of an Award will be paid, subject in all cases to the terms, conditions and limits of this Plan and of any other written commitment authorized by the Committee.

4.9 Committee Certification. No Participant shall receive any payment under this Plan unless and until the Committee has certified, by resolution or other appropriate action in writing, that the amount thereof has been accurately determined in accordance with the terms, conditions and limits of this Plan and that the applicable Performance Goals applicable to the Award were in fact satisfied.

5. General Provisions.

5.1 Rights of Participants.

(a) No Right to Awards or Continued Employment. Neither the establishment of this Plan nor the provision for or payment of any amounts hereunder nor any action of the Company, the Board or the Committee in respect of this Plan shall be held or construed to confer upon any person any legal right to receive, an Award or any other benefit under the Plan. Nothing contained in this Plan (or in any other documents evidencing any Award under this Plan) shall confer upon any Participant any right to continue in the employ of the Company or any Subsidiary, constitute any contract or agreement of employment, nor shall interfere in any way with the right of the Company or any Subsidiary to change any person’s compensation or other benefits, or to terminate his or her employment, with or without cause. Nothing in this Section 5.1(a), however, is intended to adversely affect any express independent right of such person under a separate employment contract.

(b) Plan Not Funded. Awards payable under this Plan shall be payable from the general assets of the Company, and no special or separate reserve, fund or deposit shall be made to assure payment of such Awards. No Participant or other person shall have any right, title or interest in any fund or in any specific asset of the Company by reason of any Award hereunder. Neither the provisions of this Plan (nor of any related documents), nor the creation or adoption of this Plan, nor any action taken pursuant to the provisions of this Plan shall create, or be construed to create, a trust of any kind or a fiduciary relationship between the Company and any Participant or other person. To the extent that a Participant or other person acquires a right to receive payment pursuant to any Award hereunder, such right shall be no greater than the right of any unsecured general creditor of the Company.

5.2 Non-Transferability of Benefits and Interests. Except as expressly provided by the Committee in accordance with the provisions of Section 162(m), all Awards are non-transferable, and no benefit payable under this Plan shall be subject in any manner to sale, transfer, anticipation, alienation, assignment, pledge, encumbrance or charge. This Section 5.2 shall not apply to an assignment of a contingency or payment due (a) after the death of a Participant to the deceased Participant’s legal representative or beneficiary or (b) after the disability of a Participant to the disabled Participant’s personal representative.

5

5.3 Discretion of Company, Board and Committee. Any decision made or action taken by, or inaction of, the Company, the Board or the Committee arising out of or in connection with the creation, amendment, construction, administration, interpretation and effect of the Plan that is within its authority hereunder or applicable law shall be within the absolute discretion of such entity and shall be conclusive and binding upon all persons. Neither the Board nor the Committee, nor any person acting at the direction thereof, shall be liable for any act, omission, interpretation, construction or determination made in good faith in connection with this Plan (or any Award made under this Plan).

5.4 Governing Law. All questions pertaining to the construction, regulation, validity and effect of the provisions of this Plan shall be determined in accordance with the laws of the State of Delaware.

5.5 Construction. It is the intent of the Company that this Plan, Awards, and Bonuses paid hereunder will qualify as performance-based compensation or will otherwise be exempt from deductibility limitations under Section 162(m). Any provision, application or interpretation of this Plan inconsistent with this intent to satisfy the standards in Section 162(m) shall be disregarded.

5.6 Tax Withholding. Upon the payment of any Bonus, the Company shall have the right to deduct the amount of any federal, state or local taxes that the Company or any Subsidiary may be required to withhold with respect to such payment.

5.7 Amendments, Suspension or Termination of Plan. The Board or the Committee may at any time terminate, amend, modify or suspend this Plan, in whole or in part. Notwithstanding the foregoing, no amendment may be effective without Board and/or stockholder approval if such approval is necessary to comply with the applicable rules of Section 162(m).

5.8 Effective Date. This Plan is effective as of December 23, 2011.

5.9 Captions. Captions and headings are given to the sections and subsections of this Plan solely as a convenience to facilitate reference. Such headings shall not be deemed in any way material or relevant to the construction or interpretation of this Plan or any provision thereof.

5.10 Non-Exclusivity of Plan. Subject to compliance with Section 162(m), nothing in this Plan shall limit or be deemed to limit the authority of the Board or the Committee to grant awards or authorize any other compensation under any other plan or authority.

6

EX-31.1

Exhibit 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO

SECURITIES EXCHANGE ACT RULES 13a-14(a) AND 15d-14(a) AS ADOPTED

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, James J. Peterson, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Microsemi 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(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

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

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

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

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

5. The registrant’s other certifying officer(s) 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 the registrant’s board of directors (or persons performing the equivalent functions):

(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 control over financial reporting.

Date: February 8, 2012

/s/    JAMES J. PETERSON

James J. Peterson

President and Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO

SECURITIES EXCHANGE ACT RULES 13a-14(a) AND 15d-14(a) AS ADOPTED

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, John W. Hohener, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Microsemi 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(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

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

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

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

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

5. The registrant’s other certifying officer(s) 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 the registrant’s board of directors (or persons performing the equivalent functions):

(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 control over financial reporting.

Date: February 8, 2012

/s/    JOHN W. HOHENER

John W. Hohener

Executive Vice President, Chief Financial Officer, Secretary and Treasurer

EX-32

Exhibit 32

CERTIFIED WRITTEN STATEMENT ACCOMPANYING

PERIODIC FINANCIAL REPORTS

(Pursuant to 18 U.S.C. 1350)

The undersigned, James J. Peterson, Chief Executive Officer, and John W. Hohener, Chief Financial Officer, of Microsemi Corporation, a Delaware corporation (the “Company”), each hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that—

(1) the accompanying periodic report containing financial statements filed by the Company with the Securities and Exchange Commission (the “Report”) fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934 (15 U.S.C. 78m(a)); and

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

IN WITNESS WHEREOF, the undersigned have executed this certificate which accompanies the Company’s Quarterly Report on Form 10-Q for the quarterly period ended January 1, 2012.

Dated: February 8, 2012	/s/    JAMES J. PETERSON
	James J. Peterson, President and Chief Executive Officer
Dated: February 8, 2012	/s/    JOHN W. HOHENER
	John W. Hohener, Executive Vice President, Chief Financial Officer, Secretary and Treasurer

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Components of Accrued Liabilities (Detail) (USD $) In Thousands, unless otherwise specified	Jan. 01, 2012	Oct. 02, 2011
Schedule of Accrued Liabilities [Line Items]
Payroll, bonus, accrued time off and other employee benefits	$ 39,867	$ 41,264
Fair value of foreign currency forward		11,675
Restructuring and severance	12,133	9,562
Licenses	9,082	9,636
Outside services	12,543	7,815
Interest	6,914	4,037
Warranties	2,467	2,945
Commissions	3,067	2,692
Other	18,512	11,452
Accrued liabilities	$ 104,585	$ 101,078

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INCOME TAXES - Additional Information (Detail) (USD $)	3 Months Ended
	Jan. 01, 2012	Jan. 02, 2011	Oct. 02, 2011
Income Taxes [Line Items]
Benefit for income taxes	$ 309,000	$ 13,485,000
Income (loss) before income taxes	(44,911,000)	(14,781,000)
Unrecognized tax benefits	39,700,000		36,600,000
Unrecognized tax benefit, interest and penalties	4,500,000		4,200,000
Unrecognized tax benefit that would impact effective tax rate	37,000,000		34,000,000
Within the next twelve months
Income Taxes [Line Items]
Anticipated decrease in unrecognized tax benefits	$ 11,600,000
Federal
Income Taxes [Line Items]
Open tax years by major tax jurisdiction	2007 through 2011
Federal | Minimum
Income Taxes [Line Items]
Open tax year	2007
Federal | Maximum
Income Taxes [Line Items]
Open tax year	2011
State
Income Taxes [Line Items]
Open tax years by major tax jurisdiction	2007 through 2011
State | Minimum
Income Taxes [Line Items]
Open tax year	2007
State | Maximum
Income Taxes [Line Items]
Open tax year	2011
Foreign Country
Income Taxes [Line Items]
Open tax years by major tax jurisdiction	2007 through 2011
Foreign Country | Minimum
Income Taxes [Line Items]
Open tax year	2007
Foreign Country | Maximum
Income Taxes [Line Items]
Open tax year	2011

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Net Sales by Originating Geographic Area and Estimated End Market (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Jan. 01, 2012	Jan. 02, 2011
Segment Reporting Disclosure [Line Items]
Net Sales	$ 240,920	$ 184,351
Defense And Security
Segment Reporting Disclosure [Line Items]
Net Sales	69,115	69,843
Aerospace
Segment Reporting Disclosure [Line Items]
Net Sales	49,123	45,071
Enterprise and Communication
Segment Reporting Disclosure [Line Items]
Net Sales	75,124	33,636
Industrial and Alternative Energy
Segment Reporting Disclosure [Line Items]
Net Sales	47,558	35,801
United States
Segment Reporting Disclosure [Line Items]
Net Sales	169,487	112,459
Europe
Segment Reporting Disclosure [Line Items]
Net Sales	33,228	30,689
Asia
Segment Reporting Disclosure [Line Items]
Net Sales	$ 38,205	$ 41,203

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Calculation and Allocation of Consideration (Detail) (Zarlink Semiconductor, Inc, USD $) In Thousands, unless otherwise specified	Jan. 01, 2012
Zarlink Semiconductor, Inc
Calculation of consideration:
Cash consideration for Zarlink Securities	$ 623,782
Book value of Zarlink's net assets	151,576
Inventories	7,230
Other intangible assets	210,100
Deferred tax liability, net	(35,963)
Adjustment to goodwill	$ 290,839

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ACCRUED LIABILITIES (Tables)

3 Months Ended

Jan. 01, 2012

Components of Accrued Liabilities

Accrued liabilities consisted of the following components (amounts in thousands):

	January 1, 2012		October 2, 2011
Payroll, bonus, accrued time off and other employee benefits	$	39,867	$	41,264
Fair value of foreign currency forward		—		11,675
Restructuring and severance		12,133		9,562
Licenses		9,082		9,636
Outside services		12,543		7,815
Interest		6,914		4,037
Warranties		2,467		2,945
Commissions		3,067		2,692
Other		18,512		11,452
	$	104,585	$	101,078

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Restructuring Activities and Accrued Liabilities (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Jan. 01, 2012
Scottsdale Facility
Restructuring Reserve Disclosures [Abstract]
Beginning Balance	$ 6,837
Cash expenditures	(524)
Ending Balance	6,313
Scottsdale Facility | Employee Severance
Restructuring Reserve Disclosures [Abstract]
Beginning Balance	355
Cash expenditures	(159)
Ending Balance	196
Scottsdale Facility | Contract Termination Costs
Restructuring Reserve Disclosures [Abstract]
Beginning Balance	6,482
Cash expenditures	(365)
Ending Balance	6,117
Other Facility
Restructuring Reserve Disclosures [Abstract]
Beginning Balance	2,700
Provisions	(7,200)
Other Facility | Employee Severance
Restructuring Reserve Disclosures [Abstract]
Beginning Balance	2,724
Provisions	7,225
Cash expenditures	(2,741)
Other non-cash settlement	(1,388)
Ending Balance	$ 5,820

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Earning Per Share (Detail) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended
	Jan. 01, 2012	Jan. 02, 2011
BASIC
Net loss	$ (44,602)	$ (1,296)
Weighted-average common shares outstanding for basic	85,217	82,716
Basic earnings (loss) per share	$ (0.52)	$ (0.02)
DILUTED
Net loss	$ (44,602)	$ (1,296)
Weighted-average common shares outstanding for basic	85,217	82,716
Dilutive effect of stock awards
Weighted-average common shares outstanding on a diluted basis	85,217	82,716
Diluted earnings (loss) per share	$ (0.52)	$ (0.02)

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Goodwill and Intangible Assets, Net (Detail) (USD $) In Thousands, unless otherwise specified	Jan. 01, 2012	Oct. 02, 2011
Non-amortizing intangible assets
Goodwill	$ 781,917	$ 491,079
Amortizable intangible assets, net
Amortizable intangible assets, net	466,926	281,689
Completed Technology
Amortizable intangible assets, net
Amortizable intangible assets, net	233,963	177,828
Customer Relationships
Amortizable intangible assets, net
Amortizable intangible assets, net	213,668	95,296
Backlog
Amortizable intangible assets, net
Amortizable intangible assets, net	14,655	4,658
Other Intangible Assets
Amortizable intangible assets, net
Amortizable intangible assets, net	$ 4,640	$ 3,907

XML

SUBSEQUENT EVENT - Additional Information (Detail) (Acquisition, USD $) In Millions, unless otherwise specified	Jan. 31, 2012
Acquisition
Subsequent Event [Line Items]
Business acquisition expected to be paid in cash	$ 44.0

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Long Lived Assets by Geographic Area (Detail) (USD $) In Thousands, unless otherwise specified	Jan. 01, 2012	Oct. 02, 2011
Revenues from External Customers and Long-Lived Assets [Line Items]
Property And Equipment	$ 99,527	$ 89,922
United States
Revenues from External Customers and Long-Lived Assets [Line Items]
Property And Equipment	77,561	69,647
Europe
Revenues from External Customers and Long-Lived Assets [Line Items]
Property And Equipment	14,602	12,632
Asia
Revenues from External Customers and Long-Lived Assets [Line Items]
Property And Equipment	$ 7,364	$ 7,643

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GOODWILL AND OTHER INTANGIBLE ASSETS, NET

3 Months Ended

Jan. 01, 2012

GOODWILL AND OTHER INTANGIBLE ASSETS, NET

4. GOODWILL AND OTHER INTANGIBLE ASSETS, NET

Goodwill and intangible assets, net consisted of the following components (amounts in thousands):

	January 1, 2012		October 2, 2011
Non-amortizing intangible assets
Goodwill	$	781,917	$	491,079
Amortizable intangible assets, net
Completed technology	$	233,963	$	177,828
Customer relationships		213,668		95,296
Backlog		14,655		4,658
Other		4,640		3,907
	$	466,926	$	281,689

The following table summarizes our estimated future amortization expense by period (amounts in thousands):

	Less than 1 year		1-2 years		2-3 years		3-4 years		Thereafter
Amortization expense	$	96,871	$	80,837	$	74,739	$	69,667	$	144,812

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Disclosure - EARNINGS PER SHARE - Additional Information (Detail)	3 Months Ended
	Jan. 01, 2012	Jan. 02, 2011
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Stock awards excluded from computation of diluted EPS	11,829,000	13,997,000

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SEGMENT INFORMATION (Tables)

3 Months Ended

Jan. 01, 2012

Net Sales by Originating Geographic Area and Estimated End Market

Net sales by the originating geographic area and by estimated end market are as follows (amounts in thousands):

	Quarter Ended
	January 1, 2012		January 2, 2011
United States	$	169,487	$	112,459
Europe		33,228		30,689
Asia		38,205		41,203
Total	$	240,920	$	184,351
Defense & Security		69,115	$	69,843
Aerospace		49,123		45,071
Enterprise & Communications		75,124		33,636
Industrial, Medical & Alternative Energy		47,558		35,801
Total	$	240,920	$	184,351

Long Lived Assets by Geographic Area

Tangible long lived assets by geographic area are as follows (amounts in thousands):

	January 1,     2012		October 2,     2011
United States	$	77,561	$	69,647
Europe		14,602		12,632
Asia		7,364		7,643
Total	$	99,527	$	89,922

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STOCK-BASED COMPENSATION AND EMPLOYEE BENEFIT PLANS (Tables)

3 Months Ended

Jan. 01, 2012

Awards Granted, Weighted-Average Exercise Price, Weighted-Average Fair Value and Weighted-Average Assumptions used in Calculation of Compensation Expense

Awards granted or assumed, weighted-average exercise price, weighted-average fair value and weighted-average assumptions used in the calculation of compensation expense are as follows:

Quarter Ended	# of Awards		Per Award				Risk Free Rate			Expected Dividend Yield			Expected Life (Years)		Expected Volatility
			Exercise Price		Fair Value
January 1, 2012
Restricted shares		523,800			$	16.27
Performance stock units		350,000			$	17.77
January 2, 2011
Restricted shares		1,686,311			$	20.96
Stock options and share appreciation rights		3,012,245	$	13.88	$	7.12		0.2	%		0.0	%		1.1		41.9	%

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STOCK-BASED COMPENSATION AND EMPLOYEE BENEFIT PLANS - Additional Information (Detail) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended
	Jan. 01, 2012	Jan. 02, 2011
Compensation Related Costs Share Based Payments Disclosure [Line Items]
Charge for stock based compensation	$ 7,531	$ 7,278
Performance percentage in which the target number of units to vest	70.00%
Number of units to vest based on performance for fiscal 2012	30.00%
Vesting period	2 years
Maximum
Compensation Related Costs Share Based Payments Disclosure [Line Items]
Performance percentage relative to peer group for units related to a particular metric to vest	30.00%
Maximum vesting percentage relative to the target	200.00%
Minimum
Compensation Related Costs Share Based Payments Disclosure [Line Items]
Performance percentage relative to peer group for units related to a particular metric to vest	95.00%
Stock Option Plan 2008
Compensation Related Costs Share Based Payments Disclosure [Line Items]
Additional shares to the shares limit in common stock	14,500,000
Shares limit in common stock	28,500,000
Plan expiration date	Dec. 05, 2021
Full value award of shares issued for every one share	2.41
Maximum term of a stock option grant or a stock appreciation right grant	6 years

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RESTRUCTURING AND SEVERANCE CHARGES (Tables)

3 Months Ended

Jan. 01, 2012

Scottsdale Facility

Restructuring Activities and Accrued Liabilities

The following table reflects the restructuring activities for the Scottsdale facility and the accrued liabilities in the consolidated balance sheets at the dates below (amounts in thousands):

	Employee Severance			Contract Termination Costs			Total
Balance at October 2, 2011	$	355		$	6,482		$	6,837
Cash expenditures		(159	)		(365	)		(524	)
Balance at January 1, 2012	$	196		$	6,117		$	6,313

Other Facility

Restructuring Activities and Accrued Liabilities

The following table reflects the restructuring activities and the accrued liabilities in the consolidated balance sheets at the dates below (amounts in thousands):

	Employee Severance
Balance at October 2, 2011	$	2,724
Provisions		7,225
Cash expenditures		(2,741	)
Other non-cash settlement		(1,388	)
Balance at January 1, 2012	$	5,820

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PRESENTATION OF FINANCIAL INFORMATION - Additional Information (Detail) (Actel Corporation, USD $) In Millions, unless otherwise specified	6 Months Ended
	Apr. 03, 2011
Actel Corporation
Organization, Consolidation and Presentation of Financial Statements Disclosure [Line Items]
Retrospective adjustment that increased non-current deferred tax assets and retained earnings	$ 1.3

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INVENTORIES

3 Months Ended

Jan. 01, 2012

INVENTORIES

3. INVENTORIES

Inventories are summarized as follows (amounts in thousands):

	January 1, 2012		October 2, 2011
Raw materials	$	44,868	$	40,454
Work in progress		79,141		65,190
Finished goods		40,777		35,183
	$	164,786	$	140,827

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ACQUISITIONS - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Jan. 01, 2012
Zarlink Semiconductor, Inc | Subordinated Debentures Subject to Mandatory Redemption
Significant Acquisitions and Disposals [Line Items]
Convertible rate	6.00%
Maturity date	Sep. 30, 2012
Business Acquisition Pro Forma Information
Significant Acquisitions and Disposals [Line Items]
Cost of goods sold	7.2
Acquisition cost	6.1
Credit facility refinancing cost	34.0

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COMMITMENTS AND CONTINGENCIES - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	1 Months Ended	3 Months Ended
	Nov. 30, 1998	Jan. 01, 2012	Sep. 28, 2003	Oct. 02, 2011
Commitments and Contingencies Disclosure [Line Items]
Description of the contingency loss agreement	In November 1998, we signed an agreement with the three former owners of this facility whereby they have 1) reimbursed us for $0.5 million of past costs, 2) assumed responsibility for 90% of all future clean-up costs, and 3) promised to indemnify and protect us against any and all third-party claims relating to the contamination of the facility
Reimbursements for past costs	$ 0.5
Future clean-up costs sharing percentage	90.00%
Total estimated environment remediation cost up to the year 2020		5.3
Charges for environmental remediation costs			0.5
Accrued workers' compensation liabilities		$ 1.6		$ 1.5
Filing complaint date		2010-12-08
Allegations description		The complaint alleges, inter alia, that programmable logic devices manufactured and sold by our subsidiary Microsemi – SoC infringe United States Patent Numbers 5,687,325, 6,260,087 and 6,272,646 assigned to Intellectual Ventures II LLC, and seeks damages and other relief at law or in equity as the court deems appropriate.
Defendant action		On August 8, 2011, the defendants filed a motion to stay the litigation pending conclusion of reexamination of the patents-in-suit by the United States Patent & Trademark Office.
Decision by court		The Court has not yet decided the motion to transfer or motion to stay. Discovery has not yet commenced and no trial date has been set.

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Condensed Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Jan. 01, 2012	Oct. 02, 2011
Current assets:
Cash and cash equivalents	$ 133,470	$ 266,631
Accounts receivable, net of allowance for doubtful accounts of $2,058 and $2,149 at January 1, 2012 and October 2, 2011, respectively	139,283	110,908
Inventories	164,786	140,827
Deferred income taxes	43,424	43,424
Other current assets	20,423	16,100
Total current assets	501,386	577,890
Property and equipment, net	99,527	89,922
Goodwill	781,917	491,079
Other intangible assets, net	466,926	281,689
Other assets	42,056	29,893
TOTAL ASSETS	1,891,812	1,470,473
Current liabilities:
Accounts payable	55,426	48,561
Accrued liabilities	104,585	101,078
Current maturity of long-term liabilities	8,500	4,050
Total current liabilities	168,511	153,689
Credit facility	790,000	357,384
Deferred income taxes	32,798	34,285
Other long term liabilities	43,886	33,008
Stockholders' equity:
Preferred stock, $1.00 par value; authorized 1,000 shares; none issued
Common stock, $0.20 par value; authorized 250,000; issued and outstanding 87,445 and 86,806 at January 1, 2012 and October 2, 2011, respectively	17,489	17,361
Capital in excess of par value of common stock	621,792	612,517
Retained earnings	216,841	261,443
Accumulated other comprehensive income	495	786
Total stockholders' equity	856,617	892,107
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$ 1,891,812	$ 1,470,473

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Awards Granted, Weighted-Average Exercise Price, Weighted-Average Fair Value and Weighted-Average Assumptions Used in the Calculation of Compensation Expense (Detail) (USD $)	3 Months Ended
	Jan. 01, 2012	Jan. 02, 2011
Restricted shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of Awards	523,800	1,686,311
Fair value per award	$ 16.27	$ 20.96
Performance stock units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of Awards	350,000
Fair value per award	$ 17.77
Stock options and share appreciation rights
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of Awards		3,012,245
Exercise price per award		$ 13.88
Fair value per award		$ 7.12
Risk Free Rate		0.20%
Expected Dividend Yield		0.00%
Expected Life (Years)		1.1
Expected Volatility		41.90%

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PRESENTATION OF FINANCIAL INFORMATION

3 Months Ended

Jan. 01, 2012

PRESENTATION OF FINANCIAL INFORMATION

1. PRESENTATION OF FINANCIAL INFORMATION

The unaudited condensed consolidated financial statements include the accounts of Microsemi Corporation and its subsidiaries. Intercompany transactions have been eliminated in consolidation.

The consolidated financial information furnished herein is unaudited, but in the opinion of our management, includes all adjustments (all of which are normal or recurring adjustments) necessary for a fair statement of the results of operations for the periods indicated. The results of operations for the most recently reported quarter of the current fiscal year are not necessarily indicative of the results to be expected for the full year.

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q, and therefore do not include all information and note disclosures necessary for a fair presentation of consolidated financial position, results of operations and cash flows in conformity with United States generally accepted accounting principles. The unaudited consolidated financial statements and notes must be read in conjunction with the consolidated financial statements and notes thereto in our Annual Report on Form 10-K for the fiscal year ended October 2, 2011.

The unaudited consolidated financial statements have been prepared in accordance with United States generally accepted accounting principles, which require us to make estimates and assumptions that may materially affect the reported amounts of assets and liabilities at the date of the unaudited consolidated financial statements and revenues and expenses during the periods reported. Actual results could differ materially from those estimates. Information with respect to our critical accounting policies that we believe could have the most significant effect on our reported results and require subjective or complex judgments is contained in the notes to the consolidated financial statements in our Annual Report on Form 10-K for the fiscal year ended October 2, 2011. In referencing a year, we are referring to the fiscal year ended on the Sunday closest to September 30.

Fair Value of Financial Assets and Liabilities

Accounting Standards Codification (“ASC”) 825 permits entities to elect the fair value option for certain financial assets and financial liabilities. For financial assets or financial liabilities for which an entity elects the fair value option, ASC 825 requires that the entity record the financial asset or financial liability at fair value rather than at historical cost with changes in fair value recorded in the income statement. ASC 825-25 requires that upfront costs and fees related to items for which the fair value option is elected shall be recognized in earnings as incurred and not deferred. As further discussed in Note 14, we elected the fair value option in accounting for the term loan balance outstanding as of October 2, 2011, but following the extinguishment of the term loan in conjunction with our acquisition of Zarlink Semiconductor, Inc., we did not elect the fair value option for the term loan balance outstanding as of January 1, 2012.

Measurement Period for the Acquisition of Actel Corporation

During the first quarter of 2012, we closed the measurement period for the acquisition of Actel Corporation that occurred in the prior year first quarter. We completed our evaluation of income tax-related information regarding facts and circumstances that existed as of the acquisition date. In accordance with ASC 805-10, we retrospectively adjusted the preliminary amounts previously reported and are now reporting the final amounts. In the balance sheet as of October 2, 2011, we have reflected a retrospective adjustment of $1.3 million that increased non-current deferred tax assets and retained earnings. This retrospective adjustment will be reflected in the income statement for the second quarter of 2011.

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Supplemental Pro Forma Data (Detail) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended
	Jan. 01, 2012	Jan. 02, 2011
Business Acquisition, Pro Forma Information [Line Items]
Net sales	$ 247,754	$ 266,746
Net loss	$ (18,258)	$ (10,129)
Net loss per share
Basic	$ (0.21)	$ (0.12)
Diluted	$ (0.21)	$ (0.12)

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ACQUISITION (Tables)

3 Months Ended

Jan. 01, 2012

Supplemental Pro forma Data

Supplemental pro forma data is as follows (amounts in thousands, except per share data):

	Quarters Ended
	January 1, 2012			January 2, 2011
Net sales	$	247,754		$	266,746
Net loss	$	(18,258	)	$	(10,129	)
Net loss per share
Basic	$	(0.21	)	$	(0.12	)
Diluted	$	(0.21	)	$	(0.12	)

Zarlink Semiconductor, Inc

Calculation and Allocation of Consideration

The total estimated consideration as shown in the table below is preliminarily allocated to Zarlink’s tangible and intangible assets and liabilities based on their estimated fair values as of the date of the completion of the transaction. The preliminary estimated consideration is allocated as follows (in thousands):

Calculation of consideration:
Cash consideration for Zarlink Securities	$	623,782
Preliminary allocation of consideration:
Book value of Zarlink’s net assets		151,576
Adjustments to historical net book value:
Inventories		7,230
Other intangible assets		210,100
Deferred tax liability, net		(35,963	)
Adjustment to goodwill	$	290,839

Identifiable Intangible Assets and Estimated Useful Lives

Identifiable intangible assets and their estimated useful lives are as follows (amounts in thousands):

	Asset Amount		Weighted Average Useful Life (Years)
Completed technology	$	47,800		6
Customer relationships		144,600		6
Backlog		15,700		1
Trade name		2,000		2
	$	210,100

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Summary of Inventories (Detail) (USD $) In Thousands, unless otherwise specified	Jan. 01, 2012	Oct. 02, 2011
Schedule of Inventory [Line Items]
Raw materials	$ 44,868	$ 40,454
Work in progress	79,141	65,190
Finished goods	40,777	35,183
Inventories	$ 164,786	$ 140,827

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GOODWILL AND OTHER INTANGIBLE ASSETS, NET (Tables)

3 Months Ended

Jan. 01, 2012

Goodwill and Intangible Assets, Net

Goodwill and intangible assets, net consisted of the following components (amounts in thousands):

	January 1, 2012		October 2, 2011
Non-amortizing intangible assets
Goodwill	$	781,917	$	491,079
Amortizable intangible assets, net
Completed technology	$	233,963	$	177,828
Customer relationships		213,668		95,296
Backlog		14,655		4,658
Other		4,640		3,907
	$	466,926	$	281,689

Estimated Future Amortization Expense

The following table summarizes our estimated future amortization expense by period (amounts in thousands):

	Less than 1 year		1-2 years		2-3 years		3-4 years		Thereafter
Amortization expense	$	96,871	$	80,837	$	74,739	$	69,667	$	144,812

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ACQUISITION

3 Months Ended

Jan. 01, 2012

ACQUISITION

2. ACQUISITION

During the quarter ended January 1, 2012, we completed our acquisition of Zarlink Semiconductor, Inc. (“Zarlink”) through a wholly-owned subsidiary. Following the expiration of the previously announced offers for all of the issued and outstanding common shares (“Zarlink Shares”) and 6% unsecured, subordinated convertible debentures maturing September 30, 2012 (“Zarlink Debentures” and together with the Zarlink Shares, the “Zarlink Securities”) of Zarlink, we acquired all remaining Zarlink Shares and Zarlink Debentures through compulsory acquisitions under, respectively, the Canada Business Corporations Act and the trust indenture governing the Zarlink Debentures. Zarlink delivers world-leading, mixed-signal chip technologies for a broad range of communication and medical applications. Its core capabilities include timing solutions that manage time-sensitive communication applications over wireless and wired networks, line circuits supporting high-quality voice services over cable and broadband connections, and ultra low-power radios enabling new wireless medical devices and therapies. Serving the world’s largest original equipment manufacturers, Zarlink’s highly integrated chip solutions help customers simplify design, lower costs and reach market quickly. We sometimes refer to this division herein as “Microsemi – CMPG.”

The fair value of the identified intangible assets for the Zarlink acquisition was estimated by performing a discounted cash flow analysis using the “income” approach. This method includes a forecast of direct revenues and costs associated with the respective intangible assets and charges for economic returns on tangible and intangible assets utilized in cash flow generation. Net cash flows attributable to the identified intangible assets were discounted to their present value at a rate commensurate with the perceived risk. The projected cash flow assumptions considered contractual relationships, customer attrition, eventual development of new technologies and market competition.

The useful lives of completed technology rights are based on the number of years in which net cash flows have been projected. The useful life of backlog is estimated based upon the fulfillment period. The useful lives of customer relationships are estimated based upon the length of the relationships currently in place, historical attrition patterns and natural growth and diversification of other potential customers. The useful life of a trade name was estimated based on the period in which a benefit could be ascribed to the identified trade names.

Assumptions used in forecasting cash flows for each of the identified intangible assets included consideration of the following:

• Historical performance including sales and profitability.

• Business prospects and industry expectations.

• Estimated economic life of asset.

• Development of new technologies.

• Acquisition of new customers.

• Attrition of existing customers.

• Obsolescence of technology over time.

Generally, the allocation of purchase prices result in an allocation to goodwill. Depending on the tax treatment of a particular acquisition, goodwill and identifiable intangible assets may not be deductible for tax purposes. The factors that contributed to a purchase price resulting in the recognition of goodwill include:

• The premium paid over market capitalization immediately prior to the merger announcement.

• Our belief that the merger will create a more diverse semiconductor company with expansive offerings which will enable us to expand our product offerings.

• Our belief that both companies are committed to improving cost structures and that our combined efforts after the merger should result in a realization of cost savings and an improvement of overall efficiencies.

The purchase price allocation described below is preliminary. A final determination of fair values of assets acquired and liabilities assumed relating to the transaction could differ from the preliminary purchase price allocation and if material differences exist they could result in retrospective revision to the purchase price allocation.

The total estimated consideration as shown in the table below is preliminarily allocated to Zarlink’s tangible and intangible assets and liabilities based on their estimated fair values as of the date of the completion of the transaction. The preliminary estimated consideration is allocated as follows (in thousands):

Calculation of consideration:
Cash consideration for Zarlink Securities	$	623,782
Preliminary allocation of consideration:
Book value of Zarlink’s net assets		151,576
Adjustments to historical net book value:
Inventories		7,230
Other intangible assets		210,100
Deferred tax liability, net		(35,963	)
Adjustment to goodwill	$	290,839

Identifiable intangible assets and their estimated useful lives are as follows (amounts in thousands):

	Asset Amount		Weighted Average Useful Life (Years)
Completed technology	$	47,800		6
Customer relationships		144,600		6
Backlog		15,700		1
Trade name		2,000		2
	$	210,100

We utilized the straight line method of amortization for completed technology, customer relationships and trade name and the estimated fulfillment period for backlog.

Supplemental pro forma data

The following supplemental pro forma data summarizes the results of operations for the quarters ended January 1, 2012 and January 2, 2011, as if the acquisitions we completed in 2012 and 2011 were completed as of the first day of 2011. The supplemental pro forma information presented is for illustrative purposes only and is not necessarily indicative of the financial position or results of operations that would have been realized if the transactions had been completed on the dates indicated, nor is it indicative of future operating results or financial position. Net sales and earnings for the acquisitions on a standalone basis since their acquisition dates are impracticable to determine as on the acquisition date, we began to immediately integrate these acquisitions into existing operations, engineering groups, sales distribution networks and management structure. The pro forma adjustments are based upon currently available information and certain assumptions that we believe are reasonable under the circumstances.

The supplemental pro forma data reports actual operating results, adjusted to include the pro forma effect of, among others, the impact in cost of goods sold from manufacturing profit in acquired inventory, amortization expense of identified intangible assets, timing of the impact of restructuring expenses, timing of credit facility issuance costs, foregone interest income, incremental interest expense and the related tax effect of these items. Supplemental pro forma earnings for the quarter ended January 1, 2012 were adjusted to exclude $7.2 million in cost of goods sold from manufacturing profit in acquired inventory, $6.1 million in acquisition costs and $34.0 million in credit facility refinancing costs and supplemental pro forma earnings for the quarter ended January 2, 2011 were adjusted to include these items. Supplemental pro forma data is as follows (amounts in thousands, except per share data):

	Quarters Ended
	January 1, 2012			January 2, 2011
Net sales	$	247,754		$	266,746
Net loss	$	(18,258	)	$	(10,129	)
Net loss per share
Basic	$	(0.21	)	$	(0.12	)
Diluted	$	(0.21	)	$	(0.12	)

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Condensed Consolidated Balance Sheets (Parenthetical) (USD $) In Thousands, except Per Share data, unless otherwise specified	Jan. 01, 2012	Oct. 02, 2011
Accounts receivable, allowance for doubtful accounts	$ 2,058	$ 2,149
Preferred stock, par value	$ 1.00	$ 1.00
Preferred stock, authorized	1,000	1,000
Preferred stock, issued	0	0
Common stock, par value	$ 0.20	$ 0.20
Common stock, authorized	250,000	250,000
Common stock, issued	87,445	86,806
Common stock, outstanding	87,445	86,806

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INCOME TAXES

3 Months Ended

Jan. 01, 2012

INCOME TAXES

12. INCOME TAXES

For the quarters ended January 1, 2012 and January 2, 2011, we recorded an income tax benefit of $0.3 million on $44.9 million of pre-tax loss and an income tax benefit of $13.5 million on $14.8 million of pre-tax loss, respectively. Our effective income tax rate depends on various factors, such as tax legislation, the ratio of domestic and international pre-tax income, valuation allowances on both U.S. and foreign deferred tax assets and the effectiveness of our tax planning strategies. The effective tax rate for each of the quarters ended January 1, 2012 and January 2, 2011 was the combined calculated tax expenses and benefits for various jurisdictions.

We had gross unrecognized tax benefits including interest and penalties of approximately $39.7 million and $36.6 million related to various U.S. and foreign jurisdictions at January 1, 2012 and October 2, 2011, respectively. These amounts include approximately $4.5 million and $4.2 million of interest and penalties at January 1, 2012 and October 2, 2011, respectively. Unrecognized tax benefits of approximately $37.0 million and $34.0 million at January 1, 2012 and October 2, 2011, respectively, would impact the effective tax rate if recognized. We are unaware of any position for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly increase or decrease within the next twelve months. However, based on federal and state statute expirations in various jurisdictions, we anticipate a decrease in the unrecognized tax benefits of approximately $11.6 million within the next twelve months.

We file U.S., state, and foreign income tax returns in jurisdictions with varying statutes of limitations. The 2007 through 2011 tax years generally remain subject to examination by federal tax authorities, by most state tax authorities and in significant foreign jurisdictions. Each quarter, we reassess our uncertain tax positions for additional unrecognized tax benefits, interest and penalties, and deletions due to statute expirations.

We establish liabilities for possible assessments by tax authorities resulting from known tax exposures including, but not limited to, international tax issues and certain tax credits. We are currently undergoing an Internal Revenue Service examination as well as certain state examinations. There have been no significant proposed adjustments to date. We do not expect the results of any tax audits would have a material impact on our financial position or results of operations.

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Document and Entity Information	3 Months Ended
	Jan. 01, 2012	Jan. 24, 2012
Document Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jan. 01, 2012
Document Fiscal Year Focus	2012
Document Fiscal Period Focus	Q1
Trading Symbol	MSCC
Entity Registrant Name	MICROSEMI CORP
Entity Central Index Key	0000310568
Current Fiscal Year End Date	--10-02
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		87,467,223

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RESTRUCTURING AND SEVERANCE CHARGES

3 Months Ended

Jan. 01, 2012

RESTRUCTURING AND SEVERANCE CHARGES

13. RESTRUCTURING AND SEVERANCE CHARGES

In 2009, we approved consolidation plans that resulted in the closure of our manufacturing facility in Scottsdale, Arizona (“Scottsdale”), which ceased production during the quarter ended April 3, 2011. The Scottsdale facility occupied a 135,000 square foot leased facility. Employee severance is expected to be paid through 2013. Contract termination costs relate primarily to remaining obligations under facility and equipment leases and are expected to be paid through 2016. The following table reflects the restructuring activities for the Scottsdale facility and the accrued liabilities in the consolidated balance sheets at the dates below (amounts in thousands):

	Employee Severance			Contract Termination Costs			Total
Balance at October 2, 2011	$	355		$	6,482		$	6,837
Cash expenditures		(159	)		(365	)		(524	)
Balance at January 1, 2012	$	196		$	6,117		$	6,313

At October 2, 2011, we had recorded severance accruals of $2.7 million from reductions in force at our various facilities other than Scottsdale. We recorded additional provisions, primarily related to activities at Microsemi – CMPG, for severance and retention payments totaling $7.2 million for the quarter ended January 1, 2012. Severance covered approximately 200 individuals in manufacturing, engineering and sales. Substantially all accrued amounts are expected to be paid within twelve months.

The following table reflects the restructuring activities and the accrued liabilities in the consolidated balance sheets at the dates below (amounts in thousands):

	Employee Severance
Balance at October 2, 2011	$	2,724
Provisions		7,225
Cash expenditures		(2,741	)
Other non-cash settlement		(1,388	)
Balance at January 1, 2012	$	5,820

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Condensed Consolidated Income Statements (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended
	Jan. 01, 2012	Jan. 02, 2011
Net Sales	$ 240,920	$ 184,351
Cost of sales	115,184	89,322
Gross profit	125,736	95,029
Operating expenses:
Selling, general and administrative	54,716	46,330
Research and development	39,601	23,971
Amortization of intangible assets	24,862	12,071
Restructuring and severance charges	7,225	6,334
Total operating expenses	126,404	88,706
Operating income (loss)	(668)	6,323
Other income (expense):
Interest income	141	102
Interest expense	(11,980)	(3,256)
Other income (expense), net	(32,404)	(17,950)
Total other expense	(44,243)	(21,104)
Loss before income taxes	(44,911)	(14,781)
Benefit for income taxes	(309)	(13,485)
NET LOSS	$ (44,602)	$ (1,296)
Earnings (loss) per share:
Basic	$ (0.52)	$ (0.02)
Diluted	$ (0.52)	$ (0.02)
Common and common equivalent shares outstanding:
Basic	85,217	82,716
Diluted	85,217	82,716

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COMPREHENSIVE INCOME

3 Months Ended

Jan. 01, 2012

COMPREHENSIVE INCOME

7. COMPREHENSIVE INCOME

Comprehensive income is defined as the change in equity (net assets) of a business enterprise during the period from transactions and other events and circumstances from non-owner sources. Our comprehensive income (loss) consisted of net income (loss) and the change of the cumulative foreign currency translation. Accumulated other comprehensive income consisted of the cumulative foreign currency translation adjustment.

Total comprehensive loss was calculated as follows (amounts in thousands):

	Quarter Ended
	January 1, 2012			January 2, 2011
Net loss	$	(44,602	)	$	(1,296	)
Translation adjustment		(291	)		(28	)
Comprehensive loss	$	(44,893	)	$	(1,324	)

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COMMITMENTS AND CONTINGENCIES

3 Months Ended

Jan. 01, 2012

COMMITMENTS AND CONTINGENCIES

6. COMMITMENTS AND CONTINGENCIES

In Broomfield, Colorado, the owner of a property located adjacent to a manufacturing facility owned by one of our subsidiaries, Microsemi Corp. – Colorado had notified the subsidiary and other parties of a claim that contaminants migrated to his property, thereby diminishing its value. In August 1995, the subsidiary, together with Coors Porcelain Company, FMC Corporation and Siemens Microelectronics, Inc. (former owners of the manufacturing facility), agreed to settle the claim and to indemnify the owner of the adjacent property for remediation costs. Although tricholorethylene and other contaminants previously used by former owners at the facility are present in soil and groundwater on the subsidiary’s property, we vigorously contest any assertion that the subsidiary caused the contamination. In November 1998, we signed an agreement with the three former owners of this facility whereby they have 1) reimbursed us for $0.5 million of past costs, 2) assumed responsibility for 90% of all future clean-up costs, and 3) promised to indemnify and protect us against any and all third-party claims relating to the contamination of the facility. An Integrated Corrective Action Plan was submitted to the State of Colorado. Sampling and management plans were prepared for the Colorado Department of Public Health & Environment. State and local agencies in Colorado are reviewing current data and considering study and cleanup options. The most recent forecast estimated that the total project cost, up to the year 2020, would be approximately $5.3 million; accordingly, we recorded a one-time charge of $0.5 million for this project in 2003. There has not been any significant development since September 28, 2003.

We are generally self-insured for losses and liabilities related to workers’ compensation and employer’s liability insurance. Accrued workers’ compensation liability was $1.6 million and $1.5 million at January 1, 2012 and October 2, 2011, respectively. Our self-insurance accruals are based on estimates and, while we believe that the amounts accrued are adequate, the ultimate claims may be in excess of the amounts provided.

On December 8, 2010, Intellectual Ventures I LLC and Intellectual Ventures II LLC filed a complaint in the United States District Court for the District of Delaware (the “Complaint”) against Altera Corporation, Microsemi, and Lattice Semiconductor Corporation. On February 15, 2011, the plaintiffs filed an amended complaint adding Xilinx, Inc. as a defendant. The complaint alleges, inter alia, that programmable logic devices manufactured and sold by our subsidiary Microsemi – SoC infringe United States Patent Numbers 5,687,325, 6,260,087 and 6,272,646 assigned to Intellectual Ventures II LLC, and seeks damages and other relief at law or in equity as the court deems appropriate. We have responded to the complaint. On April 26, 2011, the defendants filed a motion to transfer the case to the United States District Court for the Northern District of California. On August 8, 2011, the defendants filed a motion to stay the litigation pending conclusion of reexamination of the patents-in-suit by the United States Patent & Trademark Office. The Court has not yet decided the motion to transfer or motion to stay. Discovery has not yet commenced and no trial date has been set. While material losses are reasonably possible, currently, we cannot reasonably estimate the amount of any loss in the event of an unfavorable outcome.

We are also involved in other pending litigation matters arising out of the normal conduct of our business, including litigation relating to acquisitions, employment matters, commercial transactions, contracts, environmental matters and matters related to compliance with governmental regulations. The aggregate amount of monetary liability or financial impact with respect to these matters is subject to many uncertainties and is therefore not currently reasonably estimable. In the opinion of management, the final outcome of these matters, if they are adverse, will not have a material adverse effect on our financial position, results of operations or cash flows. However, there can be no assurance with respect to such result, and monetary liability or financial impact on us from these litigation matters could differ materially from those projected.

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INVENTORIES (Tables)

3 Months Ended

Jan. 01, 2012

Summary of Inventories

Inventories are summarized as follows (amounts in thousands):

	January 1, 2012		October 2, 2011
Raw materials	$	44,868	$	40,454
Work in progress		79,141		65,190
Finished goods		40,777		35,183
	$	164,786	$	140,827

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CREDIT AGREEMENT AND RELATED INSTRUMENTS

3 Months Ended

Jan. 01, 2012

CREDIT AGREEMENT AND RELATED INSTRUMENTS

14. CREDIT AGREEMENT AND RELATED INSTRUMENTS

Credit Agreement

In connection with the acquisition of Zarlink in the quarter ended January 1, 2012, we entered into Amendment No. 2 to our Credit Agreement dated as of November 2, 2010 with Morgan Stanley Senior Funding, Inc. (“MSSF”), Morgan Stanley & Co. Incorporated, East West Bank, Raymond James Bank, FSB and the lenders referred to therein, as amended by Amendment No. 1 to the Credit Agreement, dated as of March 2, 2011 (as amended, the “Amended and Restated Credit Agreement”). We accounted for the amendment as a debt extinguishment and recorded $34.0 million in debt extinguishment costs in other income (expense) in accordance with ASC 470-50. Pursuant to the Amended and Restated Credit Agreement, MSSF has provided $850.0 senior secured lien credit facilities, consisting of a term loan facility in an aggregate principal amount of $800.0 million and a revolving credit facility in an aggregate principal amount of $50.0 million. We accounted for the amendment as a debt extinguishment and recorded $34.0 million in debt issuance and extinguishment costs in other income (expense) in accordance with ASC 470-50.

Under the Amended and Restated Credit Agreement, the current applicable margin on revolving loans and swingline loans determined at the Base Rate is 3.00% to 3.75% and revolving loans and swingline loans determined at the Eurodollar Rate is 4.00% to 4.75%, depending on Microsemi’s consolidated leverage ratio. For term loans, the current applicable margin on term loans determined at the Base Rate is 3.50% and on term loans determined at the Eurodollar Rate is 4.50%. The “Base Rate” is defined as a rate per annum equal to the greatest of (a) the prime rate, (b)  ¹/2 of 1% per annum above the federal funds effective rate, (c) the one-month Eurodollar Rate plus 1%, and (d) in the case of any term loans, 2.25%. The “Eurodollar Rate” is defined as (a) the rate per annum offered for deposits of dollars for the applicable interest period that appears on Reuters Screen LIBOR01 Page as of 11:00 A.M., London, England time, two (2) business days prior to the first day of such interest period or (b) if no such offered rate exists, such rate will be the rate of interest per annum as determined by the administrative agent (rounded upwards, if necessary, to the nearest  ¹/100 of 1%) at which deposits of dollars in immediately available funds are offered at 11:00 A.M., London, England time, two (2) business days prior to the first day in the applicable interest period by major financial institutions reasonably satisfactory to the administrative agent in the London interbank market for such interest period and for an amount equal or comparable to the principal amount of the loans to be borrowed, converted or continued as Eurodollar Rate loans on such date of determination. In the case of term loans, the Eurodollar Rate will not be lower than 1.25%. The principal amount outstanding under our term loan facility is a LIBOR-based loan and is subject to an interest rate of 5.75% as of January 1, 2012.

As of January 1, 2012, we had $798.0 million borrowed under the term loan facility and no direct borrowings and $0.4 million in letters of credit outstanding under the revolving facility. As of October 2, 2011, we had $372.2 million borrowed under the term loan facility and no direct borrowings and $0.4 million in letters of credit outstanding under the revolving facility. The amended term loan facility matures on February 2, 2017 and requires minimum principal payments of $2.0 million per quarter or $8.0 million per year.

Pursuant to the Amended and Restated Credit Agreement, Microsemi can request, at any time and from time to time, the establishment of one or more term loan and/or revolving credit facilities with commitments in an aggregate amount not to exceed $200.0 million.

Microsemi paid upfront fees or original issue discount equal to 2.00% of the term loan facility and an amendment fee on the revolving facility of 0.25%. Additionally, Microsemi expects to pay an undrawn commitment fee ranging from 0.25% to 0.625% depending on Microsemi’s consolidated leverage ratio, on the unused portion of the revolving facility. If any letters of credit are issued, then Microsemi expects to pay a fronting fee equal to 0.25% per annum of the aggregate face amount of each letter of credit and a participation fee on all outstanding letters of credit at a per annum rate equal to the margin then in effect with respect to Eurodollar Rate-based loans on the face amount of such letter of credit.

The Amended and Restated Credit Agreement includes financial covenants requiring a maximum leverage ratio and minimum fixed charge coverage ratio and also contains other customary affirmative and negative covenants and events of default. We were in compliance with all financial covenants as of January 1, 2012.

Fair Value Option

We elected the fair value option in accounting for the term loan balance outstanding as of October 2, 2011. We classified term loan balances currently outstanding under our Credit Agreement as Level 2 where valuations are based on 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 data for substantially the full term of the assets or liabilities. Our valuation was based on market quotes provided to us by MSSF.

We determined the fair value of the outstanding term loan balance as of January 2, 2011 to be $378.8 million compared to a par value of $375.0 million, and as such, recorded expense of $3.8 million in other income (expense), net, during the quarter then ended. In addition, upon election of the fair value option in the quarter ended January 2, 2011, we were required to immediately expense up front debt issuance costs of $13.4 million that we recorded in other income (expense), net.

We determined the fair value of the term loan balance as of October 2, 2011 to be $361.0 million compared to a par value of $372.2 million, a difference of $11.2 million. Subsequent to entering into Amendment No. 2 to the credit agreement, we did not elect the fair value option on term loan balances and are reporting the $798.0 million outstanding at par. As we extinguished the existing $372.2 million term loan balance at par, we recorded an expense of $11.2 million in other income (expense), net, in the quarter ended January 1, 2012.

Interest Rate Swap Agreements

In connection with the Credit Agreement, we entered into interest rate swap agreements for the purpose of minimizing the variability of cash flows in the interest rate payments of our variable rate borrowings. The cash flows received under the interest rate swap agreements are expected to offset the change in cash flows associated with LIBOR rate borrowings between the effective and maturity dates of the swaps. Our three swap agreements have notional amounts, fixed rates and initial terms as follows: $24.0 million at 1.49% for two years, $121.0 million at 1.83% for three years and $24.0 million at 2.21% for four years. We classified interest rate swap balances as Level 2 fair value measurements. We determined the fair value of our interest rate swap agreements based on mid-market valuations reported to us by RJ Capital Services, Inc., the counterparty to the swap agreements. Related to these interest rate swap agreements, we recorded a current liability of $0.1 million and a long-term liability of $3.0 million as of January 1, 2012 and a $2.8 million long-term liability as of October 2 2011. We reflected the change in fair value of the swaps through other income (expense), net, and for the quarters ended January 1, 2012 and January 2, 2011, we recorded expense of $0.3 million and 0.7 million, respectively.

Foreign Currency Forward

In connection with the acquisition of Zarlink, we entered into a foreign currency forward agreement in the fourth quarter of 2011 to minimize our foreign currency risk associated with the transaction that we funded in Canadian Dollars (“CAD”). We agreed to purchase CAD 623.0 million for $608.2 million that settled in October 2011. We classified interest rate forward balances as Level 1 fair value measurements where there are quoted prices in active markets for identical instruments. We determined the fair value of our foreign currency forward agreement based on a corresponding quote from Morgan Stanley Capital Services LLC, the counterparty to the forward transaction. As the forward currency forward contract did not qualify for hedge accounting, we reflected the change in fair value of the swap through other income (expense), net. At October 2, 2011, we recorded a current liability and corresponding expense of $11.7 million for the change in fair value. During the quarter ended January 1, 2012, we recorded income of $15.4 million related to the settlement of this forward.

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STOCK-BASED COMPENSATION AND EMPLOYEE BENEFIT PLANS

3 Months Ended

Jan. 01, 2012

STOCK-BASED COMPENSATION AND EMPLOYEE BENEFIT PLANS

10. STOCK-BASED COMPENSATION AND EMPLOYEE BENEFIT PLANS

In January 2012, our stockholders approved an amendment to the Microsemi Corporation 2008 Performance Incentive Plan (the “2008 Plan”). The amendment a) increased the share limit by an additional 14.5 million shares so that the new aggregate share limit for the 2008 Plan is 28.5 million shares; b) extended the plan term to December 5, 2021; c) increased the number of shares counted against the share limit for every one share issued in connection with a “Full-Value Award to 2.41; d) terminates the evergreen provision in the original plan; and e) extends the Performance-Based Award feature through the first annual meeting of stockholders that occurs in calendar year 2017. Awards authorized by the 2008 Plan include options, stock appreciation rights, restricted stock, stock bonuses, stock units, performance share awards, and other cash- or share-based awards. The shares issued under the 2008 Plan may be newly issued or shares held by the Company as treasury stock. The maximum term of a stock option grant or a stock appreciation right grant is six years.

Awards granted or assumed, weighted-average exercise price, weighted-average fair value and weighted-average assumptions used in the calculation of compensation expense are as follows:

Quarter Ended	# of Awards		Per Award				Risk Free Rate			Expected Dividend Yield			Expected Life (Years)		Expected Volatility
			Exercise Price		Fair Value
January 1, 2012
Restricted shares		523,800			$	16.27
Performance stock units		350,000			$	17.77
January 2, 2011
Restricted shares		1,686,311			$	20.96
Stock options and share appreciation rights		3,012,245	$	13.88	$	7.12		0.2	%		0.0	%		1.1		41.9	%

In connection with the acquisition of Actel Corporation in 2011, we assumed Actel stock options, stock appreciation rights and restricted stock units and converted them to Microsemi awards in accordance with the merger agreement. In the quarters ended January 1, 2012 and January 2, 2011, stock-based compensation expense decreased operating income by $7.5 million and $7.3 million, respectively.

Compensation expense for stock options and stock appreciation rights was calculated based on the grant or assumption date using the Black-Scholes pricing model. All stock appreciation rights we have granted or assumed are stock-settled. Stock options and stock appreciation rights are granted at exercise prices equal to the closing price of our common stock on the date of grant. Assumed stock options and stock appreciation rights are granted at exercise prices determined in accordance with the acquisition agreement. Expected life was estimated based on historical exercise data that was stratified between members of the Board of Directors, executive employees and all other recipients. Expected volatility was estimated based on historical volatility using equally weighted daily price observations over a period approximately equal to the expected life of each option. The risk free interest rate is based on the implied yield currently available on U.S. Treasury securities with an equivalent remaining term. No dividends are expected to be paid. Restricted stock awards and units are granted to employees with compensation expense determined based on the closing price of our common stock on the date of grant. Stock awards are subject to forfeiture if a participant does not meet length of service requirements.

Performance stock units are subject to performance-based vesting requirements and are reported at target levels in the preceding table. These performance-based awards will generally vest based on the Company’s growth in net sales and earnings per share (subject to certain adjustments) for fiscal years 2012 and 2013 in comparison with the growth in net sales and adjusted earnings per share over the same period for a peer group selected by the Compensation Committee. Half of each performance-based award opportunity will be subject to the growth in net sales metric for the performance period and half will be subject to the growth in earnings per share metric for the performance period. None of the units related to a particular metric will vest if the Company’s performance ranking using that metric is lower than the 30^th percentile relative to the peer group for the performance period, and the maximum number of units related to a particular metric that will vest is capped at 200% of the “target” number of units subject to the award related to that metric (half the total target number of units subject to the total performance-based award). This maximum vesting level will be achieved only if the Company’s performance ranking using that metric is equal to or greater than the 95^th percentile relative to the peer group for the performance period. The “target” number of units subject to an award related to a particular metric (half the total target number of units subject to the total performance-based award) will vest only if the Company’s performance ranking using that metric is at the 70^th percentile of the peer group for the performance period. Thirty percent of the target number of units may vest based on performance for fiscal 2012, with the majority of each award subject to the long-term two year performance period (fiscal years 2012 and 2013).

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EARNINGS PER SHARE

3 Months Ended

Jan. 01, 2012

EARNINGS PER SHARE

8. EARNINGS PER SHARE

Basic earnings per share have been computed based upon the weighted average number of common shares outstanding during the respective periods. Diluted earnings per share have been computed, when the result is dilutive, using the treasury stock method for stock awards outstanding during the respective periods. Earnings per share (“EPS”) for the respective periods were calculated as follows (amounts in thousands, except per share data):

	Quarter Ended
	January 1, 2012			January 2, 2011
BASIC
Net loss	$	(44,602	)	$	(1,296	)
Weighted-average common shares outstanding for basic		85,217			82,716
Basic earnings (loss) per share	$	(0.52	)	$	(0.02	)
DILUTED
Net loss	$	(44,602	)	$	(1,296	)
Weighted-average common shares outstanding for basic		85,217			82,716
Dilutive effect of stock awards		—			—
Weighted-average common shares outstanding on a diluted basis		85,217			82,716
Diluted earnings (loss) per share	$	(0.52	)	$	(0.02	)

All stock awards of 11,829,000 and 13,997,000 for the quarters ended January 1, 2012 and January 2, 2011, respectively, were excluded from the computation of diluted EPS as we incurred net losses in both periods.

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RECENTLY ISSUED ACCOUNTING STANDARDS

3 Months Ended

Jan. 01, 2012

RECENTLY ISSUED ACCOUNTING STANDARDS

9. RECENTLY ISSUED ACCOUNTING STANDARDS

In January 2010, the FASB issued ASU No. 2010-06, that requires new fair value disclosures pertaining to significant transfers in and out of Level 1 and Level 2 fair value measurements and the reasons for the transfers and activity. For Level 3 fair value measurements, purchases, sales, issuances and settlements must be reported on a gross basis. Further, additional disclosures are required by class of assets or liabilities, as well as inputs used to measure fair value and valuation techniques. ASU No. 2010-06 is effective for interim and annual reporting periods beginning after December 15, 2009 (our second quarter of fiscal year 2010), except for the disclosures about purchases, sales, issuances and settlements on a gross basis, which is effective for fiscal years beginning after December 15, 2010 (our fiscal year 2012). The adoption of this ASU did not result in a material impact on our consolidated financial position, results of operations or cash flows.

In June 2011, the FASB issued ASU No. 2011-05, that updates the presentation of comprehensive income such that an entity has the option 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 No. 2011-05 is effective for public entities for fiscal years, and interim periods within those years, beginning after December 15, 2011 (the second quarter of our fiscal year 2012). The provisions of this standard only affect the presentation of comprehensive income and will not materially impact our consolidated financial position, results of operations or cash flows. In December 2011, the FASB issued ASU No. 2011-12 that effectively defers the changes in ASU No. 2011-05 related to the presentation of reclassification adjustments out of accumulated other comprehensive income. We are currently evaluating the disclosures required under these ASUs.

In December 2011, the FASB issued ASU No. 2011-11, the objective of which is to provide additional disclosures on the effect or potential effect of rights of setoff associated with an entity’s recognized assets and recognized liabilities within the scope of the update. The update primarily impacts financial instruments and derivatives subject to a master netting arrangement or similar agreement. ASU No. 2011-11 is effective for annual reporting periods beginning on or after January 1, 2013, and interim periods within those annual periods (the first quarter of our fiscal year 2015). We are currently evaluating the disclosures required under this ASU.

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SEGMENT INFORMATION

3 Months Ended

Jan. 01, 2012

SEGMENT INFORMATION

11. SEGMENT INFORMATION

We manage our business on the basis of one reportable segment, as a manufacturer of semiconductors in different geographic areas, including the United States, Europe and Asia. We derive revenue from sales of our high-performance analog/mixed-signal integrated circuits and power and high-reliability individual component semiconductors. These products include individual components as well as integrated circuit solutions that enhance customer designs by improving performance, reliability and battery optimization, reducing size or protecting circuits. The principal markets that we serve include Defense & Security, Aerospace, Enterprise & Communications and Industrial, Medical & Alternative Energy. We evaluate sales by end-market based on our understanding of end market uses of our products.

Net sales by the originating geographic area and by estimated end market are as follows (amounts in thousands):

	Quarter Ended
	January 1, 2012		January 2, 2011
United States	$	169,487	$	112,459
Europe		33,228		30,689
Asia		38,205		41,203
Total	$	240,920	$	184,351
Defense & Security		69,115	$	69,843
Aerospace		49,123		45,071
Enterprise & Communications		75,124		33,636
Industrial, Medical & Alternative Energy		47,558		35,801
Total	$	240,920	$	184,351

Tangible long lived assets by geographic area are as follows (amounts in thousands):

	January 1,     2012		October 2,     2011
United States	$	77,561	$	69,647
Europe		14,602		12,632
Asia		7,364		7,643
Total	$	99,527	$	89,922

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Identifiable Intangible Assets and their Estimated Useful Lives (Detail) (Zarlink Semiconductor, Inc, USD $) In Thousands, unless otherwise specified	3 Months Ended
	Jan. 01, 2012 Year
Acquired Finite-Lived Intangible Assets [Line Items]
Intangible assets	$ 210,100
Completed Technology
Acquired Finite-Lived Intangible Assets [Line Items]
Intangible assets	47,800
Weighted Average Useful Life (in year)	6
Customer Relationships
Acquired Finite-Lived Intangible Assets [Line Items]
Intangible assets	144,600
Weighted Average Useful Life (in year)	6
Backlog
Acquired Finite-Lived Intangible Assets [Line Items]
Intangible assets	15,700
Weighted Average Useful Life (in year)	1
Trade Names
Acquired Finite-Lived Intangible Assets [Line Items]
Intangible assets	$ 2,000
Weighted Average Useful Life (in year)	2

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CREDIT AGREEMENT AND DERIVATIVE INSTRUMENTS - Additional Information (Detail)	3 Months Ended		3 Months Ended								3 Months Ended			3 Months Ended						3 Months Ended				3 Months Ended												3 Months Ended		3 Months Ended
	Jan. 01, 2012 USD ($)	Oct. 02, 2011 USD ($)	Jan. 01, 2012 Interest Rate Swap USD ($) Contract	Jan. 02, 2011 Interest Rate Swap USD ($)	Jan. 01, 2012 Interest Rate Swap Group One USD ($)	Jan. 01, 2012 Interest Rate Swap Group Two USD ($)	Jan. 01, 2012 Interest Rate Swap Group Three USD ($)	Jan. 01, 2012 Interest Rate Swap Current Liabilities USD ($)	Jan. 01, 2012 Interest Rate Swap Noncurrent Liabilities USD ($)	Oct. 02, 2011 Interest Rate Swap Noncurrent Liabilities USD ($)	Jan. 01, 2012 Foreign Exchange Forward USD ($)	Oct. 02, 2011 Foreign Exchange Forward USD ($)	Oct. 02, 2011 Foreign Exchange Forward CAD	Jan. 01, 2012 Senior Secured Credit Facility Term Loan Facility USD ($)	Jan. 02, 2011 Senior Secured Credit Facility Term Loan Facility USD ($)	Oct. 02, 2011 Senior Secured Credit Facility Term Loan Facility USD ($)	Oct. 02, 2011 Senior Secured Credit Facility Term Loan Facility Fair Value, Inputs, Level 2 USD ($)	Jan. 02, 2011 Senior Secured Credit Facility Term Loan Facility Fair Value, Inputs, Level 2 USD ($)	Jan. 01, 2012 Amended and Restated Credit Agreement USD ($)	Jan. 01, 2012 Second Amendment Base Rate	Jan. 01, 2012 Second Amendment Eurodollar Rate Loans	Jan. 01, 2012 Second Amendment Term Loan Facility USD ($)	Oct. 02, 2011 Second Amendment Term Loan Facility USD ($)	Jan. 01, 2012 Second Amendment Term Loan Facility Minimum USD ($)	Jan. 01, 2012 Second Amendment Term Loan Facility Base Rate	Jan. 01, 2012 Second Amendment Term Loan Facility Eurodollar Rate Loans	Jan. 01, 2012 Second Amendment Revolving Credit Facility USD ($)	Oct. 02, 2011 Second Amendment Revolving Credit Facility USD ($)	Jan. 01, 2012 Second Amendment Revolving Loans And Swingline Base Rate Minimum	Jan. 01, 2012 Second Amendment Revolving Loans And Swingline Base Rate Maximum	Jan. 01, 2012 Second Amendment Revolving Loans And Swingline Eurodollar Rate Loans Minimum	Jan. 01, 2012 Second Amendment Revolving Loans And Swingline Eurodollar Rate Loans Maximum	Jan. 01, 2012 Second Amendment Federal Funds Rate Base Rate	Jan. 01, 2012 Second Amendment One-month Eurodollar Rate Eurodollar Rate Loans	Jan. 01, 2012 Second Amendment Senior Secured Credit Facility USD ($)	Jan. 01, 2012 Second Amendment Senior Secured Credit Facility Term Loan Facility USD ($)	Jan. 01, 2012 Second Amendment Senior Secured Credit Facility Revolving Credit Facility USD ($)	Jan. 01, 2012 Second Amendment Senior Secured Credit Facility Revolving Credit Facility Minimum	Jan. 01, 2012 Second Amendment Senior Secured Credit Facility Revolving Credit Facility Maximum	Jan. 01, 2012 Second Amendment Senior Secured Credit Facility Letter of Credit
Line of Credit Facility [Line Items]
Debt extinguishment costs																																				$ 34,000,000
Original issue discount rate																																				2.00%
Face amount																																			850,000,000	800,000,000	50,000,000
Applicable margin																									3.50%	4.50%			3.00%	3.75%	4.00%	4.75%
Rate description																				The "Base Rate" is defined as a rate per annum equal to the greatest of (a) the prime rate, (b) 1/2 of 1% per annum above the federal funds effective rate, (c) the one-month Eurodollar Rate plus 1%, and (d) in the case of any term loans, 2.25%.	The "Eurodollar Rate" is defined as (a) the rate per annum offered for deposits of dollars for the applicable interest period that appears on Reuters Screen LIBOR01 Page as of 11:00 A.M., London, England time, two (2) business days prior to the first day of such interest period or (b) if no such offered rate exists, such rate will be the rate of interest per annum as determined by the administrative agent (rounded upwards, if necessary, to the nearest 1/100 of 1%) at which deposits of dollars in immediately available funds are offered at 11:00 A.M., London, England time, two (2) business days prior to the first day in the applicable interest period by major financial institutions reasonably satisfactory to the administrative agent in the London interbank market for such interest period and for an amount equal or comparable to the principal amount of the loans to be borrowed, converted or continued as Eurodollar Rate loans on such date of determination. In the case of term loans, the Eurodollar Rate will not be lower than 1.25%.
Debt, stated rate																						5.75%			2.25%	1.25%							0.50%
Basis points																																		1.00%
Amount borrowed under the facility														798,000,000	375,000,000	372,200,000						798,000,000	372,200,000
Extinguishment of debt	372,188,000													372,188,000
Change in fair value of principal outstanding														(11,200,000)	(3,800,000)
Up front debt issuance and refinancing costs															13,400,000
Outstanding letter of credit																											400,000	400,000
Minimum principal payment per quarter																								2,000,000
Minimum principal payment per year																								8,000,000
Maturity date																						Feb. 02, 2017
Additional maximum borrowing capacity																			200,000,000
Upfront fee percentage																																					0.25%
Commitment fee percentage																																						0.25%	0.625%
Fronting fee percentage																																								0.25%
Fair value outstanding term loan																	361,000,000	378,800,000
Number of derivative agreements			3
Change in fair value			(300,000)	(700,000)
Notional amount					24,000,000	121,000,000	24,000,000
Fixed rate					1.49%	1.83%	2.21%
Derivative maturity period					2 years	3 years	4 years
Foreign currency agreed upon purchase amount													623,000,000
Foreign currency contract amount												608,200,000
Fair value of foreign currency forward		11,675,000						100,000	3,000,000	2,800,000		11,675,000
Income related to settlement of forward agreement											$ 15,400,000

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PRESENTATION OF FINANCIAL INFORMATION (Policies)

3 Months Ended

Jan. 01, 2012

Fair Value of Financial Assets and Liabilities

Fair Value of Financial Assets and Liabilities

Accounting Standards Codification (“ASC”) 825 permits entities to elect the fair value option for certain financial assets and financial liabilities. For financial assets or financial liabilities for which an entity elects the fair value option, ASC 825 requires that the entity record the financial asset or financial liability at fair value rather than at historical cost with changes in fair value recorded in the income statement. ASC 825-25 requires that upfront costs and fees related to items for which the fair value option is elected shall be recognized in earnings as incurred and not deferred. As further discussed in Note 14, we elected the fair value option in accounting for the term loan balance outstanding as of October 2, 2011, but following the extinguishment of the term loan in conjunction with our acquisition of Zarlink Semiconductor, Inc., we did not elect the fair value option for the term loan balance outstanding as of January 1, 2012.

Measurement Period for the Acquisition of Actel Corporation

Measurement Period for the Acquisition of Actel Corporation

During the first quarter of 2012, we closed the measurement period for the acquisition of Actel Corporation that occurred in the prior year first quarter. We completed our evaluation of income tax-related information regarding facts and circumstances that existed as of the acquisition date. In accordance with ASC 805-10, we retrospectively adjusted the preliminary amounts previously reported and are now reporting the final amounts. In the balance sheet as of October 2, 2011, we have reflected a retrospective adjustment of $1.3 million that increased non-current deferred tax assets and retained earnings. This retrospective adjustment will be reflected in the income statement for the second quarter of 2011.

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COMPREHENSIVE INCOME (Tables)

3 Months Ended

Jan. 01, 2012

Total Comprehensive Loss

Total comprehensive loss was calculated as follows (amounts in thousands):

	Quarter Ended
	January 1, 2012			January 2, 2011
Net loss	$	(44,602	)	$	(1,296	)
Translation adjustment		(291	)		(28	)
Comprehensive loss	$	(44,893	)	$	(1,324	)

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RESTRUCTURING AND SEVERANCE CHARGES - Additional Information (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended			3 Months Ended
	Apr. 03, 2011 Scottsdale Facility sqft	Jan. 01, 2012 Scottsdale Facility	Oct. 02, 2011 Scottsdale Facility	Jan. 01, 2012 Other Facility Person	Oct. 02, 2011 Other Facility
Schedule of Status of Facilities by Location [Line Items]
Occupied leased facility (square foot)	135,000
Recorded severance accruals		$ 6,313	$ 6,837		$ 2,700
Additional severance provisions				$ 7,200
Number of employees				200

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Total Comprehensive Loss (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Jan. 01, 2012	Jan. 02, 2011
Comprehensive Income (Loss) [Line Items]
Net loss	$ (44,602)	$ (1,296)
Translation adjustment	(291)	(28)
Comprehensive loss	$ (44,893)	$ (1,324)

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Condensed Consolidated Statements of Cash Flows (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Jan. 01, 2012	Jan. 02, 2011
Cash flows from operating activities:
Net loss	$ (44,602)	$ (1,296)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization	33,316	19,946
Provision for doubtful accounts	(91)	300
Settlement of foreign currency forward	(3,701)
Loss on disposition of assets	1,893
Deferred income taxes	(509)	(522)
Charge for stock based compensation	7,531	7,278
Excess tax benefits-stock awards	(362)	(2,088)
Effect of fair value option on credit facility issuance and refinancing costs	28,031	13,424
Change in assets and liabilities (net of acquisitions):
Accounts receivable	(10,304)	2,766
Inventories	5,709	(2,076)
Other current assets	33,792	(13,007)
Other assets	(6,813)	130
Accounts payable	(607)	(5,438)
Accrued liabilities	(44,076)	(15,008)
Other long-term liabilities	19,642	5,215
Net cash provided by operating activities	18,849	9,624
Cash flows from investing activities:
Purchases of property and equipment	(12,446)	(5,746)
Settlement of foreign currency forward	3,701
Payments for acquisitions, net of cash acquired	(540,285)	(380,979)
Net cash used in investing activities	(549,030)	(386,725)
Cash flows from financing activities:
Repayments of credit facility	(51,600)	(50,000)
Credit facility issuance costs	(31,031)	(13,424)
Proceeds from credit facility	849,600	425,000
Extinguishment of debt	(372,188)
Excess tax benefit from stock awards	362	2,088
Exercise of stock options	1,877	16,906
Net cash provided by financing activities	397,020	380,570
Net increase (decrease) in cash and cash equivalents	(133,161)	3,469
Cash and cash equivalents at beginning of year	266,631	199,950
Cash and cash equivalents at end of year	$ 133,470	$ 203,419

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ACCRUED LIABILITIES

3 Months Ended

Jan. 01, 2012

ACCRUED LIABILITIES

5. ACCRUED LIABILITIES

Accrued liabilities consisted of the following components (amounts in thousands):

	January 1, 2012		October 2, 2011
Payroll, bonus, accrued time off and other employee benefits	$	39,867	$	41,264
Fair value of foreign currency forward		—		11,675
Restructuring and severance		12,133		9,562
Licenses		9,082		9,636
Outside services		12,543		7,815
Interest		6,914		4,037
Warranties		2,467		2,945
Commissions		3,067		2,692
Other		18,512		11,452
	$	104,585	$	101,078

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EARNINGS PER SHARE (Tables)

3 Months Ended

Jan. 01, 2012

Earning Per Share

periods. Earnings per share (“EPS”) for the respective periods were calculated as follows (amounts in thousands, except per share data):

	Quarter Ended
	January 1, 2012			January 2, 2011
BASIC
Net loss	$	(44,602	)	$	(1,296	)
Weighted-average common shares outstanding for basic		85,217			82,716
Basic earnings (loss) per share	$	(0.52	)	$	(0.02	)
DILUTED
Net loss	$	(44,602	)	$	(1,296	)
Weighted-average common shares outstanding for basic		85,217			82,716
Dilutive effect of stock awards		—			—
Weighted-average common shares outstanding on a diluted basis		85,217			82,716
Diluted earnings (loss) per share	$	(0.52	)	$	(0.02	)

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Estimated Future Amortization Expense (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Jan. 01, 2012
Remainder of Year
Amortization expense	$ 96,871
More than One and within Two Years from Balance Sheet Date
Amortization expense	80,837
More than Two and within Three Years from Balance Sheet Date
Amortization expense	74,739
More than Three and within Four Years from Balance Sheet Date
Amortization expense	69,667
More than Four Years from Balance Sheet Date and Thereafter
Amortization expense	$ 144,812

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SUBSEQUENT EVENT

3 Months Ended

Jan. 01, 2012

SUBSEQUENT EVENT

15. SUBSEQUENT EVENT

In January 2012, we acquired the telecom clock generation, synchronization, packet timing and synthesis business from Maxim Integrated Products, Inc. for an estimated $44.0 million in cash. We expect to report a preliminary allocation of the estimated purchase consideration in the Quarterly Report on Form 10-Q for our second fiscal quarter of 2012.

As described in Note 10, our stockholders approved an amendment to the Microsemi Corporation 2008 Performance Incentive Plan.