10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 29, 2013

OR

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ________ to ________

Commission file number 0-16617

ALTERA CORPORATION

(Exact name of registrant as specified in its charter)

DELAWARE	77-0016691
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification Number)

101 INNOVATION DRIVE

SAN JOSE, CALIFORNIA 95134

(Address of principal executive offices) (zip code)

408-544-7000

(Registrant's telephone number, including area code)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [x] No [ ]

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

Large accelerated filer [x] Accelerated filer [ ] Non-accelerated filer [ ] 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]

Number of shares of common stock outstanding at April 10, 2013: 320,140,393

	PAGE NUMBER
PART I FINANCIAL INFORMATION
ITEM 1. Financial Statements (Unaudited)
Consolidated Balance Sheets	3
Consolidated Statements of Comprehensive Income	4
Consolidated Statements of Cash Flows	5
Notes to Consolidated Financial Statements	6
ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations	19
ITEM 3. Quantitative and Qualitative Disclosures about Market Risk	26
ITEM 4. Controls and Procedures	27
PART II OTHER INFORMATION
ITEM 1. Legal Proceedings	27
ITEM 1A. Risk Factors	27
ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds	28
ITEM 6. Exhibits	29
Signatures	30

2

PART I FINANCIAL INFORMATION

ITEM 1: Financial Statements

ALTERA CORPORATION

CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In thousands, except par value amount)	March 29, 2013		December 31, 2012
Assets
Current assets:
Cash and cash equivalents	$	2,953,587	$	2,876,627
Short-term investments	171,343		140,958
Total cash, cash equivalents, and short-term investments	3,124,930		3,017,585
Accounts receivable, net	366,417		323,708
Inventories	139,282		152,721
Deferred income taxes — current	72,803		59,049
Deferred compensation plan — marketable securities	57,627		60,321
Deferred compensation plan — restricted cash equivalents	17,115		17,116
Other current assets	47,113		49,852
Total current assets	3,825,287		3,680,352
Property and equipment, net	201,964		206,148
Long-term investments	712,040		704,758
Deferred income taxes — non-current	18,934		17,082
Other assets, net	46,485		49,488
Total assets	$	4,804,710	$	4,657,828
Liabilities and stockholders' equity
Current liabilities:
Accounts payable	$	31,613	$	50,036
Accrued liabilities	36,571		29,005
Accrued compensation and related liabilities	43,920		40,606
Deferred compensation plan obligations	74,742		77,437
Deferred income and allowances on sales to distributors	382,642		345,993
Total current liabilities	569,488		543,077
Income taxes payable — non-current	276,238		272,000
Long-term debt	500,000		500,000
Other non-current liabilities	9,188		9,304
Total liabilities	1,354,914		1,324,381
Commitments and contingencies
(See “Note 11 — Commitments and Contingencies”)
Stockholders' equity:
Common stock: $.001 par value; 1,000,000 shares authorized; outstanding - 320,140 shares at March 29, 2013 and 319,564 shares at December 31, 2012	320		320
Capital in excess of par value	1,153,098		1,122,555
Retained earnings	2,290,836		2,204,980
Accumulated other comprehensive income	5,542		5,592
Total stockholders' equity	3,449,796		3,333,447
Total liabilities and stockholders' equity	$	4,804,710	$	4,657,828

See accompanying notes to consolidated financial statements.

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ALTERA CORPORATION

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

	Three Months Ended
(In thousands, except per share amounts)	March 29, 2013			March 30, 2012
Net sales	$	410,501		$	383,754
Cost of sales	126,083			114,834
Gross margin	284,418			268,920
Research and development expense	87,930			82,297
Selling, general, and administrative expense	78,600			69,785
Compensation expense — deferred compensation plan	3,422			5,736
Gain on deferred compensation plan securities	(3,422		)	(5,736		)
Interest income and other	(1,659		)	(1,807		)
Gain reclassified from other comprehensive income	(54		)	(102		)
Interest expense	2,465			937
Income before income taxes	117,136			117,810
Income tax (benefit)/expense	(3,053		)	1,976
Net income	120,189			115,834
Other comprehensive (loss) income:
Unrealized holding (loss)/gain on investments:
Unrealized holding (loss)/gain on investments arising during period, net of tax of ($5) and $58	(1		)	304
Less: Reclassification adjustments for gain on investments included in net income, net of tax of $5 and $5	(49		)	(20		)
	(50		)	284
Unrealized gain on derivatives:
Unrealized gain on derivatives arising during period, net of tax of $8	—			14
Less: Reclassification adjustments for gain on derivatives included in net income, net of tax of $27	—			(50		)
	—			(36		)
Other comprehensive (loss) income	(50		)	248
Comprehensive income	$	120,139		$	116,082
Net income per share:
Basic	$	0.38		$	0.36
Diluted	$	0.37		$	0.35
Shares used in computing per share amounts:
Basic	319,867			322,586
Diluted	323,021			327,061
Cash dividends per common share	$	0.10		$	0.08

See accompanying notes to consolidated financial statements.

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ALTERA CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited, in thousands)

	Three Months Ended
	March 29, 2013			March 30, 2012
Cash Flows from Operating Activities:
Net income	$	120,189		$	115,834
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	11,374			8,160
Stock-based compensation	22,242			22,393
Deferred income tax benefit	(15,606		)	(7,055		)
Tax effect of employee stock plans	861			10,566
Excess tax benefit from employee stock plans	(741		)	(10,044		)
Changes in assets and liabilities:
Accounts receivable, net	(42,709		)	(39,119		)
Inventories	13,439			12,828
Other assets	13,317			6,416
Accounts payable and other liabilities	(9,660		)	(28,462		)
Deferred income and allowances on sales to distributors	36,649			130
Income taxes payable	6,239			(4,696		)
Deferred compensation plan obligations	(6,116		)	2,812
Net cash provided by operating activities	149,478			89,763
Cash Flows from Investing Activities:
Purchases of property and equipment	(14,586		)	(23,903		)
Sales (purchases) of deferred compensation plan securities, net	6,116			(2,812		)
Purchases of available-for-sale securities	(121,111		)	(47,174		)
Proceeds from sale and maturity of available-for-sale securities	83,394			48,387
Purchases of other investments	(176		)	—
Net cash used in investing activities	(46,363		)	(25,502		)
Cash Flows from Financing Activities:
Proceeds from issuance of common stock through various stock plans	8,442			12,888
Shares withheld for employee taxes	(3,360		)	(4,884		)
Payment of dividends to stockholders	(31,978		)	(25,822		)
Repurchase of common stock	—			(8,238		)
Excess tax benefit from employee stock plans	741			10,044
Net cash used in financing activities	(26,155		)	(16,012		)
Net increase in cash and cash equivalents	76,960			48,249
Cash and cash equivalents at beginning of period	2,876,627			3,371,933
Cash and cash equivalents at end of period	$	2,953,587		$	3,420,182

See accompanying notes to consolidated financial statements.

5

ALTERA CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 1 — Organization and Basis of Presentation

The accompanying unaudited consolidated financial statements of Altera Corporation and its subsidiaries, collectively referred to herein as “Altera”, “we”, “us”, or “our”, have been prepared by us in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information. This financial information reflects all adjustments which are, in the opinion of our management, of a normal recurring nature and necessary for a fair statement of the results for the periods presented. The December 31, 2012 consolidated balance sheet data was derived from our audited consolidated financial statements included in our 2012 Annual Report on Form 10-K, as filed with the Securities and Exchange Commission (“SEC”), but does not include all disclosures required by U.S. GAAP. The consolidated financial statements include our accounts as well as those of our wholly-owned subsidiaries after elimination of all significant inter-company balances and transactions.

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in our consolidated financial statements and accompanying notes. Actual results could differ materially from those estimates.

These consolidated financial statements should be read in conjunction with our audited consolidated financial statements for the year ended December 31, 2012 included in our Annual Report on Form 10-K. The consolidated operating results for the three months ended March 29, 2013 are not necessarily indicative of the results to be expected for any future period.

Note 2 — Recent Accounting Pronouncements

In February 2013, the FASB issued ASU No. 2013-02, “Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income.” This standard requires entities to present information about reclassification adjustments from accumulated other comprehensive income in the annual financial statements in a single note or on the face of the financial statements. Public companies will also have to provide this information in their interim financial statements. The new requirements are effective as of the beginning of a fiscal year that begins after December 15, 2012 and interim and annual periods thereafter. We early adopted this guidance in our fiscal year 2012 and it did not have a material impact on our consolidated financial statements.

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Note 3 — Financial Instruments

Cash, Cash Equivalents and Marketable Securities

The following tables summarize our cash and available-for-sale securities by significant investment category.

	March 29, 2013
(In thousands)	Cost		Unrealized Gains		Unrealized Losses			Fair Value		Cash and Cash Equivalents		Short-Term Marketable Securities		Long-Term Marketable Securities
Cash	$	61,541	$	—	$	—		$	61,541	$	61,541	$	—	$	—
Available for sale:
Level 1:
Money market funds	2,875,699		—		—			2,875,699		2,875,699		—		—
U.S. treasury securities	568,071		5,130		—			573,201		16,347		41,554		515,300
Subtotal	3,443,770		5,130		—			3,448,900		2,892,046		41,554		515,300
Level 2:
U.S. agency securities	106,068		50		(3		)	106,115		—		55,524		50,591
Non-U.S. government securities	16,611		5		(5		)	16,611		—		3,222		13,389
Municipal bond	612		1		—			613		—		613		—
Corporate securities	202,753		489		(52		)	203,190		—		70,430		132,760
Subtotal	326,044		545		(60		)	326,529		—		129,789		196,740
Total	$	3,831,355	$	5,675	$	(60	)	$	3,836,970	$	2,953,587	$	171,343	$	712,040

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	December 31, 2012
(In thousands)	Cost		Unrealized Gains		Unrealized Losses			Fair Value		Cash and Cash Equivalents		Short-Term Marketable Securities		Long-Term Marketable Securities
Cash	$	89,194	$	—	$	—		$	89,194	$	89,194	$	—	$	—
Available for sale:
Level 1:
Money market funds	2,739,904		—		—			2,739,904		2,739,904		—		—
U.S. treasury securities	564,713		5,231		(3		)	569,941		33,519		22,493		513,929
Subtotal	3,304,617		5,231		(3		)	3,309,845		2,773,423		22,493		513,929
Level 2:
U.S. agency securities	116,802		58		(1		)	116,859		11,799		53,438		51,622
Non-U.S. government securities	11,644		10		(2		)	11,652		—		2,730		8,922
Municipal bond	1,372		1		—			1,373		—		752		621
Corporate securities	193,048		436		(64		)	193,420		2,211		61,545		129,664
Subtotal	322,866		505		(67		)	323,304		14,010		118,465		190,829
Total	$	3,716,677	$	5,736	$	(70	)	$	3,722,343	$	2,876,627	$	140,958	$	704,758

We have certain cost method investments of approximately $4.7 million. These investments are included within Other assets, net  in our consolidated balance sheets.  

The adjusted cost and estimated fair value of marketable debt securities (corporate securities, municipal bonds, U.S. and foreign government securities, and U.S. treasury securities) as of March 29, 2013, by contractual maturity, are shown below. Actual maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations without call or prepayment penalties.

	March 29, 2013
(In thousands)	Cost		Estimated Fair Value
Due in one year or less	$	187,633	$	187,690
Due after one year through five years	706,482		712,040
	$	894,115	$	899,730

Note 4 — Accounts Receivable, Net and Significant Customers

Accounts receivable, net was comprised of the following:

(In thousands)	March 29, 2013			December 31, 2012
Gross accounts receivable	$	366,918		$	324,260
Allowance for doubtful accounts	(500		)	(500		)
Allowance for sales returns	(1		)	(52		)
Accounts receivable, net	$	366,417		$	323,708

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We sell our products to OEMs and to electronic components distributors who resell these products to OEMs, or their subcontract manufacturers. Net sales by customer type and net sales to significant customers were as follows:

	Three Months Ended
(Percentage of Net Sales)	March 29, 2013		March 30, 2012
Sales to distributors	76	%	73	%
Sales to OEMs	24	%	27	%
	100	%	100	%
Significant Distributors(1):
Arrow Electronics, Inc. ( “Arrow”)	43	%	39	%
Macnica, Inc. (“Macnica”)	23	%	22	%

(1) Except as presented above, no other distributor accounted for greater than 10% of our net sales for the three months ended March 29, 2013 or March 30, 2012.

For the quarterly periods ended March 29, 2013 and March 30, 2012, one OEM accounted for 13% and 18%, respectively, of our net sales.

As of March 29, 2013, accounts receivable from Arrow and Macnica individually accounted for approximately 37% and 52%, respectively, of our gross accounts receivable. As of December 31, 2012, accounts receivable from Arrow and Macnica individually accounted for approximately 30% and 47%, respectively, of our gross accounts receivable. No other distributor or OEM accounted for more than 10% of our accounts receivable as of March 29, 2013 or December 31, 2012. Accounts receivable from distributors may not be proportionate to net sales and may fluctuate on a quarterly basis due to varying factors, including inventory levels held by distributors and timing of price concessions and payments.

Note 5 — Inventories

Inventories were comprised of the following:

(In thousands)	March 29, 2013		December 31, 2012
Raw materials	$	14,564	$	12,447
Work in process	88,778		88,643
Finished goods	35,940		51,631
Total inventories	$	139,282	$	152,721

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Note 6 — Property and Equipment, Net

Property and equipment, net was comprised of the following:

(In thousands)	March 29, 2013			December 31, 2012
Land and land rights	$	23,157		$	23,157
Buildings	158,022			159,247
Equipment and software	262,133			256,725
Office furniture and fixtures	24,590			24,531
Leasehold improvements	12,105			11,915
Construction in progress	2,452			1,705
Property and equipment, at cost	482,459			477,280
Accumulated depreciation	(280,495		)	(271,132		)
Property and equipment, net	$	201,964		$	206,148

Depreciation expense was $10.2 million and $7.4 million for the three months ended March 29, 2013 and March 30, 2012, respectively. Depreciation and amortization expense as presented in our consolidated statements of cash flows includes the above amounts, together with amortization expense on our intangible assets. Intangible asset amortization expense was not significant for any period presented in our consolidated statements of comprehensive income.

Note 7 — Deferred Income and Allowances on Sales to Distributors

Deferred income and allowances on sales to distributors was comprised of the following:

(In thousands)	March 29, 2013			December 31, 2012
Deferred revenue on shipment to distributors	$	397,868		$	363,641
Deferred cost of sales on shipment to distributors	(25,470		)	(28,101		)
Deferred income on shipment to distributors	372,398			335,540
Other deferred revenue(1)	10,244			10,453
Total	$	382,642		$	345,993

(1) Principally represents revenue deferred on our software and intellectual property licenses.

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The Deferred income and allowances on sales to distributors activity for the three months ended March 29, 2013 and March 30, 2012 was as follows:

	Three Months Ended
(In thousands)	March 29, 2013			March 30, 2012
Balance at beginning of period	$	345,993		$	279,876
Deferred revenue recognized upon shipment to distributors	1,535,965			1,107,685
Deferred cost of sales recognized upon shipment to distributors	(58,008		)	(53,238		)
Revenue recognized upon sell-through to end customers	(250,048		)	(231,645		)
Cost of sales recognized upon sell-through to end customers	59,479			53,887
Earned distributor price concessions (1)	(1,226,899		)	(857,188		)
Returns	(23,244		)	(20,179		)
Other	(596		)	808
Balance at end of period	$	382,642		$	280,006

(1) Average aggregate price concessions typically range from 65% to 80% of our list price on an annual basis, depending upon the composition of our sales, volumes and factors associated with timing of shipments to distributors.

We sell the majority of our products to distributors worldwide at a list price. However, distributors resell our products to end customers at a very broad range of individually negotiated prices based on a variety of factors, including customer, product, quantity, geography and competitive differentiation. The majority of our distributors' sales to their customers are priced at a discount from our list price. Under these circumstances, we remit back to the distributor a portion of its original purchase price after the resale transaction is completed, and we validate the distributor's resale information, including end customer, device, quantity and price, against the distributor price concession that we have approved in advance. To receive a price concession, a distributor must submit the price concession claim to us for approval within 60 days of the resale of the product to an end customer. It is our practice to apply these negotiated price discounts to future purchases, requiring the distributor to settle receivable balances, on a current basis, generally within 30 days, for amounts originally invoiced.

Note 8 — Accumulated Other Comprehensive Income

The following table presents the components of, and the changes in, accumulated other comprehensive income, net of tax:

(In thousands)	December 31, 2012		Other Comprehensive (Loss) Income			March 29, 2013
Accumulated unrealized gain on available-for-sale securities, net of tax	$	5,592	$	(50	)	$	5,542
Accumulated other comprehensive income	$	5,592	$	(50	)	$	5,542

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Note 9 — Income Per Share

A reconciliation of basic and diluted income per share is presented below:

	Three Months Ended
(In thousands, except per share amounts)	March 29, 2013		March 30, 2012
Basic:
Net income	$	120,189	$	115,834
Basic weighted shares outstanding	319,867		322,586
Net income per share	$	0.38	$	0.36
Diluted:
Net income	$	120,189	$	115,834
Weighted shares outstanding	319,867		322,586
Effect of dilutive securities:
Stock options, employee stock purchase plan, and restricted stock unit shares	3,154		4,475
Diluted weighted shares outstanding	323,021		327,061
Net income per share	$	0.37	$	0.35

In applying the treasury stock method, we excluded 1.6 million and 0.9 million stock option shares and restricted stock unit shares for the three months ended March 29, 2013 and March 30, 2012, respectively, because their effect was anti-dilutive. While these shares have been anti-dilutive, they could be dilutive in the future.

Note 10 — Credit Facility and Long-Term Debt

Credit Facility

On June 29, 2012, we entered into a five-year $250 million unsecured revolving credit facility (the "Facility"). Under certain circumstances, upon our request and with the consent of the lenders, the commitments under the Facility may be increased up to an additional $250 million. Borrowings under the Facility will bear interest at a base rate determined in accordance with the Facility, plus an applicable margin based upon the debt rating of our non-credit enhanced, senior unsecured long-term debt. In addition, we are obligated to pay a quarterly commitment fee, payable in arrears, based on the available commitments. This facility fee varies and is also determined based on our debt rating. The terms of the Facility require compliance with certain financial and non-financial covenants, which we have satisfied as of March 29, 2013. As of March 29, 2013, we have not borrowed any funds under the Facility.

Long-term Debt

On May 8, 2012, we completed a public offering of $500 million aggregate principal amount of 1.75% senior notes that will mature on May 15, 2017 (the "Notes") with an effective interest rate of 1.91%. Interest on the Notes is payable semiannually in arrears on May 15 and November 15 of each year, beginning on November 15, 2012. The Notes are governed by a base and supplemental indenture between Altera and U.S. Bank National Association, as trustee. The Notes are our unsecured and unsubordinated obligations, ranking equally in right of payment to all of our existing and future unsecured and unsubordinated indebtedness and senior in right of payment to any of our future indebtedness that is expressly subordinated to the Notes. We may redeem the Notes, in whole or in part, at any time and from time to time for cash at the redemption prices described in the indenture.

We received net proceeds of $495.5 million from issuance of the Notes, after deduction of issuance costs of $3.7 million and a discount of $0.8 million. The debt issuance costs are recorded in other assets and are being amortized to interest expense

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over five years using the effective interest method. We used the net proceeds of the Notes to re-pay our former credit facility that was entered into on August 31, 2007.

The estimated fair value of Altera's long-term debt was approximately $511.1 million at March 29, 2013. Our long-term debt is classified within Level 1 of the fair value hierarchy and the estimated fair value of the debt is based on quoted market prices.

Note 11 — Commitments and Contingencies

Indemnification and Product Warranty

We indemnify certain customers, distributors, suppliers, and subcontractors for attorney's fees and damages and costs awarded against these parties in certain circumstances in which our products are alleged to infringe third party intellectual property rights, including patents, trade secrets, trademarks or copyrights. We cannot estimate the amount of potential future payments, if any, that we might be required to make as a result of these agreements. To date, we have not paid any claim or been required to defend any action related to our indemnification obligations, and, accordingly, we have not accrued any amounts for such indemnification obligations. However, we may record charges in the future as a result of these indemnification obligations.

We generally warrant our devices for one year against defects in materials, workmanship and material non-conformance to our specifications. We accrue for known warranty issues if a loss is probable and can be reasonably estimated, and accrue for estimated but unidentified issues based on historical activity. If there is a material increase in customer claims compared with our historical experience or if the costs of servicing warranty claims are greater than expected, we may record a charge against cost of sales. Warranty expense was not significant for any period presented in our consolidated statements of comprehensive income.

Purchase Obligations

We depend entirely upon subcontractors to manufacture our silicon wafers and provide assembly and test services. Due to lengthy subcontractor lead times, we must order these materials and services from these subcontractors well in advance, and we are obligated to pay for the materials and services once they are completed. As of March 29, 2013, we had approximately $135.7 million of outstanding purchase commitments to such subcontractors. We expect to receive and pay for these materials and services over the next six months.

Operating Leases

We lease facilities under non-cancelable lease agreements expiring at various times through 2021. There have been no significant changes to our operating lease obligations since December 31, 2012.

Legal Proceedings

On December 8, 2010, Intellectual Ventures I LLC and Intellectual Ventures II LLC (“Intellectual Ventures”) filed a lawsuit in the United States District Court for the District of Delaware against Altera, Microsemi Corporation, and Lattice Semiconductor Corporation (“Lattice”) alleging that Altera infringes five patents. The complaint requests unspecified monetary damages including enhanced damages for willful infringement. In February 2011, Intellectual Ventures filed a First Amended Complaint adding Xilinx, Inc. as a defendant. In March 2011, Altera answered the complaint and asserted counterclaims against Intellectual Ventures for non-infringement and invalidity of the asserted patents. The defendants filed motions in the District of Delaware to transfer the case to the United States District Court for the Northern District of California and to stay the action pending re-examination proceedings in the United States Patent and Trademark Office. Intellectual Ventures opposed the motions. In January 2012, the United States District Court for the District of Delaware denied the defendants' motion to transfer the case to the Northern District of California, and in February 2012, the court denied the defendants' motion to stay. Three of the four defendants, including Altera, filed a writ of mandamus in the Court of Appeals for the Federal Circuit requesting that the case be transferred to the Northern District of California. In July 2012, the Court of Appeals for the Federal Circuit denied the writ of mandamus. In January 2013, Intellectual Ventures and Microsemi announced a settlement agreement, which included a dismissal of all claims against Microsemi. In March 2013, Intellectual Ventures and Lattice announced a settlement agreement, which included a dismissal of all claims against Lattice.  Because the case is at a very early stage, it is not possible for us to determine whether there is a reasonable possibility that a loss has been incurred nor can we estimate the range of potential loss. The case is currently scheduled for trial in May 2014.

We file income tax returns with the Internal Revenue Service (“IRS”) and in various U.S. states and foreign jurisdictions. In 2008, the IRS completed field examinations of our tax returns for 2002 through 2004 and proposed an additional tax liability

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of $34.5 million, excluding interest. We contested this proposed additional tax liability in the IRS Office of Appeals and resolved several of the issues. On December 8, 2011, the IRS issued a Statutory Notice of Deficiency, revising the assessment of additional taxes for 2002 through 2004 to $19.8 million, excluding interest. The Notice relates primarily to inter-company adjustments between related companies, computational adjustments to the research and development ("R&D") credit and reductions to the benefits of tax credit carrybacks and carryforwards to subsequent years. On March 6, 2012, we filed a petition in the U.S. Tax Court to request a redetermination of the tax deficiency regarding certain IRS adjustments for 2004. We deposited $18.0 million as a cash bond with the IRS in 2008, and converted this amount to tax payments in March 2012. On May 8, 2012, the IRS filed its petition response in the U.S. Tax Court, in which the IRS conceded the R&D credit adjustment for 2004. In June 2012, the federal statute of limitations for the 2002 and 2003 tax years expired.

In addition, in 2010 the IRS completed field examinations for 2005 through 2007 and proposed an additional tax liability of $34.2 million, excluding interest. On January 23, 2012, the IRS issued a Statutory Notice of Deficiency, revising the assessment of additional taxes for 2005 through 2007 to $21.4 million, excluding interest. The Notice relates primarily to inter-company adjustments between related companies and reductions to the benefits of tax credit carrybacks and carryforwards to subsequent years. On April 20, 2012, we filed a petition in the U.S. Tax Court to request a redetermination of the tax deficiencies regarding certain IRS adjustments for 2005 through 2007. On June 21, 2012, the IRS filed its petition response in the U.S. Tax Court.

On August 15, 2012, the case for the 2004 tax year was combined with that for the 2005 through 2007 tax years. A judge has been assigned to our case and a motion for continuance has been granted. We believe we have made adequate tax payments or accrued adequate amounts for our tax liabilities for 2004 through 2007 and that the outcome of the above matters will not have a material adverse effect on our consolidated operating results, cash flows or financial position.

On January 31, 2013, the IRS conceded an adjustment for certain inter-company transactions in our litigation over the 2004 through 2007 tax years.  The concession only impacted our 2007 tax year. Our other inter-company transactions continue to be subject to litigation for 2004 through 2007. As a result of this concession, we recognized a tax and interest benefit of $6.8 million during the three months ended March 29, 2013 due to the release of certain tax reserves. We expect to present our legal arguments on other inter-company transactions that are subject to ligation to the U.S. Tax Court by the end of 2013.

On April 19, 2013, the IRS notified us that we would be audited for each of the 2010 and 2011 tax years. We believe we have made adequate tax payments or accrued adequate amounts for our tax liabilities for 2010 and 2011 and that the outcome of the audit will not have a material adverse effect on our consolidated operating results, cash flows or financial position.

Note 12 — Stock-Based Compensation

Our equity incentive program is a broad-based, long-term retention program intended to attract, motivate, and retain talented employees as well as align stockholder and employee interests. The program provides stock-based incentive compensation (“awards”) to both our eligible employees and non-employee directors. Awards that may be granted under the program include non-qualified and incentive stock options, restricted stock units (“RSU”s), performance-based restricted stock units (“PRSU”s), restricted stock awards, stock appreciation rights, and stock bonus awards. To date, awards granted under the program consist of stock options, RSUs and PRSUs. The majority of stock-based awards granted under the program vest over four years. Stock options granted under the program have a maximum contractual term of ten years.

Our stock-based compensation expense included in the consolidated statements of comprehensive income was as follows:

	Three Months Ended
(In thousands)	March 29, 2013			March 30, 2012
Cost of sales	$	445		$	448
Research and development expense	9,786			9,853
Selling, general, and administrative expense	12,011			12,092
Pre-tax stock-based compensation expense	22,242			22,393
Less: income tax benefit	(5,678		)	(5,704		)
Net stock-based compensation expense	$	16,564		$	16,689

No stock-based compensation was capitalized during any period presented above. As of March 29, 2013, unrecognized stock-based compensation cost related to outstanding unvested stock options, RSUs, PRSUs and Employee Stock Purchase Plan ("ESPP") shares that are expected to vest was approximately $153.8 million. This unrecognized stock-based compensation cost

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is expected to be recognized over a weighted average period of approximately 2.2 years. To the extent our actual forfeiture rate is different from our estimate, stock-based compensation related to these awards will be different from our expectations.

The assumptions used to estimate the fair value of RSUs and PRSUs were as follows:

	Three Months Ended
	March 29, 2013			March 30, 2012
RSUs and PRSUs:
Risk-free interest rate	0.4		%	0.3		%
Dividend yield	1.2		%	0.8		%
Weighted-average estimated fair value	$	32.52		$	38.96

In addition, we apply an expected forfeiture rate when amortizing stock-based compensation expense.

A summary of activity for our RSUs and PRSUs for the three months ended March 29, 2013 and information regarding RSUs and PRSUs outstanding and expected to vest as of March 29, 2013 is as follows:

(In thousands, except per share amounts and terms)	Number of Shares		Weighted-Average Grant-Date Fair Market Value Per Share		Weighted-Average Remaining Contractual Term (in Years)	Aggregate Intrinsic Value (1)
Outstanding, December 31, 2012	6,960		$	34.03
Grants	171		$	33.51
Vested	(237	)	$	36.41
Forfeited	(69	)	$	35.09
Outstanding, March 29, 2013	6,825		$	33.93	1.3	$	242,016
Vested and expected to vest, March 29, 2013	6,130		$	33.77	1.3	$	217,377

(1) Aggregate intrinsic value represents the closing price per share of our stock on March 29, 2013, multiplied by the number of RSUs and PRSUs outstanding or vested and expected to vest as of March 29, 2013.

A summary of stock option activity for the three months ended March 29, 2013 and information regarding stock options outstanding, exercisable, and vested and expected to vest as of March 29, 2013 is as follows:

(In thousands, except per share amounts and terms)	Number of Shares		Weighted-Average Exercise Price Per Share		Weighted-Average Remaining Contractual Term (in Years)	Aggregate Intrinsic Value (1)
Outstanding, December 31, 2012	5,163		$	25.81
Exercises	(429	)	$	19.70
Outstanding, March 29, 2013	4,734		$	26.37	4.1	$	48,678
Exercisable, March 29, 2013	3,482		$	22.67	2.5	$	46,588
Vested and expected to vest, March 29, 2013	4,587		$	26.03	3.9	$	48,481

(1) For those stock options with an exercise price below the closing price per share on March 29, 2013, aggregate intrinsic value represents the difference between the exercise price and the closing price per share of our common stock on March 29, 2013, multiplied by the number of stock options outstanding, exercisable, or vested and expected to vest as of March 29, 2013.

For the three months ended March 29, 2013, 0.4 million non-qualified stock option shares were exercised. The total intrinsic value of stock options exercised for the three months ended March 29, 2013 was $6.7 million. The aggregate intrinsic value represents the difference between the exercise price and the selling price received by option holders upon the exercise of stock options during the period. The total cash received from employees as a result of employee stock option exercises during the three months ended March 29, 2013 was $8.4 million.

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As of March 29, 2013, our 2005 Equity Incentive Plan had a total of 30.5 million shares reserved for future issuance, of which 21.0 million shares were available for future grants.

ESPP

Our ESPP has two consecutive, overlapping twelve-month offering periods, with a new period commencing on the first trading day on or after May 1 and November 1 of each year and terminating on the last trading day on or before April 30 and October 31. Each twelve-month offering period generally includes two six-month purchase periods. The purchase price at which shares are sold under the ESPP is 85% of the lower of the fair market value of a share of our common stock on (1) the first day of the offering period, or (2) the last trading day of the purchase period. If the fair market value at the end of any purchase period is less than the fair market value at the beginning of the offering period, each participant is automatically withdrawn from the current offering period following the purchase of shares on the purchase date and is automatically re-enrolled in the immediately following offering period.

There were no shares sold to the employees under the ESPP during the three months ended March 29, 2013 and March 30, 2012. As of March 29, 2013, 2.9 million shares were available for future issuance under the ESPP.

Note 13 — Income Taxes

We file income tax returns with the Internal Revenue Service (“IRS”) and in various U.S. states and foreign jurisdictions. In 2008, the IRS completed field examinations of our tax returns for 2002 through 2004 and proposed an additional tax liability of $34.5 million, excluding interest. We contested this proposed additional tax liability in the IRS Office of Appeals and resolved several of the issues. On December 8, 2011, the IRS issued a Statutory Notice of Deficiency, revising the assessment of additional taxes for 2002 through 2004 to $19.8 million, excluding interest. The Notice relates primarily to inter-company adjustments between related companies, computational adjustments to the research and development ("R&D") credit and reductions to the benefits of tax credit carrybacks and carryforwards to subsequent years. On March 6, 2012, we filed a petition in the U.S. Tax Court to request a redetermination of the tax deficiency regarding certain IRS adjustments for 2004. We deposited $18.0 million as a cash bond with the IRS in 2008, and converted this amount to tax payments in March 2012. On May 8, 2012, the IRS filed its petition response in the U.S. Tax Court, in which the IRS conceded the R&D credit adjustment for 2004. In June 2012, the federal statute of limitations for the 2002 and 2003 tax years expired.

In addition, in 2010 the IRS completed field examinations for 2005 through 2007 and proposed an additional tax liability of $34.2 million, excluding interest. On January 23, 2012, the IRS issued a Statutory Notice of Deficiency, revising the assessment of additional taxes for 2005 through 2007 to $21.4 million, excluding interest. The Notice relates primarily to inter-company adjustments between related companies and reductions to the benefits of tax credit carrybacks and carryforwards to subsequent years. On April 20, 2012, we filed a petition in the U.S. Tax Court to request a redetermination of the tax deficiencies regarding certain IRS adjustments for 2005 through 2007. On June 21, 2012, the IRS filed its petition response in the U.S. Tax Court.

On August 15, 2012, the case for the 2004 tax year was combined with that for the 2005 through 2007 tax years. A judge has been assigned to our case and a motion for continuance has been granted. We believe we have made adequate tax payments or accrued adequate amounts for our tax liabilities for 2004 through 2007 and that the outcome of the above matters will not have a material adverse effect on our consolidated operating results, cash flows or financial position.

On January 31, 2013, the IRS conceded an adjustment for certain inter-company transactions in our litigation over the 2004 through 2007 tax years.  The concession only impacted our 2007 tax year. Our other inter-company transactions continue to be subject to litigation for 2004 through 2007. As a result of this concession, we recognized a tax and interest benefit of $6.8 million during the three months ended March 29, 2013 due to the release of certain tax reserves. We expect to present our legal arguments on other inter-company transactions that are subject to ligation to the U.S. Tax Court by the end of 2013.

On April 19, 2013, the IRS notified us that we would be audited for each of the 2010 and 2011 tax years. We believe we have made adequate tax payments or accrued adequate amounts for our tax liabilities for 2010 and 2011 and that the outcome of the audit will not have a material adverse effect on our consolidated operating results, cash flows or financial position.

Other significant jurisdictions in which we are or may be subject to examination for fiscal years 2002 forward include China (including Hong Kong), Ireland, Malaysia, Japan, Canada, United Kingdom and the state of California. We believe we have made adequate tax payments and/or accrued adequate amounts such that the outcome of these audits will have no material adverse effect on our consolidated operating results. Due to the potential resolution of various tax examinations, and the expiration of various statutes of limitations, it is possible that our gross unrecognized tax benefits may change within the next twelve months. However,

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given the number of years remaining subject to examination and the number of matters being examined, we are unable to estimate the full range of possible adjustments to the balance of gross unrecognized tax benefits.

Our effective tax rate reflects the impact of a significant amount of our earnings being taxed in foreign jurisdictions at rates below the U.S. statutory tax rate. Our effective tax rate for the three months ended March 29, 2013 was -2.6%, compared with 1.7% for the three months ended March 30, 2012. The net decrease in our effective tax rate was primarily due to higher one-time tax benefits in 2013 compared to 2012. During the three months ended March 29, 2013, we recognized a benefit of $10.6 million resulting from the enactment of the American Taxpayer Relief Act in January 2013, which extended retroactively, the federal research and development credit for two years from January 1, 2012 through December 31, 2013. In addition, we reversed $6.8 million of liabilities for uncertain tax positions due to the IRS conceding an adjustment for certain 2007 inter-company transactions in our litigation over the 2004 through 2007 tax years. During the three months ended March 30, 2012, we reversed $6.9 million of liabilities for uncertain tax positions as a result of a Statutory Notice of Deficiency received from the IRS for 2005 to 2007. In addition, we reversed $5.2 million of liabilities for uncertain tax positions upon expiration of the statutes of limitations for certain foreign jurisdictions.

As of March 29, 2013, we had total gross unrecognized tax benefits of $282.2 million which, if recognized, would impact our effective tax rate. On December 31, 2012, we had total gross unrecognized tax benefits of $275.9 million. We are unable to make a reasonable estimate as to when cash settlements with the relevant taxing authorities will occur.

We recognize interest and penalties related to uncertain tax positions in our income tax provision. We accrued approximately $49.3 million and $48.8 million for the payment of interest and penalties related to uncertain tax positions as of March 29, 2013 and December 31, 2012, respectively.

Note 14 — Non-Qualified Deferred Compensation Plan

We allow our U.S.-based officers and director-level employees to defer a portion of their compensation under the Altera Corporation Non-Qualified Deferred Compensation Plan (the “NQDC Plan”). Our Retirement Plans Committee administers the NQDC Plan. As of March 29, 2013, there were 129 participants in the NQDC Plan who self-direct their investments, subject to certain limitations. In the event we become insolvent, the NQDC Plan assets are subject to the claims of our general creditors. Since the inception of the NQDC Plan, we have not made any contributions to the NQDC Plan, and we have no commitments to do so in the future. There are no NQDC Plan provisions that provide for any guarantees or minimum return on investments. NQDC Plan participants are prohibited from investing NQDC Plan contributions in Altera common stock. The balance of the NQDC Plan assets and related obligations was $74.7 million and $77.4 million as of March 29, 2013 and December 31, 2012, respectively.

Investment income or loss earned by the NQDC Plan is recorded as Gain on deferred compensation plan securities in our consolidated statements of comprehensive income. The investment (gain) loss also represents an (increase) decrease in the future payout to participants and is recorded as Compensation expense — deferred compensation plan in our consolidated statements of comprehensive income. Compensation expense (benefit) associated with our NQDC Plan obligations is offset by the (gain) loss from related securities. The net effect of investment income or loss and related compensation expense or benefit has no impact on our income before income taxes, net income or cash balances.

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The following tables summarize the fair value of our deferred compensation plan assets by significant investment category:

(In thousands)	March 29, 2013		December 31, 2012
Deferred compensation plan assets: (1)
Level 1:
Restricted cash equivalents	$	17,115	$	17,116
Equity securities	25,911		29,902
Mutual funds	28,895		27,073
Subtotal	71,921		74,091
Level 2:
Fixed income securities	2,821		3,346
Total	$	74,742	$	77,437

(1) Included in Deferred compensation plan - marketable securities and Deferred compensation plan - restricted cash equivalents in the accompanying consolidated balance sheets as of March 29, 2013 and December 31, 2012.

Note 15 — Declaration of Dividend Subsequent to March 29, 2013

On April 22, 2013, the audit committee of our board of directors declared a quarterly cash dividend of $0.10 per common share, payable on June 3, 2013 to stockholders of record on May 10, 2013.

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ITEM 2: Management's Discussion and Analysis of Financial Condition and Results of Operations

The following Management's Discussion and Analysis of Financial Condition and Results of Operations, as well as information contained in the risk factors described in Item 1A of this report and elsewhere in this report, contains forward-looking statements, which are provided under the “safe harbor” protection of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are generally written in the future tense and/or are preceded by words such as “will,” “may,” “should,” “could,” “expect,” “suggest,” “believe,” “anticipate,” “intend,” “plan,” or other similar words. Examples of forward-looking statements include statements regarding (1) our gross margins and factors that affect gross margins; (2) trends in our future sales; (3) our research and development expenditures and efforts; (4) our capital expenditures; (5) our provision for tax liabilities and other critical accounting estimates; and (6) our exposure to market risks related to changes in interest rates, equity prices and foreign currency exchange rates.

Forward-looking statements are not guarantees of future performance and involve risks and uncertainties. The forward-looking statements contained in this report are based on information that is currently available to us and expectations and assumptions that we deemed reasonable at the time the statements were made. We do not undertake any obligation to update any forward-looking statements in this report or in any of our other communications, except as required by law. All such forward-looking statements should be read as of the time the statements were made and with the recognition that these forward-looking statements may not be complete or accurate at a later date.

Many factors may cause actual results to differ materially from those expressed or implied by the forward-looking statements contained in this report. These factors include, but are not limited to, those risks described in Part II Item 1A of this report and those risks described under “Management's Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2012.

CRITICAL ACCOUNTING ESTIMATES

The preparation of our consolidated financial statements and related disclosures in conformity with accounting principles generally accepted in the United States requires our management to make judgments and estimates that affect the amounts reported in our consolidated financial statements and accompanying notes. Our management believes that we consistently apply these judgments and estimates and the consolidated financial statements and accompanying notes fairly represent all periods presented. However, any differences between these judgments and estimates and actual results could have a material impact on our consolidated statements of comprehensive income and financial position. Critical accounting estimates, as defined by the Securities and Exchange Commission (“SEC”), are those that are most important to the portrayal of our consolidated financial condition and results of operations and require our management's most difficult and subjective judgments and estimates of matters that are inherently uncertain. Our critical accounting estimates include those regarding (1) revenue recognition, (2) valuation of inventories, and (3) income taxes. For a discussion of our critical accounting estimates, see “Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations — Critical Accounting Estimates” in our Annual Report on Form 10-K for the year ended December 31, 2012.

RESULTS OF OPERATIONS

Sales Overview

We design, manufacture, and market high-performance, high-density programmable logic devices, or PLDs; HardCopy® ASIC devices; pre-defined software design building blocks known as intellectual property cores, or IP cores; and associated development tools.

Our net sales of $410.5 million for the three months ended March 29, 2013, increased by $26.7 million, or 7%, from our net sales of $383.8 million for the three months ended March 30, 2012. This increase was primarily driven by strong growth in sales of our New Products, partially offset by a slight decrease in Mainstream Products and an expected decline in Mature Products as our newer technologies were adopted. Net sales increased across all vertical markets with the Networking, Computer & Storage vertical market leading the growth. Sales in the Americas and EMEA had solid growth, primarily driven by an increase in the Networking, Computer & Storage vertical market and the Telecom & Wireless vertical market, partially offset by slightly lower sales in Asia and Japan, which were driven by a slight decrease in the Telecom & Wireless vertical market and the Networking, Computer & Storage vertical market.

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The net sales of FPGAs and CPLDs as a percentage of total net sales for the three-month period ended March 29, 2013, remained consistent with the prior year. 

Sales by Product Category

We classify our products into three categories: New, Mainstream, and Mature and Other Products. The composition of each product category is as follows:

• New Products include the Stratix^® V, Stratix IV, Arria^® V, Arria II, Cyclone^® V, CycloneIV, MAX^® V and HardCopy^® IV devices.

• Mainstream Products include the Stratix III, Cyclone III, MAX II and HardCopy III devices.

• Mature and Other Products include the Stratix II, Stratix, Arria GX, Cyclone II, Cyclone, Classic™, MAX 3000A, MAX 7000, MAX 7000A, MAX 7000B, MAX 7000S, MAX 9000, HardCopy II, HardCopy, FLEX^® series, APEX™ series, Mercury™, and Excalibur™ devices, configuration and other devices, intellectual property cores and software and other tools.

Net sales by product category were as follows:

	Three Months Ended						Year- Over- Year Change		Sequential Change
	March 29, 2013		March 30, 2012		December 31, 2012
New	39	%	26	%	39	%	64	%	(5	)%
Mainstream	29	%	32	%	28	%	(3	)%	(5	)%
Mature and Other	32	%	42	%	33	%	(20	)%	(10	)%
Net Sales	100	%	100	%	100	%	7	%	(7	)%

Sales by Vertical Market

The following vertical market data is derived from data that is provided to us by our distributors and end customers. With a broad base of customers, who in some cases manufacture end products spanning multiple market segments, the assignment of net sales to a vertical market requires the use of estimates, judgment and extrapolation. As such, actual results may differ from those reported.

	Three Months Ended						Year- Over- Year Change		Sequential Change
	March 29, 2013		March 30, 2012		December 31, 2012
Telecom & Wireless	41	%	41	%	44	%	8	%	(13	)%
Industrial Automation, Military & Automotive	22	%	22	%	21	%	3	%	(2	)%
Networking, Computer & Storage	18	%	17	%	17	%	17	%	1	%
Other	19	%	20	%	18	%	1	%	(2	)%
Net Sales	100	%	100	%	100	%	7	%	(7	)%

Sales of FPGAs and CPLDs

Our PLDs consist of field-programmable gate arrays, or FPGAs, and complex programmable logic devices, or CPLDs. FPGAs consist of our Stratix, Cyclone, Arria, APEX, FLEX and ACEX 1K, as well as our Excalibur and Mercury families. CPLDs consist of our MAX and Classic families. Other Products consist of our HardCopy series and other masked programmed logic devices, configuration devices, software and other tools and IP cores.

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Our net sales of FPGAs, CPLDs, and Other Products were as follows:

	Three Months Ended						Year- Over- Year Change		Sequential Change
	March 29, 2013		March 30, 2012		December 31, 2012
FPGA	85	%	83	%	84	%	9	%	(6	)%
CPLD	8	%	10	%	9	%	(11	)%	(10	)%
Other Products	7	%	7	%	7	%	7	%	(5	)%
Net Sales	100	%	100	%	100	%	7	%	(7	)%

Sales by Geography

The following table is based on the geographic location of the original equipment manufacturers or the distributors who purchased our products. The geographic location of distributors may be different from the geographic location of the ultimate end users.

Net sales by geography were as follows:

	Three Months Ended						Year- Over- Year Change		Sequential Change
	March 29, 2013		March 30, 2012		December 31, 2012
Americas	20	%	18	%	19	%	21	%	(3	)%
Asia Pacific	38	%	43	%	39	%	(3	)%	(7	)%
EMEA	27	%	23	%	28	%	22	%	(11	)%
Japan	15	%	16	%	14	%	(3	)%	(2	)%
Net Sales	100	%	100	%	100	%	7	%	(7	)%

Price Concessions and Product Returns from Distributors

We sell the majority of our products to distributors worldwide at a list price. However, distributors resell our products to end customers at a very broad range of individually negotiated prices based on a variety of factors, including customer, product, quantity, geography and competitive differentiation. The majority of our distributors' sales to their customers are priced at a discount from our list price. Under these circumstances, we remit back to the distributor a portion of its original purchase price after the resale transaction is completed and we validate the distributor's resale information, including end customer, device, quantity and price, against the distributor price concession that we have approved in advance. To receive price concessions, distributors must submit the price concession claims to us for approval within 60 days of the resale of the product to an end customer. Primarily because of the uncertainty related to the final price, we defer revenue recognition on sales to distributors until our products are sold from the distributor to the end customer, which is when our price is fixed or determinable. Accordingly, these pricing uncertainties impact our results of operations, liquidity and capital resources. Average aggregate price concessions typically range from 65% to 80% of our list price on an annual basis, depending upon the composition of our sales, volume and factors associated with timing of shipments to distributors. Total price concessions earned by distributors were $1.2 billion and $0.9 billion for the three months ended March 29, 2013 and March 30, 2012, respectively.

Our distributors have certain rights under our contracts to return defective, overstocked, obsolete or discontinued products. Our stock rotation program generally allows distributors to return unsold product to Altera, subject to certain contract limits, based on a percentage of sales occurring over various periods prior to the stock rotation. Products resold by the distributor to end customers are no longer eligible for return, unless specifically authorized by us. In addition, we generally warrant our products against defects in material, workmanship and non-conformance to our specifications. Returns from distributors totaled $23.2 million and $20.2 million for the three months ended March 29, 2013 and March 30, 2012, respectively.

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Gross Margin

	Three Months Ended
	March 29, 2013		March 30, 2012		December 31, 2012
Gross Margin Percentage	69.3	%	70.1	%	69.7	%

Gross margin rates are heavily influenced by both vertical market mix and the timing of material cost improvements. While these variables will continue to fluctuate on a quarterly basis, our gross margin target over the long term is 67%. We believe that the 67% gross margin target will enable us to achieve our desired balance between growth and profitability. Our gross margin percentage for the three months ended March 29, 2013 decreased by 0.8 points compared with the same period of 2012. The decrease was primarily attributable to an unfavorable mix within vertical markets when compared with the same period of 2012.

Research and Development Expense

Research and development expense includes costs for compensation and benefits, development masks, prototype wafers, and depreciation and amortization. These expenditures are for the design of new PLD and ASIC families, the development of process technologies, new package technology, software to support new products and design environments, and IP cores.

We will continue to make significant investments in the development of new products and focus our efforts on the development of new programmable logic devices that use advanced semiconductor wafer fabrication processes, as well as related development software. We are currently investing in the development of future silicon products, as well as our Quartus® II software, our library of IP cores and other future products.

	Three Months Ended									Year- Over- Year Change		Sequential Change
(In millions)	March 29, 2013			March 30, 2012			December 31, 2012
Research and Development Expense	$	87.9		$	82.3		$	94.2		7	%	(7	)%
Percentage of Net Sales	21.4		%	21.4		%	21.4		%

Research and development expense for the three months ended March 29, 2013increased by $5.6 million, or 7% , compared with the three months ended March 30, 2012. The increase was primarily attributable to a $6.8 million increase in personnel-related costs due to an increase in the number of employees, a $2.0 million increase in depreciation expense and a $1.1 million increase in rental and office supplies expense, all in support of increased product development efforts. These increases were partially offset by a $3.0 million decrease related to timing of external product development costs and a $1.3 million decrease in maintenance expenses.

Selling, General, and Administrative Expense

Selling, general, and administrative expense includes costs for compensation and benefits related to sales, marketing, and administrative employees, commissions and incentives, depreciation, legal, advertising, facilities and travel expenses.

	Three Months Ended									Year- Over- Year Change		Sequential Change
(In millions)	March 29, 2013			March 30, 2012			December 31, 2012
Selling, General and Administrative Expense	$	78.6		$	69.8		$	74.0		13	%	6	%
Percentage of Net Sales	19.1		%	18.2		%	16.8		%

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Selling, general, and administrative expense for the three months ended March 29, 2013increased by $8.8 million, or 13%, compared with the three months ended March 30, 2012. The increase was primarily attributable to a $3.4 million increase in personnel-related costs due to an increase in the number of employees, a non-recurring $3.0 million increase in local non-income taxes, a $1.0 million increase in travel expense, a $1.0 million increase in legal fees, and a $1.0 million increase in depreciation expense.

Deferred Compensation Plan

We allow our U.S.-based officers and director-level employees to defer a portion of their compensation under the Altera Corporation Non-Qualified Deferred Compensation Plan (the “NQDC Plan”). Since the inception of the NQDC Plan, we have not made any contributions to the NQDC Plan and we have no commitments to do so in the future. There are no NQDC Plan provisions that provide for any guarantees or minimum return on investments. Investment income or loss earned by the NQDC Plan is recorded as Gain on deferred compensation plan securities in our consolidated statements of comprehensive income. We reported net investment gains of $3.4 million on NQDC Plan assets for the three months ended March 29, 2013. We reported net investment gains of $5.7 million on NQDC Plan assets for the three months ended March 30, 2012. These amounts resulted from the overall market performance of the underlying securities. The investment (gain)/loss also represents an (increase)/decrease in the future payout to employees and is recorded as Compensation expense/(benefit) — deferred compensation plan in our consolidated statements of comprehensive income. The compensation expense/(benefit) associated with our deferred compensation plan obligations is offset by (gains) losses from related securities. The net effect of the investment income or loss and related compensation expense or benefit has no impact on our income before income taxes, net income or cash balances. See Note 14 - Non-Qualified Deferred Compensation Plan to our consolidated financial statements for a detailed discussion of the NQDC Plan.

Interest Income and Other

Interest income and other, consisting mainly of interest income generated from investments in high-quality fixed income securities, has remained consistent when compared with the same period in 2012.

Interest Expense

The increase in Interest expense by $1.5 million for the three months ended March 29, 2013, when compared to the same period in the prior year, was due primarily to the new long-term debt, which has a higher effective interest rate than the former credit facility.

Income Tax (Benefit)/ Expense

Our effective tax rate reflects the impact of a significant amount of our earnings being taxed in foreign jurisdictions at rates below the U.S. statutory tax rate. Our effective tax rate for the three months ended March 29, 2013 was -2.6%, compared with 1.7% for the three months ended March 30, 2012. The net decrease in our effective tax rate was primarily due to higher one-time tax benefits in 2013 compared to 2012. During the three months ended March 29, 2013, we recognized a benefit of $10.6 million resulting from the enactment of the American Taxpayer Relief Act in January 2013, which extended retroactively, the federal research and development credit for two years from January 1, 2012 through December 31, 2013. In addition, we reversed $6.8 million of liabilities for uncertain tax positions due to the Internal Revenue Service (“IRS”) conceding an adjustment for certain 2007 inter-company transactions in our litigation over the 2004 through 2007 tax years. During the three months ended March 30, 2012, we reversed $6.9 million of liabilities for uncertain tax positions as a result of a Statutory Notice of Deficiency received from the IRS for 2005 to 2007. In addition, we reversed $5.2 million of liabilities for uncertain tax positions upon expiration of the statutes of limitations for certain foreign jurisdictions.

As of March 29, 2013, we had total gross unrecognized tax benefits of $282.2 million which, if recognized, would impact our effective tax rate. On December 31, 2012, we had total gross unrecognized tax benefits of $275.9 million. We are unable to make a reasonable estimate as to when cash settlements with the relevant taxing authorities will occur.

We recognize interest and penalties related to uncertain tax positions in our income tax provision. We accrued approximately $49.3 million and $48.8 million for the payment of interest and penalties related to uncertain tax positions as of March 29, 2013 and December 31, 2012, respectively.

FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES

We derive our liquidity and capital resources primarily from our cash flows from operations. We continue to generate strong positive operating cash flows. In May 2012, we issued 1.75% senior notes that will mature on May 15, 2017 (the “Notes”) in the

23

aggregate principal amount of $500 million. We used the net proceeds to repay our former credit facility. In June 2012, we entered into a credit agreement that provides for a $250 million unsecured revolving line of credit (the "Facility"), which is scheduled to mature in June 2017. As of March 29, 2013, we had no borrowings under the Facility. As such, the $250 million available under the Facility represents a source of liquidity.

We currently use cash to fund dividends, capital expenditures and for repurchases of our common stock. Based on past performance and current expectations, we believe that our current available sources of funds (including cash, cash equivalents, investments and the Facility, plus anticipated cash generated from operations) will be adequate to finance our operations, cash dividends, capital expenditures and stock repurchases for at least the next year.

Our cash and cash equivalents balance during the three months ended March 29, 2013increased by $77.0 million. The change in cash and cash equivalents during the three months ended March 29, 2013 and March 30, 2012 was as follows:

	Three Months Ended
(In thousands)	March 29, 2013			March 30, 2012
Net cash provided by operating activities	$	149,478		$	89,763
Net cash used in investing activities	(46,363		)	(25,502		)
Net cash used in financing activities	(26,155		)	(16,012		)
Net increase in cash and cash equivalents	$	76,960		$	48,249

Operating Activities

For the three months ended March 29, 2013, our operating activities provided $149.5 million in cash, primarily attributable to net income of $120.2 million, adjusted for non-cash stock-based compensation expense of $22.4 million (net of related tax effects), depreciation and amortization of $11.4 million, and a deferred income tax benefit of $15.6 million. The net change in working capital accounts (excluding cash and cash equivalents) was primarily due to a $42.7 millionincrease in Accounts receivable, net, a $13.4 milliondecrease in Inventories, a $13.3 milliondecrease in Other assets, a $9.7 milliondecrease in Accounts payable and other liabilities, a$36.6 millionincreasein Deferred income and allowances on sales to distributors, and a $6.2 millionincrease in Income taxes payable.

Our sales to distributors are primarily made under agreements allowing for subsequent price adjustments and returns, and we defer recognition of revenue until the products are resold by the distributor. At the time of shipment to distributors, we (1) record a trade receivable at the list selling price since there is a legally enforceable obligation from the distributor to pay us currently for product delivered, (2) relieve inventory for the carrying value of goods shipped since legal title has passed to the distributor and (3) record deferred revenue and deferred cost of sales in Deferred income and allowances on sales to distributors in the liability section of our consolidated balance sheets. Accordingly, increases in Accounts receivable, net associated with higher billings are generally offset by corresponding increases in Deferred income and allowances on sales to distributors. However, timing differences between gross billings, discounts earned, collections, revenue recognition and changes in the mix of sales to OEMs and distributors may result in a temporary interruption to the normal relationship between these two accounts.

The $42.7 millionincrease in Accounts receivable, net, and the $36.6 millionincreasein Deferred income and allowances on sales to distributors, principally relates to increased gross billings to distributors, associated with an upward trend in demand for certain products sold through distribution during the period.

The $13.4 milliondecrease in Inventories isattributable to proactive management of our inventory levels.

The $13.3 milliondecrease in Other assets primarily resulted from a decrease in prepaid income taxes and other prepaid items.

The $9.7 milliondecrease in Accounts payable and other liabilities is attributable to a decrease in inventory purchases, a decrease in the accrual for variable compensation and a decrease in accrued expenses relating to external product development costs. These items were partially offset by an increase in other accrued liabilities related to employee benefits.

The $6.2 millionincrease in Income taxes payable was related to the additional accrued tax liabilities for foreign entities and for uncertain tax positions.

24

Investing Activities

Cash used in investing activities in the three months ended March 29, 2013, primarily consisted of purchases of available for sale securities of $121.1 million and purchases of property and equipment of $14.6 million, partially offset by net sales and maturities of available for sale securities of $83.4 million.

Financing Activities

Cash used in financing activities in the three months ended March 29, 2013, primarily consisted of cash dividend payments of $32.0 million and minimum statutory withholding for vested restricted stock units of $3.4 million. These items were partially offset by proceeds of $8.4 million from the issuance of common stock to employees through our employee stock plans.

Our dividend policy could be impacted in the future by, among other items, future changes in our cash flows from operations and our capital spending needs such as those relating to research and development, investments and acquisitions, common stock repurchases, and other strategic investments.

CONTRACTUAL OBLIGATIONS

We depend entirely upon subcontractors to manufacture our silicon wafers and provide assembly and test services. Due to lengthy subcontractor lead times, we must order these materials and services from these subcontractors well in advance, and we are obligated to pay for the materials and services once they are completed. As of March 29, 2013, we had approximately $135.7 million of outstanding purchase commitments to such subcontractors. We expect to receive and pay for these materials and services over the next six months.

As of March 29, 2013, we had $5.8 million of non-cancelable license obligations to providers of electronic design automation software and maintenance obligations expiring at various dates through December 2014.

We lease facilities under non-cancelable lease agreements expiring at various times through 2021. There have been no significant changes to our operating lease obligations since December 31, 2012.

In addition to these lease and purchase obligations, we enter into, in the normal course of business, a variety of agreements and financial commitments. It is not possible to predict the maximum potential amount of future payments under these agreements due to the conditional nature of our obligations and the unique facts and circumstances involved in each particular agreement. Historically, payments pursuant to such agreements have not been material. We believe that any future payments required pursuant to such agreements would not be significant to our consolidated financial position or operating results.

As of March 29, 2013, we had total gross unrecognized tax benefits of $282.2 million. Due to the uncertainty with respect to the timing of future cash flows associated with our unrecognized tax benefits as of March 29, 2013, we are unable to make a reasonably reliable estimate as to when cash settlements with the relevant taxing authorities will occur.

OFF-BALANCE SHEET ARRANGEMENTS

As of March 29, 2013, we did not have any off-balance sheet arrangements, as defined in Item 303(a)(4)(ii) of SEC Regulation S-K.

SUBSEQUENT EVENTS

On April 19, 2013, the IRS notified us that we would be audited for each of the 2010 and 2011 tax years. We believe we have made adequate tax payments or accrued adequate amounts for our tax liabilities for 2010 and 2011 and that the outcome of the audit will not have a material adverse effect on our consolidated operating results, cash flows or financial position.

On April 22, 2013, the audit committee of our board of directors declared a quarterly cash dividend of $0.10 per common share, payable on June 3, 2013 to stockholders of record on May 10, 2013.

25

RECENT ACCOUNTING PRONOUNCEMENTS

The information contained in Note 2 - Recent Accounting Pronouncements to our consolidated financial statements in Part I, Item 1 is incorporated by reference into this Part I, Item 2.

ITEM 3: Quantitative and Qualitative Disclosures About Market Risk

Interest Rate Risk

Our exposure to interest rate risk relates primarily to our investment portfolio, which consists of fixed income securities with a fair value of approximately $902.9 million as of March 29, 2013. Our primary aim with our investment portfolio is to invest available cash while preserving principal and meeting liquidity needs. Our investment portfolio includes U.S. and foreign government and agency securities, corporate bonds, commercial paper, and municipal bonds. In accordance with our investment policy, we place investments with high credit quality issuers and limit the amount of credit exposure to any one issuer. These securities are subject to interest rate risk and will decrease in value if market interest rates increase. A hypothetical 100 basis-point (one percentage point) increase or decrease in interest rates compared to rates at December 31, 2012 would have affected the fair value of our investment portfolio by approximately $25.0 million.

Equity Price Risk

We are exposed to equity price risk inherent in the marketable equity securities held in our investment portfolio and our NQDC Plan. A hypothetical 10% adverse change in the stock prices of these equity securities would not result in a material impact on our consolidated financial position, operating results or cash flows.

Foreign Currency Risk

We have international operations and incur expenditures in currencies other than U.S. dollars. To date, our exposure to exchange rate volatility, resulting from foreign currency transaction gains and losses and remeasurement of local currency assets and liabilities into U.S. dollars, has been insignificant. If foreign currency rates were to fluctuate by 10% from rates in effect at March 29, 2013, the resulting transaction gains or losses and the effects of remeasurement would not materially affect our consolidated financial position, operating results or cash flows.

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ITEM 4: Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, as amended, as of the end of the period covered by this Quarterly Report on Form 10-Q (the “Evaluation Date”).

The purpose of this evaluation was to determine if, as of the Evaluation Date, our disclosure controls and procedures were designed and operating effectively to provide reasonable assurance that the information relating to Altera, required to be disclosed in our Exchange Act filings (i) was recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and (ii) was accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

Based on the evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that as of the Evaluation Date, our disclosure controls and procedures were effective at a reasonable assurance level.

Changes in Internal Control over Financial Reporting

There was no change in our internal control over financial reporting (as defined in Rules 13a - 15(f) and 15(d) - 15(f) under the Exchange Act) that occurred during the period covered by this quarterly report that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Limitation on Effectiveness of Controls

It should be noted that any system of controls, however well designed and operated, can provide only reasonable, and not absolute, assurance that the objectives of the system are met. The design of any control system is based, in part, upon the benefits of the control system relative to its costs. Control systems can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control. In addition, over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies and procedures may deteriorate. In addition, the design of any control system is based in part upon certain assumptions about the likelihood of future events.

PART II OTHER INFORMATION

ITEM 1: Legal Proceedings

This information is included in Note 11 - Commitments and Contingencies to our consolidated financial statements in Part I, Item 1 of this report and is incorporated herein by reference.

ITEM 1A: Risk Factors

There have been no material changes from the risk factors previously described under Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2012. For additional information regarding risk factors, please refer to the description of the risk factors associated with our business previously disclosed in Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2012.

Before you decide to buy, hold or sell our common stock, you should carefully consider the risks described in Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2012 and the other information contained elsewhere in this report. These risks are not the only risks facing our company. Additional risks and uncertainties not presently known to us or that we currently deem immaterial may also affect our business. Our business, consolidated operating results and financial position could be seriously harmed if any of the events underlying any of these risks or uncertainties actually occurs. In that event, the market price for our common stock could decline, and you may lose all or part of your investment.

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ITEM 2: Unregistered Sales of Equity Securities and Use of Proceeds

Items 2(a) and 2(b) are inapplicable.

2(c) Issuer Purchases of Equity Securities

We have an ongoing authorization from our board of directors to repurchase up to 203.0 million shares of our common stock. As of March 29, 2013, we had repurchased 190.0 million shares for an aggregate cost of $4.1 billion. No existing repurchase plans or programs have expired, nor have we decided to terminate any repurchase plans or programs prior to expiration.

During the three-month period ended March 29, 2013, we did not repurchase shares of our common stock.

For the majority of the restricted stock units that we grant, the number of shares issued on the date the restricted stock units vest is net of the minimum statutory withholding requirements that we pay in cash to the appropriate taxing authorities on behalf of our employees. Although these withheld shares are not issued or considered common stock repurchases under our authorized plan and are not included in the common stock repurchase totals in the preceding table, they are treated as common stock repurchases in our financial statements, as they reduce the number of shares that would have been issued upon vesting.

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EXHIBIT INDEX

		Incorporated by Reference
Exhibit No.	Description	Form	File Number	Filing Date
10.1	Altera Corporation 2013 Executive Bonus Plan	Form 8-K	000-16617	2/20/2013
*#10.2	Intel Corporation Amended and Restated Foundry and Manufacturing Customer Agreement, effective as of February 21, 2013, by and among Intel Corporation, Altera Corporation and Altera International Inc.
#31.1	Certification of Chief Executive Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934
#31.2	Certification of Chief Financial Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934
##32.1	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
##32.2	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document

_________________

#Filed herewith

##Furnished herewith

* Confidential treatment has been requested as to certain portions of this exhibit. Such portions have been redacted and
submitted separately to the SEC.

29

SIGNATURES

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

ALTERA CORPORATION
By:	/s/ RONALD J. PASEK
	Ronald J. Pasek
	Senior Vice President and Chief Financial Officer (Principal Financial and Accounting Officer)

30

EXHIBIT INDEX

		Incorporated by Reference
Exhibit No.	Description	Form	File Number	Filing Date
10.1	Altera Corporation 2013 Executive Bonus Plan	Form 8-K	000-16617	2/20/2013
*#10.2	Intel Corporation Amended and Restated Foundry and Manufacturing Customer Agreement, effective as of February 21, 2013, by and among Intel Corporation, Altera Corporation and Altera International Inc.
#31.1	Certification of Chief Executive Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934
#31.2	Certification of Chief Financial Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934
##32.1	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
##32.2	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document

_________________

#Filed herewith

##Furnished herewith

* Confidential treatment has been requested as to certain portions of this exhibit. Such portions have been redacted and
submitted separately to the SEC.

31

EX-10.2

CNDA: 6203681

INTEL CORPORATION

AMENDED AND RESTATED FOUNDRY AND MANUFACTURING CUSTOMER AGREEMENT

This Agreement (the "Agreement") is entered into entered into on April 1, 2013 and effective as of February 21, 2013 (the “Effective Date”) by and between Intel Corporation, a Delaware corporation having its principal place of business at 2200 Mission College Blvd., Santa Clara, California 95054 on behalf of itself and its Subsidiaries (collectively, "Intel") and Altera Corporation having its principal place of business at 101 Innovation Drive, San Jose, California 95134 and Altera International Inc. having its registered address at Citco Trustees (Cayman) Ltd, Regatta Office Park, Windward One Building, P.O. Box 31106, Grand Cayman KY1-1205, Cayman Islands (collectively “Customer”). Intel and Customer are sometimes referred to as a "Party" and collectively referred to as the "Parties". This Agreement, including its exhibits, supersedes and replaces the Foundry and Manufacturing Customer Agreement previously executed by the Parties on February 21, 2013, and its exhibits.

RECITALS

A. Intel, a manufacturer of semiconductor components, conducts a foundry, packaging, assembly and test business whereby Intel performs foundry, packaging, assembly and test services for the manufacture of integrated circuits designed by its foundry customers; and

B. The Parties desire that (1) Intel manufacture and sell Products (defined below) containing such integrated circuits designed by Customer and (2) Customer purchase such Products, subject to the provisions of this Agreement.

1. DEFINITIONS

1.1 "Acceptance Specification" means the agreed technical and quality specifications pertaining to a particular Product or service, which specifications will be attached to the applicable Product Attachment. A sample Acceptance Specification is attached hereto as Exhibit A.

1.2 “Affiliate” means, for an identified entity, any entity: (a) that is a Subsidiary of such identified entity; or (b) that Controls or is under common Control with such identified entity, but such entity shall be deemed to be an Affiliate only for so long as such Control exists.

1.3 “Background IP Rights” means all IP Rights owned, controlled, or licensed by either Party, (i) developed, conceived, obtained, licensed, or acquired prior to the Effective Date of this Agreement, or (ii) developed, conceived, obtained, licensed, or acquired independently of this Agreement.

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1.4 "Confidential Information" is as defined in accordance with the CNDA referenced on the first page of this Agreement and any applicable separate nondisclosure agreements between the Parties.

1.5 “Control” (including “Controlled” and other forms) of an entity means: (a) beneficial ownership (whether directly or indirectly through entities or other means) of more than fifty percent (50%) of the outstanding voting securities of that entity; or (b) in the case of an entity that has no outstanding voting securities, having the power (whether directly or indirectly through entities or other means) presently to designate more than fifty percent (50%) of the directors of a corporation, or in the case of unincorporated entities, of individuals exercising similar functions.

1.6 “Copyrights” means all worldwide copyrights, copyright applications, copyright registrations, or any right analogous to those described in this definition in foreign jurisdictions.

1.7 “Creating Party” means the party who conceives, creates, or authors an invention or work.

1.8 "Customer Provided Deliverables" means the Customer deliverables set forth on a Product-by-Product basis in the particular Product's Product Attachment .

1.9 "Database" means the machine readable code which represents the layout, schematic, Netlist, or other software description of a specific design for a Product.

1.10 "Delivery" means when a Product is delivered pursuant to the applicable shipment terms.

1.11 Intentionally Deleted.

1.12 "Die Product(s)" means an integrated circuit that is the subject of a Product Attachment, in die form, manufactured with a distinct Customer-provided design at Intel pursuant to this Agreement, which passes the Customer approved sort test program.

1.13 "Engineering Samples" means limited quantities of a specific Product which are manufactured prior to Production Qualification of such Product, upon Customer’s request.

1.14 "Engineering Wafers" means Wafers that are not Risk Production Wafers or Production Wafers.

1.15 "Excluded Product(s)" means integrated circuits primarily marketed as the primary application processing device for products in the following

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market segments, and such other market segments as the Parties may agree in writing:

1.15.1 ^[*****], regardless of form factor (e.g. [*****] or [*****]) or physical media (e.g. [*****]);

1.15.2 [*****];

1.15.3 [*****];

1.15.4 [*****];

1.15.5 [*****];

1.15.6 [*****]; and

1.15.7 [*****]

For clarity, an integrated circuit may become an Excluded Product if Customer begins primarily marketing such integrated circuit as the primary application processing device for products in the above segments, even if such Product had not previously been so marketed. For further clarity, a programmable logic device with an embedded processor will not be deemed an Excluded Product merely because of the presence of such embedded processor.

1.16 "Finished Product" means the Die Product assembled and tested by Intel.

1.17 “Foreground IP Rights” means all IP Rights: (1) for patentable subject matter, to or in inventions first conceived; (2) for copyrightable subject matter or mask works, authored; or (3) for trade secrets, developed, obtained, or acquired, by Intel, Customer or jointly by the Parties in the course of work performed by either Party during the term and in the course of their performance of this Agreement or the associated Product Attachments.

1.18 "Foreground Packaging IP Rights" means Foreground IP Rights to or in Packaging Technology

1.19 "Foreground Process IP Rights" means Foreground IP Rights to or in Process Technology.

^{________________________________________} 

^[*****] Confidential portions of this document have been redacted and filed separately with the Securities and Exchange Commission.

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1.20 "Foreground Product IP Rights" means Foreground IP Rights to or in (i) designs and specifications for Products or Customer Provided Deliverables; or (ii) improvements to any of the foregoing.

1.21 “Foundry Workplan” means a document setting forth, for a particular Product, the activities and deliverables that Customer can expect from Intel, and the activities and deliverables that Intel would need from Customer in order to complete the development and manufacturing of that Product and deliver the Product to Customer expeditiously.

1.22 "Intel Licensable Technical Collateral" means Technical Collateral which Intel owns or has licensed from a third party that Intel can rightfully sublicense to Customer for development and design of Product(s), and which is identified as Intel Licensable Technical Collateral in a Foundry Workplan or Product Attachment.

1.23 "Intel Provided Deliverables" for a particular Product means the Intel deliverables set forth in the Product Attachment pertaining to such Product.

1.24 “IP Rights” means all intellectual property rights worldwide arising under statutory or common law, including without limitation Copyrights, Patent Rights, Trade Secret Rights or any analogous right in foreign jurisdictions. For purposes of this Agreement, IP Rights excludes trademarks, trade names, service marks, trade dress, or other forms of corporate or product identification whether or not recognized

1.25 "Joint Foreground IP Rights" means all IP Rights: (1) for patentable subject matter, to or in inventions first conceived; (2) for copyrightable subject matter or mask works, authored; or (3) for trade secrets, developed, obtained, or acquired, jointly by the Parties in the course of work performed during the term and in the course of their performance of this Agreement or the associated Product Attachments; provided, however, that Joint Foreground IP Rights does not include Foreground Product IP Rights.

1.26 "Joint Foreground Uncategorized IP Rights" means all IP Rights: (1) for patentable subject matter, to or in inventions first conceived; (2) for copyrightable subject matter or mask works, authored; or (3) for trade secrets, developed, obtained, or acquired, jointly by the Parties in the course of work performed during the term and in the course of their performance of this Agreement or the associated Product Attachments which is not described in Sections 1.18, 1.19, or 1.20.

1.27 “Lead Time" means the number of days required by Intel to fulfill an Order for manufacture and Delivery of a particular Product under normal operating conditions, taking into account the applicable

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Manufacturing Cycle Times involved and time required for Order processing and process planning.

1.28 "Line Item" means the specific quantity of a particular Product stated in an Order which is scheduled or requested to be manufactured and Delivered, on a particular date, where each Delivery date for each different Productrepresents a separate Line Item.

1.29 "Manufacturing Cycle Time" for a particular production segment (e.g., Wafer fab cycle time, sort cycle time, assembly/test cycle time) means the number of days allotted, under normal operating conditions, to perform the production steps comprising such segment.

1.30 "Megacells" means the hardware implementation of functional blocks.

1.31 "Megafunctions" means the software implementation of functional blocks.

1.32 "Netlist" means the list form of a circuit schematic describing the transistor to transistor connections.

1.33 “Non-Selecting Party,” as to an invention, is the Party who does not select to own that invention in the selection process described in Section 7.12

1.34 "Order" means Customer’s written authorization to Intel to perform the identified services or deliver the identified Products and to invoice Customer therefor as further provided herein.

1.35 “Packaging Technology” means technology relating to (i) semiconductor device assembly and packaging, including without limitation, package design and tools, single and multi-chip packages, package on package (POP), package in package (PIP), die stacking, other 2.5/3D packaging, die bonding, package thermal solutions, integrated heat sinks/spreaders, through silicon via, and package to board assembly techniques; and (ii) packaging, substrate, interposer, bonding, solder, solderballs, copper pillar/stud, underfill, and other materials and assembly techniques.

1.36 “Patent Indemnity Jurisdiction” means the United States, Republic of China, People’s Republic of China, Canada, Japan, South Korea, Russia, Israel, Mexico, Brazil, European Community, Switzerland, Austria, Sweden, Finland, Norway, India, Vietnam, Cambodia, Malaysia, Singapore, Philippines, and Indonesia.

1.37 “Patent Rights” means all rights in patents, including issued patents and pending patent applications whether domestic or foreign, including all

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substitutions, continuations, continuations-in-part, divisions, and renewals, and all reissues, re-examinations, and extensions.

1.38 "Process Excursion" means a process deviation outside of specified range.

1.39 “Process Technology” means technology relating to semiconductor manufacturing processes, process recipes, and device manufacturing, assembly and test techniques.

1.40 "Product" means Die Product, Finished Product ^[*****].

1.41 "Product Attachment” means a Product Family specific agreement which details the obligations and deliverables of each Party and terms and conditions in addition to those in this Agreement applying to one or more specific Products within a Product Family pursuant to Intel's quotation. The Product Attachment, and corresponding quotation, may be amended in writing from time to time by signed written agreement of the Parties.

1.42 A “Product Family” includes any products that are substantially similar to, or a successor to, a Product that is the subject of a Product Attachment signed by both parties, provided a product will only be deemed within a Product Family so long as such product is not an Excluded Product. The Parties intend that the Product Attachment for the first Product(s) in a particular Product Family will set out the scope of that Product Family, and that all Products in the Product Family will tape out within three years of Tape In of that first Product.

1.43 "Production" means the manufacture of a specified Product by Intel under this Agreement which takes place only after Production Qualification of a Product in accordance with this Agreement.

1.44 "Production Product" means a Product manufactured by Intel under this Agreement after Production Qualification for such Product has been completed in accordance with this Agreement.

1.45 "Production Qualification" means the quality and reliability status achieved when a specified Product meets the Customer's quality and reliability criteria and such status is certified in writing by Customer to Intel.

1.46 "Prototypes" means the initial units of a specified Product which are used to determine the functionality and performance of such Product.

^{________________________________________} 

^[*****] Confidential portions of this document have been redacted and filed separately with the Securities and Exchange Commission.

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1.47 “Release” means a release to manufacturing issued under a blanket Order.

1.48 "Risk Product" means Product that Customer authorizes Intel to produce before Production Qualification for a specified Product.

1.49 "Risk Production Wafers" means Wafers produced for Risk Product that are subject to Production Product pricing, production lot sizes and production Lead Times.

1.50 “Selecting Party,” as to an invention, means the Party who selects to own that invention in the selection process described in Section 7.12.

1.51 “Subsidiary” means, for an identified entity, any entity Controlled by the identified entity, but such entity shall be deemed to be a Subsidiary only for so long as such Control exists.

1.52 "Tape In" means the delivery by Customer to Intel of the GDSII Database or other Database for Intel’s use in creating masks and tooling for the manufacture of a Product.

1.53 "Technical Collateral" means technical documents, files, models, schematics, software tools, and layouts useful in the design or manufacture of integrated circuits.

1.54 “Trade Secret Rights” means all worldwide rights in trade secrets arising under statutory or common law, or any right analogous to U.S. trade secret rights in foreign jurisdictions.

1.55 "Wafers" means silicon wafers, the individual die of which embody Die Products, manufactured by Intel in accordance with a Product Attachment.

1.56 "WIP" means work in process with respect to a Product. This includes all Wafers and Product in Wafer fabrication, sort test, assembly and final test and all completed Product units not yet delivered to Customer.

2. OVERVIEW

2.1 This Agreement states the terms under which Customer and Intel agree to undertake the manufacture of one or more Product(s) as agreed in writing from time to time, using Intel’s fabrication processes. The Parties may make this Agreement applicable to a Product by executing a Product Attachment which identifies the Product or Products and which references this Agreement. All the terms of this Agreement will apply to each separate Product unless an amendment to this Agreement is made in writing. This is not a "requirement contract": unless otherwise agreed in writing, Customer is not obligated to have all

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its needs for products fulfilled by Intel, nor is Intel obligated to manufacture all products required by Customer. Notwithstanding the foregoing, Intel will be obligated to manufacture and sell any Product that is the subject of a Product Attachment signed by both parties (and products that are within the Product Family of such Product) and cannot later claim such Product (or products that are within the Product Family of such Product) are Excluded Products unless such Products become Excluded Products by virtue of being marketed in a manner which brings the Product within the definition of Excluded Product set forth in Section 1.15. Customer’s and Intel’s agreement to have a particular Product manufactured at Intel does not imply any obligation to manufacture, or have manufactured, Customer’s other products at Intel and Intel may decline to manufacture any prospective product, including but not limited to Excluded Products. Customer may at any time propose additional products for manufacture at Intel under this Agreement, by providing to Intel, with respect to each such product, anticipated application(s), process node, anticipated volumes and other pertinent information, and Intel will promptly engage with Customer to make a preliminary determination as to whether manufacture at Intel is in the best interest of both Parties. Neither Party will be committed to develop for manufacture, nor to manufacture, any product unless and until a Product Attachment has been executed by both Parties. To the extent a Product Attachment contains terms which are in addition to or in conflict with the terms of this Agreement, the Product Attachment shall prevail, solely with respect to the Product to which the Product Attachment specifically pertains.

2.2 The Parties anticipate that, for each Product or Product Family, the Parties will jointly maintain a Foundry Workplan. Foundry Workplans are nonbinding, working documents which are periodically updated and revised to reflect the Parties' developing joint best understanding of their intentions based on available information. To the extent activities and/or deliverables are revised during the course of a project to a degree that the quotation is affected, the parties will negotiate and revise the Product Attachment accordingly.

2.3 It is Customer’s intention to purchase [*****] from Intel. [*****], both Parties will make reasonable accommodations to [*****] and [*****] Products to suitable [*****] and [*****] designated by [*****] (provided that Customer will not provide Products in [*****] to [*****] other than [*****]). Based on the Parties’ respective future business and manufacturing needs, however, the Parties will negotiate in good faith regarding terms for [*****] to [*****] designated [*****].

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^[*****] Confidential portions of this document have been redacted and filed separately with the Securities and Exchange Commission.

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2.4 Each Product Attachment will specify whether applicable Products will be delivered as ^[*****] or [*****] (solely to Customer’s own sites for use solely at such sites), as [*****] Products, or as Finished Products, provided that:

2.4.1 For [*****] Products as to which Customer will not utilize Intel [*****], provision by Intel or by Customer [*****] Products to Customer’s [*****] will be pursuant to a nondisclosure agreement with such [*****] which meets Intel’s reasonable requirements (for purposes of this section, a nondisclosure agreement at least as protective of Intel as the CNDA referenced on the first page of this Agreement, and which names Intel as a third party beneficiary, will be deemed to meet Intel’s requirements) and, in any event, Intel will not be required to [*****] Products on any leading edge node until [*****] after Intel’s [*****] on that node has been [*****]; and

2.4.2 Customer will be responsible for all costs of enabling Customer’s [*****], and, as between Intel and Customer, will be responsible for all aspects of, and liabilities created by, [*****] interaction or integration, and will not look to Intel for failure analysis or [*****] for any issues to the extent arising from such [*****] interaction or integration.

3. INTEL LICENSABLE TECHNICAL COLLATERAL

3.1 To the extent Customer requires access to, or use of, third party Technical Collateral which is sublicensable to Customer by Intel, Customer may be required to agree in writing to terms imposed by such third party as a prerequisite to such access or use. Prior to using any third party Technical Collateral, Intel will notify Customer and receive Customer’s written approval of such use, including any additional terms that may apply to such third party Technical Collateral.

3.2 Customer will [*****] development non-reoccurring engineering (“NRE”) or support [*****] for test program development, or for base Intel IP required to enable a Product (e.g., standard cell) that is part of Intel’s standard foundry IP offering, [*****] for integration of such IP into lead Products. The parties will negotiate in good faith with respect to charges for NRE, license fees (at market rates), integration and support for advanced or custom IP and other collateral.

3.3 Intel will provide commercially reasonable support for Customer’s use of third party-developed IP blocks, tools, and other technology referenced

^{________________________________________} 

^[*****] Confidential portions of this document have been redacted and filed separately with the Securities and Exchange Commission.

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in a Product Attachment provided that (a) use of such IP does not necessitate modification to the selected process technology nor Intel’s design or manufacturing methodologies and (b) to the extent Customer requires access to, or use of, third party technology, Customer may be required to agree in writing to terms imposed by the third party as a prerequisite to access or use. All Customer-selected third party IP blocks, tools, and other technology (unless within the scope of Intel Licensable Technical Collateral or Intel Provided Deliverables) will be understood for purposes of Section 10.4 to be Customer Provided Deliverables.

4. PRODUCTION PERIOD

4.1 Forecasting

4.1.1 Demand Forecast. Customer will provide to Intel a twelve (12) month rolling demand forecast for Wafer-outs each month, taking into account applicable Lead Times for each Product, with the month in which the forecast is provided being “Month 1” of the forecast, commencing six months prior to anticipated Product Tape-In. If Customer does not provide an updated forecast for a given month, the most recently provided forecast will be deemed Customer’s current forecast. Customer’s forecast will state monthly requirements for Risk Wafers and Products. Customer is not required to forecast Prototypes. Except as set forth herein, each Customer forecast is non-binding on either Party and for capacity planning and material ordering purposes only, provided that Customer shall make good faith efforts to ensure that all forecasts are reasonable estimates of its anticipated needs. Subject to this obligation, and except as expressly stated in this Section 4.1, all such forecasts (and any responses to them) will be for planning purposes only, and will not create any obligation to purchase and/or sell. Customer is only liable for manufacture of Wafers ordered pursuant to an Order submitted and accepted under the terms of this Agreement.

4.1.2 Supply Assurance. Pursuant to the forecasting schedule in the Policy & Procedure document that will be made accessible to Customer via the Intel Foundry Services (IFS) portal, as such document may be modified by agreement of the Parties, Intel will provide a monthly rolling response to Customer's demand forecast. Intel's response may accept or reduce quantities forecast for any month for which a forecast has not previously been received. So long as Customer’s forecasts for any given month are equal to or less than amounts previously accepted for that month, Intel will accept the amounts forecast for each

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month, and will make commercially reasonable efforts to accept forecasts in excess of amounts previously forecast for each given month. For each month in Months 1-6 for which an Order is timely (prior to commencement of the applicable Lead Time) placed, Intel will accept Order quantities up to ^[*****] of the quantity accepted by Intel in response to Customer’s forecast received in the immediately preceding month for such month, in substantially the product mix forecast. Intel may modify its forecast response for any month(s) if Orders for such month(s) have not been timely placed by Customer. To the extent that any Customer forecast fails to forecast the full capacity or quantity if any, previously allocated to Customer in response to the immediately preceding forecast (after subtracting Orders placed by Customer for such month): (i) Intel shall be entitled in its sole and complete discretion to enter commitments with others for such unexercised capacity for the applicable months (calculated as Intel’s response to Customer’s immediately preceding forecast minus Customer’s current forecast) and in the amounts not so exercised, and (ii) Customer will not have any right to require Intel to provide that unexercised capacity to Customer in the month(s) involved.

4.1.3 Supply Upside. Intel agrees to consider requests to support upsides within Lead Time in Production or to expedite manufacture of any Wafers. If Intel agrees to accommodate Customer’s request for upside or expedited processing within Lead Time, Customer may incur expedite charges as set forth in the applicable price quote.

4.1.4 In the event either Party fails to meet its commitments pursuant to this Section 4.1, the sole remedy for the other Party is, at its discretion, to adjust future capacity and/or Order commitments, as the case may be, in an amount reasonably related to the amount of the shortfall, and taking into account the other’s ordering/fulfillment patterns and any information the other wishes to share regarding its forecasted needs or capacities, and neither Party shall have any right to bring any action in law or in equity to enforce any provision of this Section 4.1 other than this subsection 4.1.4. Notwithstanding the foregoing, in the event Intel fails to meet its Delivery commitments pursuant to this Section 4.1, Intel may not adjust committed quantities, and Intel may only

^{________________________________________} 

^[*****] Confidential portions of this document have been redacted and filed separately with the Securities and Exchange Commission.

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reschedule Delivery dates as expressly permitted in this Agreement.

4.1.5 The Parties will attempt to settle or resolve any claim or controversy arising from this Section 4.1 through consultation and negotiation in good faith and a spirit of mutual cooperation. Pursuant to this process, in the event of any material dissatisfaction or assertion by either Party of the other’s failure to perform any commitment under this Section 4.1, or any concern that a Party is not placing, accepting or fulfilling Orders consistent with the letter or spirit of this Section 4.1, the senior managers shall immediately take action to address the issue, and, failing that, will thereupon escalate the issue to executive level management and each Party will expeditiously obtain executive level review and resolution of the concern or situation.

4.1.6 Forecasting for manufacture of Products in other than Wafer form will be negotiated in good faith at an appropriate time.

4.1.7 For new product Tape Ins Intel will provide the fastest available cycle times, which are the same or better than standard Intel new product introduction cycle times.

4.2 Ordering

4.2.1 Customer will from time to time issue blanket Orders for manufacture of Production Products against which Customer may, outside of the applicable Lead Time(s) for the Product(s) involved, issue Releases referencing the applicable blanket Order, each of which, upon acceptance by Intel, will constitute an Order and, accordingly, authorization to Intel to start Wafers, and to enter a corresponding Line Item in the blanket Order corresponding to the Release.

4.2.2 Each Order (including Releases) will reference this Agreement. Additionally, each Order will include (a) Intel’s assigned part number and Customer’s assigned part number, (b) the Product(s) to be manufactured and quantity, (c) the requested Delivery date, and (d) the applicable price and agreed payment terms. For avoidance of confusion, under no circumstances, except as provided in Sections 2.3 and 8.5, will Intel be obligated to ship Products in Wafer form.

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4.2.3 Orders must be received at Intel at least ^[*****] calendar days ahead of Tape-In for lead lots and at least [*****] calendar days ahead of silicon starts for additional engineering lots.

4.2.4 Orders may be issued on Customer’s behalf by Customer’s Subsidiaries, and Intel is authorized to accept, fulfill, and invoice for such Orders as if they had been issued by Customer. Orders issued by Subsidiaries, and services performed pursuant to such Orders, will be treated in all respects as if they had been issued by and performed for Customer. Customer agrees to consolidate warranty and indemnity requests on behalf of Customer’s Subsidiaries, and to communicate those requests to Intel, provided that this will not be deemed to diminish nor increase Intel’s warranty or indemnity obligations under this Agreement. Customer will be responsible to Intel for any failure by any Customer Subsidiary to comply with any term of this Agreement, including but not limited to failure to timely pay invoices.

4.3 Acknowledgement

4.3.1 Intel will acknowledge the Order and inform the Customer of Intel’s committed Delivery date within [*****] business days. Provided that Orders are timely, Intel must accept the quantity of Products ordered by Customer, provided that Intel’s committed Delivery dates may be scheduled in accordance with Intel’s supply commitment obligations set forth in this Agreement. Order acknowledgements by Intel that do not meet the requested Delivery dates will only be effective if Customer sends Intel a written acceptance notice within [*****] business days after Customer’s receipt of such deviating Order acknowledgement from Intel.

4.3.2 Each Order acknowledgment will reference this Agreement and include (a) Intel’s assigned part number and Customer’s assigned part number, (b) the Product(s) to be manufactured and order quantity in the Order, (c) the applicable price and agreed payment terms, (d) the Intel committed quantity and Delivery date.

4.3.3 Orders and Order acknowledgments are only deemed valid (i) if sent to the other Party’s designated department responsible for such Party’s Order processing under this Agreement and (ii) if provided in writing or in the electronic data interchange

^{________________________________________} 

^[*****] Confidential portions of this document have been redacted and filed separately with the Securities and Exchange Commission.

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("EDI") format that may be agreed to between the Parties by separate written EDI agreement. No terms or conditions in a Party’s Order, delivery or shipping form, forms of acknowledgements, or similar documents will modify, replace or supplement the terms and conditions set forth in this Agreement, except for those terms reflecting the information categories specified in Section 4.3.2. In the event that the price on the Order differs from the price on the applicable quotation, the quotation will control.

4.3.4 A calendar for the demand forecast, supply assurance, Order and Order acknowledgment will be provided in the Policy & Procedure document that will be made accessible to Customer via the Intel Foundry Services (IFS) portal.

4.4 Cancellations and Reschedules.

4.4.1 Customer’s Orders for manufacture of Product(s) (including Risk Production Wafers, Engineering Wafers or Engineering Samples) that are within Lead Time and already in WIP may be canceled subject to payment upon invoice of the Cancellation Fees set forth in Section 4.4.2. Except as otherwise provided, forecasted requirements and Orders for manufacture of Product(s) outside of Lead Time are cancelable by Customer in whole or in part at any time without liability. However, if Intel starts Wafers outside of Lead Time in response to Customer’s written instructions, Customer will be responsible for cancellation liability pursuant to Section 4.4.2.

4.4.2 Cancellation Fees

4.4.2.1 If the production or delivery of Products are cancelled by the Customer within the Lead Time and after Products are already in WIP, then Customer shall pay to Intel a cancellation charge based on the following formula:

4.4.2.2 Cancellation charge per Wafer = Base cancellation fee + [percentage of manufacturing segments completed) * (Wafer sell price under contract - Base cancellation fee)].

4.4.2.3 Total Cancellation fees = (Cancellation charge per Wafer * number of Wafers)

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4.4.2.4 The Base cancellation fee shall be ^[*****] dollars. If Wafers have not been started, Intel shall waive the cancellation fee.

4.4.2.5 Masks. Mask cancellation fees, if applicable, will be based on the number and cost of reticles completed and /or started.

4.4.2.6 Late Line Item Cancellations. Intel will use commercially reasonable efforts to meet Delivery Dates specified in each Order accepted hereunder. Customer may cancel without liability any late items or shipments if and only if the delay is not caused by Customer and the delay exceeds the committed manufacturing Lead Time by more than [*****] calendar days, and if late shipment is not subject to force majeure under Section 14.2.

4.4.2.7 Line Item Reschedules. Customer may on occasion reschedule any Order Line Item from Intel’s committed Delivery date. Wafers in the manufacturing line will be held only at technically permissible hold locations and the hold time will not exceed maximum time allowed in the given technology node so as to avoid quality degradation of the Product and risk to the manufacturing line. Customer may reschedule an Order Line Item for [*****], and for a maximum of [*****] for Die Products to be released from existing die bank inventory at the time of such [*****] Order, and for a maximum of [*****] for other Finished Products Orders. Customer may reschedule an Order Line Item for Wafers or Die Products for up to [*****] from Customer’s original requested Delivery date or from Intel’s committed Delivery date, whichever is later. If Delivery is rescheduled, Intel’s invoice dates may not be earlier than the rescheduled Delivery dates described in this section. In the event Customer takes excessive advantage of its right to reschedule under this Section, the

^{________________________________________} 

^[*****] Confidential portions of this document have been redacted and filed separately with the Securities and Exchange Commission.

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Parties will negotiate in good faith as to appropriate limits on the right to reschedule.

4.5 Delivery Performance.

4.5.1 On-time delivery. Intel’s on time delivery performance goal will be ^[*****] as measured by on time shipment (per Intel’s committed delivery date) to Intel dock (package ready to be picked up by Customer arranged carrier). Intel will absorb all internal expedite costs to meet as closely as possible Intel’s original delivery commitment in Intel’s Order confirmation pursuant to Section 4.3 unless such failure was caused by force majeure as described in Section 14.2 or in direct response to customer hold instructions. Intel’s payment of such expedite costs will be Customer’s sole remedy in the event of a failure to meet Intel’s Delivery commitment.

4.5.2 Lead Time and Manufacturing Cycle Times. Intel will provide Customer Order Lead Times which will be reviewed on a periodic basis with Customer.

4.6 Shipping Terms.

4.6.1 The shipment terms will be as set forth in Exhibit B with title transferring over the high seas prior to entry at the port of disembarkation and risk of loss for Products passing to customer upon Delivery by Intel to Customer, except that, for [*****] Products only, the Parties will negotiate in good faith as to the place of title transfer, provided that title to [*****] Products will pass, if it all, at an agreed time no earlier than the earlier of (1) [*****] calendar days from invoice or (2) Delivery to Customer or Customer's designee. For purposes of section 199 of the U.S. Internal Revenue Code of 1986 (as amended), the Parties agree that Intel should be considered to have the benefits and burdens of ownership of the Product during the production phase. Accordingly, for purposes of clarity, Intel (and not Customer) should be the Party entitled to take the deduction attributable to domestic production activities provided for by section 199 of the U.S. Internal Revenue Code of 1986 (as amended).

4.6.2 Export Regulation. Customer and Intel agree that the distribution and export/re-export of Products and technical data provided by either Party to the other will comply with all

^{________________________________________} 

^[*****] Confidential portions of this document have been redacted and filed separately with the Securities and Exchange Commission.

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laws, regulations, orders, or other restrictions of the U.S. Export Administration Regulations and any other applicable export control laws. The Parties agree that neither they nor any of their Subsidiaries will export/re-export any Technical Collateral directly or indirectly to any country for which the United States government or any agencies thereof requires an export license or other government approval without first obtaining such license or approval. Each Party will promptly provide all necessary or useful information for the other Party to obtain any required export or import licenses, including export control classification number (ECCN) and harmonized tariff structure (HTS) codes.

4.7 End of Life Requirements.

4.7.1 Except in accordance with Intel’s express termination rights in this Agreement, Intel will not terminate manufacture of any Product that is subject to a Product Attachment if Intel is still manufacturing products at the applicable production node.

4.7.2 Notwithstanding the provisions of Section 4.7.1, if Intel decides to terminate production on a given technology node, then Intel will notify Customer in writing at least ^[*****] months in advance of the termination date, if Intel intends to cease providing any process technology required for the manufacture of a Product(s) provided, however, that Intel will not end of life Intel's applicable manufacturing, packaging, assembly and test technologies earlier than twelve (12) years from the later of the quarter following production launch of Intel’s lead product in the node or availability of initial foundry design kits for the applicable technology node to be used by Customer. Termination of this Agreement other than for Customer's material breach will not act to shorten such twelve (12) year period. Customer may order the manufacturing of their expected demand for the affected Product(s) throughout the life of the Product by the last-time Order date, which will be [*****] months in advance of the termination date, and will take Delivery by the date which is [*****] following the termination date. Customer will notify Intel in writing of last-time Order quantity in the form of a last-time Order. If a last-time Order is not received by the last-time Order date, then existing Orders will constitute the last- time Order quantity and Intel will manufacture only enough to ship those volumes.

^{________________________________________} 

^[*****] Confidential portions of this document have been redacted and filed separately with the Securities and Exchange Commission.

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Last time Orders are not subject to cancellation, change or rescheduling.

4.7.3 Notwithstanding the provisions of Sections 4.7.1and 4.7.2, if Customer fails to place an Order for manufacture of any Products of a Product Family for twelve (12) consecutive months, Intel may, at its option, cease manufacturing such Product Family, and may transmit a request, to Customer’s last known address, that Customer pay reasonable storage charges for any Customer owned masks related to such Product Family. In the event Customer fails to arrange for such payment within 30 calendar days of transmission of such notice, Intel may, without liability, scrap the masks. In addition, upon Customer request, Intel will destroy all masks for the requested Product.

4.7.4 Intentionally Deleted.

4.7.5 Notwithstanding anything else in this Agreement, Intel may terminate work under any Product Attachment:

4.7.5.1 Without liability for the termination of technology nodes that are larger than 14nm or smaller than the full Moore’s law node smaller than 10nm, which is currently projected to be called 7nm; or

4.7.5.2 Without liability for the termination in the event of a material uncured breach by Customer; or

4.7.5.3 Without liability for the termination at any time prior to the later of (1) expiration of ^[*****] calendar days after execution of the Product Attachment or (2) [*****] calendar days before the then-scheduled date of the first Product Tape In under the Product Attachment; or

4.7.5.4 Without liability for the termination at Customer's written request; or

4.7.5.5 At any other time, subject to payment of the Product Design Termination Fee described below.  In the event of termination of a Product Attachment pursuant to this subsection 4.7.5.5, Customer will invoice Intel

^{________________________________________} 

^[*****] Confidential portions of this document have been redacted and filed separately with the Securities and Exchange Commission.

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for the Product Design Termination Fee, which the Parties agree is a reasonable approximation, made in good faith at the time of executing this Agreement, of the actual losses that Customer would incur as a result of such termination.   Payment by Intel of the Product Design Termination Fee will fully satisfy Customer with respect to any losses incurred by Customer in connection with or as a result of Intel's termination of work under the Product Attachment, and, subject to Intel tendering such payment, Customer will have no cause of action or remedy with respect to such termination or losses resulting from such termination, nor may Customer elect to pursue, nor be entitled to, actual damages or any other measure of damages in lieu of or in addition to the Product Design Termination Fee.

4.7.5.6 In the event Intel elects to terminate work under one or more Product Attachments pursuant to subsection 4.7.5.5 above (whether or not terminated simultaneously), the Product Design Termination Fee for each such termination, payable by Intel to Customer will be:

^[*****] where [*****] with one or more Products for which Tape In has not been completed at the time of termination (provided that no node is counted more than once for this purpose during the term of this Agreement); and [*****] as to which, at the time of termination, a full production reticle set has not yet been fabricated (provided that no Product is counted more than once for this purpose during the term of this Agreement), all further provided that, notwithstanding anything else in this Agreement, Intel’s liability for Product Design Termination Fee(s) will not exceed a cumulative [*****] over the term of this Agreement, including any renewals or extensions.

^{________________________________________} 

^[*****] Confidential portions of this document have been redacted and filed separately with the Securities and Exchange Commission.

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4.7.6 Notwithstanding anything else in this Agreement, Intel may terminate manufacture of any Product as to which Tape In has been completed prior to the expiration of the periods identified in Sections 4.7.1 and 4.7.2 of this Agreement:

4.7.6.1 Without liability for the termination in the event of a material uncured breach by Customer; or

4.7.6.2 Without liability for the termination as permitted by Section 4.7.2 of this Agreement, provided that Intel provides the last time buy opportunity described by that section; or

4.7.6.3 Without liability for the termination at Customer's written request; or

4.7.6.4 At any other time prior to the expiration of the periods identified in Section 4.7.2 of this Agreement, provided that in the event of termination pursuant to this subsection 4.7.6.4, Intel will provide notice 24 months in advance of such termination, Customer will be permitted to make ^[*****] involving one or more masks to any terminated Products covered under this subsection 4.7.6.4 within [*****] days of such termination notice, and Intel will [*****] terminated Products at the time of such termination to meet Customer's anticipated production needs for the remainder of the 12 year period for which Intel had [*****] to [*****] pursuant to Section 4.7.2. To determine Customer's [*****], Intel and Customer will negotiate in good faith to reach, within [*****] of Intel's notice of termination, a reasonable [*****], based on Customer’s [*****] and [*****] to the product from the [*****] process technology platform which was [*****] to the same [*****]. Specific product mix within the technology node will be solely determined by Customer.  Intel will [*****] of [*****]. All Product in the [*****] will be [*****] by Intel.  Customer will [*****] at least the quantity of said material that it projected to be [*****] over the first [*****] following termination when ^{________________________________________} 

^[*****] Confidential portions of this document have been redacted and filed separately with the Securities and Exchange Commission.

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it sees fit at a price documented in the last ^[*****] document for the years covered in that document, and for all years thereafter at a [*****] off the [*****] shown in the last [*****] document. Intel may, at Intel's sole option and without liability, scrap any un-purchased Product in Intel's inventory at or after the expiration of the [*****] period for which Intel had [*****] pursuant to Sections 4.7.1 and 4.7.2.

4.7.7 Intel's compliance with Section 4.7.6 will fully satisfy Customer with respect to any losses incurred by Customer in connection with or as a result of Intel's termination of the manufacture of any Product as to which Production has commenced prior to the expiration of the later of the periods identified in Sections 4.7.1 and 4.7.2 of this Agreement and, subject to Intel’s compliance, Customer will have no cause of action or remedy with respect to such termination or losses resulting from such termination, nor may Customer elect to pursue, nor be entitled to, actual damages or any other measure of damages in lieu of or in addition to Intel's obligations set forth in subsection 4.7.6.

4.7.8 Intel will not raise the quoted price for any Product after providing the [*****] end of life notice for that Product.

4.7.9 In no event will Intel be required to provide the remedies described by both subsections 4.7.5.6 and 4.7.6.4 in connection with the same Product.

5. PRICE AND PAYMENT

5.1 Price. Price will be as stated on the applicable Intel quotation unless otherwise agreed in writing. Quotations will be issued in compliance with a multiyear pricing agreement to be negotiated separately.

5.2 Invoicing. Intel will invoice Customer for [*****] upon Delivery to Customer, [*****] Products upon Delivery to die bank [*****] (subject to subsection 4.4.2.7), and for [*****] upon Delivery per the applicable shipment terms.

5.3 Tax. All payments will be made free and clear without deduction for any and all present and future taxes imposed by any taxing authority.  In the

^{________________________________________} 

^[*****] Confidential portions of this document have been redacted and filed separately with the Securities and Exchange Commission.

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event that Customer is prohibited by law from making such payments unless Customer deducts or withholds taxes therefrom and remits such taxes to the local taxing jurisdiction, then Customer will duly withhold and remit such taxes and will pay to Intel the remaining net amount after the taxes have been withheld.  Customer will promptly furnish Intel with a copy of an official tax receipt or other appropriate evidence of any taxes imposed on payments made under this Agreement, including taxes on any additional amounts paid.  In cases other than taxes referred to above, including but not limited to sales and use taxes, stamp taxes, value added taxes, property taxes and other taxes or duties imposed by any taxing authority on or with respect to the transactions contemplated by this Agreement (“Transaction Taxes”) the costs of such Transaction Taxes will be borne by Customer.  In the event that such Transaction Taxes are legally imposed initially on Intel or Intel is later assessed by any taxing authority, then Customer will reimburse Intel for such Transaction Taxes plus any interest and penalties suffered by Intel within 30 calendar days of Intel's invoice for such amounts.  Notwithstanding the foregoing, in the event that any other taxes which are legally imposed initially on either Party are later determined to have been properly due from the other, then the underpaying Party will reimburse the overpaying Party within 30 calendar days of the overpaying Party's invoice therefor. For the avoidance of doubt, each Party is responsible for its own respective income taxes or taxes based upon gross revenues, with respect to the transactions contemplated by the Agreement.  Both Intel and Customer will use reasonable efforts to minimize withholding taxes and Transaction Taxes, including but not limited to obtaining any appropriate exemptions, and resolve any common tax disputes on the transactions contemplated by the Agreement.   Intel and Customer agree to furnish or cause to be furnished to one another, as reasonably requested, any such information and assistance with respect to the transactions contemplated by the Agreement for the filing of all tax returns and the preparation for any tax audit.  In the event any taxing authority informs Intel or Customer of any notice of proposed audit, claim, assessment or other dispute concerning an amount of taxes with respect to which the other Party may incur liability hereunder, the Party so informed shall promptly notify the other Party of such matter.

5.4 Payment Terms.

5.4.1 Invoices will be issued at the time of Delivery. Invoices will include Customer’s full Order number, Line Item number, Customer’s part number, quantity as stated in the Order, and ship to address as provided by Customer.

5.4.2 Invoices will be payable net thirty (30) calendar days. Intel may charge and Customer agrees to pay upon demand the

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lesser of ^[*****] per month or the highest lawful monthly rate on overdue accounts.

5.4.3 Customer has received and reviewed a copy of the Intel Corporation Money Laundering Prevention Policy (the "Policy") and with respect to its transactions with Intel, agrees to abide by all of the payment terms and conditions therein. Customer understands that Intel may refuse to accept forms of payment specified as unacceptable in the Policy.

5.4.4 If at any time the financial condition of Customer materially changes, or if Customer fails to make payment(s) to Intel when due, Intel may condition further shipments upon payment of any past due amounts and/or suspend credit. In the event Intel is obliged to pursue litigation to obtain payment, after Intel has provided written notice to Customer of its failure to make payment(s) when due and an opportunity to cure consistent with subsection 12.2.1, Intel will be entitled to reimbursement from Customer for all expenses incurred by Intel in respect thereof, including, without limitation, reasonable attorneys’ fees and costs.

5.5 The NRE or equipment charges, if any, will be subject to written agreement.

6. PRODUCTION SUPPORT

6.1 WIP Status Reporting. For each Product, Intel will provide to Customer WIP and inventory status information to show production lot progress at the key processing steps: FE (Diff, Poly, GCN); BE ( M1, M3, M5, M7, M9, V10, C4). Separate expectations will be set for monitoring shuttle progress. Intel will provide lot status flags for holds and scrap at lot level (but not rework information). Intel will promptly notify Customer of any significant scraps and holds which, despite standard Intel dynamic adjustments, can reasonably be expected to impact Delivery commitments.

6.2 To intercept backend changes, Intel will support lot holds for up to the maximum period allowed in the given technology node, so as to avoid quality degradation of the product, in safe locations in front end (pre-contact) and backend.

6.3 Process Excursions. Intel will notify Customer in the event of Process Excursions which have a materially negative impact to performance,

^{________________________________________} 

^[*****] Confidential portions of this document have been redacted and filed separately with the Securities and Exchange Commission.

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quality, reliability or Intel's delivery commitment for a Product. Customer will provide resources for the purpose of resolving the impact of Process Excursions on Products.

6.4 Production or Business Plan Change Mitigation. In the event of an Intel-initiated change in Intel’s manufacturing, assembly or test process that, per applicable industry standards, necessitates product requalification, Intel will reimburse Customer for requalification, not to exceed ^[*****] per affected Product die type and not to exceed [*****] Product die types per product change notification. Intel will also cover all costs related to new masks, qualification Wafer lots and Wafer test at Intel during qualification. Intel will also agree to build and hold die bank or FGI inventory buffers, up to [*****] fully yielded Wafer equivalents, to help Customer’s customers with their product transitions due to any resulting product change notification.

6.5 Failure Analysis Correlation Request ("FACR").

6.5.1 Intel agrees to support physical failure analysis for silicon and [*****], with Customer support. Customer will provide adequate fault isolation support to assist Intel with physical failure analysis (FA). Intel will use commercially reasonable efforts in performing correlation and failure analysis needed for all Intel related issues and defects.

6.5.2 If the FACR process concludes the failure root cause is due to Intel process, Intel will determine and take appropriate containment, corrective and preventative actions.

6.5.3 Customer and Intel will negotiate in good faith with respect to [*****], provided that FA services shall be [*****] of work [*****].

6.6 Yield and Yield Improvement Support

6.6.1 For Products in Production, Intel final sort yield “reject limits” will be statistically derived from a minimum volume of Production Wafers which have been run on a production sort test program, and reference Intel’s baseline yield distribution.

6.6.2 Intel will provide good die per Wafer projections for each Product based on key product attributes from first silicon through peak yields.

6.6.3 Intel will not be obligated to share [*****].

^{________________________________________} 

^[*****] Confidential portions of this document have been redacted and filed separately with the Securities and Exchange Commission.

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6.6.4 Intel’s fab engineers will support collaboration with Customer’s technology team on agreed yield enhancement activities, including product yield and performance improvement based on agreed upon benefit threshold and effort/risk analysis.

6.6.5 To facilitate communication regarding engineering issues between Intel and Customer (and specifically not for the purposes of, e.g., auditing/managing production practices), Intel will cooperate with Customer’s assignment of a limited number of resident Customer engineers in close physical proximity to Intel’s fab site(s) where Products are manufactured, and provide those engineers with routine access to Intel personnel familiar with day-to-day issues arising in the course of Product manufacture for the purpose of discussing such matters as product feedback, improvement splits, and FA results. To the extent Customer personnel are provided access to Intel facilities, whether to enable Customer to perform its responsibilities or otherwise, such access will be governed by the terms of Exhibit E hereto.

6.7 Intel Information. Intel agrees to provide to Customer information set forth in a Product Attachment as required by Customer or Customer’s end customers to confirm product quality and manufacturing process controls pertaining to Products. Further, Intel agrees to discuss in good faith providing to Customer additional information required by Customer or Customer’s end customers to confirm product quality and manufacturing process controls pertaining to Products, subject to Intel's reasonable concerns regarding the confidentiality of its proprietary manufacturing processes.

7. OWNERSHIP

7.1 Project Materials. Title to all tangible embodiments of Technical Collateral, including but not limited to specifications, Netlists, Databases, cells, IP blocks, test vectors and/or test tapes furnished by a Party, and all IP rights in such Technical Collateral, shall remain with the Party that furnished them. Each Party shall not use Technical Collateral furnished by the other Party for any purpose other than for performance of its obligations under this Agreement and the associated Product Attachments and Foundry Workplans. Customer agrees that nothing in this Agreement will limit or restrict Intel with respect to the development and use of Process Technology or Packaging Technology even if such Process Technology or Packaging Technology was developed in the performance of Intel’s obligations under this Agreement; provided, however, that nothing in this sentence will be deemed a grant of any license under any intellectual property rights of Customer or its Affiliates.

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7.2 Intel will not supply any Products nor WIP to any other party without Customer’s prior written consent.

7.3 Background Intellectual Property. This Agreement does not change the Parties’ ownership of their Background IP Rights. Except as expressly provided by this Agreement or by a separate written agreement between Customer and Intel, neither Party shall have any right or license under the other's Background IP Rights.

7.4 Foreground Intellectual Property. Except as otherwise expressly set forth in a Product Attachment specifically referencing this Section 7.4, Customer and Intel agree that the ownership of Foreground IP Rights shall be allocated as set forth in Sections 7.5 through 7.13 of this Agreement. For purposes of this Agreement, inventorship shall be determined in accordance with United States patent laws.

7.5 Independent Foreground IP and Joint Foreground IP.

7.5.1 Independent Foreground IP. Except as specified in Sections 7.6 through 7.8, all Foreground IP Rights arising from inventions or works first conceived, for patentable subject matter, or authored, for copyrightable subject matter or mask works; or developed, obtained, or acquired, for trade secrets, solely by a Party shall be solely and exclusively owned (as between the Parties) by the Creating Party.

7.5.2 IP Rights License to Joint Foreground IP. Each Party (the “First Party”) hereby grants to the other Party and its Subsidiaries (collectively, the “Second Party”) a non-exclusive, non-transferable (except as permitted by Section 14.4), non-sublicensable, irrevocable, perpetual, worldwide, royalty-free, fully paid up license under the First Party’s Joint Foreground IP Rights (but not under its other Foreground IP Rights or its Background IP Rights, even in the Second Party’s exercise of the licensed Joint Foreground IP Rights, and even if such other Foreground IP Rights or Background IP Rights are required to use or exploit the licensed Joint Foreground IP Rights) to make, have made, use, offer to sell, sell, import, copy, make derivative works of, publicly display, publicly perform, and otherwise dispose of its products and to perform services in connection therewith

7.6 Foreground Product IP. Customer shall be the sole and exclusive owner of all Foreground Product IP Rights. Intel agrees to assign and hereby assigns to Customer all of Intel’s right, title and interest in and to such Foreground Product IP Rights. Customer hereby grants to Intel a non-exclusive, non-transferable (except as permitted by Section 14.4), non-sublicensable, irrevocable, perpetual, worldwide, royalty-free, fully paid up license under its Foreground Product IP Rights to or in subject matter that is conceived, authored or developed solely by Intel or jointly

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by Intel and Customer (but not under Customer’s other Foreground IP Rights or its Background IP Rights, even in Intel’s exercise of the licensed Foreground Product IP Rights, and even if such other Foreground IP Rights or Background IP Rights are required to use or exploit the licensed Foreground Product IP Rights) to make, have made, use, offer to sell, sell, import, copy, make derivative works of, publicly display, publicly perform, and otherwise dispose of Intel’s products and to perform services in connection therewith.

7.7 Joint Foreground Process IP. Intel shall be the sole and exclusive owner of all Foreground Process IP Rights to or in subject matter that is conceived, authored or developed jointly by Intel and Customer. Customer agrees to assign and hereby assigns to Intel all of Customer’s right, title and interest in and to such Foreground Process IP Rights.

7.8 Joint Foreground Packaging IP. Intel shall be the sole and exclusive owner of all Foreground Packaging IP Rights to or in subject matter that is conceived, authored or developed jointly by Intel and Customer. Customer agrees to assign and hereby assigns to Intel all of Customer’s right, title and interest in such Foreground Packaging IP Rights.

7.9 Foreground IP Rights in Customer’s Improvements. Customer grants Intel a non-exclusive, non-transferable (except as permitted by Section 14.4), non-sublicensable, irrevocable, perpetual, worldwide, royalty-free, fully paid up license under Customer’s Patent Rights in any modifications Customer makes to any Intel Licensable Technical Collateral or Intel Provided Deliverables (but not under Customer’s or its Subsidiaries’ other Foreground IP Rights or its Background IP Rights, even in Intel’s exercise of the licensed Patent Rights in such modifications, and even if such other Foreground IP Rights or Background IP Rights are required to use or exploit the licensed Patent Rights) to make, have made, use, offer to sell, sell, import, and otherwise dispose of Intel’s products and to perform services in connection therewith.

7.10 Disclosure of Joint Inventions. Periodically, the Parties will disclose in writing to one another all jointly created inventions first conceived during the term, and in the course of their performance, of this Agreement or the associated Product Attachments (each a “Collaboration Invention”).

7.11 Uncategorized IP Rights. The ownership of Joint Foreground Uncategorized IP Rights is addressed in Sections 7.12 and 7.13 below.

7.12 Ownership of and Licenses to Patent Rights in Joint Inventions. Ownership of any Patent Rights in Joint Foreground Uncategorized IP

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Rights will be allocated between the parties according to the following selection process, which will take place as frequently or infrequently as the Parties together determine is necessary. All inventions conceived during the period before the selection process takes place will be compiled. The Parties will then divide the inventions equally between them (unless there are an odd number of inventions, in which case Customer will have one more selected invention than will Intel). Customer will make the first selection of a jointly created invention in which Joint Foreground Uncategorized IP Rights are embodied, then Intel will make its selection. This process will continue until all of the inventions in which Joint Foreground Uncategorized IP Rights are embodied are selected. The Party that has selected a particular invention in which Joint Foreground Uncategorized IP Rights are embodied will exclusively own all Patent Rights to such invention.

7.12.1 Assignment and Representation of Rights. The Non-Selecting Party hereby assigns all of its rights, title and interest in the Patent Rights of the selected Collaboration Invention to the Selecting Party on behalf of itself and its employees or agents. The Non-Selecting Party further represents and warrants to the Selecting Party that all of Non-Selecting Party’s employees or agents have assigned, and are obligated to assign, all of its employee’s or agent’s rights, title and interest in the selected Collaboration Invention and all IP Rights therein to the Non-Selecting Party.

7.12.2 Cooperation. Each Party will cause its employees, subcontractors and agents who are co-inventors of Collaboration Inventions selected by the other Party to cooperate with the Party filing the patent application. The Party filing the application will not be charged for the time of the non-filing Party’s employees, subcontractors and agents or for their participation in the preparation for filing and prosecution of any applications. The filing Party will only contact employees, subcontractors or agents of the other Party through that Party’s designated representative or legal counsel.

7.12.3 Specific Assistance. On request from a Party, the other Party will promptly:

i. Deliver to the requesting Party the records, data, or other documents reasonably requested;

ii. Execute and deliver assignments of all patents required to be assigned;

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iii. Make its employees, agents, and consultants reasonably available to the requesting Party or its attorneys, agents, or representatives;

iv. Take necessary actions to perfect the other Party’s rights to a Collaboration Invention that other Party has selected;

v. Complete any procedures required by local jurisdictions for claiming employer invention rights with respect to a Party’s employees; and

vi. Pay any compensation relating to its use of its employee’s, subcontractor’s, or agent’s invention rights without right of reimbursement from the other Party regardless of which Party has selected the Collaboration Invention.

7.12.4 Filing Patent Applications. The Party selecting a Collaboration Invention may, at its sole discretion, file patent applications claiming Patent Rights to the selected Collaboration Invention anywhere in the world, solely in its own name, and at its own expense.

7.12.5 No Registration or Filing Obligations. The Non-Selecting Party will not have any obligation to the Selecting Party for any of the following items related to that invention:

i. filing patents or registering copyrights;

ii. maintaining a filed patent application; or

iii. accountings.

7.12.6 Intentionally Deleted.

7.12.7 Right to Challenge Validity. If a Party or its employees have assigned Patent Rights to the other Party pursuant to this Section 7.12, the assigning Party expressly reserves the right to challenge the validity or enforceability of any Patent Rights resulting from the applicable invention(s), and the assignee Party expressly waives all rights to assert the doctrine of “assignor estoppel” in any dispute or legal action involving assigned Patent Rights.

7.12.8 Reliance on Waiver of Rights to Assert Assignor Estoppel. No assignment under this Section 7.12 will prevent the assignor

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Party from challenging the validity or enforceability of the assigned Patent Rights.

7.13 Other IP Rights in Joint Uncategorized IP. Both Parties will jointly own any Copyrights and Trade Secret Rights comprising Joint Foreground Uncategorized IP Rights.

7.13.1 Use and Disclosure. In its sole discretion, either Party may reproduce, distribute, publicly display, publicly perform, create derivative works, use or disclose works in which it is a joint owner of the Copyrights and Trade Secret Rights comprising Joint Foreground Uncategorized IP Rights as if the Copyrights and Trade Secret Rights were solely owned by that Party, without any duty of accounting, compensation, or consent of the other party. Neither Party, however, grants to the other Party any license or authorization under its Patent Rights under this subsection 7.13.1, even in the other Party’s exercise of Copyright and Trade Secret Rights granted in this section and that may be granted elsewhere in this agreement.

7.13.2 Confidential Treatment in Certain Cases. Either Party may request that a work to which Copyrights or Trade Secret Rights comprising Joint Foreground Uncategorized IP Rights pertain be maintained as Confidential Information by both parties. The requesting Party must make its request in writing and must describe with reasonable particularity the specific work proposed to be maintained as confidential.  Both parties agree that information will be protected by each Party in the same manner in which that Party protects its own Confidential Information of a similar nature.

7.14 Confidential Treatment for a Limited Time.The Party that did not select any particular Collaboration Invention pursuant to the process described in Section 7.12 agrees that it will not disclose Confidential Information about the Collaboration Invention to third parties and it will protect such information in the same manner in which it protects its own confidential information of a similar nature for three years or until a patent application for the Collaboration Invention is published, whichever is earlier. For a Collaboration Invention that the Party did not select, the Non-Selecting Party may request in writing to the Selecting Party that it need not maintain the confidentiality of the Collaboration Invention. If the Selecting Party agrees, the Non-Selecting Party need not keep the information confidential.

7.15 No Other Rights or Obligations. Nothing contained in this Section 7:

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7.15.1 is a warranty or representation by either Party about the validity, enforceability, or scope of any IP Right;

7.15.2 imposes an obligation on either Party to institute any legal action for infringement or defense of any IP Rights or to defend any legal action brought by a third party with respect to the validity, enforceability, or scope of any IP Right;

7.15.3 imposes an obligation on either Party to file a patent application or register any copyright to secure, maintain, or enforce any IP Right; or

7.15.4 imposes an obligation to furnish any technical information or know-how.

7.16 Disclaimer of CREATE Act. This is not a joint research agreement as that term is defined in the CREATE Act, Public Law No., 108-453 (currently codified at 35 United States Code §103(c)(2)), including any similar provisions of applicable law and any amendments to the foregoing. Each Party expressly disclaims the right to amend a patent application to name the other Party for the purpose of claiming the benefit of the CREATE Act.

7.17 Intel will destroy masks using Intel’s standard procedure upon EOL of Product, as permitted by Section 4.7.3.

7.18 Except as specifically stated in this Agreement, nothing contained in this Agreement grants to either Party or any third party, either directly or by implication, estoppel, or otherwise, any license under, or assignment of, any IP Rights.

7.19 Customer authorizes Intel to ship, import, export, and otherwise transfer work in process between and among Intel and its contracted manufacturing sites. After title to the Product passes in accordance with Section 4.6.1, if Customer requests in writing that Intel retain possession of Products, Products will: (i) be held by Intel for the sole benefit of Customer; (ii) remain Customer’s property; (iii) be used by Intel exclusively for Orders by Customer; (iv) be clearly marked as Customer property; and (v) be kept in good condition at Intel's expense. In addition, Intel will not represent or assert any ownership interest in Customer property and upon request of Customer will execute any documents necessary to perfect Customer’s ownership interest in such Customer property. Intel will keep the Customer property free of liens, attachments, and other encumbrances while in Intel’s control. 

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8. CONFIDENTIALITY

8.1 Confidential Information exchanged between the parties will be governed by the Corporate Non-Disclosure Agreement ("CNDA") # 6203681 dated January 3, 2001 in effect between the Parties. The existence of this Agreement and the content hereof is the Confidential Information (as defined in the CNDA) of the Parties.

8.2 The disclosure of certain sensitive Confidential Information may be subject to and governed by the terms of one or more Restricted Secret Non-Disclosure Agreement(s) or Restricted Use Non Disclosure Agreement(s) executed or to be executed between the Parties, (collectively "Custom NDA(s)"). For the Confidential Information disclosed under a Custom NDA, in the event of a conflict between the terms of this Agreement, the CNDA and the Custom NDA the following order of precedence (from highest to lowest) will apply: (1) the applicable Custom NDA (2) this Agreement and (3) the CNDA.

8.3 However, notwithstanding Section 8.2 above, in order to facilitate disclosures which would otherwise be prohibited in furtherance of projects of benefit to both Parties, the Parties agree:

8.3.1 Subject to the terms of this Section 8.3, but notwithstanding any other use restrictions and other provisions relating to confidentiality in this or any other agreement between the Parties, including but not limited to the CNDA, any Custom NDA, license agreements, manufacturing agreements, and development agreements, whether entered prior to or during the term of this Agreement (collectively, "Other Agreements"), and to the extent not otherwise permitted by the Other Agreements, or any of them, each Party hereto (each a "Discloser") may share Confidential Information (as that term is defined in the Other Agreement pursuant to which such Discloser received the information) received from the other (each a "Source") with third parties (including but not limited to contractors, IP vendors, and EDA vendors) (each an "Agreed Third Party"), on a need-to-know basis, solely for the purposes of debugging tool issues relating to, and otherwise supporting, the design, manufacture, test, and packaging of, foundry products at Intel, provided that:

8.3.1.1 Prior to any disclosure to an Agreed Third Party, the Discloser confirms in writing (including by email) with the Source that the Source consents to disclosure of the particular information to the Agreed Third Party, and obtains from the Source the title and date of

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the agreement between the Source and the Agreed Third Party which sets forth the Agreed Third Party's rights and obligations with respect to the information;

8.3.1.2 When disclosing Confidential Information provided by the Source, the Discloser identifies it to the Agreed Third Party as being the Source's Confidential Information, and designates it as being subject to the agreement identified by the Source pursuant to subsection 8.3.1.1 above;

8.3.1.3 A Party may not disclose Confidential Information which that Party received pursuant to an Other Agreement (including but not limited to a Restricted Secret Non Disclosure Agreement or Restricted Use Non Disclosure Agreement) which limits disclosure by such Party to particular individuals (collectively, "Highly Sensitive Information"), to any employee of an Agreed Third Party who is not authorized to access such information under his own employer's agreements with the owner of such Highly Sensitive Information, and each Party will be responsible to put procedures in place to prevent such disclosure, such as assigning a gatekeeper to ensure that only authorized persons attend meetings at which such Highly Sensitive Information can reasonably be anticipated to be discussed. To effectuate this Section, the Parties may disclose to one another the identities of the persons authorized to have access to one another's Highly Sensitive Information; and

8.3.1.4 Each Party agrees to treat Agreed Third Party-provided Confidential Information received from the other Party pursuant to this Agreement as required by its agreements with the Source of the Confidential Information involved.

8.4 Customer acknowledges that Wafers in process will embody Intel trade secrets that Intel does not normally disclose. To protect the Intel trade

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secrets, once Intel starts to process a Wafer to Customer’s specifications, Customer shall not:

8.4.1 be entitled to take physical possession of the Wafer for any reason even if Customer otherwise would be entitled to take such possession under any applicable law, except as otherwise agreed by Intel pursuant to this Agreement;

8.4.2 place any lien or other encumbrance on the Wafer that would enable a third party to take possession of the Wafer; nor

8.4.3 have any right to inspect the Wafer or otherwise gain access to the Wafer, except as otherwise agreed by Intel pursuant to this Agreement.

8.5 Notwithstanding Section 8.4, and subject to Customer’s commitment to comply with security measures as reasonably required by Intel, Intel will ^[*****] a reasonable number of [*****] to Customer locations solely for development of [*****] and [*****]. Applicable security measures will include, but not be limited to, secure storage of [*****], and all [*****] (including [*****]) being returned to Intel promptly after use. Customer will allow access to [*****] solely by its employees on a strict need-to-know basis solely for the purpose of performing activities permitted by this Agreement, and will maintain as Intel Confidential Information, and not attempt to reverse engineer, debug or analyze any Intel in [*****] variation and [*****] on [*****].

9. WARRANTY

9.1 Warranty.

9.1.1 Die Products [*****]. Intel warrants that Intel’s manufacture of all Die Product(s) [*****] Delivered shall meet the Acceptance Specification referenced in Exhibit A for twelve (12) months following the date of Intel's invoice therefor.

9.1.2 Finished Product. Intel warrants that the assembly process and materials used in the manufacture of Finished Product(s) shall meet the Acceptance Specification referenced in Exhibit A for twelve (12) months following the date of Delivery. For avoidance of doubt, assembly process and materials shall not include Die Products, which are covered under the warranty in Section 9.1.1 even when they are incorporated into Finished Products.

^{________________________________________} 

^[*****] Confidential portions of this document have been redacted and filed separately with the Securities and Exchange Commission.

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9.1.3 Exclusions. Products which have been subject (other than by Intel or Intel’s subcontractors) to abuse, misuse, accident, alteration, neglect, electromigration effects or other conditions outside specifications, radiation-induced damage, unauthorized or improper repair or improper application are not covered by any warranty. There is no warranty extended for damage resulting from environmental or externally induced degradation. Intel will not be responsible for claims pursuant to this warranty caused by acts not performed by Intel or Intel’s subcontractors; or by design or application; or by combination of Products with other things if such combination was the cause of the damage.

9.1.4 Conflict Minerals. Intel shall define, implement and communicate to its suppliers a Conflict Mineral Policy that outlines Intel’s commitment to responsible sourcing and measures for implementation of Intel’s policy. Intel shall work with its suppliers to ensure traceability of these metals at least to smelter level. Traceability data shall be maintained and recorded for five (5) years and provided to Customer upon request. Once such mechanisms are available, Intel and its suppliers shall ensure that purchased metals originate from smelters validated by Intel and its suppliers as being conflict mineral free. Intel is encouraged to support industry efforts to enhance traceability and responsible practices in global minerals supply chains. Further, upon Customer’s reasonable request, Intel agrees to exercise commercially reasonable efforts to provide information regarding its conformance efforts with applicable Conflict Minerals regulatory requirements.

9.2 Warranty Claims. Pursuant to the procedure set forth in Section 9.3 herein, if any Product, for which process qualification has been completed, furnished by Intel, fails to conform to the warranty set forth in Section 9.1, Intel's sole and exclusive liability will be, at Intel's option (provided however that Customer will not be required to accept replacement Products if Customer no longer has a need for such Products), to repair, replace or credit Customer's account with an amount equal to the price paid for any such Product which fails to conform during the applicable warranty period provided that (i) Customer returns the Product in accordance with Intel’s RMA procedure referenced in Exhibit C. If such Product is nonconforming, transportation and other charges for the shipment of replacement or repaired Product to Customer will be paid by Intel (excluding customs clearance charges for ex-USA locations, which charges will be paid by Customer). Intel will have a reasonable time to make repairs or to replace Product or to credit Customer's account. All warranty claims must be made within six months of the date Customer learns, or with

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reasonable diligence should have learned, of the nonconformance giving rise to the claim.

9.3 RMA Procedure. All Product returned to Intel by Customer will be in accordance with Intel’s return material authorization ("RMA") procedure referenced in Exhibit C. Intel will pay all freight charges on returned materials. Intel is responsible for (i) secure storage in a segregated facility, handling, processing and return of Product and packaged units incorporating Product, and (ii) the return (or certified destruction) of all scrap or rejects to Customer. Intel will be liable for any loss of Product received by Intel pursuant to such RMA procedure, including, but not limited to, theft, destruction, and deterioration.

9.4 WARRANTY DISCLAIMERS.

9.4.1 THE WARRANTY SET FORTH IN SECTION 9.1 IS IN LIEU OF ANY OTHER WARRANTY, WHETHER EXPRESS, IMPLIED OR STATUTORY, INCLUDING, BUT NOT LIMITED TO, ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR ANY PARTICULAR PURPOSE, OR ANY WARRANTY OTHERWISE ARISING OUT OF ANY PROPOSAL, SPECIFICATION OR SAMPLE. THERE IS ALSO NO IMPLIED WARRANTY OF NONINFRINGEMENT. INTEL NEITHER ASSUMES NOR AUTHORIZES ANY PERSON TO ASSUME FOR IT ANY OTHER LIABILITY.

9.4.2 Products are not intended for use in, and no warranty is made with respect to, applications where failure to perform can reasonably be expected to result in significant injury (including, without limitation, automatic navigation control systems, weaponry, aviation or nuclear equipment, or for surgical implant or to support or sustain life).

9.4.3 Customer is not relying on any statements or information in Intel’s literature, and Customer will test all parts and applications under extended field and laboratory conditions and to ensure reasonable margins over a range of conditions, including for warranty life and to provide guard bands extending beyond normally expected conditions as appropriate. Notwithstanding any cross-reference or statements of compatibility, functionality, interchangeability, and the like, Intel-made goods, embedded devices and processes may differ from similar goods, devices and processes from other vendors in performance, function or operation, or as to matters, ranges and conditions not stated in and/or outside the applicable Product Acceptance Specification; and Customer agrees that Intel makes no

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warranties and is not responsible for such things. To the extent that Customer obtains reusable IP from a vendor to which Customer is referred by Intel, Customer acknowledges that such referrals are made for Customer's convenience, and that Intel is not liable for the performance of such IP or the performance of such vendors. In particular, to the extent reusable IP, including but not limited to blocks, libraries, tools, and documentation therefor, is licensed to Customer by the individual IP vendors and not by Intel, Intel makes no warranty in connection with such IP. Customer is not relying on any statements or information provided by Intel in connection with such IP. Customer will fully verify all IP as appropriate and be responsible to ensure that such IP is compatible and suitable for Customer's intended purpose and applications.

9.4.4 IN NO EVENT WILL INTEL BE LIABLE FOR ANY OTHER COSTS ASSOCIATED WITH THE REPLACEMENT OR REPAIR OF PRODUCT, INCLUDING LABOR, INSTALLATIONS OR OTHER COSTS, AND IN PARTICULAR, ANY COSTS RELATING TO THE REMOVAL OR REPLACEMENT OF ANY PRODUCT SOLDERED OR OTHERWISE PERMANENTLY AFFIXED TO ANY PRINTED CIRCUIT BOARD.

9.5 Root Cause Analysis. The Parties acknowledge and agree that it is in their best interest to promptly identify and address the root cause of any repetitive failures that occur with the Products. Each Party agrees to promptly notify the other of any repetitive failures of the Products it becomes aware of, and the Parties will act in good faith to identify and address the root cause of any such repetitive failures as soon as reasonably practicable, even if such failures are identified outside of the applicable warranty period.

10. INDEMNIFICATION

10.1 Intel Intellectual Property Infringement. Intel will defend Customer and its Subsidiaries against any claim or discovery brought in any suit or proceeding against Customer or its Subsidiaries by a third party based on an allegation that any Intel Licensable Technical Collateral, Intel Provided Deliverables or the Intel manufacturing process used to manufacture a Product misappropriates a trade secret or infringes a copyright, mask work right or Patent Indemnity Jurisdiction patent (hereinafter "Intel Covered Claims"), and indemnify Customer and its Subsidiaries from and against any damages awarded or paid in settlement of any Intel Covered Claims.

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10.2 Exclusions from Intel Intellectual Property Infringement. Intel will not be liable for any costs or damages, and will not indemnify or defend Customer or its Subsidiaries, from any expenses, damages, costs or losses resulting from any Intel Covered Claim to the extent based upon a claim arising from:

10.2.1 an allegation that any Product manufactured using any Customer Provided Deliverables, without modification, infringes a copyright, trademark, trade secret, mask work or patent as a result of the use by Intel of any such Customer Provided Deliverables in the manufacture of Products;

10.2.2 the combination of the Intel Licensable Technical Collateral, Intel Provided Deliverables or Intel manufacturing process (i) with any Customer provided process, or (ii) with anything not provided or procured by Intel, if the infringement or misappropriation would not have occurred but for such combination;

10.2.3 the combination or use of Product(s) with other services or devices if the infringement or misappropriation would not have occurred but for such combination;

10.2.4 the combination or use of Product(s) with any software, or resulting from programming by Customer or any third party, if the infringement or misappropriation would not have occurred but for such combination or programming;

10.2.5 a Product’s alleged compliance with or use of memory or a memory interface compliant with a DDR standard (including but not limited to DDR, DDR2 and DDR3) or a cellular communication or wireless wide area network standard, including but not limited to any version of IEEE 802.16 (a.k.a. "Wi-MAX"), UMTS, EDGE, GPRS, GSM, CDMA, TD-SCDMA, WCDMA, HSxPA, LTE, ‘2G,’ ‘3G,’ ‘4G’ or their successors;

10.2.6 an allegation that Intel, Customer, or a Product indirectly infringes, including by inducing or contributing to another’s infringement;

10.2.7 a Product’s compliance with any media decoding, encoding, or transcoding technology (inter alia, an audio or video codec); or

10.2.8 modification of the Product by a party other than Intel after delivery by Intel if infringement or misappropriation would not have occurred but for such modification.

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10.3 In the event that any Intel Licensable Technical Collateral, Intel Provided Deliverables or Intel manufacturing process used to manufacture Products is held by a court of competent jurisdiction to constitute an infringement, or Intel’s use of such Intel Licensable Technical Collateral, Intel Provided Deliverables or manufacturing process used to manufacture Products is enjoined due to infringement, Intel will, at its sole discretion and at its own expense (i) obtain the right to continue using the Intel Licensable Technical Collateral, Intel Provided Deliverables or manufacturing process to manufacture Products, (ii) modify or replace the Intel Licensable Technical Collateral, Intel Provided Deliverables or manufacturing process so that it becomes non-infringing, or (iii) credit Customer the amounts paid by Customer to Intel for any Product(s) manufactured using the Intel Licensable Technical Collateral, Intel Provided Deliverables or manufacturing process that are affected by the claim, in which case Customer will further cease all further sale of the applicable Product(s).

10.4 Customer Indemnification.

10.4.1 Customer will defend Intel against any claim or discovery brought in any suit or proceeding against Intel by a third party based on an allegation that any Customer Provided Deliverables used to manufacture a Product misappropriates a trade secret or infringes a copyright, mask work right or Patent Indemnity Jurisdiction patent (hereinafter "Customer Covered Claims"), and indemnify Intel from and against any damages awarded or paid in settlement of any Customer Covered Claims.

10.4.2 Customer will defend Intel against any claim brought in any suit or proceeding against Intel by a third party based on Customer’s breach of Section 9.4.2, and indemnify Intel from and against any damages awarded or paid in settlement of any such suit or proceeding.

10.4.3 In the event that any Customer Provided Deliverables are held to constitute an infringement, or Intel’s use of such Customer Provided Deliverables is enjoined due to infringement, Intel will cease all infringing uses of the applicable Customer Provided Deliverables. Intel will not be deemed in breach of its supply obligations under this Agreement if Intel ceases to manufacture Products as a result of this Section 10.4.3.

10.5 Exclusions from Customer Intellectual Property Infringement. Customer will not be liable for any costs or damages, and will not indemnify or defend Intel from any expenses, damages, costs or losses resulting from any suit or proceeding based upon a claim arising from any claim

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as to which Intel owes an indemnity pursuant to this Article 10 or resulting from any Customer Covered Claim or to the extent based upon a claim arising from:

10.5.1 the combination or use of Customer Provided Deliverables with any devices or software not provided or procured by Customer if the infringement or misappropriation would not have occurred but for such combination;

10.5.2 Intel’s willful infringement of any United States patent or copyright, except to the extent such willful infringement arises from compliance with Customer’s written instructions relating to a Customer Covered Claim; or

10.5.3 modification of the Customer Provided Deliverables by a party other than Customer after delivery by Customer if infringement or misappropriation would not have occurred but for such modification.

10.6 Obligations of Indemnitee. The Party seeking indemnity ("Indemnitee") from the Party obligated to provide indemnity under Sections 10.1 or 10.4 ("Indemnitor") will (i) promptly notify Indemnitor in writing of such claim; (ii) cooperate and provide all reasonably requested authority, information and assistance to Indemnitor; and (iii) obtain Indemnitor’s written consent before incurring any costs or expenses or entering into any compromise or settlement of such claim.

10.7 Obligations of Indemnitor

10.7.1 Indemnitor may, in its sole discretion, control the defense and settlement of any action involving an indemnified claim. If Indemnitor controls defense or settlement, Indemnitee may retain its own counsel to monitor such defense or settlement, at Indemnitee’s own expense, but such Indemnitee’s counsel will not be entitled to control defense or settlement.

10.7.2 Indemnitor will pay reasonable attorneys’ and experts fees and costs incurred in the course of defense or settlement, and any damages and costs finally awarded against Indemnitee or amounts agreed by Indemnitor to be paid in settlement, for any indemnified claim only to the extent such damages and costs are awarded or such settlement is paid for the Intel Covered Claim or the Customer Covered Claim, respectively.

10.8 Exclusive Remedy. The foregoing states the entire set of obligations and remedies flowing between Customer and its Subsidiaries and Intel arising from any intellectual property claim by a third party.

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10.9 Intel and Customer will cooperate in connection with any issue raised with respect to intellectual property rights of third parties relating to Products and/or to services under this Agreement. In the event there is a finding by a court of competent jurisdiction that either Party infringed any third party patent or copyright and/or misappropriated any third party trade secrets which affects the production of Products, the other (the "Concerned Party") may, at its sole option and without liability, terminate and/or suspend ordering or production of the relevant Products, as the case may be, provided however the Concerned Party will, prior to such termination and/or suspension, provide the other a commercially reasonable opportunity to address and/or offset the risks and costswhich the Concerned Party reasonably believes it may incur but for such termination and/or suspension. In the event of a disagreement over whether the Concerned Party has provided reasonable opportunity to address and/or offset the risks and costs, the matter will be promptly escalated on each side to the highest levels of management, including, if necessary, each party's CEO, prior to any termination and/or suspension of ordering or producing of the relevant Products.

11. USE OF CONTRACTORS.

11.1 Intel will have the right to utilize individuals as on-site or off-site third-party contractors to perform the obligations hereunder; provided, however, that Intel will remain responsible for complying with its obligations hereunder and will be liable for the third-party contractors performing obligations on Intel’s behalf. Furthermore, subject to Section 8.3, Customer acknowledges and agrees that Intel may provide to such third-party contractors (whether on-site or off-site) any Customer Confidential Information necessary to perform the obligations hereunder; provided that Intel obtains executed confidentiality agreements with such third-party contractors prior to the disclosure of any such Confidential Information.

12. TERM AND TERMINATION

12.1 Term.

12.1.1 This Agreement will remain in effect for four (4) years from the Effective Date. Thereafter, this Agreement will automatically renew from year-to-year for additional one (1) year periods ("Subsequent Period(s)") unless either Party gives notice that it does not want to renew as provided in Section 12.1.2. In addition, this Agreement may be terminated prior to completion of the Initial Period or a Subsequent Period in Accordance with Section 12.2.

12.1.2 Either Party may stop the automatic renewal of this Agreement by giving at least six (6) months prior written

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notice specifying that it does not want to automatically renew the Agreement.

12.2 Termination.

12.2.1 Either Party may terminate this Agreement if the other Party: (a) materially breaches this Agreement and fails to cure the same within ninety (90) calendar days after receipt of written notice from the terminating Party but subject to the dispute resolution procedure as set forth in Section 12.4; (b) files or has filed against it a petition in bankruptcy; or (c) has a receiver appointed to handle its assets or affairs.

12.3 Survival of Provisions. The following provisions of this Agreement will survive its termination or expiration: Article 1 (Definitions), and Articles 4 (Production Period), 5 (Price & Payment), 6 (Production Support), 7 (Ownership), 8 (Confidentiality), 9 (Warranty),10 (Indemnification), 11 (Use of Contractors) 12 (Term and Termination), 13 (Limitation of Liability), 14 (General Terms), Exhibits A through E ,and any Product Attachment(s) in effect as of the termination or expiration, and Articles 2 (Overview) and 3 (Intel Licensable Technical Collateral) to the extent they pertain to such Product Attachment(s).

12.4 Dispute Resolution. Any dispute, other than those pursuant to Section 4.1, arising directly under the express terms of this Agreement or the grounds for termination of any rights granted under this Agreement will be resolved as follows: First, within fifteen (15) calendar days from one Party’s written request to the other, senior executives of both Parties will meet to attempt to resolve such dispute. If the senior executives cannot resolve the dispute, either Party may then make a written demand for formal dispute resolution by tendering to the other Party notice of the dispute and its intent to invoke the terms of this Section 12.4. The Parties agree to meet within thirty (30) calendar days of such a demand with an impartial mediator selected by agreement to participate in a one-day, non-binding mediation. In the event the Parties cannot agree on a mediator, they will each select one nominator, who will not at that time be employed by either Party, and the two nominators will agree on and appoint the mediator. If the Parties have not resolved the dispute or claim within fifteen (15) calendar days after the one-day, non-binding mediation, either Party may begin litigation proceedings. Nothing in this Section 12.4 will limit the right of either Party to seek an injunction or other equitable relief in any court of competent jurisdiction.

12.5 Governing Law. All matters arising out of or related to this Agreement, including without limitation all matters connected with its performance, will be construed, interpreted, applied and governed in all respects in

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accordance with the laws of the United States of America and the State of New York without reference to conflict of laws principles and without application of the United Nations Convention on the International Sale of Goods.

12.6 Jurisdiction. All disputes and litigation arising out of or related to this Agreement, including without limitation matters connected with its performance, will be subject to the exclusive jurisdiction of the courts of the State of New York or of the Federal courts sitting therein. Each Party hereby irrevocably submits to the personal jurisdiction of such courts and irrevocably waives all objections to such venue. No action or proceeding (except for payment for delivered Products) may be commenced by either Party against the other, whether for breach, indemnification, contribution or otherwise, more than three (3) years after the claiming Party knew, or with reasonable diligence ought to have known, of the facts underlying such claim. No claim may be brought unless the non-claiming Party has first been given commercially reasonable notice, a full written explanation of all pertinent details (including copies of all materials), and a good faith opportunity to resolve the matter.

13. LIMITATION OF LIABILITY

13.1 DISCLAIMER. EXCEPT AS EXPRESSLY STATED IN THIS AGREEMENT, ALL TECHNOLOGY (AND ALL INTELLECTUAL PROPERTY THEREIN) IS PROVIDED TO THE OTHER PARTY "AS IS." NEITHER PARTY MAKES ANY ADDITIONAL WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, ARISING FROM COURSE OF DEALING OR USAGE OF TRADE. IN PARTICULAR, ANY AND ALL WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND NON-INFRINGEMENT ARE HEREBY EXPRESSLY DISCLAIMED. ALSO, EXCEPT AS EXPRESSLY STATED IN THIS AGREEMENT, THERE IS NO WARRANTY OR CONDITION OF TITLE, QUIET ENJOYMENT, QUIET POSSESSION, OR CORRESPONDENCE TO DESCRIPTION WITH REGARD TO TECHNOLOGY PROVIDED BY EITHER PARTY.

13.2 LIMITATION OF LIABILITY. EXCEPT FOR (A) LIABILITY FOR AMOUNTS COMPRISING A JUDGMENT OR SETTLEMENT PAID TO A THIRD PARTY AND LEGAL FEES AND COSTS PURSUANT TO ARTICLE 10 IN CONNECTION WITH AN INTEL COVERED CLAIM OR CUSTOMER COVERED CLAIM; (B) INFRINGEMENT OR MISAPPROPRIATION OF A PARTY’S INTELLECTUAL PROPERTY RIGHTS; (C) A BREACH OF THE OBLIGATIONS OF CONFIDENTIALITY SET FORTH IN ARTICLE 8 (CONFIDENTIALITY); OR (D) INTEL’S LIABILITY PURSUANT TO SECTION 4.7.6.4; IN NO EVENT WILL EITHER PARTY HAVE ANY LIABILITY TO THE OTHER

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PARTY, END USERS OR ANY OTHER THIRD PARTY, FOR ANY LOST PROFITS OR COSTS OF PROCUREMENT OF SUBSTITUTE GOODS OR SERVICES, OR FOR ANY INDIRECT, ENHANCED, SPECIAL, EXEMPLARY, PUNITIVE, OR CONSEQUENTIAL DAMAGES ARISING OUT OF THIS AGREEMENT, UNDER ANY CAUSE OF ACTION OR THEORY OF LIABILITY, AND WHETHER OR NOT SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGE. THESE LIMITATIONS WILL APPLY NOTWITHSTANDING THE FAILURE OF THE ESSENTIAL PURPOSE OF ANY LIMITED REMEDY. IN ADDITION, NEITHER PARTY WILL BE LIABLE FOR: (i) AMOUNTS ASSESSED OR AWARDED ON THE VALUE OF SERVICES OR AN ASSEMBLY OF PRODUCTS, DEVICES OR COMPONENTS THAT INCLUDES A PRODUCT, SUBJECT TO A CLAIM UNDER ARTICLE 10 , WHERE THAT CLAIM INCLUDES A DEMAND FOR DAMAGES ASSOCIATED WITH THE ENTIRE ASSEMBLY (E.G., DAMAGES BASED UPON THE "ENTIRE MARKET VALUE" RULE); OR (ii) AMOUNTS ASSESSED OR AWARDED BASED ON THE VALUE OR SALES PRICE OF ANY PRODUCTS, DEVICES, COMPONENTS OR SERVICES OTHER THAN A PRODUCT INDEMNIFIED UNDER THIS AGREEMENT, WHEN AN ASSESSMENT OR AWARD INCLUDES AN ALLEGATION THAT THOSE OTHER ITEMS WOULD HAVE BEEN SOLD TOGETHER WITH, OR AS SPARE PARTS SOLD FOR, A PRODUCT SUBJECT TO A CLAIM UNDER ARTICLE 10 (E.G., "CONVOYED SALES" OR "DERIVATIVE SALES").

13.3 EXCEPT FOR (A) LIABILITY FOR AMOUNTS COMPRISING A JUDGMENT OR SETTLEMENT PAID TO A THIRD PARTY AND LEGAL FEES AND COSTS PURSUANT TO ARTICLE 10 IN CONNECTION WITH AN INTEL COVERED CLAIM OR CUSTOMER COVERED CLAIM; (B) INFRINGEMENT OR MISAPPROPRIATION OF A PARTY’S INTELLECTUAL PROPERTY RIGHTS; (C) A BREACH OF THE OBLIGATIONS OF CONFIDENTIALITY SET FORTH IN ARTICLE 8 (CONFIDENTIALITY); (D) INTEL'S INDEMNITY OBLIGATIONS ARISING FROM ASSERTED INFRINGEMENT BY THIRD PARTY INTELLECTUAL PROPERTY SUBLICENSED BY INTEL TO CUSTOMER, AS TO WHICH INTEL'S LIABILITY WILL BE LIMITED TO BE COEXTENSIVE WITH AMOUNTS RECOVERABLE BY INTEL PURSUANT TO SUCH THIRD PARTY'S INDEMNIFICATION OBLIGATIONS TO INTEL; (E) INTEL'S LIABILITY PURSUANT TO SECTION 4.7.5.6, AS TO WHICH INTEL'S LIABILITY WILL BE LIMITED TO A CUMULATIVE ^[*****]; OR (F) INTEL’S LIABILITY PURSUANT TO SECTION 4.7.6.4, IN NO EVENT WILL EITHER PARTY’S TOTAL CUMULATIVE LIABILITY FOR CLAIMS OR CAUSES

^{________________________________________} 

^[*****] Confidential portions of this document have been redacted and filed separately with the Securities and Exchange Commission.

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ARISING OUT OF THIS AGREEMENT OR THE TRANSACTION CONTEMPLATED THEREBY, EXCEED THE SUM PAID OR PAYABLE TO INTEL BY CUSTOMER DURING THE ^[*****] PERIOD IMMEDIATELY PRECEDING THE TENDER OF THE CLAIM FOR PRODUCTS MANUFACTURED FOR OR DELIVERED TO CUSTOMER UNDER THIS AGREEMENT. THE EXISTENCE OF MORE THAN ONE CLAIM AGAINST THE PARTICULAR PRODUCTS MANUFACTURED FOR OR DELIVERED TO CUSTOMER UNDER THIS AGREEMENT WILL NOT ENLARGE OR EXTEND THIS LIMIT.

13.4 Essential Element. THE PARTIES UNDERSTAND AND AGREE THAT THE FOREGOING LIABILITY LIMITATIONS ARE ESSENTIAL ELEMENTS OF THIS AGREEMENT AND THAT IN THE ABSENCE OF SUCH LIMITATIONS THE MATERIAL AND ECONOMIC TERMS OF THIS AGREEMENT WOULD BE SUBSTANTIALLY DIFFERENT.

13.5 REGARDLESS OF CAUSE OR REASON FOR DAMAGE (WHETHER ACCIDENT, NEGLIGENCE, OR OTHERWISE) INTEL WILL HAVE NO LIABILITY (DIRECT, CONSEQUENTIAL OR OTHER) FOR, IN CONNECTION WITH OR ARISING FROM TANGIBLE PROPERTY FURNISHED FOR USE AT OR LEFT AT INTEL; and, by delivering or entrusting property to Intel, Customer expressly confirms this limitation. Notwithstanding this limitation, Intel will replace, or pay the reasonable retooling costs to replace Customer-owned tangible property and masks damaged or destroyed as a result of Intel’s negligence or fault.

13.6 To the extent a judgment paid to a third party pursuant to Article 10 in connection with an Intel Covered Claim or Customer Covered Claim includes increased damages resulting from a finding of willful infringement of any United States patent or copyright, except to the extent such willful infringement arises from compliance with the applicable Indemnitor’s written instructions relating to an Intel Covered Claim or Customer Covered Claim, as applicable, the Indemnitor will have no liability with respect to the amount of such increase, provided the Indemnitor shall remain liable for the original amount of such damages.

14. GENERAL TERMS

14.1 Publicity.

14.1.1 Obligations Regarding Agreement Information. Agreement Information (as defined below) may not be disclosed by any

^{________________________________________} 

^[*****] Confidential portions of this document have been redacted and filed separately with the Securities and Exchange Commission.

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Party hereto to any third party, including, without limitation, the Securities and Exchange Commission or any other governmental authority or regulatory body, except in accordance with the provisions set forth below. For purposes of this Agreement, the term "Agreement Information" refers to the following items: (i) the existence of this Agreement, (ii) the terms and provisions of this Agreement, and (iii) agreements which are adjunct or ancillary to this Agreement, or which incorporate this section of this Agreement by reference.

14.1.2 Prohibition on Announcements and Other Disclosures. No announcement or other disclosure (including, without limitation, any filing with any governmental authority or regulatory body) regarding any Agreement Information will be made in a press release, conference, advertisement, announcement, professional or trade publication, mass marketing materials, private placement memorandum, offering circular, prospectus, registration statement, filing, notice or otherwise without the prior written consent of each of the parties hereto.

14.1.3 Permitted Disclosures. Notwithstanding the foregoing, (i) any Party may disclose any of the Agreement Information to its senior management, employees and individual contractors, investment bankers, lenders, accountants and attorneys, in each case only where such persons or entities have a reasonable need to know such information and are under appropriate nondisclosure obligations (with the disclosing Party being responsible for any failure of any person to whom the disclosing Party discloses Agreement Information to comply with the provisions of this Section).

14.1.4 Legally Compelled Disclosure. In the event that Customer is requested or is legally required or becomes legally compelled by any governmental authority or regulatory body (including, without limitation, the Securities and Exchange Commission) or by statute or regulation or by oral questions, interrogatories, requests for information or documents, subpoena, criminal or civil investigative demand or similar process, including, without limitation, in connection with any public or private offering of the Company’s capital stock to disclose any Agreement Information, Customer will provide Intel with prompt written notice of that fact before such disclosure and will use its reasonable efforts to fully cooperate with Intel to seek a protective order, confidential treatment or other appropriate remedy with respect to the disclosure. In the event of any disclosure, Customer will disclose only that

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portion of the Agreement Information that Customer is legally required to disclose and shall exercise its reasonable efforts to obtain confidential treatment for such information to the extent requested by Intel and to the maximum extent possible under law. Customer agrees that it will provide Intel with drafts of the disclosing materials in which Customer desires to disclose Agreement Information under this subsection 14.1.4 at least five (5) business days prior to disclosure thereof (to the extent such advance notice is legally permissible), and that it will consider any changes to such materials as requested by Intel to the extent permitted by law.

14.1.5 Repetitive Disclosures. To the extent any Agreement Information is publicly disclosed without breach of this Agreement, each Party shall be free to make additional disclosures of such already publicly disclosed Agreement Information without having to comply with the procedures in subsection 14.1.4 with respect to such additional disclosures.

14.2 Force Majeure. The Parties hereto will not be liable for any failure to perform due to unforeseen circumstances or causes beyond that Party’s reasonable control, for a period not to exceed ninety calendar days. Examples of such causes include, but are not limited to, acts of God, war, riot, terrorist acts, embargoes, acts of civil or military authority, fire, flood, accidents, earthquakes or shortages of transportation facilities, fuel or materials which cannot be reasonably replaced from other sources. If the services are to be delayed by such contingencies for more than ninety calendar days, Intel will immediately notify Customer in writing and Customer may, (i) extend time of performance, or (ii) terminate the uncompleted portion of the Order at an agreed upon cost to Customer.

14.3 No Partnership/Joint Venture. Performance by the Parties under this Agreement will be as independent contractors. Nothing contained herein or done under the terms of this Agreement will constitute the Parties entering upon a joint venture or partnership, or will constitute either Party as the agent of the other Party for any purpose.

14.4 Assignment. Intel may assign, in whole, or delegate its rights and/or obligations, or any part of such obligations, under this Agreement to any or all of its wholly-owned Subsidiaries, provided Intel shall remain liable hereunder notwithstanding any such assignment or delegation. Otherwise, neither Party may assign any rights or delegate any duties under this Agreement whether by contract, merger, operation of law or otherwise without the prior written approval of the other Party. Any attempt to assign any rights, duties or obligations hereunder without the

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other Party’s written consent will be a material breach of this Agreement and will be null and void.

14.5 Trademarks. Neither Party has any right to use any trademark, logo, trade name or other identifying mark of the other Party, provided however that Intel may, as instructed by Customer, affix Customer’s trademarks, logos, trade names and other identifying marks to Products.

14.6 Merger, Modification, Waiver. Failure by either Party to insist in any instance upon strict conformance to any term or condition herein, or failure by any Party to act in the event of a breach or default, will not be construed as a consent to or a waiver of that breach or default or any subsequent breach or default of the same or of any other term or condition contained herein.

14.7 Notices. All Notices and requests required under this Agreement will be in writing and will be deemed given if personally delivered by hand or Federal Express or other overnight service having international operations or five calendar days after being mailed postage prepaid, certified or registered mail, to:

INTEL CORPORATION

2200 Mission College Blvd.

Santa Clara, CA 95054

Attn.: Office of The General Counsel

Mailstop: SC4-203

ALTERA CORPORATION

101 Innovation Drive

San Jose, CA 95134

Attn.: Office of the General Counsel

ALTERA INTERNATIONAL INC.

c/o Altera Corporation (M) Sdn Bhd (Foreign Subsidiary of Altera Corporation)

6, Bayan Lepas Technoplex

Medan Bayan Lepas, 11900

Penang, Malaysia

14.8 Severability. If any provision or provisions of this Agreement will become or be held to be invalid, illegal or unenforceable, the validity, legality or enforceability of the remaining provisions will in no way be

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affected or impaired thereby; provided, however, that if such holding substantially alters the terms and conditions of this Agreement, the Parties agree to negotiate a provision to be substituted for the eliminated provision which will, as close as possible, have the economic effect of the eliminated provision.

14.9 Order of Precedence.

14.9.1 Orders for manufacture of Product placed by Customer during the term of this Agreement will be governed by and subject to only the terms and conditions of this Agreement and applicable Orders. If any inconsistency or conflict should arise between this Agreement and the applicable Orders or exhibits or attachments, the order of precedence in resolving such inconsistency or conflict will be (from highest to lowest):

14.9.1.1 Exhibit F (Supplemental Terms).

14.9.1.2 Section 13 of this Agreement.

14.9.1.3 Sections 4.7.5 and 4.7.6 of this Agreement.

14.9.1.4 Product Attachments.

14.9.1.5 Amendments to this Agreement.

14.9.1.6 This Agreement (excluding Sections 4.7.5 and 4.7.6) including Exhibits A-E.

14.9.1.7 Orders.

14.9.2 Notwithstanding the foregoing, the Parties agree that the terms and conditions on Customer’s Orders and/or the terms and conditions on Intel’s Order acknowledgment forms, and on any other routine Order-related documentation will not apply, except for those items described in Section 4.3.3.

14.9.3 It is expressly agreed that any lack of reference to this Agreement on any Order issued by Customer will not affect the applicability of this Agreement to such Order.

14.10 Entire Agreement. This Agreement and Exhibits A-F and the Product Attachments which are hereby incorporated by reference, constitute the entire Agreement between the Parties with respect to the subject matter hereof, merge all prior and contemporaneous Agreements and negotiations, and may only be modified in a writing signed by authorized representatives of the Parties.

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SIGNATURE PAGE NEXT PAGE

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AGREED TO:
INTEL CORPORATION	ALTERA CORPORATION
/s/ Sunit Rikhi	/s/ William Y. Hata
Signature	Signature
Sunit Rikhi	William Y. Hata
Printed Name	Printed Name
Vice President, ICF	Senior Vice President
Title	Title
04/01/2013	04/01/2013
Date	Date
	ALTERA INTERNATIONAL INC
	/s/ Katherine Schuelke
	Signature
	Katherine Schuelke
	Printed Name
	Secretary
	Title
	04/01/2013
	Date

SIGNATURE PAGE TO

AMENDED AND RESTATED FOUNDRY AND MANUFACTURING CUSTOMER AGREEMENT

List of Exhibits

Exhibit A – Customer/Intel Acceptance Specification Outline

Exhibit B – Shipping Terms

Exhibit C - Intel’s Return Material Authorization Procedure

Exhibit D – Additional Terms and Conditions

Exhibit E- Green Badge Requirements

Exhibit F- Supplemental Terms

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EXHIBIT A

Customer/Intel Acceptance Specification Outline

Product: _______________________________________________

(This will become a Rev 0 Specification when content is defined, agreed and signed by the two parties before any Delivery by Intel)

ORIGINATOR:

APPROVER:

Effective Date: Revision History: TBD (before first Production shipments) Expiration Date: Renew every 2 years

1.0 PURPOSE/SCOPE of ACCEPTANCE SPECIFICATION

1.1 Purpose of Acceptance Specification:

1.1.1 To define the acceptance requirements that will be satisfied by Intel, for Die Product or Finished Product purchased under the Customer/Intel manufacturing agreement.

1.1.2 To define procedures and requirements for traceability, packing, labeling, and shipping Product to Customer or its subcontractors.     

1.2 Scope:

1.2.1 The Acceptance Specification will apply to all part numbers manufactured by Intel and sold to Customer in Die Product or Finished Product under the Customer/Intel manufacturing agreement.

2.0 KEY RESULTS from ACCEPTANCE SPECIFICATION:

2.1 Ensure that all manufacturing performed by Intel of Products for shipment to Customer or its subcontractors, meets applicable quality and reliability requirements.

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2.2 Ensure that all materials are packed, shipped, and managed by Intel in a manner that is compatible with methods in use at Customer.

3.0 REFERENCE DOCUMENTS:

3.1 Intel Quality Management System Overview.

This system provides details on Intel’s Manufacturing Process Control Systems, Process Qualification Document, Change Control System and Discrepant Material handling methodology. Presentations to explain this system will be shared when requested by Customer

3.2 Wafer and Assembly Acceptance Criteria

Wafer Acceptance Criteria will define list of E-test parameters, their pass/fail criteria that will be shared with Customer.

3.3 Intel Outgoing Final Visual Inspection Criteria

3.4 Package Marking or shipping logistics

4.0 REQUIREMENTS:

Details of the following will be defined in a separate document by Intel before Production commences, which will be deemed to have been made a part of the Acceptance Specification. Yield acceptance criteria will become applicable after mutually agreed, minimum Wafer volume shipments have been met.

4.1 Wafer Acceptance Criterion

4.2 Outgoing Final Visual Inspection Criteria.

Details of the following will be defined jointly before Production shipments commence.

4.3 Quality Requirements:

4.3.1 Conformance to Product and Quality Specifications as reflected in Final Test data based on agreed test plan

4.4 Term Definitions:

4.4.1 List and definition of relevant Intel and Customer terms used in packing, labeling and shipping logistics

4.5 Packing And Label Requirements:

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4.5.1 Agreements on Customer requirements on packing of inner boxes (e.g. Tape and Reel), intermediate boxes and outer boxes will be documented.

4.5.2 Intel uses ILABEL software for labeling. Agreement on specific bar-coding or other labeling of inner, intermediate packages and outer shipping cartons to meet customer requirements will be documented.

4.5.3 Any specific packing and labeling procedures that need to be agreed upon between Intel and Customer

4.6 Traceability Requirements:

4.6.1 Agreed Traceability requirements via lot code, date code, product code and unit level coding will be documented.

4.7 Paperwork Requirements:

4.7.1 Agreed Packing list, Ship Alert and other paperwork requirements

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EXHIBIT BSHIPPING TERMS

I. Incoterms: The trade terms used in this Exhibit B will have the meaning given to such terms in the International Chamber of Commerce Incoterms 2000.

II. The trade terms will be F.C.A. (Incoterms 2000) with title transferring over the high seas prior to entry at the port of disembarkation. The Parties may on occasion agree to revise the INCOTERMS and delivery locations, in all instances taking due account of Customer’s business requirements with respect to passage of title and risk of loss or damage.

III. Customer will pay all taxes, duties, shipping, insurance, and handling charges after the Delivery point.

IV. Intel will be the exporter of record on all shipments of Products, provided, however, that Customer must first provide Intel with background classification information (ECCN) for all Customer Provided Deliverables that are used in connection with the design and/or manufacture of Products, and assist as necessary in collaboration with Intel in establishing the ECCN for each Product. Delivery will not occur until Intel has obtained any export license or other official authorization necessary for export of Products. Intel will pay all relevant export duties, including surcharges, taxes, or the like levied by the (origin country) government or its agency.

V. The terms of this Exhibit B will be subject to acquisition of any necessary export license or permit from the (origin country) government or its agency. Should such export license or permit be refused, Customer will have the right to cancel, and reissue Orders.

VI. Customer will be responsible for obtaining an import license and other governmental approval or permit required in the country to which the Products are imported.

VII. Other than for WIP, which Customer authorizes Intel to manage and ship to and from Intel and its contracted manufacturing sites, for product manufactured outside the United States Customs Territory and imported into the United States, the Party responsible for importing, clearing through U.S. customs, and acting as importer of record will be Customer.

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EXHIBIT C    Intel's Return Material Authorization Procedure

Within the applicable warranty period, if a Product does not meet the warranty set forth in Section 9.1 of the Agreement, the Product may be returned to Intel to perform Failure Analysis Correlation Requested (FACR), provided that the customer promptly notifies Intel in writing that such Product is nonconforming and furnishes an explanation of the deficiency.

Intel will request a quantity of the affected material to be submitted first for FACR and failure analysis, with customer support to verify the Product is nonconforming.  Customer will provide adequate fault isolation support to assist Intel with physical failure analysis (FA). If the FACR process finds the product to be nonconforming and concludes the failure root cause is subject to the warranty set forth in Section 9.1 of the Agreement, Intel will provide customer with a Return Material Authorization (RMA) number. Transportation charges for the return of Product to Intel will be paid by Intel. Upon receipt of defective material at Intel’s RMA warehouse, Intel will have a reasonable time (not to exceed three (3) business days) to elect the applicable remedy set forth in Section 9.2 of the Agreement.

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EXHIBIT DAdditional Terms and Conditions

1. Pursuant to Section 3.1 of the Agreement, Customer agrees, with respect to third party technical collateral identified in this Exhibit ("Intel Licensable Technical Collateral"), that the terms of this Exhibit D (and any sub-exhibits D.X) will control.

2. Customer acknowledges and agrees that Intel Licensable Technical Collateral may contain trade secrets and other proprietary information of Intel and Intel licensors. In order to protect those trade secrets and other proprietary information, Customer agrees that, except as expressly permitted under applicable law, it will not make any attempt to modify or to derive the underlying source code of the Intel Licensable Technical Collateral nor authorize any third party to do so. Customer acknowledges and agrees that the Intel Licensable Technical Collateral and/or certain output generated through use of the Intel Licensable Technical Collateral licensed hereunder may contain information that complies with the Virtual Component Identification Physical Tagging Standard (VCID) as maintained by the Virtual Socket Interface Alliance (VSIA), and agrees not to alter, delete, or change any such information.

3. Customer disclaims liability of the Intel licensors with respect to any claim arising from Customer's exercise of its rights under this Exhibit D, or arising from the Intel Licensable Technical Collateral, and agrees that it will pursue only Intel, and not the Intel licensors, with respect to any such claim, whether based on breach of contract, tort (including negligence), product liability, infringement of intellectual property rights or otherwise, and whether or not the licensor(s) involved have been advised of the possibility of damage to Customer or such damage were reasonably foreseeable. Intel agrees to accept responsibility and liability for claims arising from the Intel Licensable Technical Collateral. For purposes of this paragraph only, the Intel licensors will be deemed third party beneficiaries of this Agreement.

4. Intel's liability, and the limitations thereof, with respect to the Intel Licensable Technical Collateral will be as set forth in the Agreement, as the terms of the Agreement pertain to Intel Licensable Technical Collateral.

5. The parties acknowledge that requirements and conditions in addition to or different from those in this Exhibit may apply to particular technical collateral, and agree that such requirements and conditions will be addressed on a case-by-case basis as they arise and will be incorporated into a sub-exhibit (numbered D.X) to this Exhibit as needed.

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EXHIBIT EGreen Badge

As preconditions to enabling certain employees of Customer to be admitted to enter, and utilize resources on, Intel premises, and with respect to all employees of Customer as to whom access to Intel's premises is sought:

1. Customer will comply with all employment and labor laws, and must provide its employees with legal right to work in the country in which they are working.

2. Customer will comply with all applicable laws regarding non-discrimination in terms and conditions of employment, payment of minimum wage and legally mandated employee benefits and compliance with mandated work hours. Customer will comply with all applicable laws regarding employment of underage or child labor and will not employ children under the age of 16. Customer represents and agrees that it is in compliance with Executive Order 11246 and implementing Equal Opportunity regulations, the Vietnam Era Veterans’ Readjustment Assistance Act as amended by the Veterans Employment Opportunities Act of 1998 (to include Vietnam-era Veterans and other Veterans who served on active duty during a war or campaign or expedition for which a campaign badge has been authorized), and the Immigration Act of 1987, unless exempted or inapplicable. Customer agrees that Customer employees that are green badged by Intel will fully comply with Intel’s Code of Conduct and EICC policy as set forth at Customer.intel.com.

3. Customer will make all deductions for taxes, worker’s compensation, and other deductions from income as required by any applicable tax code or law, or any other governmental tax laws, and will make all such payments to the applicable authority.

4. Neither Customer nor any of its Subsidiaries will export/re-export any technical data, process, product, or service, directly or indirectly (including the release of controlled technology to foreign nationals from controlled countries), to any country for which the United States government or any agency thereof requires an export license or other government approval without first obtaining such license.

5. For employees in the U.S., Customer agrees not to designate foreign nationals (non U.S. citizens or U.S. permanent residents) for work on any Intel site unless that foreign national is covered under a valid U.S. Export License or is not exposed to controlled technology. Additionally, for employees outside of the U.S., Customer agrees not to designate foreign nationals for work on any Intel site unless that foreign national is a citizen or permanent resident of the country of that Intel site or the foreign national is covered under a valid U.S. Export Authorization or the foreign national is not exposed to controlled technology or the foreign national does not require a valid U.S. Export License.

6. It is a requirement of this Agreement that the Customer will be responsible for

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obtaining all such approvals, authorizations, permits and licenses and will indemnify and hold Intel harmless from any failure to comply with such requirement.

7. Customer acknowledges and agrees that neither Customer nor any of Customer’s employees are entitled to participate in any of Intel’s benefit plans, including but not limited to stock option plans, stock participation plans, profit sharing, retirement or pension plan contributions or savings or medical plans.

8. Customer is independent of Intel, and its personnel and other representatives will not act as nor be agents or employees of Intel. Customer will have complete charge and responsibility for personnel employed by Customer; however, Intel reserves the right to instruct Customer to remove from Intel's premises immediately any of Customer's personnel who are in breach of this contract.

9. Subject to the procedures set forth in Sections 10.6 and 10.7 of the Agreement, Customer will, to the fullest extent permitted by law, protect, defend, indemnify, and hold Intel harmless from and against any and all claims, liabilities, demands, penalties, forfeitures, suits, judgments, and the associated costs and expenses (including attorney’s fees), which Intel may hereafter incur, become responsible for, or pay out as a result of: death or personal injury (including bodily injury) to any person, destruction or damage to any property, contamination of or adverse effects on the environment, and any clean up costs in connection therewith, or any violation of law, governmental regulation or orders, to the extent caused by (i) Customer’s breach of any term or provision of this Addendum; or ii) any negligent acts, errors, or omissions or willful misconduct by Customer, its employees, officers, agents, representatives, or subcontractors while on Intel premises.

10. The foregoing indemnity will include any claim made or threatened, whether by legal proceedings or otherwise, against Intel by a third party on the grounds that any person designated by Customer for work on Intel premises is or was deemed to be an employee of Intel. Customer further agrees that if Intel is required by law or otherwise to include Customer or any of Customer’s employees in any of Intel’s benefit plans or provide severance benefits under law, Customer will reimburse Intel for the actual amount required to be paid, or the fair market value of any benefit received by Customer or Customer’s employees arising from work performed under this Agreement.

11. Without limiting or qualifying Customer's liabilities, obligations, or indemnities otherwise assumed by Customer pursuant to this Addendum, Customer will maintain, at its sole cost and expense, commercial general liability insurance with a limit of liability not less than $1,000,000.00 per occurrence and including liability coverage for bodily injury or property damage (1) assumed in a contract or agreement pertaining to Customer's business and (2) arising out of Customer's activities. Customer's insurance will be primary, and any applicable insurance maintained by Intel will be excess and non-contributing. The above

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coverages will name Intel as additional insured. Customer will also maintain statutory workers' compensation coverage, including a broad form all states endorsement in the amount required by law, and employers' liability insurance in the amount of $1,000,000.00 per occurrence. Such insurance will include an insurer's waiver of subrogation in favor of Intel.

12. Customers who assign employees to Intel’s premises are responsible for complying with Intel’s global contingent workforce policy. This includes but is not limited to adhering to requirements for site and network access and complying with all relevant restrictions on placement at Intel, which includes waiting periods to satisfy workforce stabilization guidelines and adherence to the 12 month rule (or as otherwise advised) for staff augmentation workers. All of the guidelines are found on supplier.intel.com under CW Supplier Policy.

13. Intel is committed to fulfilling its legal and ethical responsibility to maintain a safe and efficient working environment on Intel premises. Customer will actively support Intel’s objective to provide "risk free" and "drug free" environment for at Intel. Customer will comply with Intel’s drug free work place directive as outlined in the contingent workforce policy on supplier.intel.com.

14. Customer confirms that, to the best of its knowledge and efforts, all Customer employees set to perform work, or already performing work, if so permitted, at an Intel facility have met all Intel site access and security standards, including, but not limited to cooperation with access paperwork and completion of any required Intel orientation, and that Customer has or will perform all relevant screening requirements. Customer will contact the local badging office or reference the contingent workforce Customer policy at supplier.intel.com for details, prior to assigning employees to positions requiring on-site access.

15. Intentionally Omitted

16. Customer is responsible for ensuring that Customer and all of its employees designated to work at Intel premises comply with all Intel access and security requirements, including but not limited to cooperation with access paperwork, relevant screening requirements, and completion of any required orientation required by Intel. Customer should refer to local badging office and the contingent workforce Customer policy at supplier.intel.com for details.

17. Satisfaction of the foregoing preconditions does not guarantee that employees of Customer, or any particular employee, will be admitted to enter, nor utilize resources on, Intel premises.

18. Use of Intel resources on Intel premises, unless otherwise agreed in writing, will be for the limited purposes identified in one or more Product Attachments, to further the project described in the applicable Product Attachment, and solely in connection with:

18.1 Verification of tool flow; and

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18.2 Testing customer product database through Intel approved EDA tool flow for customer design learning for product manufacturability and reliability.

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EXHIBIT FSupplemental Terms

1. Intel agrees that it will not produce or sell Intel-branded Standalone PLDs (as defined below), nor invest in or acquire any companies whose principal business is the sale of programmable logic devices (“PLD Companies”), for a ^[*****] of the Agreement or until [*****], whichever is earlier. For clarity, this paragraph 1 of this Exhibit F is not intended to prohibit Intel from investing in investment vehicles (e.g., mutual funds, exchange traded funds) that own securities in PLD Companies solely for purposes of financial investing where such investment vehicles do not participate in any way in the management or operation of such PLD Companies. As used in this exhibit, “PLD” or “programmable logic device” means an integrated circuit that derives its value primarily due to its field programmability and contains field programmable functions such as digital logic, an interconnect fabric, IOs, and other complex IP blocks. As used in this paragraph, "Standalone PLD" is a PLD which is neither bonded with one or more other die performing material and substantial complex logic functions, nor specifically designed to be sold or to work in conjunction with another specific die performing material and substantial logic functions.

2. Customer agrees, during the term of the Agreement, to evaluate Intel foundry services for all Wafer foundry, [*****] for PLDs to be manufactured utilizing technology nodes smaller than 20 nanometers (“<20nm”) and, [*****] Intel is [*****]. If Customer desires to manufacture a PLD utilizing a <20nm technology node, Customer will provide to Intel a notice describing Customer’s technological, scheduling, financial, anticipated volume, and commercial requirements for such PLD and describing the attributes of the Product Family for such PLD (“PLD Manufacturing Notice”). [*****] with respect to such PLD, and Customer will promptly respond to Intel's requests for information reasonably required to enable Intel to make its determination. Intel will make every effort to provide its determination to Customer as promptly as is practicable under the circumstances. In the event of a disagreement over whether Intel has been provided a reasonable time to make its determination, the matter will be promptly escalated on each side to the highest levels of management, including, if necessary, each party's CEO. This [*****] upon delivery by Intel of written notice (“PLD Manufacturing [*****]”) prior to the expiration of the [*****]. Following delivery of the PLD Manufacturing [*****], Intel and Customer will begin design and manufacturing evaluations for such PLD and will negotiate in good faith the terms of the Product Attachment for such PLD, which Product Attachment will include terms reflecting Customer’s technological, financial and commercial requirements for such PLD. If, after a reasonable period of time following Intel’s provision of the PLD Manufacturing [*****], Customer determines, in its sole reasonable discretion, that Intel is [*****]. If the PLD Manufacturing [*****] is not given within the time permitted by this paragraph, Customer will be [*****].

^{________________________________________} 

^[*****] Confidential portions of this document have been redacted and filed separately with the Securities and Exchange Commission.

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3. During the term of the Agreement, Intel agrees not to provide foundry services for the manufacture of PLDs in technology nodes of ^[*****] and smaller: (a) to [*****] nor to entities that acquire [*****] unless, in either case, such [*****] are [*****] of Intel as of the Effective Date of the Agreement (“[*****]”) (as to whom Intel will [*****] for any technology node smaller than [*****] nanometers for [*****]until at least [*****]after the date the [*****] for that node was made [*****]); or (b) to [*****] that, after the termination of Intel’s obligations pursuant to paragraph 1 of this Exhibit F, become [*****] as a result of [*****] with or [*****] by [*****].

4. If an [*****] is [*****] by a company, then, during the term of the Agreement, Intel will [*****] accept for [*****] any [*****] for such [*****] or the [*****] company other than those specific [*****] as to which Intel is [*****] to [*****] as of the date of the [*****].

5. Intel and Customer may, by written agreement on an IP-by-IP basis, place restrictions on Intel’s right to provide Intel-owned design IP to other PLD Companies, when that IP is developed specifically to support Customer’s 14 nanometer [*****]. Any such agreement will be entered into prior to commencement of development of the IP involved.

6. Intel will have no obligation to comply with its agreements pursuant to paragraphs 1, 3, 4, or 5 (including agreements entered into pursuant to paragraph 5) of this Exhibit F if and when Customer [*****]. Intel’s rights under this paragraph 6 of this Exhibit F are Intel’s sole remedy in the event [*****].

^{________________________________________} 

^[*****] Confidential portions of this document have been redacted and filed separately with the Securities and Exchange Commission.

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EX-31.1

EXHIBIT 31.1

ALTERA CORPORATION

CERTIFICATION

I, John P. Daane, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Altera Corporation;

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

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

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

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

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

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

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

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of 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: April 26, 2013

	/s/ JOHN P. DAANE
	John P. Daane
Chief Executive Officer	Chief Executive Officer

EX-31.2

EXHIBIT 31.2

ALTERA CORPORATION

CERTIFICATION

I, Ronald J. Pasek, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Altera Corporation;

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

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

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

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

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

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

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

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of 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: April 26, 2013

	/s/ RONALD J. PASEK
	Ronald J. Pasek
/s/ RONALD J. PASEK	Chief Financial Officer

EX-32.1

EXHIBIT 32.1

ALTERA CORPORATION

CERTIFICATION

In connection with the periodic report of Altera Corporation (the “Company”) on Form 10-Q for the period ended March 29, 2013, as filed with the Securities and Exchange Commission (the “Report”), I, John P. Daane, Chief Executive Officer of the Company, hereby certify as of the date hereof, solely for purposes of Title 18, Chapter 63, Section 1350 of the United States Code, that to the best of my knowledge:

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

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

Date: April 26, 2013

	/s/ JOHN P. DAANE
	John P. Daane
Chief Executive Officer	Chief Executive Officer

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

EX-32.2

EXHIBIT 32.2

ALTERA CORPORATION

CERTIFICATION

In connection with the periodic report of Altera Corporation (the “Company”) on Form 10-Q for the period ended March 29, 2013, as filed with the Securities and Exchange Commission (the “Report”), I, Ronald J. Pasek, Chief Financial Officer of the Company, hereby certify as of the date hereof, solely for purposes of Title 18, Chapter 63, Section 1350 of the United States Code, that to the best of my knowledge:

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

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

Date: April 26, 2013

	/s/ RONALD J. PASEK
	Ronald J. Pasek
/s/ RONALD J. PASEK	Chief Financial Officer

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

XML

Credit Facility and Long-Term Debt (Details) (USD $)		0 Months Ended
	Mar. 29, 2013 Senior Notes [Member]	May 08, 2012 Senior Notes [Member] 1.75% Senior Note Maturing May 15, 2017 [Member] Rate	Jun. 29, 2012 Revolving Credit Facility [Member]
Debt Instrument [Line Items]
Debt instrument, Term			5 years
Line of credit facility, maximum borrowing capacity			$ 250,000,000
Increase in borrowing capacity of line of credit			250,000,000
Senior notes, principal amount		500,000,000
Debt Instrument, Interest Rate, Stated Percentage		1.75%
Debt Instrument, Interest Rate, Effective Percentage Rate Range, Maximum		1.91%
Net proceeds from Issuance of Long-term Debt		495,500,000
Payments of Debt Issuance Costs		3,700,000
Debt Instrument, Unamortized Discount		800,000
Long-term Debt, Fair Value	$ 511,100,000

XML

Non-Qualified Deferred Compensation Plan (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 29, 2013 employee		Dec. 31, 2012
Deferred compensation plan - marketable securities [Line Items]
Number of participants NQDC	129
Deferred Compensation Plan Assets	$ 74,742	[1]	$ 77,437	[1]
Level 1 [Member]
Deferred compensation plan - marketable securities [Line Items]
Deferred Compensation Plan Assets	71,921	[1]	74,091	[1]
Level 1 [Member] | Restricted cash equivalents [Member]
Deferred compensation plan - marketable securities [Line Items]
Deferred Compensation Plan Assets	17,115	[1]	17,116	[1]
Level 1 [Member] | Equity securities [Member]
Deferred compensation plan - marketable securities [Line Items]
Deferred Compensation Plan Assets	25,911	[1]	29,902	[1]
Level 1 [Member] | Mutual funds [Member]
Deferred compensation plan - marketable securities [Line Items]
Deferred Compensation Plan Assets	28,895	[1]	27,073	[1]
Level 2 [Member] | Fixed income securities [Member]
Deferred compensation plan - marketable securities [Line Items]
Deferred Compensation Plan Assets	$ 2,821	[1]	$ 3,346	[1]

[1] Included in Deferred compensation plan - marketable securities and Deferred compensation plan - restricted cash equivalents in the accompanying consolidated balance sheets as of March 29, 2013 and December 31, 2012.

XML

Accounts Receivable, Net and Significant Customers (Significant Customers) (Details)	3 Months Ended
	Mar. 29, 2013 Rate		Mar. 30, 2012 Rate		Dec. 31, 2012 Rate
Revenue, Major Customer [Line Items]
Sales to distributors	0.76		0.73
Sales to OEMs	0.24		0.27
Sales Revenue Net Percentage Of Net Sales	100.00%		100.00%
Accounts Receivable From OEM As Percentage Of Total Accounts Receivables	10.00%
Sales [Member]
Revenue, Major Customer [Line Items]
Sales to distributors	0.10
Huawei Technologies Co., Ltd
Revenue, Major Customer [Line Items]
Sales to OEMs	0.13		0.18
Arrow Electronics, Inc
Revenue, Major Customer [Line Items]
Sales to distributors	0.43	[1]	0.39	[1]
Accounts Receivable From Distributors As Percentage Of Total Accounts Receivables	0.37				0.30
Macnica, Inc
Revenue, Major Customer [Line Items]
Sales to distributors	0.23	[1]	0.22	[1]
Accounts Receivable From Distributors As Percentage Of Total Accounts Receivables	0.52				0.47

[1] Except as presented above, no other distributor accounted for greater than 10% of our net sales for the three months ended March 29, 2013 or March 30, 2012.

XML

Property and Equipment (Tables)

3 Months Ended

Mar. 29, 2013

Property, Plant and Equipment [Abstract]

Schedule of Property and Equipment, Net

Property and equipment, net was comprised of the following:

(In thousands)	March 29, 2013			December 31, 2012
Land and land rights	$	23,157		$	23,157
Buildings	158,022			159,247
Equipment and software	262,133			256,725
Office furniture and fixtures	24,590			24,531
Leasehold improvements	12,105			11,915
Construction in progress	2,452			1,705
Property and equipment, at cost	482,459			477,280
Accumulated depreciation	(280,495		)	(271,132		)
Property and equipment, net	$	201,964		$	206,148

XML

Stock-Based Compensation (Valuation Assumptions) (Details) (Restricted Stock Units And Performance Based Restricted Stock Units [Member], USD $)	3 Months Ended
	Mar. 29, 2013	Mar. 30, 2012
Restricted Stock Units And Performance Based Restricted Stock Units [Member]
ESPP Purchase Rights And Restricted Stock And Performance Based Restricted Stock Units [Abstract]
Risk-free interest rate	0.40%	0.30%
Dividend yield	1.20%	0.80%
Weighted-average estimated fair value	$ 32.52	$ 38.96

XML

Accumulated Other Comprehensive Income (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 29, 2013	Mar. 30, 2012
Accumulated unrealized gain on available-for-sale securities, net of tax
December 31, 2012	$ 5,592
Other Comprehensive (Loss) Income	(50)	284
March 29, 2013	5,542
Accumulated other comprehensive income
December 31, 2012	5,592
Other Comprehensive (Loss) Income	(50)	248
March 29, 2013	$ 5,542

XML

Declaration of Dividend Subsequent to March 29, 2013 (Details) (Subsequent Event [Member], USD $)	0 Months Ended
	Apr. 22, 2013
Subsequent Event [Line Items]
Dividends Payable, Date Declared	Apr. 22, 2013
Dividends Payable, Date of Record	May 10, 2013
Dividends Payable, Date to be Paid	Jun. 03, 2013
Dividend Declared [Member]
Subsequent Event [Line Items]
Dividends Payable, Amount Per Share	0.10

XML

Financial Instruments

3 Months Ended

Mar. 29, 2013

Financial Instruments [Abstract]

Financial Instruments

Financial Instruments

Cash, Cash Equivalents and Marketable Securities

The following tables summarize our cash and available-for-sale securities by significant investment category.

	March 29, 2013
(In thousands)	Cost		Unrealized Gains		Unrealized Losses			Fair Value		Cash and Cash Equivalents		Short-Term Marketable Securities		Long-Term Marketable Securities
Cash	$	61,541	$	—	$	—		$	61,541	$	61,541	$	—	$	—
Available for sale:
Level 1:
Money market funds	2,875,699		—		—			2,875,699		2,875,699		—		—
U.S. treasury securities	568,071		5,130		—			573,201		16,347		41,554		515,300
Subtotal	3,443,770		5,130		—			3,448,900		2,892,046		41,554		515,300
Level 2:
U.S. agency securities	106,068		50		(3		)	106,115		—		55,524		50,591
Non-U.S. government securities	16,611		5		(5		)	16,611		—		3,222		13,389
Municipal bond	612		1		—			613		—		613		—
Corporate securities	202,753		489		(52		)	203,190		—		70,430		132,760
Subtotal	326,044		545		(60		)	326,529		—		129,789		196,740
Total	$	3,831,355	$	5,675	$	(60	)	$	3,836,970	$	2,953,587	$	171,343	$	712,040

	December 31, 2012
(In thousands)	Cost		Unrealized Gains		Unrealized Losses			Fair Value		Cash and Cash Equivalents		Short-Term Marketable Securities		Long-Term Marketable Securities
Cash	$	89,194	$	—	$	—		$	89,194	$	89,194	$	—	$	—
Available for sale:
Level 1:
Money market funds	2,739,904		—		—			2,739,904		2,739,904		—		—
U.S. treasury securities	564,713		5,231		(3		)	569,941		33,519		22,493		513,929
Subtotal	3,304,617		5,231		(3		)	3,309,845		2,773,423		22,493		513,929
Level 2:
U.S. agency securities	116,802		58		(1		)	116,859		11,799		53,438		51,622
Non-U.S. government securities	11,644		10		(2		)	11,652		—		2,730		8,922
Municipal bond	1,372		1		—			1,373		—		752		621
Corporate securities	193,048		436		(64		)	193,420		2,211		61,545		129,664
Subtotal	322,866		505		(67		)	323,304		14,010		118,465		190,829
Total	$	3,716,677	$	5,736	$	(70	)	$	3,722,343	$	2,876,627	$	140,958	$	704,758

We have certain cost method investments of approximately $4.7 million. These investments are included within Other assets, net  in our consolidated balance sheets.  

The adjusted cost and estimated fair value of marketable debt securities (corporate securities, municipal bonds, U.S. and foreign government securities, and U.S. treasury securities) as of March 29, 2013, by contractual maturity, are shown below. Actual maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations without call or prepayment penalties.

	March 29, 2013
(In thousands)	Cost		Estimated Fair Value
Due in one year or less	$	187,633	$	187,690
Due after one year through five years	706,482		712,040
	$	894,115	$	899,730

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Stock-Based Compensation (Details) (USD $)	3 Months Ended
	Mar. 29, 2013
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period for stock-based awards granted under the Equity Plan (in years)	4 years 0 months 0 days
Contractual term for stock-based awards granted under the Equity plan (in years)	10 years 0 months 0 days
Stock Options, Number of Shares
Exercises	(400,000)
Stock Options, Weighted-Average Exercise Price Per Share (in dollars per share):
Intrinsic value of stock options exercised	$ 6,700,000
Cash received from exercise of stock options	8,400,000
Shares reserved for future issuance under the Equity Plan	30,500,000
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant	21,000,000
Restricted Stock Units And Performance Based Restricted Stock Units [Member]
RSUs and PRSUs, Number of Shares
Outstanding, December 31, 2012	6,960,000
Grants	171,000
Vested	(237,000)
Forfeited	(69,000)
Outstanding, March 29, 2013	6,825,000
Vested and expected to vest, March 29, 2013	6,130,000
RSUs and PRSUs, Weighted-Average Grant-Date Fair Market Value Per Share (in dollars per share):
Outstanding, December 31, 2012	$ 34.03
Grants	$ 33.51
Vested	$ 36.41
Forfeited	$ 35.09
Outstanding, March 29, 2013	$ 33.93
Vested and expected to vest, March 29, 2013	$ 33.77
Outstanding, Weighted-Average Remaining Contractual Term (in Years)	1 year 3 months 20 days
Outstanding, Aggregate Intrinsic Value	242,016,000	[1]
Vested and expected to vest, Weighted-Average Remaining Contractual Term (in Years)	1 year 3 months 20 days
Vested and expected to vest, Aggregate Intrinsic Value	217,377,000	[1]
Stock Options [Member]
Stock Options, Number of Shares
Outstanding, December 31, 2012	5,163,000
Exercises	(429,000)
Outstanding, March 29, 2013	4,734,000
Exercisable, March 29, 2013	3,482,000
Vested and expected to vest, March 29, 2013	4,587,000
Stock Options, Weighted-Average Exercise Price Per Share (in dollars per share):
Outstanding, December 31, 2012	$ 25.81
Exercises	$ 19.70
Outstanding, March 29, 2013	$ 26.37
Exercisable, March 29, 2013	$ 22.67
Vested and expected to vest, March 29, 2013	$ 26.03
Outstanding, Weighted-Average Remaining Contractual Term (in Years)	4 years 1 month 7 days
Exercisable, Weighted-Average Contractual Term (in Years)	2 years 6 months 0 days
Vested and expected to vest, Weighted-Average Remaining Contractual Term (in Years)	3 years 10 months 25 days
Outstanding, Aggregate Intrinsic Value	48,678,000	[2]
Exercisable, Aggregate Intrinsic Value	46,588,000	[2]
Vested and expected to vest, Aggregate Intrinsic Value	$ 48,481,000	[2]

[1] Aggregate intrinsic value represents the closing price per share of our stock on March 29, 2013, multiplied by the number of RSUs and PRSUs outstanding or vested and expected to vest as of March 29, 2013.

[2] For those stock options with an exercise price below the closing price per share on March 29, 2013, aggregate intrinsic value represents the difference between the exercise price and the closing price per share of our common stock on March 29, 2013, multiplied by the number of stock options outstanding, exercisable, or vested and expected to vest as of March 29, 2013.

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Stock-Based Compensation (Tables)

3 Months Ended

Mar. 29, 2013

Share-based Compensation [Abstract]

Schedule of Compensation Expense Included in the Consolidated Statements of Comprehensive Income

Our stock-based compensation expense included in the consolidated statements of comprehensive income was as follows:

	Three Months Ended
(In thousands)	March 29, 2013			March 30, 2012
Cost of sales	$	445		$	448
Research and development expense	9,786			9,853
Selling, general, and administrative expense	12,011			12,092
Pre-tax stock-based compensation expense	22,242			22,393
Less: income tax benefit	(5,678		)	(5,704		)
Net stock-based compensation expense	$	16,564		$	16,689

Schedule of Assumptions Used to Estimate Fair Value of ESPP, RSUs and PRSUs

The assumptions used to estimate the fair value of RSUs and PRSUs were as follows:

	Three Months Ended
	March 29, 2013			March 30, 2012
RSUs and PRSUs:
Risk-free interest rate	0.4		%	0.3		%
Dividend yield	1.2		%	0.8		%
Weighted-average estimated fair value	$	32.52		$	38.96

In addition, we apply an expected forfeiture rate when amortizing stock-based compensation expense.

Summary of Activity for Restricted Stock Units and Performance Based Restricted Stock Units

A summary of activity for our RSUs and PRSUs for the three months ended March 29, 2013 and information regarding RSUs and PRSUs outstanding and expected to vest as of March 29, 2013 is as follows:

(In thousands, except per share amounts and terms)	Number of Shares		Weighted-Average Grant-Date Fair Market Value Per Share		Weighted-Average Remaining Contractual Term (in Years)	Aggregate Intrinsic Value (1)
Outstanding, December 31, 2012	6,960		$	34.03
Grants	171		$	33.51
Vested	(237	)	$	36.41
Forfeited	(69	)	$	35.09
Outstanding, March 29, 2013	6,825		$	33.93	1.3	$	242,016
Vested and expected to vest, March 29, 2013	6,130		$	33.77	1.3	$	217,377

(1) Aggregate intrinsic value represents the closing price per share of our stock on March 29, 2013, multiplied by the number of RSUs and PRSUs outstanding or vested and expected to vest as of March 29, 2013.

Summary of Stock Option Activity

A summary of stock option activity for the three months ended March 29, 2013 and information regarding stock options outstanding, exercisable, and vested and expected to vest as of March 29, 2013 is as follows:

(In thousands, except per share amounts and terms)	Number of Shares		Weighted-Average Exercise Price Per Share		Weighted-Average Remaining Contractual Term (in Years)	Aggregate Intrinsic Value (1)
Outstanding, December 31, 2012	5,163		$	25.81
Exercises	(429	)	$	19.70
Outstanding, March 29, 2013	4,734		$	26.37	4.1	$	48,678
Exercisable, March 29, 2013	3,482		$	22.67	2.5	$	46,588
Vested and expected to vest, March 29, 2013	4,587		$	26.03	3.9	$	48,481

(1) For those stock options with an exercise price below the closing price per share on March 29, 2013, aggregate intrinsic value represents the difference between the exercise price and the closing price per share of our common stock on March 29, 2013, multiplied by the number of stock options outstanding, exercisable, or vested and expected to vest as of March 29, 2013.

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Income Per Share (Tables)

3 Months Ended

Mar. 29, 2013

Earnings Per Share [Abstract]

Schedule of Basic and Diluted Income Per Share

A reconciliation of basic and diluted income per share is presented below:

	Three Months Ended
(In thousands, except per share amounts)	March 29, 2013		March 30, 2012
Basic:
Net income	$	120,189	$	115,834
Basic weighted shares outstanding	319,867		322,586
Net income per share	$	0.38	$	0.36
Diluted:
Net income	$	120,189	$	115,834
Weighted shares outstanding	319,867		322,586
Effect of dilutive securities:
Stock options, employee stock purchase plan, and restricted stock unit shares	3,154		4,475
Diluted weighted shares outstanding	323,021		327,061
Net income per share	$	0.37	$	0.35

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Stock-Based Compensation (Employee Stock Purchase Plan) (Details)	3 Months Ended
	Mar. 30, 2012	Mar. 29, 2013 1987 Employee Stock Purchase Plan [Member]
Employee Stock Purchase Plan [Line Items]
Part of fair market value of common stock used to determine purchase price for share under ESPP		85.00%
Common stock sold under the ESPP plan	0	0
Shares available for future issuance under Employee Stock Purchase Plan		2,900,000

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Non-Qualified Deferred Compensation Plan (Tables)

3 Months Ended

Mar. 29, 2013

Non Qualified Deferred Compensation Plan [Abstract]

Schedule of Allocation of Plan Assets

The following tables summarize the fair value of our deferred compensation plan assets by significant investment category:

(In thousands)	March 29, 2013		December 31, 2012
Deferred compensation plan assets: (1)
Level 1:
Restricted cash equivalents	$	17,115	$	17,116
Equity securities	25,911		29,902
Mutual funds	28,895		27,073
Subtotal	71,921		74,091
Level 2:
Fixed income securities	2,821		3,346
Total	$	74,742	$	77,437

(1) Included in Deferred compensation plan - marketable securities and Deferred compensation plan - restricted cash equivalents in the accompanying consolidated balance sheets as of March 29, 2013 and December 31, 2012.

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Financial Instruments (Details) (USD $)	3 Months Ended
	Mar. 29, 2013	Dec. 31, 2012	Mar. 30, 2012	Dec. 31, 2011
Schedule of Available-for-sale Securities [Line Items]
Cash and Available for Sale Securities, Cost	$ 3,831,355,000	$ 3,716,677,000
Available-for-sale Securities Unrealized Gains	5,675,000	5,736,000
Available-for-Sale Securities Unrealized Losses	(60,000)	(70,000)
Cash and Cash Equivalents, at Carrying Value	2,953,587,000	2,876,627,000	3,420,182,000	3,371,933,000
Short-Term Marketable Securities	171,343,000	140,958,000
Long-Term Marketable Securities	712,040,000	704,758,000
Cash and Cash Equivalents, Fair Value Disclosure	3,836,970,000	3,722,343,000
Available-for-sale Securities, Debt Maturities, within One Year, Amortized Cost Basis	187,633,000
Available-for-sale Securities, Debt Maturities, after One Through Five Years, Amortized Cost Basis	706,482,000
Available-for-sale, Cost	894,115,000
Available-for-sale Securities, Debt Maturities, within One Year, Fair Value	187,690,000
Available-for-sale Securities, Debt Maturities, after One Through Five Years, Fair Value	712,040,000
Available-for-sale Securities, Fair Value Disclosure	899,730,000
Payments to Acquire Investments	4,700,000
Level 1 [Member]
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale Securities	2,892,046,000	2,773,423,000
Available-for-sale Securities Unrealized Gains	5,130,000	5,231,000
Available-for-Sale Securities Unrealized Losses	0	3,000
Available-for-sale Securities, Fair Value Disclosure	3,448,900,000	3,309,845,000
Short-Term Marketable Securities	41,554,000	22,493,000
Long-Term Marketable Securities	515,300,000	513,929,000
Available-for-sale, Cost	3,443,770,000	3,304,617,000
Level 2 [Member]
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale Securities	0	14,010,000
Available-for-sale Securities Unrealized Gains	545,000	505,000
Available-for-Sale Securities Unrealized Losses	(60,000)	(67,000)
Available-for-sale Securities, Fair Value Disclosure	326,529,000	323,304,000
Short-Term Marketable Securities	129,789,000	118,465,000
Long-Term Marketable Securities	196,740,000	190,829,000
Available-for-sale, Cost	326,044,000	322,866,000
Cash [Member]
Schedule of Available-for-sale Securities [Line Items]
Cash, Cost	61,541,000	89,194,000
Available-for-sale Securities Unrealized Gains	0	0
Available-for-Sale Securities Unrealized Losses	0	0
Short-Term Marketable Securities	0	0
Long-Term Marketable Securities	0	0
Cash and Cash Equivalents, at Carrying Value	61,541,000	89,194,000
Cash [Member] | Level 1 [Member]
Schedule of Available-for-sale Securities [Line Items]
Cash and Cash Equivalents, at Carrying Value		89,194,000
Money Market Funds [Member] | Level 1 [Member]
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale Securities	2,875,699,000	2,739,904,000
Available-for-sale Securities Unrealized Gains	0	0
Available-for-Sale Securities Unrealized Losses	0	0
Available-for-sale Securities, Fair Value Disclosure	2,875,699,000	2,739,904,000
Short-Term Marketable Securities	0	0
Long-Term Marketable Securities	0	0
Available-for-sale, Cost	2,875,699,000	2,739,904,000
US Treasury Securities [Member] | Level 1 [Member]
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale Securities	16,347,000	33,519,000
Available-for-sale Securities Unrealized Gains	5,130,000	5,231,000
Available-for-Sale Securities Unrealized Losses	0	3,000
Available-for-sale Securities, Fair Value Disclosure	573,201,000	569,941,000
Short-Term Marketable Securities	41,554,000	22,493,000
Long-Term Marketable Securities	515,300,000	513,929,000
Available-for-sale, Cost	568,071,000	564,713,000
U.S Agency Securities [Member] | Level 2 [Member]
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale Securities	0	11,799,000
Available-for-sale Securities Unrealized Gains	50,000	58,000
Available-for-Sale Securities Unrealized Losses	(3,000)	(1,000)
Available-for-sale Securities, Fair Value Disclosure	106,115,000	116,859,000
Short-Term Marketable Securities	55,524,000	53,438,000
Long-Term Marketable Securities	50,591,000	51,622,000
Available-for-sale, Cost	106,068,000	116,802,000
Non-U.S Government Debt Securities [Member] | Level 2 [Member]
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale Securities	0	0
Available-for-sale Securities Unrealized Gains	5,000	10,000
Available-for-Sale Securities Unrealized Losses	(5,000)	(2,000)
Available-for-sale Securities, Fair Value Disclosure	16,611,000	11,652,000
Short-Term Marketable Securities	3,222,000	2,730,000
Long-Term Marketable Securities	13,389,000	8,922,000
Available-for-sale, Cost	16,611,000	11,644,000
Municipal Bonds [Member] | Level 2 [Member]
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale Securities	0	0
Available-for-sale Securities Unrealized Gains	1,000	1,000
Available-for-Sale Securities Unrealized Losses	0	0
Available-for-sale Securities, Fair Value Disclosure	613,000	1,373,000
Short-Term Marketable Securities	613,000	752,000
Long-Term Marketable Securities	0	621,000
Available-for-sale, Cost	612,000	1,372,000
Corporate Securities [Member] | Level 2 [Member]
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale Securities	0	2,211,000
Available-for-sale Securities Unrealized Gains	489,000	436,000
Available-for-Sale Securities Unrealized Losses	(52,000)	(64,000)
Available-for-sale Securities, Fair Value Disclosure	203,190,000	193,420,000
Short-Term Marketable Securities	70,430,000	61,545,000
Long-Term Marketable Securities	132,760,000	129,664,000
Available-for-sale, Cost	$ 202,753,000	$ 193,048,000

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Recent Accounting Pronouncements

3 Months Ended

Mar. 29, 2013

New Accounting Pronouncements and Changes in Accounting Principles [Abstract]

Recent Accounting Pronouncements

Recent Accounting Pronouncements

In February 2013, the FASB issued ASU No. 2013-02, “Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income.” This standard requires entities to present information about reclassification adjustments from accumulated other comprehensive income in the annual financial statements in a single note or on the face of the financial statements. Public companies will also have to provide this information in their interim financial statements. The new requirements are effective as of the beginning of a fiscal year that begins after December 15, 2012 and interim and annual periods thereafter. We early adopted this guidance in our fiscal year 2012 and it did not have a material impact on our consolidated financial statements.

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Accounts Receivable, Net and Significant Customers (Accounts Receivables) (Details) (USD $) In Thousands, unless otherwise specified	Mar. 29, 2013	Dec. 31, 2012
Accounts Receivable, Net and Significant Customers [Abstract]
Gross accounts receivable	$ 366,918	$ 324,260
Allowance for doubtful accounts	(500)	(500)
Allowance for sales returns	(1)	(52)
Accounts receivable, net	$ 366,417	$ 323,708

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Commitments and Contingencies (Details) (USD $) In Millions, unless otherwise specified	12 Months Ended						12 Months Ended
	Dec. 31, 2011 lawsuits	Dec. 31, 2010 lawsuits	Dec. 31, 2009 lawsuits	Dec. 31, 2008 lawsuits	Dec. 31, 2006 lawsuits	Mar. 29, 2013 lawsuits	Dec. 31, 2008 Tax Return Examination Years 2002 through 2004 [Member]	Dec. 08, 2011 Tax Return Examination Years 2002 through 2004 [Member]	Mar. 29, 2013 Tax Return Examination Years 2005 through 2007 [Member]	Jan. 23, 2012 Tax Return Examination Years 2005 through 2007 [Member]	Dec. 31, 2010 Tax Return Examination Years 2005 through 2007 [Member]
Loss Contingencies [Line Items]
Loss Contingency, New Claims Filed, Number		1
Loss Contingency, Pending Claims, Number						1
Significant Commitment, Remaining Minimum Amount Committed						$ 135.7
Proposed tax adjustment from examination							34.5	19.8	6.8	21.4	34.2
Income Taxes Paid							$ 18.0
Loss Contingency, Claims Settled and Dismissed, Number	2		1	4	1

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Consolidated Balance Sheets (Unaudited) (USD $) In Thousands, unless otherwise specified	Mar. 29, 2013	Dec. 31, 2012
Current assets:
Cash and cash equivalents	$ 2,953,587	$ 2,876,627
Short-term investments	171,343	140,958
Total cash, cash equivalents, and short-term investments	3,124,930	3,017,585
Accounts receivable, net	366,417	323,708
Inventories	139,282	152,721
Deferred income taxes — current	72,803	59,049
Deferred compensation plan — marketable securities	57,627	60,321
Deferred compensation plan — restricted cash equivalents	17,115	17,116
Other current assets	47,113	49,852
Total current assets	3,825,287	3,680,352
Property and equipment, net	201,964	206,148
Long-term investments	712,040	704,758
Deferred income taxes — non-current	18,934	17,082
Other assets, net	46,485	49,488
Total assets	4,804,710	4,657,828
Current liabilities:
Accounts payable	31,613	50,036
Accrued liabilities	36,571	29,005
Accrued compensation and related liabilities	43,920	40,606
Deferred compensation plan obligations	74,742	77,437
Deferred income and allowances on sales to distributors	382,642	345,993
Total current liabilities	569,488	543,077
Income taxes payable — non-current	276,238	272,000
Long-term debt	500,000	500,000
Other non-current liabilities	9,188	9,304
Total liabilities	1,354,914	1,324,381
Commitments and contingencies
Stockholders' equity:
Common stock: $.001 par value; 1,000,000 shares authorized; outstanding - 320,140 shares at March 29, 2013 and 319,564 shares at December 31, 2012	320	320
Capital in excess of par value	1,153,098	1,122,555
Retained earnings	2,290,836	2,204,980
Accumulated other comprehensive income	5,542	5,592
Total stockholders' equity	3,449,796	3,333,447
Total liabilities and stockholders' equity	$ 4,804,710	$ 4,657,828

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Income Taxes (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended			12 Months Ended
	Mar. 29, 2013 Rate	Mar. 30, 2012 Rate	Dec. 31, 2012	Dec. 31, 2008 Tax Return Examination Years 2002 through 2004 [Member]	Dec. 08, 2011 Tax Return Examination Years 2002 through 2004 [Member]	Mar. 29, 2013 Tax Return Examination Years 2005 through 2007 [Member]	Jan. 23, 2012 Tax Return Examination Years 2005 through 2007 [Member]	Dec. 31, 2010 Tax Return Examination Years 2005 through 2007 [Member]
Income Tax Contingency [Line Items]
Proposed tax adjustment from examination				$ 34.5	$ 19.8	$ 6.8	$ 21.4	$ 34.2
Income Taxes Paid				18.0
Effective Tax Rate	(2.60%)	1.70%
Income Tax Holiday, Aggregate Dollar Amount	10.6
Income Tax Benefit from Expiration Statutes of Limitations[US]	6.9
Income Tax Benefit from Expiration Statutes of Limitation[Non-US]	5.2
Unrecognized Tax Benefits	282.2		275.9
Payments of Interest and Penalties Related to Uncertain Tax Positions (Approximately)	$ 49.3		$ 48.8

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Consolidated Statements of Cash Flows (Unaudited) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 29, 2013	Mar. 30, 2012
Cash Flows from Operating Activities:
Net income	$ 120,189	$ 115,834
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	11,374	8,160
Stock-based compensation	22,242	22,393
Deferred income tax benefit	(15,606)	(7,055)
Tax effect of employee stock plans	861	10,566
Excess tax benefit from employee stock plans	(741)	(10,044)
Changes in assets and liabilities:
Accounts receivable, net	(42,709)	(39,119)
Inventories	13,439	12,828
Other assets	13,317	6,416
Accounts payable and other liabilities	(9,660)	(28,462)
Deferred income and allowances on sales to distributors	36,649	130
Income taxes payable	6,239	(4,696)
Deferred compensation plan obligations	(6,116)	2,812
Net cash provided by operating activities	149,478	89,763
Cash Flows from Investing Activities:
Purchases of property and equipment	(14,586)	(23,903)
Sales (purchases) of deferred compensation plan securities, net	6,116	(2,812)
Purchases of available-for-sale securities	(121,111)	(47,174)
Proceeds from sale and maturity of available-for-sale securities	83,394	48,387
Purchases of other investments	(176)	0
Net cash used in investing activities	(46,363)	(25,502)
Cash Flows from Financing Activities:
Proceeds from issuance of common stock through various stock plans	8,442	12,888
Shares withheld for employee taxes	(3,360)	(4,884)
Payment of dividends to stockholders	(31,978)	(25,822)
Repurchase of common stock	0	(8,238)
Excess tax benefit from employee stock plans	741	10,044
Net cash used in financing activities	(26,155)	(16,012)
Net increase in cash and cash equivalents	76,960	48,249
Cash and cash equivalents at beginning of period	2,876,627	3,371,933
Cash and cash equivalents at end of period	$ 2,953,587	$ 3,420,182

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Property and Equipment (Details) (USD $)	3 Months Ended
	Mar. 29, 2013	Mar. 30, 2012	Dec. 31, 2012
Property, Plant and Equipment [Line Items]
Property and equipmpent, gross	$ 482,459,000		$ 477,280,000
Accumulated depreciation	(280,495,000)		(271,132,000)
Property and equipment, net	201,964,000		206,148,000
Depreciation and Amortization	10,200,000	7,400,000
Land and land rights [Member]
Property, Plant and Equipment [Line Items]
Property and equipmpent, gross	23,157,000		23,157,000
Building [Member]
Property, Plant and Equipment [Line Items]
Property and equipmpent, gross	158,022,000		159,247,000
Equipment and software [Member]
Property, Plant and Equipment [Line Items]
Property and equipmpent, gross	262,133,000		256,725,000
Office furniture and fixtures [Member]
Property, Plant and Equipment [Line Items]
Property and equipmpent, gross	24,590,000		24,531,000
Leasehold improvements [Member]
Property, Plant and Equipment [Line Items]
Property and equipmpent, gross	12,105,000		11,915,000
Construction in progress [Member]
Property, Plant and Equipment [Line Items]
Property and equipmpent, gross	$ 2,452,000		$ 1,705,000

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Financial Instruments (Tables)

3 Months Ended

Mar. 29, 2013

Financial Instruments [Abstract]

Schedule of Cash and Available-for-sale Securities by Significant Investment Category

The following tables summarize our cash and available-for-sale securities by significant investment category.

	March 29, 2013
(In thousands)	Cost		Unrealized Gains		Unrealized Losses			Fair Value		Cash and Cash Equivalents		Short-Term Marketable Securities		Long-Term Marketable Securities
Cash	$	61,541	$	—	$	—		$	61,541	$	61,541	$	—	$	—
Available for sale:
Level 1:
Money market funds	2,875,699		—		—			2,875,699		2,875,699		—		—
U.S. treasury securities	568,071		5,130		—			573,201		16,347		41,554		515,300
Subtotal	3,443,770		5,130		—			3,448,900		2,892,046		41,554		515,300
Level 2:
U.S. agency securities	106,068		50		(3		)	106,115		—		55,524		50,591
Non-U.S. government securities	16,611		5		(5		)	16,611		—		3,222		13,389
Municipal bond	612		1		—			613		—		613		—
Corporate securities	202,753		489		(52		)	203,190		—		70,430		132,760
Subtotal	326,044		545		(60		)	326,529		—		129,789		196,740
Total	$	3,831,355	$	5,675	$	(60	)	$	3,836,970	$	2,953,587	$	171,343	$	712,040

	December 31, 2012
(In thousands)	Cost		Unrealized Gains		Unrealized Losses			Fair Value		Cash and Cash Equivalents		Short-Term Marketable Securities		Long-Term Marketable Securities
Cash	$	89,194	$	—	$	—		$	89,194	$	89,194	$	—	$	—
Available for sale:
Level 1:
Money market funds	2,739,904		—		—			2,739,904		2,739,904		—		—
U.S. treasury securities	564,713		5,231		(3		)	569,941		33,519		22,493		513,929
Subtotal	3,304,617		5,231		(3		)	3,309,845		2,773,423		22,493		513,929
Level 2:
U.S. agency securities	116,802		58		(1		)	116,859		11,799		53,438		51,622
Non-U.S. government securities	11,644		10		(2		)	11,652		—		2,730		8,922
Municipal bond	1,372		1		—			1,373		—		752		621
Corporate securities	193,048		436		(64		)	193,420		2,211		61,545		129,664
Subtotal	322,866		505		(67		)	323,304		14,010		118,465		190,829
Total	$	3,716,677	$	5,736	$	(70	)	$	3,722,343	$	2,876,627	$	140,958	$	704,758

Schedule of Investments Classified by Contractual Maturity Date

The adjusted cost and estimated fair value of marketable debt securities (corporate securities, municipal bonds, U.S. and foreign government securities, and U.S. treasury securities) as of March 29, 2013, by contractual maturity, are shown below. Actual maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations without call or prepayment penalties.

	March 29, 2013
(In thousands)	Cost		Estimated Fair Value
Due in one year or less	$	187,633	$	187,690
Due after one year through five years	706,482		712,040
	$	894,115	$	899,730

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Deferred Income and Allowances on Sales to Distributors (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 29, 2013 Rate D		Mar. 30, 2012		Dec. 31, 2012
Deferred Income and Allowances on Sales to Distributors
Deferred revenue on shipment to distributors	$ 397,868				$ 363,641
Deferred cost of sales on shipment to distributors	(25,470)				(28,101)
Deferred income on shipment to distributors	372,398				335,540
Other deferred revenue	10,244	[1]			10,453	[1]
Total	382,642				345,993
Deferred Income and Allowances on Sales to Distributor Activity
Balance at beginning of period	345,993		279,876
Deferred revenue recognized upon shipment to distributors	1,535,965		1,107,685
Deferred cost of sales recognized upon shipment to distributors	(58,008)		(53,238)
Revenue recognized upon sell-through to end customers	(250,048)		(231,645)
Cost of sales recognized upon sell-through to end customers	59,479		53,887
Earned distributor price concessions	(1,226,899)	[2]	(857,188)	[2]
Returns	(23,244)		(20,179)
Other	(596)		808
Balance at end of period	$ 382,642		$ 280,006
Deferred Income and Allowances on Sales to Distributors Textuals [Abstract]
Minimum percentage of average aggregate price concessions on list price	65.00%
Maximum percentage of average aggregate price concessions on list price	80.00%
Maximum time period to submit claim for receiving price concession, days	60
Period of settlement for receivable balances, days	30

[1] Principally represents revenue deferred on our software and intellectual property licenses.

[2] Average aggregate price concessions typically range from 65% to 80% of our list price on an annual basis, depending upon the composition of our sales, volumes and factors associated with timing of shipments to distributors.

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Inventories (Tables)

3 Months Ended

Mar. 29, 2013

Inventory, Net [Abstract]

Schedule of Inventory

Inventories were comprised of the following:

(In thousands)	March 29, 2013		December 31, 2012
Raw materials	$	14,564	$	12,447
Work in process	88,778		88,643
Finished goods	35,940		51,631
Total inventories	$	139,282	$	152,721

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Organization and Basis of Presentation

3 Months Ended

Mar. 29, 2013

Organization and Basis of Presentation [Abstract]

Organization and Basis of Presentation

Organization and Basis of Presentation

The accompanying unaudited consolidated financial statements of Altera Corporation and its subsidiaries, collectively referred to herein as “Altera”, “we”, “us”, or “our”, have been prepared by us in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information. This financial information reflects all adjustments which are, in the opinion of our management, of a normal recurring nature and necessary for a fair statement of the results for the periods presented. The December 31, 2012 consolidated balance sheet data was derived from our audited consolidated financial statements included in our 2012 Annual Report on Form 10-K, as filed with the Securities and Exchange Commission (“SEC”), but does not include all disclosures required by U.S. GAAP. The consolidated financial statements include our accounts as well as those of our wholly-owned subsidiaries after elimination of all significant inter-company balances and transactions.

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in our consolidated financial statements and accompanying notes. Actual results could differ materially from those estimates.

These consolidated financial statements should be read in conjunction with our audited consolidated financial statements for the year ended December 31, 2012 included in our Annual Report on Form 10-K. The consolidated operating results for the three months ended March 29, 2013 are not necessarily indicative of the results to be expected for any future period.

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Consolidated Balance Sheets (Unaudited) (Parenthetical) (USD $)	Mar. 29, 2013	Dec. 31, 2012
Statement of Financial Position [Abstract]
Common Stock, par value per share	$ 0.001	$ 0.001
Common Stock, shares authorized	1,000,000,000	1,000,000,000
Common Stock, shares outstanding	320,140,000	319,564,000

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Commitments and Contingencies

3 Months Ended

Mar. 29, 2013

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

Indemnification and Product Warranty

We indemnify certain customers, distributors, suppliers, and subcontractors for attorney's fees and damages and costs awarded against these parties in certain circumstances in which our products are alleged to infringe third party intellectual property rights, including patents, trade secrets, trademarks or copyrights. We cannot estimate the amount of potential future payments, if any, that we might be required to make as a result of these agreements. To date, we have not paid any claim or been required to defend any action related to our indemnification obligations, and, accordingly, we have not accrued any amounts for such indemnification obligations. However, we may record charges in the future as a result of these indemnification obligations.

We generally warrant our devices for one year against defects in materials, workmanship and material non-conformance to our specifications. We accrue for known warranty issues if a loss is probable and can be reasonably estimated, and accrue for estimated but unidentified issues based on historical activity. If there is a material increase in customer claims compared with our historical experience or if the costs of servicing warranty claims are greater than expected, we may record a charge against cost of sales. Warranty expense was not significant for any period presented in our consolidated statements of comprehensive income.

Purchase Obligations

We depend entirely upon subcontractors to manufacture our silicon wafers and provide assembly and test services. Due to lengthy subcontractor lead times, we must order these materials and services from these subcontractors well in advance, and we are obligated to pay for the materials and services once they are completed. As of March 29, 2013, we had approximately $135.7 million of outstanding purchase commitments to such subcontractors. We expect to receive and pay for these materials and services over the next six months.

Operating Leases

We lease facilities under non-cancelable lease agreements expiring at various times through 2021. There have been no significant changes to our operating lease obligations since December 31, 2012.

Legal Proceedings

On December 8, 2010, Intellectual Ventures I LLC and Intellectual Ventures II LLC (“Intellectual Ventures”) filed a lawsuit in the United States District Court for the District of Delaware against Altera, Microsemi Corporation, and Lattice Semiconductor Corporation (“Lattice”) alleging that Altera infringes five patents. The complaint requests unspecified monetary damages including enhanced damages for willful infringement. In February 2011, Intellectual Ventures filed a First Amended Complaint adding Xilinx, Inc. as a defendant. In March 2011, Altera answered the complaint and asserted counterclaims against Intellectual Ventures for non-infringement and invalidity of the asserted patents. The defendants filed motions in the District of Delaware to transfer the case to the United States District Court for the Northern District of California and to stay the action pending re-examination proceedings in the United States Patent and Trademark Office. Intellectual Ventures opposed the motions. In January 2012, the United States District Court for the District of Delaware denied the defendants' motion to transfer the case to the Northern District of California, and in February 2012, the court denied the defendants' motion to stay. Three of the four defendants, including Altera, filed a writ of mandamus in the Court of Appeals for the Federal Circuit requesting that the case be transferred to the Northern District of California. In July 2012, the Court of Appeals for the Federal Circuit denied the writ of mandamus. In January 2013, Intellectual Ventures and Microsemi announced a settlement agreement, which included a dismissal of all claims against Microsemi. In March 2013, Intellectual Ventures and Lattice announced a settlement agreement, which included a dismissal of all claims against Lattice.  Because the case is at a very early stage, it is not possible for us to determine whether there is a reasonable possibility that a loss has been incurred nor can we estimate the range of potential loss. The case is currently scheduled for trial in May 2014.

We file income tax returns with the Internal Revenue Service (“IRS”) and in various U.S. states and foreign jurisdictions. In 2008, the IRS completed field examinations of our tax returns for 2002 through 2004 and proposed an additional tax liability of $34.5 million, excluding interest. We contested this proposed additional tax liability in the IRS Office of Appeals and resolved several of the issues. On December 8, 2011, the IRS issued a Statutory Notice of Deficiency, revising the assessment of additional taxes for 2002 through 2004 to $19.8 million, excluding interest. The Notice relates primarily to inter-company adjustments between related companies, computational adjustments to the research and development ("R&D") credit and reductions to the benefits of tax credit carrybacks and carryforwards to subsequent years. On March 6, 2012, we filed a petition in the U.S. Tax Court to request a redetermination of the tax deficiency regarding certain IRS adjustments for 2004. We deposited $18.0 million as a cash bond with the IRS in 2008, and converted this amount to tax payments in March 2012. On May 8, 2012, the IRS filed its petition response in the U.S. Tax Court, in which the IRS conceded the R&D credit adjustment for 2004. In June 2012, the federal statute of limitations for the 2002 and 2003 tax years expired.

In addition, in 2010 the IRS completed field examinations for 2005 through 2007 and proposed an additional tax liability of $34.2 million, excluding interest. On January 23, 2012, the IRS issued a Statutory Notice of Deficiency, revising the assessment of additional taxes for 2005 through 2007 to $21.4 million, excluding interest. The Notice relates primarily to inter-company adjustments between related companies and reductions to the benefits of tax credit carrybacks and carryforwards to subsequent years. On April 20, 2012, we filed a petition in the U.S. Tax Court to request a redetermination of the tax deficiencies regarding certain IRS adjustments for 2005 through 2007. On June 21, 2012, the IRS filed its petition response in the U.S. Tax Court.

On August 15, 2012, the case for the 2004 tax year was combined with that for the 2005 through 2007 tax years. A judge has been assigned to our case and a motion for continuance has been granted. We believe we have made adequate tax payments or accrued adequate amounts for our tax liabilities for 2004 through 2007 and that the outcome of the above matters will not have a material adverse effect on our consolidated operating results, cash flows or financial position.

On January 31, 2013, the IRS conceded an adjustment for certain inter-company transactions in our litigation over the 2004 through 2007 tax years.  The concession only impacted our 2007 tax year. Our other inter-company transactions continue to be subject to litigation for 2004 through 2007. As a result of this concession, we recognized a tax and interest benefit of $6.8 million during the three months ended March 29, 2013 due to the release of certain tax reserves. We expect to present our legal arguments on other inter-company transactions that are subject to ligation to the U.S. Tax Court by the end of 2013.

On April 19, 2013, the IRS notified us that we would be audited for each of the 2010 and 2011 tax years. We believe we have made adequate tax payments or accrued adequate amounts for our tax liabilities for 2010 and 2011 and that the outcome of the audit will not have a material adverse effect on our consolidated operating results, cash flows or financial position.

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Document and Entity Infomration	3 Months Ended
	Mar. 29, 2013	Apr. 10, 2013
Entity Information [Line Items]
Entity Registrant Name	ALTERA CORP
Entity Central Index Key	0000768251
Document Type	10-Q
Document Period End Date	Mar. 29, 2013
Amendment Flag	false
Document Fiscal Year	2013
Document Fiscal Period	Q1
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		320,140,393

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Stock-Based Compensation

3 Months Ended

Mar. 29, 2013

Share-based Compensation [Abstract]

Stock-Based Compensation

Stock-Based Compensation

Our equity incentive program is a broad-based, long-term retention program intended to attract, motivate, and retain talented employees as well as align stockholder and employee interests. The program provides stock-based incentive compensation (“awards”) to both our eligible employees and non-employee directors. Awards that may be granted under the program include non-qualified and incentive stock options, restricted stock units (“RSU”s), performance-based restricted stock units (“PRSU”s), restricted stock awards, stock appreciation rights, and stock bonus awards. To date, awards granted under the program consist of stock options, RSUs and PRSUs. The majority of stock-based awards granted under the program vest over four years. Stock options granted under the program have a maximum contractual term of ten years.

Our stock-based compensation expense included in the consolidated statements of comprehensive income was as follows:

	Three Months Ended
(In thousands)	March 29, 2013			March 30, 2012
Cost of sales	$	445		$	448
Research and development expense	9,786			9,853
Selling, general, and administrative expense	12,011			12,092
Pre-tax stock-based compensation expense	22,242			22,393
Less: income tax benefit	(5,678		)	(5,704		)
Net stock-based compensation expense	$	16,564		$	16,689

No stock-based compensation was capitalized during any period presented above. As of March 29, 2013, unrecognized stock-based compensation cost related to outstanding unvested stock options, RSUs, PRSUs and Employee Stock Purchase Plan ("ESPP") shares that are expected to vest was approximately $153.8 million. This unrecognized stock-based compensation cost is expected to be recognized over a weighted average period of approximately 2.2 years. To the extent our actual forfeiture rate is different from our estimate, stock-based compensation related to these awards will be different from our expectations.

The assumptions used to estimate the fair value of RSUs and PRSUs were as follows:

	Three Months Ended
	March 29, 2013			March 30, 2012
RSUs and PRSUs:
Risk-free interest rate	0.4		%	0.3		%
Dividend yield	1.2		%	0.8		%
Weighted-average estimated fair value	$	32.52		$	38.96

In addition, we apply an expected forfeiture rate when amortizing stock-based compensation expense.

A summary of activity for our RSUs and PRSUs for the three months ended March 29, 2013 and information regarding RSUs and PRSUs outstanding and expected to vest as of March 29, 2013 is as follows:

(In thousands, except per share amounts and terms)	Number of Shares		Weighted-Average Grant-Date Fair Market Value Per Share		Weighted-Average Remaining Contractual Term (in Years)	Aggregate Intrinsic Value (1)
Outstanding, December 31, 2012	6,960		$	34.03
Grants	171		$	33.51
Vested	(237	)	$	36.41
Forfeited	(69	)	$	35.09
Outstanding, March 29, 2013	6,825		$	33.93	1.3	$	242,016
Vested and expected to vest, March 29, 2013	6,130		$	33.77	1.3	$	217,377

(1) Aggregate intrinsic value represents the closing price per share of our stock on March 29, 2013, multiplied by the number of RSUs and PRSUs outstanding or vested and expected to vest as of March 29, 2013.

A summary of stock option activity for the three months ended March 29, 2013 and information regarding stock options outstanding, exercisable, and vested and expected to vest as of March 29, 2013 is as follows:

(In thousands, except per share amounts and terms)	Number of Shares		Weighted-Average Exercise Price Per Share		Weighted-Average Remaining Contractual Term (in Years)	Aggregate Intrinsic Value (1)
Outstanding, December 31, 2012	5,163		$	25.81
Exercises	(429	)	$	19.70
Outstanding, March 29, 2013	4,734		$	26.37	4.1	$	48,678
Exercisable, March 29, 2013	3,482		$	22.67	2.5	$	46,588
Vested and expected to vest, March 29, 2013	4,587		$	26.03	3.9	$	48,481

(1) For those stock options with an exercise price below the closing price per share on March 29, 2013, aggregate intrinsic value represents the difference between the exercise price and the closing price per share of our common stock on March 29, 2013, multiplied by the number of stock options outstanding, exercisable, or vested and expected to vest as of March 29, 2013.

For the three months ended March 29, 2013, 0.4 million non-qualified stock option shares were exercised. The total intrinsic value of stock options exercised for the three months ended March 29, 2013 was $6.7 million. The aggregate intrinsic value represents the difference between the exercise price and the selling price received by option holders upon the exercise of stock options during the period. The total cash received from employees as a result of employee stock option exercises during the three months ended March 29, 2013 was $8.4 million.

As of March 29, 2013, our 2005 Equity Incentive Plan had a total of 30.5 million shares reserved for future issuance, of which 21.0 million shares were available for future grants.

ESPP

Our ESPP has two consecutive, overlapping twelve-month offering periods, with a new period commencing on the first trading day on or after May 1 and November 1 of each year and terminating on the last trading day on or before April 30 and October 31. Each twelve-month offering period generally includes two six-month purchase periods. The purchase price at which shares are sold under the ESPP is 85% of the lower of the fair market value of a share of our common stock on (1) the first day of the offering period, or (2) the last trading day of the purchase period. If the fair market value at the end of any purchase period is less than the fair market value at the beginning of the offering period, each participant is automatically withdrawn from the current offering period following the purchase of shares on the purchase date and is automatically re-enrolled in the immediately following offering period.

There were no shares sold to the employees under the ESPP during the three months ended March 29, 2013 and March 30, 2012. As of March 29, 2013, 2.9 million shares were available for future issuance under the ESPP.

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Consolidated Statements of Comprehensive Income (Unaudited) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended
	Mar. 29, 2013	Mar. 30, 2012
Income Statement [Abstract]
Net sales	$ 410,501	$ 383,754
Cost of sales	126,083	114,834
Gross margin	284,418	268,920
Research and development expense	87,930	82,297
Selling, general, and administrative expense	78,600	69,785
Compensation expense — deferred compensation plan	3,422	5,736
Gain on deferred compensation plan securities	(3,422)	(5,736)
Interest income and other	(1,659)	(1,807)
Gain reclassified from other comprehensive income	(54)	(102)
Interest expense	2,465	937
Income before income taxes	117,136	117,810
Income tax (benefit)/expense	(3,053)	1,976
Net income	120,189	115,834
Unrealized holding (loss)/gain on investments:
Unrealized holding (loss)/gain on investments arising during period, net of tax of ($5) and $58	(1)	304
Less: Reclassification adjustments for gain on investments included in net income, net of tax of $5 and $5	(49)	(20)
Total other comprehensive income, unrealized (loss)/gain on investments	(50)	284
Unrealized gain on derivatives:
Unrealized gain on derivatives arising during period, net of tax of $8	0	14
Less: Reclassification adjustments for gain on derivatives included in net income, net of tax of $27	0	(50)
Total other comprehensive income, unrealized gain on derivatives	0	(36)
Other comprehensive (loss) income	(50)	248
Comprehensive income	$ 120,139	$ 116,082
Net income per share (in dollars per share):
Basic (in dollars per share)	$ 0.38	$ 0.36
Diluted (in dollars per share)	$ 0.37	$ 0.35
Shares used in computing per share amounts (in shares):
Basic (in shares)	319,867	322,586
Diluted (in shares)	323,021	327,061
Cash dividends per common share	$ 0.10	$ 0.08

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Property and Equipment

3 Months Ended

Mar. 29, 2013

Property, Plant and Equipment [Abstract]

Property and Equipment, Net

Property and Equipment, Net

Property and equipment, net was comprised of the following:

(In thousands)	March 29, 2013			December 31, 2012
Land and land rights	$	23,157		$	23,157
Buildings	158,022			159,247
Equipment and software	262,133			256,725
Office furniture and fixtures	24,590			24,531
Leasehold improvements	12,105			11,915
Construction in progress	2,452			1,705
Property and equipment, at cost	482,459			477,280
Accumulated depreciation	(280,495		)	(271,132		)
Property and equipment, net	$	201,964		$	206,148

Depreciation expense was $10.2 million and $7.4 million for the three months ended March 29, 2013 and March 30, 2012, respectively. Depreciation and amortization expense as presented in our consolidated statements of cash flows includes the above amounts, together with amortization expense on our intangible assets. Intangible asset amortization expense was not significant for any period presented in our consolidated statements of comprehensive income.

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Inventories

3 Months Ended

Mar. 29, 2013

Inventory, Net [Abstract]

Inventories

Inventories

Inventories were comprised of the following:

(In thousands)	March 29, 2013		December 31, 2012
Raw materials	$	14,564	$	12,447
Work in process	88,778		88,643
Finished goods	35,940		51,631
Total inventories	$	139,282	$	152,721

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Accounts Receivable, Net and Significant Customers (Tables)

3 Months Ended

Mar. 29, 2013

Accounts, Notes, Loans and Financing Receivable, Gross, Allowance, and Net [Abstract]

Schedule of Accounts Receivable, Net

Accounts receivable, net was comprised of the following:

(In thousands)	March 29, 2013			December 31, 2012
Gross accounts receivable	$	366,918		$	324,260
Allowance for doubtful accounts	(500		)	(500		)
Allowance for sales returns	(1		)	(52		)
Accounts receivable, net	$	366,417		$	323,708

Schedule of Net Sales by Customer Type and Net Sales to Significant Customers

We sell our products to OEMs and to electronic components distributors who resell these products to OEMs, or their subcontract manufacturers. Net sales by customer type and net sales to significant customers were as follows:

	Three Months Ended
(Percentage of Net Sales)	March 29, 2013		March 30, 2012
Sales to distributors	76	%	73	%
Sales to OEMs	24	%	27	%
	100	%	100	%
Significant Distributors(1):
Arrow Electronics, Inc. ( “Arrow”)	43	%	39	%
Macnica, Inc. (“Macnica”)	23	%	22	%

(1) Except as presented above, no other distributor accounted for greater than 10% of our net sales for the three months ended March 29, 2013 or March 30, 2012.

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Income Taxes

3 Months Ended

Mar. 29, 2013

Income Tax Expense (Benefit) [Abstract]

Income Taxes

Income Taxes

We file income tax returns with the Internal Revenue Service (“IRS”) and in various U.S. states and foreign jurisdictions. In 2008, the IRS completed field examinations of our tax returns for 2002 through 2004 and proposed an additional tax liability of $34.5 million, excluding interest. We contested this proposed additional tax liability in the IRS Office of Appeals and resolved several of the issues. On December 8, 2011, the IRS issued a Statutory Notice of Deficiency, revising the assessment of additional taxes for 2002 through 2004 to $19.8 million, excluding interest. The Notice relates primarily to inter-company adjustments between related companies, computational adjustments to the research and development ("R&D") credit and reductions to the benefits of tax credit carrybacks and carryforwards to subsequent years. On March 6, 2012, we filed a petition in the U.S. Tax Court to request a redetermination of the tax deficiency regarding certain IRS adjustments for 2004. We deposited $18.0 million as a cash bond with the IRS in 2008, and converted this amount to tax payments in March 2012. On May 8, 2012, the IRS filed its petition response in the U.S. Tax Court, in which the IRS conceded the R&D credit adjustment for 2004. In June 2012, the federal statute of limitations for the 2002 and 2003 tax years expired.

In addition, in 2010 the IRS completed field examinations for 2005 through 2007 and proposed an additional tax liability of $34.2 million, excluding interest. On January 23, 2012, the IRS issued a Statutory Notice of Deficiency, revising the assessment of additional taxes for 2005 through 2007 to $21.4 million, excluding interest. The Notice relates primarily to inter-company adjustments between related companies and reductions to the benefits of tax credit carrybacks and carryforwards to subsequent years. On April 20, 2012, we filed a petition in the U.S. Tax Court to request a redetermination of the tax deficiencies regarding certain IRS adjustments for 2005 through 2007. On June 21, 2012, the IRS filed its petition response in the U.S. Tax Court.

On August 15, 2012, the case for the 2004 tax year was combined with that for the 2005 through 2007 tax years. A judge has been assigned to our case and a motion for continuance has been granted. We believe we have made adequate tax payments or accrued adequate amounts for our tax liabilities for 2004 through 2007 and that the outcome of the above matters will not have a material adverse effect on our consolidated operating results, cash flows or financial position.

On January 31, 2013, the IRS conceded an adjustment for certain inter-company transactions in our litigation over the 2004 through 2007 tax years.  The concession only impacted our 2007 tax year. Our other inter-company transactions continue to be subject to litigation for 2004 through 2007. As a result of this concession, we recognized a tax and interest benefit of $6.8 million during the three months ended March 29, 2013 due to the release of certain tax reserves. We expect to present our legal arguments on other inter-company transactions that are subject to ligation to the U.S. Tax Court by the end of 2013.

On April 19, 2013, the IRS notified us that we would be audited for each of the 2010 and 2011 tax years. We believe we have made adequate tax payments or accrued adequate amounts for our tax liabilities for 2010 and 2011 and that the outcome of the audit will not have a material adverse effect on our consolidated operating results, cash flows or financial position.

Other significant jurisdictions in which we are or may be subject to examination for fiscal years 2002 forward include China (including Hong Kong), Ireland, Malaysia, Japan, Canada, United Kingdom and the state of California. We believe we have made adequate tax payments and/or accrued adequate amounts such that the outcome of these audits will have no material adverse effect on our consolidated operating results. Due to the potential resolution of various tax examinations, and the expiration of various statutes of limitations, it is possible that our gross unrecognized tax benefits may change within the next twelve months. However, given the number of years remaining subject to examination and the number of matters being examined, we are unable to estimate the full range of possible adjustments to the balance of gross unrecognized tax benefits.

Our effective tax rate reflects the impact of a significant amount of our earnings being taxed in foreign jurisdictions at rates below the U.S. statutory tax rate. Our effective tax rate for the three months ended March 29, 2013 was -2.6%, compared with 1.7% for the three months ended March 30, 2012. The net decrease in our effective tax rate was primarily due to higher one-time tax benefits in 2013 compared to 2012. During the three months ended March 29, 2013, we recognized a benefit of $10.6 million resulting from the enactment of the American Taxpayer Relief Act in January 2013, which extended retroactively, the federal research and development credit for two years from January 1, 2012 through December 31, 2013. In addition, we reversed $6.8 million of liabilities for uncertain tax positions due to the IRS conceding an adjustment for certain 2007 inter-company transactions in our litigation over the 2004 through 2007 tax years. During the three months ended March 30, 2012, we reversed $6.9 million of liabilities for uncertain tax positions as a result of a Statutory Notice of Deficiency received from the IRS for 2005 to 2007. In addition, we reversed $5.2 million of liabilities for uncertain tax positions upon expiration of the statutes of limitations for certain foreign jurisdictions.

As of March 29, 2013, we had total gross unrecognized tax benefits of $282.2 million which, if recognized, would impact our effective tax rate. On December 31, 2012, we had total gross unrecognized tax benefits of $275.9 million. We are unable to make a reasonable estimate as to when cash settlements with the relevant taxing authorities will occur.

We recognize interest and penalties related to uncertain tax positions in our income tax provision. We accrued approximately $49.3 million and $48.8 million for the payment of interest and penalties related to uncertain tax positions as of March 29, 2013 and December 31, 2012, respectively.

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Income Per Share

3 Months Ended

Mar. 29, 2013

Earnings Per Share [Abstract]

Income Per Share

Income Per Share

A reconciliation of basic and diluted income per share is presented below:

	Three Months Ended
(In thousands, except per share amounts)	March 29, 2013		March 30, 2012
Basic:
Net income	$	120,189	$	115,834
Basic weighted shares outstanding	319,867		322,586
Net income per share	$	0.38	$	0.36
Diluted:
Net income	$	120,189	$	115,834
Weighted shares outstanding	319,867		322,586
Effect of dilutive securities:
Stock options, employee stock purchase plan, and restricted stock unit shares	3,154		4,475
Diluted weighted shares outstanding	323,021		327,061
Net income per share	$	0.37	$	0.35

In applying the treasury stock method, we excluded 1.6 million and 0.9 million stock option shares and restricted stock unit shares for the three months ended March 29, 2013 and March 30, 2012, respectively, because their effect was anti-dilutive. While these shares have been anti-dilutive, they could be dilutive in the future.

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Deferred Income and Allowances on Sales to Distributors

3 Months Ended

Mar. 29, 2013

Deferred Income And Allowances On Sales To Distributors [Abstract]

Deferred Income and Allowances on Sales to Distributors

Deferred Income and Allowances on Sales to Distributors

Deferred income and allowances on sales to distributors was comprised of the following:

(In thousands)	March 29, 2013			December 31, 2012
Deferred revenue on shipment to distributors	$	397,868		$	363,641
Deferred cost of sales on shipment to distributors	(25,470		)	(28,101		)
Deferred income on shipment to distributors	372,398			335,540
Other deferred revenue(1)	10,244			10,453
Total	$	382,642		$	345,993

(1) Principally represents revenue deferred on our software and intellectual property licenses.

The Deferred income and allowances on sales to distributors activity for the three months ended March 29, 2013 and March 30, 2012 was as follows:

	Three Months Ended
(In thousands)	March 29, 2013			March 30, 2012
Balance at beginning of period	$	345,993		$	279,876
Deferred revenue recognized upon shipment to distributors	1,535,965			1,107,685
Deferred cost of sales recognized upon shipment to distributors	(58,008		)	(53,238		)
Revenue recognized upon sell-through to end customers	(250,048		)	(231,645		)
Cost of sales recognized upon sell-through to end customers	59,479			53,887
Earned distributor price concessions (1)	(1,226,899		)	(857,188		)
Returns	(23,244		)	(20,179		)
Other	(596		)	808
Balance at end of period	$	382,642		$	280,006

(1) Average aggregate price concessions typically range from 65% to 80% of our list price on an annual basis, depending upon the composition of our sales, volumes and factors associated with timing of shipments to distributors.

We sell the majority of our products to distributors worldwide at a list price. However, distributors resell our products to end customers at a very broad range of individually negotiated prices based on a variety of factors, including customer, product, quantity, geography and competitive differentiation. The majority of our distributors' sales to their customers are priced at a discount from our list price. Under these circumstances, we remit back to the distributor a portion of its original purchase price after the resale transaction is completed, and we validate the distributor's resale information, including end customer, device, quantity and price, against the distributor price concession that we have approved in advance. To receive a price concession, a distributor must submit the price concession claim to us for approval within 60 days of the resale of the product to an end customer. It is our practice to apply these negotiated price discounts to future purchases, requiring the distributor to settle receivable balances, on a current basis, generally within 30 days, for amounts originally invoiced.

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Accumulated Other Comprehensive Income

3 Months Ended

Mar. 29, 2013

Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract]

Accumulated Other Comprehensive Income

Accumulated Other Comprehensive Income

The following table presents the components of, and the changes in, accumulated other comprehensive income, net of tax:

(In thousands)	December 31, 2012		Other Comprehensive (Loss) Income			March 29, 2013
Accumulated unrealized gain on available-for-sale securities, net of tax	$	5,592	$	(50	)	$	5,542
Accumulated other comprehensive income	$	5,592	$	(50	)	$	5,542

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Credit Facility and Long-Term Debt

3 Months Ended

Mar. 29, 2013

Long Term Debt and Credit Facility [Abstract]

Credit Facility and Long-Term Debt

Credit Facility and Long-Term Debt

Credit Facility

On June 29, 2012, we entered into a five-year $250 million unsecured revolving credit facility (the "Facility"). Under certain circumstances, upon our request and with the consent of the lenders, the commitments under the Facility may be increased up to an additional $250 million. Borrowings under the Facility will bear interest at a base rate determined in accordance with the Facility, plus an applicable margin based upon the debt rating of our non-credit enhanced, senior unsecured long-term debt. In addition, we are obligated to pay a quarterly commitment fee, payable in arrears, based on the available commitments. This facility fee varies and is also determined based on our debt rating. The terms of the Facility require compliance with certain financial and non-financial covenants, which we have satisfied as of March 29, 2013. As of March 29, 2013, we have not borrowed any funds under the Facility.

Long-term Debt

On May 8, 2012, we completed a public offering of $500 million aggregate principal amount of 1.75% senior notes that will mature on May 15, 2017 (the "Notes") with an effective interest rate of 1.91%. Interest on the Notes is payable semiannually in arrears on May 15 and November 15 of each year, beginning on November 15, 2012. The Notes are governed by a base and supplemental indenture between Altera and U.S. Bank National Association, as trustee. The Notes are our unsecured and unsubordinated obligations, ranking equally in right of payment to all of our existing and future unsecured and unsubordinated indebtedness and senior in right of payment to any of our future indebtedness that is expressly subordinated to the Notes. We may redeem the Notes, in whole or in part, at any time and from time to time for cash at the redemption prices described in the indenture.

We received net proceeds of $495.5 million from issuance of the Notes, after deduction of issuance costs of $3.7 million and a discount of $0.8 million. The debt issuance costs are recorded in other assets and are being amortized to interest expense over five years using the effective interest method. We used the net proceeds of the Notes to re-pay our former credit facility that was entered into on August 31, 2007.

The estimated fair value of Altera's long-term debt was approximately $511.1 million at March 29, 2013. Our long-term debt is classified within Level 1 of the fair value hierarchy and the estimated fair value of the debt is based on quoted market prices.

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Inventories (Details) (USD $) In Thousands, unless otherwise specified	Mar. 29, 2013	Dec. 31, 2012
Inventory, Net [Abstract]
Raw materials	$ 14,564	$ 12,447
Work in process	88,778	88,643
Finished goods	35,940	51,631
Total inventories	$ 139,282	$ 152,721

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Declaration of Dividend Subsequent to March 29, 2013

3 Months Ended

Jun. 28, 2013

Subsequent Events [Abstract]

Declaration of Dividend Subsequent to March 29, 2013

Declaration of Dividend Subsequent to March 29, 2013

On April 22, 2013, the audit committee of our board of directors declared a quarterly cash dividend of $0.10 per common share, payable on June 3, 2013 to stockholders of record on May 10, 2013.

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Deferred Income and Allowances on Sales to Distributors (Tables)

3 Months Ended

Mar. 29, 2013

Deferred Income And Allowances On Sales To Distributors [Abstract]

Schedule of Deferred Income and Allowances on Sales to Distributors

Deferred income and allowances on sales to distributors was comprised of the following:

(In thousands)	March 29, 2013			December 31, 2012
Deferred revenue on shipment to distributors	$	397,868		$	363,641
Deferred cost of sales on shipment to distributors	(25,470		)	(28,101		)
Deferred income on shipment to distributors	372,398			335,540
Other deferred revenue(1)	10,244			10,453
Total	$	382,642		$	345,993

(1) Principally represents revenue deferred on our software and intellectual property licenses.

Schedule of Deferred Income and Allowances on Sales to Distributors Activity

The Deferred income and allowances on sales to distributors activity for the three months ended March 29, 2013 and March 30, 2012 was as follows:

	Three Months Ended
(In thousands)	March 29, 2013			March 30, 2012
Balance at beginning of period	$	345,993		$	279,876
Deferred revenue recognized upon shipment to distributors	1,535,965			1,107,685
Deferred cost of sales recognized upon shipment to distributors	(58,008		)	(53,238		)
Revenue recognized upon sell-through to end customers	(250,048		)	(231,645		)
Cost of sales recognized upon sell-through to end customers	59,479			53,887
Earned distributor price concessions (1)	(1,226,899		)	(857,188		)
Returns	(23,244		)	(20,179		)
Other	(596		)	808
Balance at end of period	$	382,642		$	280,006

(1) Average aggregate price concessions typically range from 65% to 80% of our list price on an annual basis, depending upon the composition of our sales, volumes and factors associated with timing of shipments to distributors.

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Stock-Based Compensation (Expense Included in the Consolidated of Income) (Details) (USD $)	3 Months Ended
	Mar. 29, 2013	Mar. 30, 2012
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Pre-tax stock-based compensation expense	$ 22,242,000	$ 22,393,000
Less: income tax benefit	(5,678,000)	(5,704,000)
Net stock-based compensation expense	16,564,000	16,689,000
Unrecognized stock-based compensation	153,800,000
Unrecognized stock-based compensation, period for recognition	2 years 2 months 13 days
Cost of sales [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Pre-tax stock-based compensation expense	445,000	448,000
Research And Development [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Pre-tax stock-based compensation expense	9,786,000	9,853,000
Selling, General and Administrative [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Pre-tax stock-based compensation expense	$ 12,011,000	$ 12,092,000

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Consolidated Statements of Comprehensive Income (Unaudited) (Parenthetical) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 29, 2013	Mar. 30, 2012
Income Statement [Abstract]
Tax on unrealized holding gain/(loss) on investments arising during period	$ (5)	$ 58
Tax on reclassification adjustments for (gain)/loss on investments included in net income	5	5
Tax on unrealized gain (loss) on derivatives arising during the period	0	8
Tax on reclassification adjustments for gain on derivatives included in net income	$ 0	$ 27

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Accounts Receivable, Net and Significant Customers

3 Months Ended

Mar. 29, 2013

Accounts, Notes, Loans and Financing Receivable, Gross, Allowance, and Net [Abstract]

Accounts Receivable, Net and Significant Customers

Accounts Receivable, Net and Significant Customers

Accounts receivable, net was comprised of the following:

(In thousands)	March 29, 2013			December 31, 2012
Gross accounts receivable	$	366,918		$	324,260
Allowance for doubtful accounts	(500		)	(500		)
Allowance for sales returns	(1		)	(52		)
Accounts receivable, net	$	366,417		$	323,708

We sell our products to OEMs and to electronic components distributors who resell these products to OEMs, or their subcontract manufacturers. Net sales by customer type and net sales to significant customers were as follows:

	Three Months Ended
(Percentage of Net Sales)	March 29, 2013		March 30, 2012
Sales to distributors	76	%	73	%
Sales to OEMs	24	%	27	%
	100	%	100	%
Significant Distributors(1):
Arrow Electronics, Inc. ( “Arrow”)	43	%	39	%
Macnica, Inc. (“Macnica”)	23	%	22	%

(1) Except as presented above, no other distributor accounted for greater than 10% of our net sales for the three months ended March 29, 2013 or March 30, 2012.

For the quarterly periods ended March 29, 2013 and March 30, 2012, one OEM accounted for 13% and 18%, respectively, of our net sales.

As of March 29, 2013, accounts receivable from Arrow and Macnica individually accounted for approximately 37% and 52%, respectively, of our gross accounts receivable. As of December 31, 2012, accounts receivable from Arrow and Macnica individually accounted for approximately 30% and 47%, respectively, of our gross accounts receivable. No other distributor or OEM accounted for more than 10% of our accounts receivable as of March 29, 2013 or December 31, 2012. Accounts receivable from distributors may not be proportionate to net sales and may fluctuate on a quarterly basis due to varying factors, including inventory levels held by distributors and timing of price concessions and payments.

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Accumulated Other Comprehensive Income (Tables)

3 Months Ended

Mar. 29, 2013

Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract]

Schedule of Accumulated Other Comprehensive Income

The following table presents the components of, and the changes in, accumulated other comprehensive income, net of tax:

(In thousands)	December 31, 2012		Other Comprehensive (Loss) Income			March 29, 2013
Accumulated unrealized gain on available-for-sale securities, net of tax	$	5,592	$	(50	)	$	5,542
Accumulated other comprehensive income	$	5,592	$	(50	)	$	5,542

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Income Per Share (Details) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended
	Mar. 29, 2013	Mar. 30, 2012
Basic:
Net income	$ 120,189	$ 115,834
Basic weighted shares outstanding (in shares)	319,867,000	322,586,000
Net income per share (in dollars per share)	$ 0.38	$ 0.36
Diluted:
Net income	$ 120,189	$ 115,834
Basic weighted shares outstanding (in shares)	319,867,000	322,586,000
Stock options, ESPP, and restricted stock unit shares (in shares)	3,154,000	4,475,000
Diluted weighted shares outstanding	323,021,000	327,061,000
Net income per share (in dollars per share)	$ 0.37	$ 0.35
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	1,600,000	900,000

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Non-Qualified Deferred Compensation Plan

3 Months Ended

Mar. 29, 2013

Non Qualified Deferred Compensation Plan [Abstract]

Non-Qualified Deferred Compensation Plan

Non-Qualified Deferred Compensation Plan

We allow our U.S.-based officers and director-level employees to defer a portion of their compensation under the Altera Corporation Non-Qualified Deferred Compensation Plan (the “NQDC Plan”). Our Retirement Plans Committee administers the NQDC Plan. As of March 29, 2013, there were 129 participants in the NQDC Plan who self-direct their investments, subject to certain limitations. In the event we become insolvent, the NQDC Plan assets are subject to the claims of our general creditors. Since the inception of the NQDC Plan, we have not made any contributions to the NQDC Plan, and we have no commitments to do so in the future. There are no NQDC Plan provisions that provide for any guarantees or minimum return on investments. NQDC Plan participants are prohibited from investing NQDC Plan contributions in Altera common stock. The balance of the NQDC Plan assets and related obligations was $74.7 million and $77.4 million as of March 29, 2013 and December 31, 2012, respectively.

Investment income or loss earned by the NQDC Plan is recorded as Gain on deferred compensation plan securities in our consolidated statements of comprehensive income. The investment (gain) loss also represents an (increase) decrease in the future payout to participants and is recorded as Compensation expense — deferred compensation plan in our consolidated statements of comprehensive income. Compensation expense (benefit) associated with our NQDC Plan obligations is offset by the (gain) loss from related securities. The net effect of investment income or loss and related compensation expense or benefit has no impact on our income before income taxes, net income or cash balances.

The following tables summarize the fair value of our deferred compensation plan assets by significant investment category:

(In thousands)	March 29, 2013		December 31, 2012
Deferred compensation plan assets: (1)
Level 1:
Restricted cash equivalents	$	17,115	$	17,116
Equity securities	25,911		29,902
Mutual funds	28,895		27,073
Subtotal	71,921		74,091
Level 2:
Fixed income securities	2,821		3,346
Total	$	74,742	$	77,437

(1) Included in Deferred compensation plan - marketable securities and Deferred compensation plan - restricted cash equivalents in the accompanying consolidated balance sheets as of March 29, 2013 and December 31, 2012.