10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 29, 2013

Commission file number 0-23298

QLogic Corporation

(Exact name of registrant as specified in its charter)

Delaware	33-0537669
(State of incorporation)	(I.R.S. Employer Identification No.)

26650 Aliso Viejo Parkway

Aliso Viejo, California 92656

(Address of principal executive office and zip code)

(949) 389-6000

(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 the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer  þ Accelerated filer ¨ Non-accelerated filer  ¨ Smaller reporting company  ¨

(Do not check if a 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

As of October 25, 2013, 86,744,000 shares of the Registrant’s common stock were outstanding.

QLOGIC CORPORATION

INDEX

		Page
	PART I. FINANCIAL INFORMATION
Item 1.	Financial Statements:
	Condensed Consolidated Balance Sheets as of September 29, 2013 and March 31, 2013		1
	Condensed Consolidated Statements of Income for the three and six months ended September 29, 2013 and September 30, 2012		2
	Condensed Consolidated Statements of Comprehensive Income for the three and six months ended September  29, 2013 and September 30, 2012		3
	Condensed Consolidated Statements of Cash Flows for the six months ended September 29, 2013 and September 30, 2012		4
	Notes to Condensed Consolidated Financial Statements		5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		10
Item 3.	Quantitative and Qualitative Disclosures About Market Risk		20
Item 4.	Controls and Procedures		20
	PART II. OTHER INFORMATION
Item 1A.	Risk Factors		21
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		33
Item 6.	Exhibits		34
	Signatures		35

i

PART I.

FINANCIAL INFORMATION

Item 1. Financial Statements

QLOGIC CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

	September 29, 2013			March 31, 2013
	(Unaudited; In thousands, except share and per share amounts)
ASSETS
Current assets:
Cash and cash equivalents	$	86,507		$	95,532
Marketable securities		346,501			359,974
Accounts receivable, less allowance for doubtful accounts of $1,209 and $1,196 as of September 29, 2013 and March 31, 2013, respectively		67,934			66,135
Inventories		17,363			20,160
Deferred tax assets		13,341			13,036
Other current assets		27,546			24,381
Total current assets		559,192			579,218
Property and equipment, net		90,942			96,336
Goodwill		110,976			110,976
Purchased intangible assets, net		3,692			4,054
Deferred tax assets		27,272			31,992
Other assets		2,421			2,587
	$	794,495		$	825,163
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	26,449		$	29,668
Accrued compensation		20,312			27,453
Accrued taxes		990			4,559
Deferred revenue		4,450			4,676
Other current liabilities		9,378			7,651
Total current liabilities		61,579			74,007
Accrued taxes		16,681			10,772
Other liabilities		7,104			6,107
Total liabilities		85,364			90,886
Stockholders’ equity:
Preferred stock, $0.001 par value; 1,000,000 shares authorized; no shares issued and outstanding		—			—
Common stock, $0.001 par value; 500,000,000 shares authorized; 213,342,000 and 212,145,000 shares issued as of September 29, 2013 and March 31, 2013, respectively		213			212
Additional paid-in capital		944,564			932,557
Retained earnings		1,698,264			1,690,337
Accumulated other comprehensive income		267			1,887
Treasury stock, at cost: 126,332,000 and 122,185,000 shares as of September 29, 2013 and March 31, 2013, respectively		(1,934,177	)		(1,890,716	)
Total stockholders’ equity		709,131			734,277
	$	794,495		$	825,163

See accompanying notes to condensed consolidated financial statements.

1

QLOGIC CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

	Three Months Ended				Six Months Ended
	September 29, 2013		September 30, 2012		September 29, 2013		September 30, 2012
	(Unaudited; In thousands, except per share amounts)
Net revenues	$	112,622	$	117,867	$	225,738	$	248,238
Cost of revenues		36,313		38,980		72,932		82,293
Gross profit		76,309		78,887		152,806		165,945
Operating expenses:
Engineering and development		34,790		38,024		75,177		77,482
Sales and marketing		16,431		19,739		35,844		38,625
General and administrative		7,553		8,139		15,292		16,812
Special charges		4,349		—		16,382		—
Total operating expenses		63,123		65,902		142,695		132,919
Operating income		13,186		12,985		10,111		33,026
Interest and other income, net		25		954		798		2,032
Income from continuing operations before income taxes		13,211		13,939		10,909		35,058
Income taxes		2,234		2,159		2,982		4,837
Income from continuing operations		10,977		11,780		7,927		30,221
Income from discontinued operations, net of income taxes		—		94		—		39
Net income	$	10,977	$	11,874	$	7,927	$	30,260
Income from continuing operations per share:
Basic	$	0.13	$	0.13	$	0.09	$	0.32
Diluted	$	0.13	$	0.13	$	0.09	$	0.31
Income from discontinued operations per share:
Basic	$	—	$	—	$	—	$	—
Diluted	$	—	$	—	$	—	$	—
Net income per share:
Basic	$	0.13	$	0.13	$	0.09	$	0.32
Diluted	$	0.13	$	0.13	$	0.09	$	0.31
Number of shares used in per share calculations:
Basic		87,430		93,762		88,288		95,584
Diluted		87,669		93,949		88,720		96,159

See accompanying notes to condensed consolidated financial statements.

2

QLOGIC CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

	Three Months Ended					Six Months Ended
	September 29, 2013		September 30, 2012			September 29, 2013			September 30, 2012
	(Unaudited; In thousands)
Net income	$	10,977	$	11,874		$	7,927		$	30,260
Other comprehensive income, net of income taxes:
Changes in fair value of marketable securities:
Changes in unrealized gains		602		1,103			(1,319	)		1,349
Net realized losses (gains) reclassified into earnings		135		(84	)		(259	)		(188	)
		737		1,019			(1,578	)		1,161
Foreign currency translation adjustments		252		292			(42	)		74
Total other comprehensive income (loss)		989		1,311			(1,620	)		1,235
Comprehensive income	$	11,966	$	13,185		$	6,307		$	31,495

See accompanying notes to condensed consolidated financial statements.

3

QLOGIC CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

	Six Months Ended
	September 29, 2013			September 30, 2012
	(Unaudited; In thousands)
Cash flows from operating activities:
Net income	$	7,927		$	30,260
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		15,730			13,524
Stock-based compensation		12,989			16,322
Deferred income taxes		3,632			(3,493	)
Impairment of property and equipment		2,429			—
Other non-cash items		1,698			2,094
Changes in operating assets and liabilities:
Accounts receivable		(1,818	)		3,749
Inventories		2,797			(2,064	)
Other assets		180			(2,223	)
Accounts payable		(102	)		2,222
Accrued compensation		(7,141	)		(7,270	)
Accrued taxes, net		(905	)		12,908
Other liabilities		3,249			2,779
Net cash provided by operating activities		40,665			68,808
Cash flows from investing activities:
Purchases of available-for-sale securities		(162,673	)		(137,446	)
Proceeds from sales and maturities of available-for-sale securities		172,629			129,587
Purchases of property and equipment		(15,389	)		(22,029	)
Net cash used in investing activities		(5,433	)		(29,888	)
Cash flows from financing activities:
Proceeds from issuance of common stock under stock-based awards		4,565			4,894
Excess tax benefits from stock-based awards		10			128
Minimum tax withholding paid on behalf of employees for restricted stock units		(4,514	)		(5,505	)
Purchases of treasury stock		(44,212	)		(99,488	)
Payments for credit facility commitment fee		(106	)		—
Net cash used in financing activities		(44,257	)		(99,971	)
Net decrease in cash and cash equivalents		(9,025	)		(61,051	)
Cash and cash equivalents at beginning of period		95,532			164,516
Cash and cash equivalents at end of period	$	86,507		$	103,465

See accompanying notes to condensed consolidated financial statements.

4

QLOGIC CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 1. Basis of Presentation

In the opinion of management of QLogic Corporation (QLogic or the Company), the accompanying unaudited condensed consolidated financial statements contain all normal recurring accruals and adjustments necessary to present fairly the Company’s consolidated financial position, results of operations and cash flows. The accompanying condensed consolidated financial statements should be read in conjunction with the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2013. The results of operations for the three and six months ended September 29, 2013 are not necessarily indicative of the results that may be expected for the entire fiscal year. The preparation of financial statements in accordance with U.S. generally accepted accounting principles requires management to make estimates that affect the amounts reported in the Company’s consolidated financial statements and accompanying notes. The Company evaluates its estimates on an ongoing basis using historical experience and other factors, including the current economic environment. Among the significant estimates affecting the consolidated financial statements are those related to revenue recognition, stock-based compensation, income taxes, marketable securities, inventories, goodwill and long-lived assets. The actual results experienced by the Company could differ materially from management’s estimates.

Certain immaterial reclassifications have been made to prior year amounts to conform to the current year presentation.

Note 2. Marketable Securities

The Company’s portfolio of available-for-sale marketable securities consists of the following:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
	(In thousands)
September 29, 2013
U.S. government and agency securities	$	83,424	$	98	$	(163	)	$	83,359
Corporate debt obligations		166,190		1,027		(162	)		167,055
Mortgage-backed securities		52,583		210		(406	)		52,387
Municipal bonds		41,079		62		(134	)		41,007
Other debt securities		2,696		—		(3	)		2,693
	$	345,972	$	1,397	$	(868	)	$	346,501
March 31, 2013
U.S. government and agency securities	$	113,033	$	327	$	(1	)	$	113,359
Corporate debt obligations		153,460		1,429		(30	)		154,859
Mortgage-backed securities		50,852		473		(44	)		51,281
Municipal bonds		39,661		211		—			39,872
Other debt securities		602		1		—			603
	$	357,608	$	2,441	$	(75	)	$	359,974

The amortized cost and estimated fair value of debt securities as of September 29, 2013, by contractual maturity, are presented below. Expected maturities will differ from contractual maturities because the issuers of securities may have the right to repay obligations without prepayment penalties. Certain debt instruments, although possessing a contractual maturity greater than one year, are classified as short-term marketable securities based on their ability to be traded on active markets and availability for current operations.

	Amortized Cost		Estimated Fair Value
	(In thousands)
Due in one year or less	$	90,782	$	90,923
Due after one year through three years		151,994		152,292
Due after three years through five years		62,462		62,115
Due after five years		40,734		41,171
	$	345,972	$	346,501

5

QLOGIC CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The following table presents the Company’s marketable securities with unrealized losses by investment category and length of time that individual securities have been in a continuous unrealized loss position as of September 29, 2013 and March 31, 2013.

	Less Than 12 Months					12 Months or Greater					Total
Description of Securities	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
	(In thousands)
September 29, 2013
U.S. government and agency securities	$	21,116	$	(163	)	$	—	$	—		$	21,116	$	(163	)
Corporate debt obligations		58,338		(162	)		—		—			58,338		(162	)
Mortgage-backed securities		30,290		(392	)		819		(14	)		31,109		(406	)
Municipal bonds		20,380		(134	)		—		—			20,380		(134	)
Other debt securities		2,091		(3	)		—		—			2,091		(3	)
	$	132,215	$	(854	)	$	819	$	(14	)	$	133,034	$	(868	)
March 31, 2013
U.S. government and agency securities	$	4,502	$	(1	)	$	—	$	—		$	4,502	$	(1	)
Corporate debt obligations		24,203		(30	)		—		—			24,203		(30	)
Mortgage-backed securities		10,048		(44	)		—		—			10,048		(44	)
	$	38,753	$	(75	)	$	—	$	—		$	38,753	$	(75	)

As of September 29, 2013 and March 31, 2013, the fair value of certain of the Company’s available-for-sale securities was less than their cost basis. Management reviewed various factors in determining whether to recognize an impairment charge related to these unrealized losses, including the current financial and credit market environment, the financial condition and near-term prospects of the issuer of the security, the magnitude of the unrealized loss compared to the cost of the investment, the length of time the investment had been in a loss position and the Company’s intent and ability to hold the investment for a period of time sufficient to allow for any anticipated recovery of market value. As of September 29, 2013 and March 31, 2013, the Company determined that the unrealized losses were temporary in nature and recorded them as a component of accumulated other comprehensive income.

Realized gains and losses reclassified from accumulated other comprehensive income are included in interest and other income, net, in the condensed consolidated statements of income.

Note 3. Fair Value Measurements

Fair value is the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The fair value hierarchy is based on three levels of inputs that may be used to measure fair value. The first two levels of inputs are considered observable and the last unobservable. A description of the three levels of inputs is as follows:

• Level 1 – Quoted prices in active markets for identical assets or liabilities.

• Level 2 – Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

• Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

6

QLOGIC CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Assets measured at fair value on a recurring basis as of September 29, 2013 and March 31, 2013 are as follows:

	Fair Value Measurements Using
	Level 1		Level 2		Level 3		Total
	(In thousands)
September 29, 2013
Cash and cash equivalents	$	86,507	$	—	$	—	$	86,507
Marketable securities:
U.S. government and agency securities		83,359		—		—		83,359
Corporate debt obligations		—		167,055		—		167,055
Mortgage-backed securities		—		52,387		—		52,387
Municipal bonds		—		41,007		—		41,007
Other debt securities		—		2,693		—		2,693
		83,359		263,142		—		346,501
	$	169,866	$	263,142	$	—	$	433,008
March 31, 2013
Cash and cash equivalents	$	95,098	$	434	$	—	$	95,532
Marketable securities:
U.S. government and agency securities		113,359		—		—		113,359
Corporate debt obligations		—		154,859		—		154,859
Mortgage-backed securities		—		51,281		—		51,281
Municipal bonds		—		39,872		—		39,872
Other debt securities		—		603		—		603
		113,359		246,615		—		359,974
	$	208,457	$	247,049	$	—	$	455,506

The Company’s investments classified within Level 2 were primarily valued based on valuations obtained from a third-party pricing service. To estimate fair value, the pricing service utilizes industry-standard valuation models, including both income and market-based approaches for which all significant inputs are observable either directly or indirectly. The Company obtained documentation from the pricing service as to the methodology and summary of inputs used for the various types of securities. The pricing service maximizes the use of relevant observable inputs and minimizes the use of unobservable inputs. These observable inputs include reported trades and broker/dealer quotes of the same or similar securities, issuer credit spreads, benchmark securities and other observable inputs. The Company compares valuation information from the pricing service with other pricing sources to validate the reasonableness of the valuations.

Note 4. Inventories

Components of inventories are as follows:

	September 29, 2013		March 31, 2013
	(In thousands)
Raw materials	$	1,555	$	2,039
Finished goods		15,808		18,121
	$	17,363	$	20,160

Note 5. Stock-Based Compensation

During the six months ended September 29, 2013, the Company granted 1.2 million restricted stock units and options to purchase 0.1 million shares of common stock with weighted average grant date fair values of $9.93 and $4.12 per share, respectively. The restricted stock units included 0.1 million restricted stock units with service and market conditions, which were granted to certain senior executives.

7

QLOGIC CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

A summary of stock-based compensation expense, by functional line item in the condensed consolidated statements of income, is as follows:

	Three Months Ended				Six Months Ended
	September 29, 2013		September 30, 2012		September 29, 2013		September 30, 2012
	(In thousands)
Cost of revenues	$	239	$	540	$	823	$	1,310
Engineering and development		2,257		3,096		6,608		7,414
Sales and marketing		1,230		1,633		3,023		3,598
General and administrative		1,092		1,776		2,535		4,000
	$	4,818	$	7,045	$	12,989	$	16,322

Note 6. Special Charges

In June 2013, the Company commenced a restructuring plan designed to enhance product focus and streamline business operations. The restructuring plan includes a workforce reduction and the consolidation and elimination of certain engineering activities. In connection with this plan, the Company ceased development of future switch application-specific integrated circuits (ASICs). The Company expects to incur between $16 million and $18 million of exit costs associated with this restructuring plan, which consists of between $13 million and $14 million related to workforce reductions and between $3 million and $4 million related to facilities and other costs. The Company expects to substantially complete the restructuring activities during fiscal 2014.

During the three and six months ended September 29, 2013, the Company recorded special charges of $4.3 million and $16.4 million, respectively. Special charges for the three months ended September 29, 2013 consisted entirely of exit costs. Special charges for the six months ended September 29, 2013 consisted of $14.0 million of exit costs and $2.4 million of asset impairment charges primarily related to property and equipment. The exit costs include severance and related costs associated with involuntarily terminated employees. Certain employees that were notified of their termination are required to provide services for varying periods in excess of statutory notice periods. Severance costs related to these services are recognized ratably over the estimated requisite service period. Exit costs also include the estimated costs associated with the portion of a facility under a non-cancelable lease that the Company ceased using and other costs.

Activity and liability balances for exit costs, including a liability associated with exit costs related to a portion of the facility the Company ceased using prior to fiscal 2013, are as follows:

	Workforce Reduction			Facilities and Other			Total
	(In thousands)
Balance as of March 31, 2013	$	—		$	1,771		$	1,771
Charged to costs and expenses		11,653			2,300			13,953
Payments		(8,385	)		(457	)		(8,842	)
Balance as of September 29, 2013	$	3,268		$	3,614		$	6,882

The unpaid exit costs are expected to be paid over the terms of the related agreements through fiscal 2018. As of September 29, 2013, unpaid exit costs totaling $3.5 million are included in other current liabilities.

Note 7. Income Taxes

The Company’s provision for income taxes from continuing operations was $2.2 million and $3.0 million for the three and six months ended September 29, 2013, respectively, and $2.2 million and $4.8 million for the three and six months ended September 30, 2012, respectively. The provision for income taxes is based on the estimated income for the year, the composition of the estimated income in different tax jurisdictions, and the tax effect, if any, in the applicable quarterly periods of newly enacted tax legislation, resolution of tax audits, changes in uncertain tax positions, and other discrete tax-related items. The allocation of taxable income to domestic and foreign tax jurisdictions impacts the effective tax rate, as the Company’s income tax rate in foreign jurisdictions is generally lower than its income tax rate in the United States.

During the three months ended September 29, 2013, the Company determined that certain positions would be taken on various state income tax returns and recorded liabilities for unrecognized tax benefits of $5.2 million related to these tax positions.

8

QLOGIC CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The Company’s federal consolidated income tax returns for fiscal years 2010, 2011 and 2012 are currently under examination by the Internal Revenue Service. Management does not believe that the results of these examinations will have a material impact on the Company’s financial condition or results of operations.

Note 8. Income Per Share

The following table sets forth the computation of basic and diluted income from continuing operations per share:

	Three Months Ended				Six Months Ended
	September 29, 2013		September 30, 2012		September 29, 2013		September 30, 2012
	(In thousands, except per share amounts)
Income from continuing operations	$	10,977	$	11,780	$	7,927	$	30,221
Shares:
Weighted-average shares outstanding – basic		87,430		93,762		88,288		95,584
Dilutive potential common shares, using treasury stock method		239		187		432		575
Weighted-average shares outstanding – diluted		87,669		93,949		88,720		96,159
Income from continuing operations per share:
Basic	$	0.13	$	0.13	$	0.09	$	0.32
Diluted	$	0.13	$	0.13	$	0.09	$	0.31

Stock-based awards, including stock options and restricted stock units, representing 15.0 million and 16.1 million shares of common stock have been excluded from the diluted per share calculations for the three and six months ended September 29, 2013, respectively, and 20.0 million and 18.2 million shares of common stock have been excluded from the diluted per share calculations for the three and six months ended September 30, 2012, respectively. These stock-based awards have been excluded from the diluted per share calculations because their effect would have been antidilutive.

9

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

This Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with our unaudited condensed consolidated financial statements and related notes. In this discussion and elsewhere in this report, we make forward-looking statements. These forward-looking statements are made in reliance upon safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements include, without limitation, descriptions of our expectations regarding future trends affecting our business and other statements regarding future events or our objectives, goals, strategies, beliefs and underlying assumptions that are other than statements of historical fact. When used in this report, the words “anticipates,” “believes,” “can,” “continue,” “could,” “estimates,” “expects,” “intends,” “may,” “plans,” “potential,” “predicts,” “should,” “will” and similar expressions, or the negative of such expressions, are intended to identify these forward-looking statements. Statements concerning current conditions may also be forward-looking if they imply a continuation of current conditions. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of several factors, including, but not limited to those factors set forth and discussed in Part II, Item 1A “Risk Factors” and elsewhere in this report. In light of the significant uncertainties inherent in the forward-looking information included in this report, the inclusion of this information should not be regarded as a representation by us or any other person that our objectives or plans will be achieved. You are cautioned, therefore, not to place undue reliance on these forward-looking statements, which are made only as of the date of this report. We undertake no obligation to update or revise these forward-looking statements, whether as a result of new information, future events or otherwise.

Overview

We design and supply high performance server and storage networking infrastructure products that provide, enhance and manage computer data communication. These products facilitate the rapid transfer of data and enable efficient resource sharing between servers, networks and storage. Our products are used in enterprise data centers, cloud computing, Web 2.0 and other environments dependent on high performance, reliable data networking.

Our products are based primarily on Fibre Channel and Ethernet technologies and are used in connection with storage networks, local area networks, and converged networks. Storage networks are used to provide data across enterprise environments. Fibre Channel is currently the dominant technology for enterprise storage networking. Local area networks, or LANs, are used to provide workstation-to-server, server-to-server, and server-to-storage connectivity using Ethernet. Converged networks are designed to address the evolving data center by consolidating and unifying various classes of connectivity and networks, such as storage area networks and LANs, using Ethernet speeds of 10Gb per second and greater. Fibre Channel over Ethernet, or FCoE, is a converged networking technology that uses an Ethernet LAN for both storage and local area data transmission, thus combining the benefits of Fibre Channel technology with the pervasiveness of Ethernet-based networks. Similarly, Internet Small Computer System Interface, or iSCSI, is an alternative to FCoE, also providing storage over Ethernet capabilities. Our converged products can operate individually as 10Gb Ethernet network products, FCoE products, iSCSI products, or in combination as multi-protocol products.

We classify our products into two categories – Advanced Connectivity Platforms and Legacy Connectivity Products. Advanced Connectivity Platforms are comprised primarily of adapters and application-specific integrated circuits, or ASICs, for server and storage connectivity applications. Legacy Connectivity Products are comprised primarily of Fibre Channel switch products and 1Gb iSCSI products.

Our products are sold worldwide, primarily to original equipment manufacturers, or OEMs, and distributors. Our customers rely on our various server and storage connectivity products to deliver solutions to information technology professionals in virtually every business sector. Our products are found primarily in server and storage subsystem solutions that are used by enterprises with critical business data requirements. These products are incorporated in solutions from a number of server and storage system OEM customers, including Cisco Systems, Inc., Dell Inc., EMC Corporation, Fujitsu Ltd., Hewlett-Packard Company, Huawei Technologies Co. Ltd., Inspur Worldwide Services Ltd., International Business Machines Corporation, Lenovo Group Ltd., NetApp, Inc. and Oracle Corporation.

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Restructuring Plan

In June 2013, we commenced a restructuring plan designed to enhance product focus and streamline business operations. The restructuring plan includes a workforce reduction and the consolidation and elimination of certain engineering activities. In connection with this plan, we ceased development of future switch ASICs. We recorded special charges of $16.4 million related to the restructuring plan during the six months ended September 29, 2013, which consisted of $14.0 million of exit costs and $2.4 million of asset impairment charges primarily related to property and equipment. We expect to incur additional exit costs of between $2 million and $4 million associated with this restructuring plan, primarily during the remainder of fiscal 2014.

Disposition of Business

In February 2012, we completed the sale of the product lines and certain assets associated with our InfiniBand business. As a result of this divestiture, our condensed consolidated statements of income for all periods present the operations of this business as discontinued operations. The following discussion and analysis is based on our continuing operations and excludes any results or discussion of our discontinued operations.

Second Quarter Financial Highlights and Other Information

A summary of our financial performance during the second quarter of fiscal 2014 is as follows:

• Net revenues were $112.6 million in the second quarter of fiscal 2014 compared to $113.1 million in the first quarter of fiscal 2014. Revenue from Advanced Connectivity Platforms was $94.0 million in the second quarter of fiscal 2014 compared to $93.2 million in the first quarter of fiscal 2014. Revenue from Legacy Connectivity Products was $18.6 million for the second quarter of fiscal 2014 compared to $19.9 million in the first quarter of fiscal 2014.

• Gross profit as a percentage of net revenues was 67.8% in the second quarter of fiscal 2014 compared to 67.6% in the first quarter of fiscal 2014.

• Operating income increased to $13.2 million in the second quarter of fiscal 2014 from an operating loss of $3.1 million in the first quarter of fiscal 2014. We recorded special charges of $4.3 million during the second quarter of fiscal 2014 and $12.0 million during the first quarter of fiscal 2014.

• Income from continuing operations increased to $11.0 million, or $0.13 per diluted share, in the second quarter of fiscal 2014 from a loss from continuing operations of $3.1 million, or $0.03 per diluted share, in the first quarter of fiscal 2014.

• Cash, cash equivalents and marketable securities were $433.0 million as of September 29, 2013 compared to $431.9 million as of June 30, 2013.

• Accounts receivable decreased to $67.9 million as of September 29, 2013 from $69.3 million as of June 30, 2013. Days sales outstanding (DSO) in receivables was 55 days as of September 29, 2013.

• Inventories were $17.4 million as of September 29, 2013 compared to $17.1 million as of June 30, 2013. Our annualized inventory turns were 8.4 turns in the second quarter of fiscal 2014.

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Results of Operations

Net Revenues

A summary of our net revenues by product category is as follows:

	Three Months Ended						Six Months Ended
	September 29, 2013			September 30, 2012			September 29, 2013			September 30, 2012
	(Dollars in millions)
Net revenues:
Advanced Connectivity Platforms	$	94.0		$	97.4		$	187.2		$	205.4
Legacy Connectivity Products		18.6			20.5			38.5			42.8
	$	112.6		$	117.9		$	225.7		$	248.2
Percentage of net revenues:
Advanced Connectivity Platforms		83	%		83	%		83	%		83	%
Legacy Connectivity Products		17			17			17			17
		100	%		100	%		100	%		100	%

Historically, the global marketplace for server and storage connectivity solutions has expanded in response to the information requirements of enterprise data centers, cloud computing, Web 2.0 and other environments dependent on high performance, reliable data networking. The markets we serve have been characterized by rapid advances in technology and related product performance, which has generally resulted in declining average selling prices over time.

The United States and other countries around the world have experienced, and are continuing to experience, economic weakness and uncertainty. Economic uncertainty is adversely affecting, and in the future may adversely affect, information technology spending rates, which is negatively impacting our revenue and operating results. Accordingly, it is extremely difficult for us to forecast future sales levels and historical information may not be indicative of future trends.

Net revenues of $112.6 million for the three months ended September 29, 2013 decreased from $117.9 million for the three months ended September 30, 2012. The decrease in net revenues was the result of a $3.4 million, or 3%, decrease in revenue from Advanced Connectivity Platforms and a $1.9 million, or 9%, decrease in revenue from Legacy Connectivity Products. The decrease in revenue from Advanced Connectivity Platforms was primarily due to a decrease in the average selling prices of these products. The decrease in revenue from Legacy Connectivity Products was primarily due to an 18% decrease in the quantity of switch products sold, partially offset by a 13% increase in the average selling prices of these products. We expect net revenue from our Legacy Connectivity Products to continue to decline over time. As part of our restructuring plan, we ceased development of future switch ASICs, however, we will continue to sell and support products based on the current generation switch ASICs. In addition, we expect our 1Gb iSCSI products will continue to be replaced with solutions based on current technology.

Net revenues of $225.7 million for the six months ended September 29, 2013 decreased from $248.2 million for the six months ended September 30, 2012. The decrease in net revenues was the result of an $18.2 million, or 9%, decrease in revenue from Advanced Connectivity Platforms and a $4.3 million, or 10%, decrease in revenue from Legacy Connectivity Products. The decrease in revenue from Advanced Connectivity Platforms was primarily due to a decrease in units sold. The decrease in revenue from Legacy Connectivity Products was primarily due to a 19% decrease in the quantity of switch products sold, partially offset by a 12% increase in the average selling prices of these products.

A small number of our customers account for a substantial portion of our net revenues, and we expect that a small number of customers will continue to represent a substantial portion of our net revenues for the foreseeable future. Our top ten customers accounted for 84% and 83% of net revenues during the six months ended September 29, 2013 and September 30, 2012, respectively.

We believe our major customers continually evaluate whether or not to purchase products from alternative or additional sources. Accordingly, there can be no assurance that a major customer will not reduce, delay or eliminate its purchases from us. Any such reduction, delay or loss of purchases could have a material adverse effect on our business, financial condition or results of operations.

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Net revenues by geographic area are as follows:

	Three Months Ended				Six Months Ended
	September 29, 2013		September 30, 2012		September 29, 2013		September 30, 2012
	(In millions)
United States	$	47.2	$	49.7	$	96.3	$	108.3
Asia-Pacific and Japan		41.0		40.5		79.7		81.6
Europe, Middle East and Africa		20.1		22.6		40.7		46.0
Rest of world		4.3		5.1		9.0		12.3
	$	112.6	$	117.9	$	225.7	$	248.2

Revenues by geographic area are presented based upon the ship-to location of the customer, which is not necessarily indicative of the location of the ultimate end-user of our products. The United States and China are the only countries that represented 10% or more of net revenues for the periods presented. Net revenues from customers in China were $13.5 million and $27.4 million for the three and six months ended September 29, 2013, respectively, and $15.9 million and $33.9 million for the three and six months ended September 30, 2012, respectively.

Gross Profit

Gross profit represents net revenues less cost of revenues. Cost of revenues consists primarily of the cost of purchased products, assembly and test services; costs associated with product procurement, inventory management, logistics and product quality; and the amortization of purchased intangible assets. A summary of our gross profit and related percentage of net revenues is as follows:

	Three Months Ended						Six Months Ended
	September 29, 2013			September 30, 2012			September 29, 2013			September 30, 2012
	(Dollars in millions)
Gross profit	$	76.3		$	78.9		$	152.8		$	165.9
Percentage of net revenues		67.8	%		66.9	%		67.7	%		66.8	%

Gross profit for the three months ended September 29, 2013 decreased $2.6 million, or 3%, from gross profit for the three months ended September 30, 2012. The gross profit percentage for the three months ended September 29, 2013 increased to 67.8% from 66.9% for the corresponding quarter in the prior year. The increase in gross profit percentage was primarily due to a favorable change in product mix.

Gross profit for the six months ended September 29, 2013 decreased $13.1 million, or 8%, from gross profit for the six months ended September 30, 2012. The gross profit percentage for the six months ended September 29, 2013 increased to 67.7% from 66.8% for the corresponding period in the prior year. The increase in gross profit percentage was primarily due to a favorable change in product mix.

Our ability to maintain our current gross profit percentage may be significantly affected by factors such as manufacturing volumes over which fixed costs are absorbed, sales discounts and customer incentives, component costs, the mix of products shipped, the transition to new products, competitive price pressures, the timeliness of volume shipments of new products, our ability to achieve manufacturing cost reductions, and amortization and impairments of purchased intangible assets. We anticipate that it will continue to be difficult to reduce manufacturing costs. As a result of these and other factors, our gross profit percentage may decline in future periods.

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Operating Expenses

Our operating expenses are summarized in the following table:

	Three Months Ended						Six Months Ended
	September 29, 2013			September 30, 2012			September 29, 2013			September 30, 2012
	(Dollars in millions)
Operating expenses:
Engineering and development	$	34.8		$	38.0		$	75.2		$	77.5
Sales and marketing		16.4			19.8			35.8			38.6
General and administrative		7.6			8.1			15.3			16.8
Special charges		4.3			—			16.4			—
	$	63.1		$	65.9		$	142.7		$	132.9
Percentage of net revenues:
Engineering and development		30.9	%		32.3	%		33.3	%		31.2	%
Sales and marketing		14.6			16.7			15.9			15.5
General and administrative		6.7			6.9			6.8			6.8
Special charges		3.8			—			7.2			—
		56.0	%		55.9	%		63.2	%		53.5	%

Engineering and Development. Engineering and development expenses consist primarily of compensation and related employee benefit costs, outside service and material costs, occupancy and equipment costs and related computer support costs. During the three months ended September 29, 2013, engineering and development expenses decreased to $34.8 million from $38.0 million for the three months ended September 30, 2012. The decrease was primarily due to a $2.1 million decrease in outside service and material costs related to new product development and a $1.0 million decrease in cash compensation and related employee benefit costs, principally due to cost savings achieved as a result of our restructuring plan.

During the six months ended September 29, 2013, engineering and development expenses decreased to $75.2 million from $77.5 million for the six months ended September 30, 2012. The decrease was primarily due to a $4.4 million decrease in outside service and material costs related to new product development, partially offset by a $1.6 million increase in equipment depreciation and maintenance costs.

We believe continued investments in engineering and development activities are critical to achieving future design wins, expansion of our customer base and revenue growth opportunities.

Sales and Marketing. Sales and marketing expenses consist primarily of compensation and related employee benefit costs, sales commissions, promotional activities and travel for sales and marketing personnel. During the three months ended September 29, 2013, sales and marketing expenses decreased to $16.4 million from $19.8 million for the three months ended September 30, 2012. The decrease is primarily due to a $1.6 million decrease in cash compensation and related employee benefit costs, principally due to cost savings achieved as a result of our restructuring plan, and a $1.2 million decrease in promotional expenses.

During the six months ended September 29, 2013, sales and marketing expenses decreased to $35.8 million from $38.6 million for the six months ended September 30, 2012. The decrease is primarily due to a $1.1 million decrease in promotional expenses and a $0.9 million decrease in cash compensation and related employee benefit costs, principally due to cost savings achieved as a result of our restructuring plan.

General and Administrative. General and administrative expenses consist primarily of compensation and related employee benefit costs for executive, finance, accounting, human resources, legal and information technology personnel. Non-compensation components of general and administrative expenses include accounting, legal and other professional fees, facilities expenses and other corporate expenses. General and administrative expenses decreased to $7.6 million for the three months ended September 29, 2013 from $8.1 million for the three months ended September 30, 2012, primarily due to a decrease in stock-based compensation.

General and administrative expenses decreased to $15.3 million for the six months ended September 29, 2013 from $16.8 million for the six months ended September 30, 2012, primarily due to a decrease in stock-based compensation.

Special Charges. During the three and six months ended September 29, 2013, we recorded special charges of $4.3 million and $16.4 million, respectively, related to our restructuring plan. The special charges for the three months ended September 29, 2013

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consisted entirely of exit costs. The special charges for the six months ended September 29, 2013 consisted of $14.0 million of exit costs and $2.4 million of asset impairment charges primarily related to property and equipment. The exit costs include severance and related costs associated with involuntarily terminated employees. Certain employees that were notified of their termination are required to provide services for varying periods in excess of statutory notice periods. Severance costs related to these services are recognized ratably over the estimated requisite service period. Exit costs also include the estimated costs associated with the portion of a facility under a non-cancelable lease that we ceased using and other costs. As we continue our restructuring activities, we expect to record additional special charges during the remainder of fiscal 2014, primarily related to severance costs for terminated employees that are required to provide services beyond the statutory notice period.

The unpaid exit costs of $6.9 million as of September 29, 2013 are expected to be paid over the terms of the related agreements through fiscal 2018, including $3.5 million during the next twelve months.

Income Taxes

Income tax expense from continuing operations of $3.0 million for the six months ended September 29, 2013 decreased from $4.8 million for the six months ended September 30, 2012, primarily due to a decrease in income before income taxes, offset by the effect of a discrete tax-related item associated with the difference between stock-based compensation expense and the deduction related to stock-based awards on income tax returns.

Given the global scope of our operations and the complexity of global tax and transfer pricing rules and regulations, it is difficult to estimate earnings within each tax jurisdiction. If actual earnings within each tax jurisdiction differ materially from our estimates, we may not achieve our expected effective tax rate. Additionally, our effective tax rate may be impacted by other items, including the tax effects of acquisitions and dispositions, changes to tax laws or regulations, examinations by tax authorities, stock-based compensation, uncertain tax positions and changes in the realizability of deferred tax assets.

Our federal consolidated income tax returns for fiscal years 2010, 2011 and 2012 are currently under examination by the Internal Revenue Service. We do not believe that the results of these examinations will have a material impact on our financial condition or results of operations.

Liquidity and Capital Resources

Our combined balances of cash, cash equivalents and marketable securities decreased to $433.0 million as of September 29, 2013 from $455.5 million as of March 31, 2013. As of September 29, 2013 and March 31, 2013, our international subsidiaries held $334.3 million and $317.1 million, respectively, of our total cash, cash equivalents and marketable securities. These holdings by our international subsidiaries consisted primarily of debt securities due from U.S. issuers, including the U.S. government and related agencies, and U.S. dollar denominated cash and money market funds. Certain foreign regulations could impact our ability to transfer funds to the United States. We currently intend to invest the funds held outside of the United States in our international operations and, as a result, do not intend to repatriate these funds. Should we decide to repatriate funds held outside of the United States, we may incur a significant tax obligation.

We believe that existing cash, cash equivalents, marketable securities and expected cash flow from operations will provide sufficient funds to finance our operations for at least the next twelve months. However, it is possible that we may need to supplement our existing sources of liquidity to finance our activities beyond the next twelve months or for the future acquisition of businesses, products or technologies and there can be no assurance that sources of liquidity will be available to us at that time.

Revolving Credit Facility

We have a credit agreement that provides us with a $125 million unsecured revolving credit facility that matures in March 2018. Borrowings under the credit agreement may be used for general corporate purposes, including permitted share repurchases and acquisitions. Under the credit agreement, we may increase the revolving commitments or obtain incremental term loans in an aggregate amount up to an additional $100 million, subject to certain conditions. There were no borrowings outstanding under the credit agreement as of September 29, 2013.

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Operating, Investing and Financing Activities

Cash provided by operating activities decreased to $40.7 million for the six months ended September 29, 2013 from $68.8 million for the six months ended September 30, 2012. Operating cash flow for the six months ended September 29, 2013 consisted of our net income of $7.9 million and net non-cash expenses of $36.5 million, partially offset by net cash used as a result of changes in operating assets and liabilities of $3.7 million. The changes in operating assets and liabilities included a $7.1 million decrease in accrued compensation, partially offset by a $3.2 million increase in other liabilities. The decrease in accrued compensation was primarily due to the timing of payment obligations. The increase in other liabilities was primarily due to accrued exit costs associated with our restructuring plan.

Cash provided by operating activities of $68.8 million for the six months ended September 30, 2012 consisted of our net income of $30.3 million, net non-cash expenses of $28.4 million and net cash provided as a result of changes in operating assets and liabilities of $10.1 million. The changes in operating assets and liabilities included a $12.9 million increase in accrued taxes, net, and a $3.7 million decrease in accounts receivable, partially offset by a $7.3 million decrease in accrued compensation. The increase in accrued taxes, net, is primarily due to a tax refund received during the period. The decrease in accounts receivable was primarily due to the timing of cash collections and a decrease in net revenues. The decrease in accrued compensation was primarily due to the timing of payment obligations.

Cash used in investing activities was $5.4 million for the six months ended September 29, 2013 and consisted of $15.4 million of purchases of property and equipment, partially offset by $10.0 million of net sales and maturities of available-for-sale securities. During the six months ended September 30, 2012, cash used in investing activities was $29.9 million and consisted of $22.0 million of purchases of property and equipment and $7.9 million of net purchases of available-for-sale securities.

We expect capital expenditures to remain significant in the future as we continue to invest in more costly engineering and production tools for new technologies, machinery and equipment, and enhancements to our corporate information technology infrastructure.

Cash used in financing activities of $44.3 million for the six months ended September 29, 2013 consisted primarily of our purchase of $44.2 million of common stock under our stock repurchase program and $4.5 million for minimum tax withholdings paid on behalf of employees for restricted stock units that vested during the period, partially offset by $4.6 million of proceeds from the issuance of common stock under stock-based awards. During the six months ended September 30, 2012, cash used in financing activities of $100.0 million consisted of our purchase of $99.5 million of common stock under our stock repurchase program and $5.5 million for minimum tax withholdings paid on behalf of employees for restricted stock units that vested during the period, partially offset by $5.0 million of proceeds from the issuance of common stock and excess tax benefits from stock-based awards.

Since fiscal 2003, we have had various stock repurchase programs that authorized the purchase of up to $1.95 billion of our outstanding common stock. As of September 29, 2013, we had repurchased a total of 126.3 million shares of common stock under our stock repurchase programs for an aggregate purchase price of $1.93 billion. Pursuant to the existing stock repurchase program, we are authorized to repurchase shares with an aggregate cost of up to $15.8 million as of September 29, 2013.

Contractual Obligations and Commitments

We have certain contractual obligations and commitments to make future payments in the form of non-cancelable purchase orders to our suppliers and commitments under operating lease arrangements. A summary of our contractual obligations as of September 29, 2013, and their impact on our cash flows in future fiscal years, is as follows:

	2014 (Remaining six months)		2015		2016		2017		2018		Thereafter		Total
	(In millions)
Operating leases	$	4.6	$	6.3	$	2.5	$	2.0	$	1.9	$	0.2	$	17.5
Non-cancelable purchase obligations		32.4		1.6		—		—		—		—		34.0
Total	$	37.0	$	7.9	$	2.5	$	2.0	$	1.9	$	0.2	$	51.5

The amount of unrecognized tax benefits, including related accrued interest and penalties, was $16.7 million as of September 29, 2013. We are not able to provide a reasonable estimate of the timing of future tax payments related to these obligations.

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Critical Accounting Policies and Estimates

The preparation of financial statements in accordance with U.S. generally accepted accounting principles requires us to make estimates and judgments that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of net revenues and expenses during the reporting period. We base our estimates on historical experience and on various other factors that we believe to be reasonable under the circumstances, including the current economic environment, in making judgments about the carrying values of assets and liabilities. We believe the accounting policies described below to be our most critical accounting policies. These accounting policies are affected significantly by judgments, assumptions and estimates used in the preparation of the financial statements and actual results could differ materially from the amounts reported based on these policies.

Revenue Recognition

We recognize revenue from product sales when all of the following fundamental criteria are met: (i) persuasive evidence of an arrangement exists, (ii) delivery has occurred, (iii) the price to the customer is fixed or determinable and (iv) collection of the resulting accounts receivable is reasonably assured.

For all sales, we use a binding purchase order or a signed agreement as evidence of an arrangement. Delivery occurs when goods are shipped and title and risk of loss transfer to the customer, in accordance with the terms specified in the arrangement with the customer. The customer’s obligation to pay and the payment terms are set at the time of delivery and are not dependent on the subsequent resale of the product. However, certain of our sales are made to distributors under agreements that contain a limited right to return unsold product and price protection provisions. These return rights and price protection provisions limit our ability to reasonably estimate product returns and the final price of the inventory sold to distributors. As a result, the price to the customer is not fixed or determinable at the time products are delivered to distributors. Accordingly, we recognize revenue from these distributors based on the sell-through method using inventory information provided by the distributor. At times, we provide standard incentive programs to our customers. We account for our competitive pricing incentives and rebates as a reduction of revenue in the period the related revenue is recorded based on the specific program criteria and historical experience. In addition, we record provisions against revenue and cost of revenue for estimated product returns in the same period that revenue is recognized. These provisions are based on historical experience as well as specifically identified product returns. Service and other revenue is recognized when earned and receipt is reasonably assured.

For those sales that include multiple deliverables, we allocate revenue based on the relative selling price of the individual components. When more than one element, such as hardware and services, are contained in a single arrangement, we allocate revenue between the elements based on each element’s relative selling price, provided that each element meets the criteria for treatment as a separate unit of accounting. When applying the relative selling price method, we determine the selling price for each deliverable using vendor-specific objective evidence (VSOE) of the selling price, if it exists. In order to establish VSOE of the selling price, we must regularly sell the product and/or service on a standalone basis with a substantial majority of the sales priced within a relatively narrow range. If VSOE of the selling price cannot be determined, we then consider third party evidence (TPE) of the selling price. Generally, we are not able to determine TPE due to the lack of similar products and services sold by other companies within the industry. If neither VSOE nor TPE exists, we determine the estimated selling price based on multiple factors including, but not limited to, cost, gross margin, market conditions and pricing practices. Revenue allocated to each element is then recognized when the basic revenue recognition criteria is met for each deliverable.

We sell certain software products and related post-contract customer support. We recognize revenue from software products when all of the following fundamental criteria are met: (i) persuasive evidence of an arrangement exists, (ii) delivery has occurred, (iii) the price to the customer is fixed or determinable and (iv) collection of the resulting accounts receivable is probable. Revenue is allocated to undelivered elements based upon VSOE of the fair value of the element. VSOE of the fair value is based upon the price charged when the element is sold separately. Revenue allocated to each element is then recognized when the basic revenue recognition criteria are met for each element. If we are unable to determine VSOE of fair value for an undelivered element, the entire amount of revenue from the arrangement is deferred and recognized over the service period or when all elements have been delivered.

Stock-Based Compensation

We recognize compensation expense for all stock-based awards made to employees and non-employee directors, including stock options, restricted stock units and stock purchases under our Employee Stock Purchase Plan (the ESPP), based on estimated fair values on the measurement date, which is generally the date of grant. Stock-based compensation is recognized for the portion of the award that is ultimately expected to vest. Forfeitures are estimated at the time of grant based on historical trends and revised, if

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necessary, in subsequent periods if actual forfeitures differ from those estimates. We recognize stock-based compensation expense for awards that are subject to only a service condition on a straight-line basis over the requisite service period for the entire award, which is the vesting period for stock options and restricted stock units, and the offering period for the ESPP. For all other stock-based awards, stock-based compensation is recognized on a straight-line basis over the requisite service period for each separately vesting portion of the award. The determination of fair value of stock-based awards on the date of grant using an option-pricing model is affected by our stock price, as well as assumptions regarding a number of highly complex and subjective variables. These variables include, but are not limited to, our expected stock price volatility over the term of the awards and actual and projected employee stock option exercise behaviors. In estimating expected stock price volatility, we use a combination of (i) historical volatility, calculated based on the daily closing prices of our common stock over a period equal to the expected term of the option, and (ii) implied volatility, utilizing market data of actively traded options on our common stock. We believe that the historical volatility of the price of our common stock over the expected term of the option is a strong indicator of the expected future volatility. We also believe that implied volatility takes into consideration market expectations of how future volatility will differ from historical volatility. Accordingly, we believe a combination of both historical and implied volatility provides the best estimate of the future volatility of the market price of our common stock. Changes in the subjective assumptions can materially affect the estimated fair value of stock-based awards.

Income Taxes

We utilize the asset and liability method of accounting for income taxes. Income tax positions taken or expected to be taken in a tax return are recognized in the first reporting period that it is more likely than not the tax position will be sustained upon examination. A tax position that meets the more-likely-than-not recognition threshold is initially and subsequently measured as the largest amount of tax benefit that is greater than 50% likely of being realized upon settlement with a taxing authority that has full knowledge of all relevant information. Previously recognized income tax positions that fail to meet the recognition threshold in a subsequent period are derecognized in that period. Differences between actual results and our assumptions, or changes in our assumptions in future periods, are recorded in the period they become known. We record potential accrued interest and penalties related to unrecognized tax benefits in income tax expense.

Deferred income taxes are recognized for the future tax consequences of temporary differences using enacted statutory tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Temporary differences include the difference between the financial statement carrying amounts and the tax bases of existing assets and liabilities and operating loss and tax credit carryforwards. The effect on deferred taxes of a change in tax rates is recognized in earnings in the period that includes the enactment date.

A valuation allowance is recorded when it is more likely than not that some or all of a deferred tax asset will not be realized. Significant judgment and estimates are required in determining whether a valuation allowance is recorded. In assessing the need for a valuation allowance, we consider all available evidence, including past operating results, estimates of future taxable income, and the feasibility of tax planning strategies. Our estimates and projections require significant judgment and are subject to uncertainty due to various factors, including the economic environment, industry and market conditions, and the length of time of the projections included in the analyses. If our actual results are less favorable than current estimates, or we revise our estimates downward in future analyses, a valuation allowance may be required with a corresponding adjustment to earnings in the period in which such determination is made.

As a multinational corporation, we are subject to complex tax laws and regulations in various jurisdictions. The application of tax laws and regulations is subject to legal and factual interpretation, judgment and uncertainty. Tax laws themselves are subject to change as a result of changes in fiscal policy, changes in legislation, evolution of regulations and court rulings. Therefore, the actual liability for U.S. or foreign taxes may be materially different from our estimates, which could result in the need to record additional liabilities or potentially to reverse previously recorded tax liabilities. Differences between actual results and our assumptions, or changes in our assumptions in future periods, are recorded in the period they become known.

Marketable Securities

Marketable securities consist of available-for-sale securities and are classified in the consolidated balance sheets based on the nature of the security and the availability for use in current operations. Available-for-sale securities are recorded at fair value, based on quoted market prices or other observable inputs. Unrealized gains and losses, net of related income taxes, on available-for-sale securities are excluded from earnings and reported as a separate component of accumulated other comprehensive income until realized.

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We recognize an impairment charge on available-for-sale securities when the decline in the fair value of an investment below its cost basis is judged to be other-than-temporary. If we intend to sell the security or it is more likely than not that we will be required to sell the security before recovery of its amortized cost basis less any current-period credit loss, we would recognize the entire impairment in earnings. If we do not intend to sell the security and it is not more likely than not that we will be required to sell the security before recovery of its amortized cost basis less any current-period credit loss, the other-than-temporary impairment is separated into (a) the amount representing the credit loss and (b) the amount related to all other factors. The amount of the other-than-temporary impairment related to the credit loss is recognized in earnings. The amount of the other-than-temporary impairment related to other factors is recognized in other comprehensive income, net of applicable taxes. Significant judgment is required in determining the fair value of investment securities in inactive markets as well as determining when declines in fair value constitute an other-than-temporary impairment and the portion of any impairment that is due to a credit loss. We consider various factors in determining whether to recognize an impairment charge, including the current financial and credit market environment, the financial condition and near-term prospects of the issuer of the security, the magnitude of the unrealized loss compared to the cost of the investment, the length of time the investment has been in a loss position and our intent and ability to hold the investment for a period of time sufficient to allow for any anticipated recovery of market value.

Realized gains or losses are determined on a specific identification basis and reported in interest and other income, net, as incurred.

Inventories

Inventories are stated at the lower of cost (first-in, first-out) or market. We write down the carrying value of our inventory to estimated net realizable value for estimated excess and obsolete inventory based upon assumptions about future demand and market conditions. These assumptions are based on economic conditions and trends (both current and projected), anticipated customer demand and acceptance of our current products, expected future products and other assumptions. If actual market conditions are less favorable than those projected by management, additional write-downs may be required. Once we write down the carrying value of inventory, a new cost basis is established. Subsequent changes in facts and circumstances do not result in an increase in the newly established cost basis.

Goodwill and Other Intangible Assets

Goodwill is recorded as the difference, if any, between the aggregate consideration paid for an acquisition and the fair value of the net tangible and intangible assets acquired. The amounts and useful lives assigned to intangible assets acquired, other than goodwill, impact the amount and timing of future amortization. The amount assigned to in-process research and development is capitalized and accounted for as an indefinite-lived intangible asset until the underlying projects are completed or abandoned.

Goodwill is not amortized but instead is tested at least annually for impairment, or more frequently when events or changes in circumstances indicate a potential impairment, by comparing the carrying value to the fair value of the reporting unit to which the goodwill is assigned. A two-step test is used to identify the potential impairment and to measure the amount of impairment, if any. The first step is to compare the fair value of the reporting unit with its carrying amount, including goodwill. If the fair value of the reporting unit is less than its carrying amount, goodwill is considered impaired and the loss is measured by performing step two. Under step two, the impairment loss is measured by comparing the implied fair value of the reporting unit goodwill with the carrying amount of that goodwill. We perform the annual test for impairment as of the first day of our fourth fiscal quarter.

The initial recording and subsequent evaluation for impairment of goodwill and purchased intangible assets requires the use of significant management judgment regarding the forecasts of future operating results. It is possible that our business plans may change and our estimates used may prove to be inaccurate. If our actual results or estimates used in future impairment analyses are lower than current estimates, we could incur impairment charges.

Long-Lived Assets

Long-lived assets, including property and equipment and purchased intangible assets, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable. Significant judgment is required in determining whether a potential indicator of impairment of our long-lived assets exists. Recoverability of assets to be held and used is measured by the comparison of the carrying amount of an asset or asset group to future undiscounted net cash flows expected to be generated by the asset or asset group. If such an asset or asset group is considered to be impaired, the impairment to be recognized is measured as the amount by which the carrying amount of the asset or asset group exceeds the fair value of the asset or asset group. Assets to be disposed of are reported at the lower of their carrying amount or fair value less costs to sell. Estimating future net cash flows and determining proper asset groupings for the purpose of this impairment test requires the use of significant management judgment. If our actual results, or estimates used in future impairment analyses, are lower than our current estimates, we could incur impairment charges.

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Recently Issued Accounting Standards Not Yet Effective

In July 2013, the Financial Accounting Standards Board issued an accounting standard update that requires certain unrecognized tax benefits to be presented as a reduction to deferred tax assets rather than as liabilities when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists. This standard will be effective for us beginning in the first quarter of fiscal 2015 and applied prospectively. Early adoption and retrospective application are permitted. We are currently evaluating the impact this standard will have on our consolidated financial statements.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Our cash and cash equivalents are not subject to significant interest rate risk due to the short maturities of these instruments. As of September 29, 2013, the carrying value of our cash and cash equivalents approximates fair value.

We maintain a portfolio of marketable securities consisting primarily of U.S. government and agency securities, corporate debt obligations, mortgage-backed securities and municipal bonds, the majority of which have remaining terms of three years or less. We are exposed to fluctuations in interest rates as movements in interest rates can result in changes in the market value of our investments in debt securities. However, due to the short-term expected duration of our portfolio of marketable securities, we do not believe that we are subject to material interest rate risk.

In accordance with our investment guidelines, we only invest in instruments with high credit quality ratings and we limit our exposure to any one issuer or type of investment. Our portfolio of marketable securities as of September 29, 2013 consists of $346.5 million of securities that are classified as available-for-sale. As of September 29, 2013, we had gross unrealized losses associated with our available-for-sale securities of $0.9 million that were determined by management to be temporary in nature.

We do not use derivative financial instruments.

Item 4. Controls and Procedures

We maintain disclosure controls and procedures to ensure that information we are required to disclose in reports that we file or submit under the Securities Exchange Act of 1934, as amended, (i) is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms and (ii) is accumulated and communicated to our management, including our principal executive officer and principal financial officer, to allow timely decisions regarding required disclosure. In designing and evaluating our disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives.

Our management evaluated, with the participation of our principal executive officer and principal financial officer, the effectiveness of our disclosure controls and procedures, as such term is defined under Rules 13a-15(e) and 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended. Based on this evaluation, our principal executive officer and principal financial officer have concluded that our disclosure controls and procedures were effective at a reasonable assurance level as of September 29, 2013. There was no change in our internal control over financial reporting during our quarter ended September 29, 2013 that materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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PART II.

OTHER INFORMATION

Item 1A. Risk Factors

We have updated the risk factors discussed in Item 1A of our Annual Report on Form 10-K for the year ended March 31, 2013, as set forth below. We do not believe any of the updates constitute material changes from the risk factors previously discussed in our Annual Report on Form 10-K for the year ended March 31, 2013.

Our operating results have been, are being, and may in the future be, adversely affected by unfavorable economic conditions.

The United States and other countries around the world have experienced, and are continuing to experience, economic weakness and uncertainty. Economic uncertainty is adversely affecting, and in the future may adversely affect, information technology, or IT, spending rates. For example, certain of our large original equipment manufacturer, or OEM, customers are reporting significant weakness in particular markets and geographies. Reductions in IT spending rates have resulted in reduced sales volumes, and could result in lower prices for our products, longer sales cycles, increased inventory provisions and increased production costs, all of which could negatively impact our results of operations.

As a result of worldwide economic weakness and uncertainty, it is extremely difficult for us and our customers to forecast future revenue levels based on historical information and trends. In addition, U.S. federal government spending cuts might reduce demand for our products from organizations that receive funding from the U.S. government and could negatively affect macroeconomic conditions in the United States, which could further reduce demand for our products. To the extent that we do not achieve our anticipated level of revenue, our operating results could be adversely affected.

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

We have experienced, are currently experiencing, and expect to experience in future periods, fluctuations in sales and operating results from quarter to quarter. In addition, there can be no assurance that we will maintain our current gross margins or profitability in the future. A significant portion of our net revenues in each fiscal quarter results from orders booked in that quarter. Orders placed by major customers are typically based on their forecasted sales and inventory levels for our products.

Fluctuations in our quarterly operating results may also be the result of:

• the timing, size and mix of orders from customers;

• gain or loss of significant customers;

• industry consolidation among both our competitors and our customers;

• customer policies pertaining to desired inventory levels of our products;

• sales discounts and customer incentives;

• the availability and sale of new products;

• changes in our average selling prices;

• the timing of server refresh cycles;

• variations in manufacturing capacities, efficiencies and costs;

• the availability and cost of components, including silicon chips;

• variations in product development costs, especially related to advanced technologies;

• variations in operating expenses;

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• changes in effective income tax rates, including those resulting from changes in tax laws;

• our ability to timely produce products that comply with new environmental restrictions or related requirements of our OEM customers;

• actual events, circumstances, outcomes and amounts differing from judgments, assumptions and estimates used in determining the value of certain assets (including the amounts of related valuation allowances), liabilities and other items reflected in our consolidated financial statements;

• the timing of revenue recognition and revenue deferrals;

• gains or losses related to our marketable securities; or

• changes in accounting rules or our accounting policies.

In addition, our quarterly results of operations are influenced by competitive factors, including the pricing and availability of our products and our competitors’ products. Furthermore, communications regarding new products and technologies could cause our customers to defer or cancel purchases of our products. Order deferrals by our customers, delays in our introduction of new products, and longer than anticipated design-in cycles for our products have in the past adversely affected our quarterly results of operations. Due to these factors, as well as other unanticipated factors, it is likely that in some future quarter or quarters our operating results will be below the expectations of public market analysts or investors, and as a result, the price of our common stock could significantly decrease.

We expect gross margin to vary over time and our recent level of gross margin may not be sustainable.

Our recent level of gross margin may not be sustainable and may be adversely affected by numerous factors, including:

• changes in product mix;

• transitions to products based on emerging technologies, such as 10Gb Ethernet, which may have lower gross margins;

• changes in manufacturing volumes over which fixed costs are absorbed;

• increased price competition;

• introduction of new products by us or our competitors, including products with advantages in price, performance or features;

• our inability to reduce manufacturing-related or component costs;

• entry into new markets;

• amortization and impairments of purchased intangible assets;

• sales discounts and customer incentives;

• increases in material, labor or overhead costs;

• excess inventory and inventory holding charges;

• changes in distribution channels;

• increased warranty costs; and

• acquisitions and dispositions of businesses or product lines.

A decrease in our gross margin could adversely affect the market price of our common stock.

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Our stock price may be volatile.

The market price of our common stock has fluctuated substantially, and there can be no assurance that such volatility will not continue. Several factors could impact our stock price including, but not limited to:

• differences between our actual revenues and operating results and the published expectations of public market analysts;

• quarterly fluctuations in our revenues and operating results;

• introduction of new products or changes in product pricing policies by our competitors or us;

• conditions in the markets in which we operate;

• changes in market projections by industry forecasters;

• changes in estimates of our earnings or rating upgrades or downgrades of our stock by public market analysts;

• operating results or forecasts of our major customers or competitors;

• rumors or dissemination of false information; and

• general economic and geopolitical conditions.

In addition, stock markets have experienced extreme price and volume volatility in recent years and stock prices of technology companies have been especially volatile. This volatility has had a substantial effect on the market prices of securities of many public companies for reasons frequently unrelated to the operating performance of the specific companies. These broad market fluctuations could adversely affect the market price of our common stock, which could have a material adverse impact on investor confidence and employee retention.

Our business is dependent, in large part, on the continued growth of the networking markets that we serve and if these markets do not continue to develop, our business will suffer.

Our products are used in storage, local area and converged networks, and therefore our business is dependent on these markets. Our success in generating revenue in these markets will depend on, among other things, our ability to:

• educate potential OEM customers, distributors, resellers, system integrators, storage system providers and end-user organizations about the benefits of our products;

• maintain and enhance our relationships with OEM customers, distributors, resellers, system integrators and storage system providers;

• predict and base our products on standards that ultimately become industry standards; and

• achieve and maintain interoperability between our products and other equipment and components from diverse vendors.

If we are not successful in any or all of these items, our business and results of operations could be materially and adversely affected.

Our financial condition will be materially harmed if we do not maintain and gain market acceptance of our products.

The markets in which we compete involve rapidly changing technologies, evolving industry standards and continuing improvements in products and services. Our future success depends, in part, on our ability to:

• enhance our current products and develop and introduce, in a timely manner, new products that keep pace with technological developments and industry standards;

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• compete effectively on the basis of price and performance; and

• adequately address OEM and end-user customer requirements and achieve market acceptance.

We believe that to remain competitive, we will need to continue to develop new products and enter new markets, which will require significant investment. Our competitors may be developing alternative technologies, or entering into exclusive strategic alliances with our major customers, either of which may adversely affect the market acceptance of our products, our ability to enter new markets, or our ability to secure customer design wins. Although we continue to explore and develop products based on new technologies, a substantial portion of our revenues is generated today from Fibre Channel technology. If alternative technologies are adopted by the industry, we may not be able to develop products for these technologies in a timely manner. Further, even if alternative technologies do augment Fibre Channel revenues, our products may not be fully developed in time to be accepted by our customers. Even if our new products are developed in time, we may not be able to manufacture them at competitive prices or in sufficient volumes.

Some of our products are based on Fibre Channel over Ethernet, or FCoE, or 10Gb Ethernet technologies. FCoE is a converged networking technology that provides a unified storage and data network over Enhanced Ethernet, while preserving the investment by end users in their existing Fibre Channel infrastructure and storage. As with most emerging technologies, it is expected that the market for FCoE will take a number of years to fully develop and mature. We expect products based on FCoE to supplement, and perhaps replace, certain products based on Fibre Channel technology. 10Gb Ethernet is an emerging technology for use in enterprise data centers. The market for 10Gb Ethernet products includes well-established participants who have significantly more engineering, sales and marketing resources to dedicate to developing and penetrating the market than we do. An inability to maintain, or build on, our market share in the Fibre Channel, converged or 10Gb Ethernet markets, or the failure of these markets to expand, could have a material adverse effect on our business or results of operations.

We depend on a small number of customers and any decrease in revenues from any one of our major customers could adversely affect our results of operations and cause our stock price to decline.

A small number of customers account for a substantial portion of our net revenues, and we expect that a small number of customers will continue to represent a substantial portion of our net revenues in the foreseeable future. Our top ten customers accounted for 84% and 83% of net revenues for the six months ended September 29, 2013 and September 30, 2012, respectively. Total revenue from our two largest customers, Hewlett-Packard Company and International Business Machines Corporation, together accounted for 40% or more of net revenues during the six months ended September 29, 2013 and September 30, 2012. We are also subject to credit risk associated with the concentration of our accounts receivable.

A significant portion of the products we sell are incorporated into servers manufactured by our major customers. Certain of our large OEM customers are reporting weakness in this market. If server sales by our major customers continue to be adversely affected by the IT spending environment or server market factors, demand for our products could decrease further, which could have a material adverse effect on our business, financial condition or results of operations.

Our customers generally order products through written purchase orders instead of long-term supply contracts and, therefore, are generally not obligated to purchase products from us for any extended period. Customers typically incorporate our products into complex devices and systems, which creates supply chain cross-dependencies. Accordingly, supply chain disruptions affecting components of our customers’ devices and/or systems could negatively impact the demand for our products, even if the supply of our products is not directly affected. Major customers also have significant leverage over us and may attempt to change the sales terms, including pricing, customer incentives and payment terms, or insist that we undertake or fund significant aspects of the design, qualification and testing that our customers have typically been responsible for, either of which could have a material adverse effect on our business, financial condition or results of operations. As our OEM customers are pressured to reduce prices as a result of competitive factors, we may be required to contractually commit to price reductions for our products before we know how, or if, cost reductions can be achieved. If we are unable to achieve these cost reductions, our gross margins could decline and such a decline could have a material adverse effect on our business, financial condition or results of operations.

The ongoing consolidation in the technology industry could adversely impact our business. There is the potential for some of our customers to merge with or acquire one or more of our other customers. There is also a potential that one of our large customers could acquire one of our current competitors. Similarly, there is also the potential for a large customer to sell portions of their business that we serve to a company with which we have a limited business relationship. As a result of such transactions, demand for our products could decrease, which could have a material adverse effect on our business, financial condition or results of operations.

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Competition within the markets for products such as ours is intense and includes various established competitors.

The markets for networking infrastructure components are highly competitive and are characterized by short product life cycles, price erosion, rapidly changing technology, frequent product performance improvements and evolving industry standards. Due to the diversity of products required in storage, local area and converged networking infrastructure, we compete with many companies. In the traditional enterprise storage Fibre Channel adapter and application-specific integrated circuit, or ASIC, markets, our primary competitor is Emulex Corporation. In the 10Gb Ethernet adapter and ASIC markets, which include converged networking products such as FCoE and Internet Small Computer Systems Interface, or iSCSI, we compete primarily with Emulex Corporation, Broadcom Corporation and Intel Corporation. In the Fibre Channel switch market, we compete primarily with Brocade Communications Systems, Inc. and Cisco Systems, Inc. We may also compete with some of our server and storage systems customers, some of which have the capability to develop products comparable to those we offer.

We need to continue to develop products appropriate to our markets to remain competitive as our competitors continue to introduce products with improved features. While we continue to devote significant resources to engineering and development, these efforts may not be successful or competitive products may not be developed and introduced in a timely manner. In addition, while relatively few competitors offer a full range of storage, local area and converged networking infrastructure products, additional domestic and foreign manufacturers may increase their presence in these markets either through the development of new products or through industry consolidation. We may not be able to compete successfully against these or other competitors. If we are unable to design, develop or introduce competitive new products on a timely basis, or if our competitors introduce new products that are more successful than ours in the marketplace, our future operating results may be materially and adversely affected.

If we are unable to attract and retain key personnel, we may not be able to sustain or grow our business.

Our future success largely depends on our key engineering, sales, marketing and executive personnel, including highly skilled semiconductor design personnel and software developers. Our Chief Executive Officer resigned in May 2013 and we have appointed an interim CEO while we conduct a search for a permanent CEO. During our search for a new CEO, it is important that we retain key personnel. If we lose the services of key personnel, especially during this period of transition, or do not hire or retain other personnel for key positions, including the Chief Executive Officer position, our business could be adversely affected.

We believe that the market for key personnel in the industries in which we compete is highly competitive. In particular, we have periodically experienced difficulty in attracting and retaining qualified engineers and other technical personnel and anticipate that competition for such personnel will increase in the future. For example, the market for qualified technical personnel within India has become extremely competitive, resulting in significant wage inflation. As a result, we may not be able to attract and retain key personnel with the skills and expertise necessary to develop new products in the future or to manage our business, both in the United States and abroad.

We have historically used equity awards and our employee stock purchase program as key components of our total employee compensation program in order to align employees’ interests with the interests of our stockholders, encourage retention of key personnel, and provide competitive compensation packages. However, the guidelines of proxy advisory firms relating to stockholder approval of shares available under equity compensation plans and share usage could make it more difficult for us to obtain such approval and therefore grant stock-based awards to employees in the future, which may result in changes in our stock-based compensation strategy. These and other developments relating to the provision of stock-based compensation to employees could make it more difficult to attract, retain and motivate key personnel.

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Our products are complex and may contain undetected software or hardware errors that could lead to an increase in our costs, reduce our net revenues or damage our reputation.

Our products are complex and may contain undetected software or hardware errors when first introduced or as newer versions are released. We are also exposed to risks associated with latent defects in existing products and to risks that components purchased from third-party subcontractors and incorporated into our products may not meet our specifications or may otherwise fail prematurely. From time to time, we have found errors in existing, new or enhanced products. In addition, our products are frequently combined with other products, including software, from other vendors, and these products often need to interface with existing networks, each of which have different specifications and utilize multiple protocol standards. As a result, when problems occur, it may be difficult to identify the source of the problem. The occurrence of hardware or software errors could adversely affect the sales of our products, cause us to incur significant warranty and repair costs, divert the attention of our engineering personnel from our product development efforts and cause significant customer relations problems, any of which could materially and adversely affect our operating results.

We expect the pricing of our products to continue to decline, which could reduce our revenues, gross margins and profitability.

We expect the average unit prices of our products (on a like-for-like product comparison basis) to decline in the future as a result of competitive pricing pressures, increased sales discounts and customer incentives, new product introductions by us or our competitors, or other factors. If we are unable to offset these factors by increasing sales volumes or reducing product manufacturing costs, our total revenues and gross margins may decline. Moreover, most of our expenses are fixed in the short-term or incurred in advance of receipt of corresponding revenues. As a result, we may not be able to decrease our spending to offset any unexpected shortfall in revenues. If this occurs, our revenues, gross margins and profitability could decline.

We are dependent on sole source and limited source suppliers for certain key components.

Certain key components used in the manufacture of our products are purchased from single or limited sources. ASICs are purchased from single sources and other key components such as microprocessors, logic chips, power supplies and programmable logic devices are purchased from limited sources. If one of these suppliers experiences an interruption in its ability to supply our needs, or chooses to sever its relationship with us, we may be unable to produce certain of our products, which could result in the loss of customers and have a material adverse effect on our results of operations.

We are dependent on worldwide third-party subcontractors and contract manufacturers.

Third-party subcontractors located outside the United States assemble and test certain products for us. To the extent that we rely on third-party subcontractors to perform these functions, we will not be able to directly control product delivery schedules and quality assurance. This lack of control may result in product shortages or quality assurance problems that could delay shipments of products or increase manufacturing, assembly, testing or other costs. If a subcontractor experiences capacity constraints or financial difficulties, suffers damage to its facilities, experiences power outages, natural disasters, labor shortages or labor strikes, or any other disruption of assembly or testing capacity, we may not be able to obtain alternative assembly and testing services in a timely manner.

In addition, the loss of any of our major third-party contract manufacturers could significantly impact our ability to produce products for an indefinite period of time. Qualifying a new contract manufacturer and commencing volume production is a lengthy and expensive process. Some customers will not purchase any products, other than a limited number of evaluation units, until they qualify the manufacturing line for the product. If we are required to change a contract manufacturer or if a contract manufacturer experiences delays, disruptions, capacity constraints, component parts shortages or quality control problems in its manufacturing operations, shipment of our products to our customers could be delayed, resulting in loss or postponement of revenues and potential harm to our competitive position and relationships with customers.

The migration of our customers toward new products could adversely affect our results of operations.

As new or enhanced products are introduced, we must successfully manage the transition from older products in order to minimize the effects of product inventories that may become excess and obsolete, as well as ensure that sufficient supplies of new products can be delivered to meet customer demand. Our failure to manage the transition to newer products in the future or to develop and successfully introduce new products and product enhancements could adversely affect our business or results of operations. In addition, our customers are demanding a higher level of customization for new products, which prevents us from fully leveraging our product design work and adds to our new product development costs. When we introduce new products and product enhancements,

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we face additional risks relating to product transitions, including risks relating to forecasting demand and longer lead times associated with smaller product geometries and more complex production operations. Any such adverse event or increased costs could have a material adverse effect on our business, financial condition or results of operations.

Historically, the technology industry has developed higher performance ASICs, which create chip-level solutions that replace selected board-level or box-level solutions at a significantly lower average selling price. We have previously offered ASICs to customers for certain applications that have effectively resulted in a lower-priced solution when compared to an adapter solution. This transition to ASICs may also occur with respect to other current and future products. The result of this transition may have an adverse effect on our business, financial condition or results of operations. In the future, a similar adverse effect to our business could occur if there were rapid shifts in customer purchases from our midrange networking infrastructure products to lower-cost products.

Our business is subject to seasonal fluctuations and uneven sales patterns.

A large percentage of our products are sold to customers who experience seasonality and uneven sales patterns in their businesses. As a result, we experience similar seasonality and uneven sales patterns. We believe this uneven sales pattern is a result of many factors including:

• the tendency of our customers to close a disproportionate percentage of their sales transactions in the last month, weeks and days of each quarter;

• spikes in sales during the fourth quarter of each calendar year that some of our customers experience; and

• differences between our quarterly fiscal periods and the fiscal periods of our customers.

In addition, because our customers require us to maintain products at hub locations near their facilities, it is difficult for us to predict sales trends. Our uneven sales pattern also makes it extremely difficult to predict the demand of our customers and adjust manufacturing capacity accordingly. If we predict demand that is substantially greater than actual customer orders, we will have excess inventory. Alternatively, if customer orders substantially exceed predicted demand, the ability to assemble, test and ship orders received in the last weeks and days of each quarter may be limited, or at an increased cost, which could have a material adverse effect on our quarterly revenues and earnings.

Our distributors may not effectively sell our products and their reseller customers may purchase products from our competitors, which could negatively affect our results of operations.

Our distributors, which currently account for less than 15% of our net revenues, generally offer a diverse array of products from several different manufacturers and suppliers. Accordingly, we are at risk that these distributors may give higher priority to selling products from other suppliers, thus reducing their efforts to sell our products. A reduction in sales efforts by our current distributors could materially and adversely impact our business or results of operations. In addition, if we decrease our distributor-incentive programs (i.e., competitive pricing and rebates), our distributors may decrease the amount of product purchased from us. This could result in a change of business behavior, and distributors may decide to decrease their inventory levels, which could impact availability of our products to their customers.

As a result of these factors regarding our distributors or other unrelated factors, the reseller customers of our distributors could decide to purchase products developed and manufactured by our competitors. Any loss of demand for our products by value-added resellers and system integrators could have a material adverse effect on our business or results of operations.

Unanticipated changes in our tax provisions or adverse outcomes resulting from examination of our income tax returns could adversely affect our results of operations.

We are subject to income taxes in the United States and various foreign jurisdictions. Our effective tax rate has been and could in the future be adversely affected by changes in tax laws or interpretations of those tax laws, by changes in the mix of earnings in countries with differing statutory tax rates, or by changes in the valuation of our deferred tax assets and liabilities. Our effective tax rate is also affected by intercompany transactions for licenses, services, funding and other items. Given the global scope of our operations, and the complexity of global tax and transfer pricing rules and regulations, it is difficult to estimate earnings within each tax jurisdiction. If actual earnings within a tax jurisdiction differ materially from our estimates, we may not achieve our expected effective tax rate.

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Additionally, our effective tax rate may be impacted by the tax effects of acquisitions, dispositions, changes to tax laws or regulations, examinations by tax authorities, stock-based compensation, uncertain tax positions and changes in the realizability of deferred tax assets. Significant judgment and estimates are required in determining the impact on our effective tax rate related to these items, including whether it is more likely than not that some or all of our deferred tax assets will be realized. Such estimates are subject to uncertainty due to various factors, including the economic environment, industry and market conditions, and the length of time of the projections included in the analyses. If our actual results are less favorable than current estimates, or we revise our estimates downward in future analyses, a valuation allowance may be required related to our deferred tax assets with a corresponding adjustment to earnings in the period in which such determination is made, which could have a material effect on our results of operations.

Finally, we are subject to examination of our income tax returns by the United States Internal Revenue Service (IRS) and other tax authorities, which may result in the assessment of additional income taxes. For example, our federal consolidated income tax returns for fiscal years 2010, 2011 and 2012 are currently under examination by the IRS. We regularly assess the likelihood of adverse outcomes resulting from examinations to determine the adequacy of our provisions for income taxes. However, unanticipated outcomes from examinations could have a material adverse effect on our financial condition or results of operations.

Because we have operations in foreign countries and depend on foreign customers and suppliers, we are subject to international economic, currency, regulatory, political and other risks that could harm our business, financial condition and results of operations.

International revenues accounted for 57% and 56% of our net revenues for the six months ended September 29, 2013 and September 30, 2012, respectively. We expect that international revenues will continue to account for a significant percentage of our net revenues for the foreseeable future. In addition, we maintain operations in foreign countries and a significant portion of our inventory purchases are from suppliers that are located outside the United States. As a result, we are subject to several risks, which include:

• a greater difficulty of administering and managing our business globally;

• compliance with multiple, and potentially conflicting, regulatory requirements, such as import or export requirements, tariffs and other barriers;

• less effective intellectual property protections outside of the United States;

• currency fluctuations;

• overlapping or differing tax structures;

• political and economic instability, including terrorism and war; and

• general trade restrictions.

As of September 29, 2013, our international subsidiaries held $334.3 million of our total cash, cash equivalents and marketable securities. These holdings by our international subsidiaries consist primarily of debt securities due from U.S. issuers, including the U.S. government and related agencies, and U.S. dollar denominated cash and money market funds. Certain foreign regulations could impact our ability to transfer funds to the United States. Additionally, should we decide to repatriate cash held outside of the United States, we may incur a significant tax obligation.

Our international sales are invoiced in U.S. dollars and, accordingly, if the relative value of the U.S. dollar in comparison to the currency of our foreign customers should increase, the resulting effective price increase of our products to such foreign customers could result in decreased sales. In addition, a significant portion of our inventory is purchased from international suppliers, who invoice us in U.S. dollars. If the relative value of the U.S. dollar in comparison to the currency of our foreign suppliers should decrease, our suppliers may increase prices, which could result in a decline of our gross margin. Any of the foregoing factors could have a material adverse effect on our business, financial condition or results of operations.

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Our facilities and the facilities of our suppliers and customers are located in regions that are subject to natural disasters.

Our California facilities, including our principal executive offices, our principal design facilities and our critical business operations, are located near major earthquake faults. We are not specifically insured for earthquakes or other natural disasters. Any personal injury at, or damages to, the facilities as a result of such occurrences could have a material adverse effect on our business, results of operations or financial condition. Additionally, we have operations, suppliers and customers in regions that have historically experienced natural disasters. Any earthquake or other natural disaster, including a hurricane, flood, volcanic eruption, tsunami or fire, affecting any of these regions could adversely affect our business, results of operations and financial condition.

In addition, as a result of a natural disaster, our major customers may face shortages of components that could negatively impact their ability to build the servers and data center devices into which our products are integrated, thereby negatively impacting the demand for our products even if the supply of our products is not directly affected by the natural disaster. For example, the earthquake, tsunami and related events that occurred in Japan in March 2011, and the extensive flooding that occurred in Thailand beginning in October 2011, caused widespread destruction in regions that include suppliers of components for many technology companies.

Our proprietary rights may be inadequately protected and difficult to enforce.

In some jurisdictions, we have patent protection on certain aspects of our technology. However, we rely primarily on trade secrets, trademarks, copyrights and contractual provisions to protect our proprietary rights. There can be no assurance that these protections will be adequate to protect our proprietary rights, that others will not independently develop or otherwise acquire equivalent or superior technology, or that we can maintain such technology as trade secrets. There also can be no assurance that any patents we possess will not be invalidated, circumvented or challenged. We have taken steps in several jurisdictions to enforce our trademarks against third parties. No assurances can be given that we will ultimately be successful in protecting our trademarks. The laws of certain countries in which our products are or may be developed, manufactured or sold, including various countries in Asia, may not protect our products and intellectual property rights to the same extent as the laws of the United States, or at all. If we fail to protect our intellectual property rights, our business could be negatively impacted.

Disputes relating to claimed infringement of intellectual property rights may adversely affect our business.

We have in the past received notices of claimed infringement of intellectual property rights and been involved in intellectual property litigation. There can be no assurance that third parties will not assert future claims of infringement of intellectual property rights against us, or against customers who we are contractually obligated to indemnify, with respect to existing and future products. In addition, our supply of silicon chips and other components can also be interrupted by intellectual property infringement claims against our suppliers.

Individuals and groups are purchasing intellectual property assets for the sole purpose of making claims of infringement and attempting to extract settlements from companies such as ours. Although patent and intellectual property disputes may be settled through licensing or similar arrangements, costs associated with these arrangements may be substantial and the necessary licenses or similar arrangements may not be available to us on satisfactory terms, or at all. As a result, we could be prevented from manufacturing and selling some of our products. In addition, if we litigate these kinds of claims, the litigation could be expensive, time consuming and could divert management’s attention from other matters and there is no guarantee we would prevail. Our business could suffer regardless of the outcome of the litigation.

We may engage in mergers, acquisitions, divestitures and strategic investments and these activities could adversely affect our results of operations and stock price.

Our future growth may depend in part on our ability to identify and acquire complementary businesses, technologies or product lines that are compatible with our existing business. Mergers and acquisitions involve numerous risks, including:

• the failure of markets for the products of acquired companies to develop as expected;

• uncertainties in identifying and pursuing target companies;

• difficulties in assimilating the operations, technologies and products of the acquired companies;

29

• the existence of unknown defects in acquired companies’ products or assets that may not be identified due to the inherent limitations involved in the due diligence process of an acquisition;

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

• risks associated with entering markets or conducting operations with which we have no or limited direct prior experience;

• risks associated with assuming the legal obligations of acquired companies;

• risks related to the effect that acquired companies’ internal control processes might have on our financial reporting and management’s report on our internal control over financial reporting;

• the potential loss of, or impairment of our relationships with, current customers or failure to retain the acquired companies’ customers;

• the potential loss of key employees of acquired companies; and

• the incurrence of significant exit charges if products or technologies acquired in business combinations are unsuccessful.

Further, we may never realize the perceived benefits of a business combination or divestiture. Acquisitions by us could negatively impact gross margins or dilute stockholders’ investment and cause us to incur debt, contingent liabilities and amortization/impairment charges related to intangible assets, all of which could materially and adversely affect our financial condition or results of operations. Divestitures involve risks, such as difficulty splitting up businesses, distracting employees, potential loss of revenue and negatively impacting margins, and potentially disrupting customer relationships. In addition, our effective tax rate for future periods could be negatively impacted by acquisitions or divestitures.

We have made, and could make in the future, investments in technology companies, including privately-held companies in a development stage. Many of these private equity investments are inherently risky because the companies’ businesses may never develop, and we may incur losses related to these investments. In addition, we may be required to write down the carrying value of these investments to reflect other-than-temporary declines in their value, which could have a material adverse effect on our financial condition and results of operations.

Our portfolio of marketable securities could experience a decline in market value, which could materially and adversely affect our financial results.

As of September 29, 2013, we held short-term marketable securities totaling $346.5 million. We invest in debt securities, the majority of which are high investment grade, and we limit the exposure to credit risk through diversification and investment in highly-rated securities. However, investing in highly-rated securities does not entirely mitigate the risk of potential declines in market value. For example, in the past we have recorded impairment charges related to investment securities, including securities issued by companies in the financial services sector that had previously been rated AA or higher. A deterioration in the economy, including tightening of credit markets or significant volatility in interest rates, could cause declines in value of our marketable securities or could impact the liquidity of the portfolio. If market conditions deteriorate significantly, our results of operations or financial condition could be materially and adversely affected.

Changes in and compliance with regulations could materially and adversely affect us.

Our business, results of operations or financial condition could be materially and adversely affected if new laws, regulations or standards relating to us or our products are implemented or existing ones are changed. In addition, our compliance with existing regulations may have a material adverse impact on us. For example, in July 2010, the Dodd-Frank Wall Street Reform and Consumer Protection Act, or the Dodd-Frank Act, was enacted. There are significant corporate governance and executive compensation related provisions in the Dodd-Frank Act that require the U.S. Securities and Exchange Commission to adopt additional rules and regulations in these areas. The U.S. Securities and Exchange Commission has also finalized new disclosure requirements relating to the sourcing of so-called conflict minerals from the Democratic Republic of Congo and certain other adjoining countries. Our disclosure will be predicated upon the timely receipt of accurate information from suppliers, who may be unwilling or unable to provide us with the relevant information. As a result, these new requirements could adversely affect our costs, the availability of minerals used in our products and our relationships with customers and suppliers.

30

We and our customers are subject to various import and export regulations of the United States government and other countries. Certain government export regulations apply to the encryption or other features contained in some of our products. Changes in or violations of any such import or export regulations could materially and adversely affect our business, financial condition or results of operations.

In many foreign countries, particularly in those with developing economies, it is common to engage in business practices that are prohibited by regulations applicable to us, such as the Foreign Corrupt Practices Act and other anti-bribery laws. Although we have policies and procedures designed to ensure compliance with these laws, our employees, contractors and agents, as well as those companies to which we outsource certain of our business operations, may take actions in violation of our policies. Any such violation, even if prohibited by our policies, could have a material adverse effect on our business, financial condition or results of operations.

We face increasing complexity in our product design and procurement operations as we adjust to new and future requirements relating to the chemical and material composition of our products, their safe use, the energy consumption associated with those products and product take-back legislation (i.e., legislation that makes producers of electrical goods financially responsible for specified collection, recycling, treatment and disposal of past and future covered products). We could incur substantial costs, our products could be restricted from entering certain jurisdictions, and we could face other sanctions, if we were to violate or become liable under environmental laws or if our products become non-compliant with environmental laws.

We continually seek ways to increase the energy efficiency of our products. Recent analyses have estimated the amount of global carbon emissions that are due to information technology products. As a result, governmental and non-governmental organizations have turned their attention to development of regulations and standards to drive technological improvements and reduce the amount of carbon emissions. There is a risk that these regulations or standards, once developed, will not fully address the complexity of the technology developed by the IT industry or will favor certain technological approaches that we do not currently utilize. Depending on the regulations or standards that are ultimately adopted, compliance could adversely affect our business, results of operations or financial condition.

We may experience difficulties in transitioning to smaller geometry process technologies.

We expect to continue to transition our semiconductor products to increasingly smaller line width geometries. This transition requires us to modify the manufacturing processes for our products and to redesign some products, as well as standard cells and other integrated circuit designs that we may use in multiple products. We periodically evaluate the benefits, on a product-by-product basis, of migrating to smaller geometry process technologies. In the past, we have experienced some difficulties in shifting to smaller geometry process technologies or new manufacturing processes, which resulted in reduced manufacturing yields, delays in product deliveries and increased expenses. We may face similar difficulties, delays and expenses as we continue to transition our products to smaller geometry processes.

If we fail to carefully manage the use of “open source” software in our products, we may be required to license key portions of our products on a royalty-free basis or expose key parts of our source code.

Certain of our software may be derived from “open source” software that is generally made available to the public by its authors and/or other third parties. Such open source software is often made available to us under licenses, such as the GNU General Public License (GPL), that impose certain obligations on us in the event we were to distribute derivative works of the open source software. These obligations may require us to make source code for the derivative works available to the public and license such derivative works under a particular type of license, rather than the forms of licenses customarily used to protect our intellectual property. In the event the copyright holder of any open source software were to successfully establish in court that we had not complied with the terms of a license for a particular work, we could be required to release the source code of that work to the public or stop distributing that work.

System security risks, data protection breaches and cyber-attacks could disrupt our internal operations, and any such disruption could reduce our expected revenues, increase our expenses, damage our reputation and adversely affect our stock price.

Experienced computer programmers and hackers may be able to penetrate our network and misappropriate or compromise our confidential information or that of third parties, create system disruptions or cause shutdowns. Computer programmers and hackers also may be able to develop and deploy viruses, worms, and other malicious software programs that attack our products or otherwise exploit any security vulnerabilities of our products. In addition, sophisticated hardware and operating system software and applications that we produce or procure from third parties may contain defects in design or manufacture, including “bugs” and other problems that could unexpectedly interfere with the operation of the system. The costs to us to eliminate or alleviate cyber or other security

31

problems, bugs, viruses, worms, malicious software programs and security vulnerabilities could be significant and, if our efforts to address these problems are not successful, this could result in interruptions, delays, cessation of service and loss of existing or potential customers that may impede our sales, manufacturing, distribution or other critical functions.

We manage and store various proprietary information and sensitive or confidential data relating to our business. We have also outsourced a number of our business functions to third party contractors. Breaches of our or our third party contractors’ security measures or the accidental loss, inadvertent disclosure or unapproved dissemination of proprietary information or sensitive or confidential data about us or our customers, including the potential loss or disclosure of such information or data as a result of fraud, trickery or other forms of deception, could expose us or our customers to a risk of loss or misuse of this information, result in litigation and potential liability for us, damage our brand and reputation or otherwise harm our business. In addition, the cost and operational consequences of implementing further data protection measures could be significant.

Our ability to borrow and maintain outstanding borrowings under our credit agreement is subject to certain covenants.

We have a credit agreement that provides us with a $125 million unsecured revolving credit facility that matures in March 2018. Borrowings under the credit agreement may be used for general corporate purposes, including permitted share repurchases and acquisitions. Under the credit agreement, we may increase the revolving commitments or obtain incremental term loans in an aggregate amount up to an additional $100 million, subject to certain conditions. Our ability to borrow under the credit agreement is subject to continued compliance with certain financial and non-financial covenants. In addition, a breach of any of the covenants or other provisions in the credit agreement could result in an event of default, which if not cured or waived, could result in outstanding borrowings becoming immediately due and payable. We may be unable to maintain compliance with these covenants and, if we fail to do so, we may be unable to obtain waivers or amend the covenants. In the event that some or all of our outstanding borrowings are accelerated and become immediately due and payable, we may not have the funds to repay, or the ability to refinance, our borrowings. There were no borrowings outstanding under the credit agreement as of September 29, 2013.

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Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

In November 2011, our Board of Directors approved a program to repurchase up to $200 million of our common stock through March 2014. Set forth below is information regarding our stock repurchases made during the second quarter of fiscal 2014 under this program.

Period	Total Number of Shares Purchased		Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plan		Approximate Dollar Value of Shares that May Yet be Purchased Under the Plan
July 1, 2013 – July 28, 2013		709,000	$	10.62		709,000	$	27,321,000
July 29, 2013 – August 25, 2013		700,000	$	11.31		700,000	$	19,412,000
August 26, 2013 – September 29, 2013		324,000	$	11.09		324,000	$	15,821,000
		1,733,000	$	10.99		1,733,000	$	15,821,000

33

Item 6. Exhibits

Exhibits

Exhibit No.
10.1	QLogic Corporation 1998 Employee Stock Purchase Plan (Amended and Restated Effective May 23, 2013) (incorporated by reference to Exhibit 10.1 of the Registrant’s Current Report on Form 8-K filed on August 23, 2013).*
31.1	Certification of Chief Executive Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of Chief Financial Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32	Certification of Chief Executive Officer and Chief Financial Officer pursuant to Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended, and 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.DEF	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

* Compensation plan, contract or arrangement required to be filed as an exhibit pursuant to applicable rules of the Securities and Exchange Commission.

34

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.

QLOGIC CORPORATION
By:	/s/    JEAN HU
	Jean Hu
	Interim Chief Executive Officer,
	Senior Vice President and
	Chief Financial Officer
	(Principal Financial and Accounting Officer)

Date: October 31, 2013

35

EXHIBIT INDEX

Exhibit No.
10.1	QLogic Corporation 1998 Employee Stock Purchase Plan (Amended and Restated Effective May 23, 2013) (incorporated by reference to Exhibit 10.1 of the Registrant’s Current Report on Form 8-K filed on August 23, 2013).*
31.1	Certification of Chief Executive Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of Chief Financial Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32	Certification of Chief Executive Officer and Chief Financial Officer pursuant to Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended, and 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.DEF	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

* Compensation plan, contract or arrangement required to be filed as an exhibit pursuant to applicable rules of the Securities and Exchange Commission.

36

EX-31.1

EXHIBIT 31.1

Certification pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934,

as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Jean Hu, certify that:

1. I have reviewed this quarterly report on Form 10-Q of QLogic 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 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.

By:	/s/ JEAN HU
	Jean Hu
	Interim Chief Executive Officer

Date: October 31, 2013

EX-31.2

EXHIBIT 31.2

Certification pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934,

as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Jean Hu, certify that:

1. I have reviewed this quarterly report on Form 10-Q of QLogic 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 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.

By:	/s/ JEAN HU
	Jean Hu
	Senior Vice President and
	Chief Financial Officer

Date: October 31, 2013

EX-32

EXHIBIT 32

Certification pursuant to Rule 13a-14(b) of the Securities Exchange Act of 1934,

as amended, and 18 U.S.C. Section 1350, as adopted pursuant to

Section 906 of the Sarbanes-Oxley Act of 2002

The undersigned Interim Chief Executive Officer and Chief Financial Officer of QLogic Corporation (the “Company”), hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) the Quarterly Report on Form 10-Q of the Company for the quarter ended September 29, 2013 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) 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.

/s/ JEAN HU

Jean Hu

Interim Chief Executive Officer,

Senior Vice President and

Chief Financial Officer

Dated: October 31, 2013

The foregoing certification is being furnished to the Securities and Exchange Commission pursuant to 18 U.S.C. Section 1350. It is not being filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and it is not to be incorporated by reference into any filing of the Company, whether made before or after the date hereof, except to the extent that the Company specifically incorporates it by reference and regardless of any general incorporation language in such filing.

XML

Inventories (Tables)

6 Months Ended

Sep. 29, 2013

Inventory Disclosure [Abstract]

Components of Inventories

Components of inventories are as follows:

	September 29, 2013		March 31, 2013
	(In thousands)
Raw materials	$	1,555	$	2,039
Finished goods		15,808		18,121
	$	17,363	$	20,160

XML

Condensed Consolidated Statements of Income (Unaudited) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Sep. 29, 2013	Sep. 30, 2012	Sep. 29, 2013	Sep. 30, 2012
Income Statement [Abstract]
Net revenues	$ 112,622	$ 117,867	$ 225,738	$ 248,238
Cost of revenues	36,313	38,980	72,932	82,293
Gross profit	76,309	78,887	152,806	165,945
Operating expenses:
Engineering and development	34,790	38,024	75,177	77,482
Sales and marketing	16,431	19,739	35,844	38,625
General and administrative	7,553	8,139	15,292	16,812
Special charges	4,349		16,382
Total operating expenses	63,123	65,902	142,695	132,919
Operating income	13,186	12,985	10,111	33,026
Interest and other income, net	25	954	798	2,032
Income from continuing operations before income taxes	13,211	13,939	10,909	35,058
Income taxes	2,234	2,159	2,982	4,837
Income from continuing operations	10,977	11,780	7,927	30,221
Income from discontinued operations, net of income taxes		94		39
Net income	$ 10,977	$ 11,874	$ 7,927	$ 30,260
Income from continuing operations per share:
Basic	$ 0.13	$ 0.13	$ 0.09	$ 0.32
Diluted	$ 0.13	$ 0.13	$ 0.09	$ 0.31
Income from discontinued operations per share:
Basic
Diluted
Net income per share:
Basic	$ 0.13	$ 0.13	$ 0.09	$ 0.32
Diluted	$ 0.13	$ 0.13	$ 0.09	$ 0.31
Number of shares used in per share calculations:
Basic	87,430	93,762	88,288	95,584
Diluted	87,669	93,949	88,720	96,159

XML

Inventories

6 Months Ended

Sep. 29, 2013

Inventory Disclosure [Abstract]

Inventories

Note 4. Inventories

Components of inventories are as follows:

	September 29, 2013		March 31, 2013
	(In thousands)
Raw materials	$	1,555	$	2,039
Finished goods		15,808		18,121
	$	17,363	$	20,160

XML

Fair Value Measurements - Schedule of Assets Measured at Fair Value on Recurring Basis (Detail) (USD $) In Thousands, unless otherwise specified	Sep. 29, 2013	Mar. 31, 2013
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities	$ 346,501	$ 359,974
Fair Value, Measurements, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents	86,507	95,532
Marketable securities	346,501	359,974
Total assets at fair value disclosure	433,008	455,506
U.S. government and agency securities [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities	83,359	113,359
Corporate debt obligations [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities	167,055	154,859
Mortgage-backed securities [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities	52,387	51,281
Municipal bonds [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities	41,007	39,872
Other debt securities [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities	2,693	603
Fair Value Measurements Using, Level 1 [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents	86,507	95,098
Marketable securities	83,359	113,359
Total assets at fair value disclosure	169,866	208,457
Fair Value Measurements Using, Level 1 [Member] | U.S. government and agency securities [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities	83,359	113,359
Fair Value Measurements Using, Level 1 [Member] | Corporate debt obligations [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities
Fair Value Measurements Using, Level 1 [Member] | Mortgage-backed securities [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities
Fair Value Measurements Using, Level 1 [Member] | Municipal bonds [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities
Fair Value Measurements Using, Level 1 [Member] | Other debt securities [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities
Fair Value Measurements Using, Level 2 [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents		434
Marketable securities	263,142	246,615
Total assets at fair value disclosure	263,142	247,049
Fair Value Measurements Using, Level 2 [Member] | U.S. government and agency securities [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities
Fair Value Measurements Using, Level 2 [Member] | Corporate debt obligations [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities	167,055	154,859
Fair Value Measurements Using, Level 2 [Member] | Mortgage-backed securities [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities	52,387	51,281
Fair Value Measurements Using, Level 2 [Member] | Municipal bonds [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities	41,007	39,872
Fair Value Measurements Using, Level 2 [Member] | Other debt securities [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities	2,693	603
Fair Value Measurements Using, Level 3 [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents
Marketable securities
Total assets at fair value disclosure
Fair Value Measurements Using, Level 3 [Member] | U.S. government and agency securities [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities
Fair Value Measurements Using, Level 3 [Member] | Corporate debt obligations [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities
Fair Value Measurements Using, Level 3 [Member] | Mortgage-backed securities [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities
Fair Value Measurements Using, Level 3 [Member] | Municipal bonds [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities
Fair Value Measurements Using, Level 3 [Member] | Other debt securities [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities

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Stock-Based Compensation (Tables)

6 Months Ended

Sep. 29, 2013

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Summary of Stock-Based Compensation Expense

A summary of stock-based compensation expense, by functional line item in the condensed consolidated statements of income, is as follows:

	Three Months Ended				Six Months Ended
	September 29, 2013		September 30, 2012		September 29, 2013		September 30, 2012
	(In thousands)
Cost of revenues	$	239	$	540	$	823	$	1,310
Engineering and development		2,257		3,096		6,608		7,414
Sales and marketing		1,230		1,633		3,023		3,598
General and administrative		1,092		1,776		2,535		4,000
	$	4,818	$	7,045	$	12,989	$	16,322

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Stock-Based Compensation - Summary of Stock-Based Compensation Expense (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Sep. 29, 2013	Sep. 30, 2012	Sep. 29, 2013	Sep. 30, 2012
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock-based compensation expense	$ 4,818	$ 7,045	$ 12,989	$ 16,322
Cost of revenues [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock-based compensation expense	239	540	823	1,310
Engineering and development [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock-based compensation expense	2,257	3,096	6,608	7,414
Sales and marketing [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock-based compensation expense	1,230	1,633	3,023	3,598
General and administrative [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock-based compensation expense	$ 1,092	$ 1,776	$ 2,535	$ 4,000

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Stock-Based Compensation - Additional Information (Detail) (USD $) In Millions, except Per Share data, unless otherwise specified	6 Months Ended
	Sep. 29, 2013
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock options granted, shares	0.1
Weighted average grant date fair values per share, options granted for purchase of common stock	$ 4.12
Restricted stock units (RSUs) [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Restricted stock units granted, shares	1.2
Weighted average grant date fair values per share, restricted stock units granted	$ 9.93
Restricted stock units with service and market conditions [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Restricted stock units granted, shares	0.1

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Income Per Share - Computation of Basic and Diluted Income Per Share from Continuing Operations (Detail) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Sep. 29, 2013	Sep. 30, 2012	Sep. 29, 2013	Sep. 30, 2012
Earnings Per Share [Abstract]
Income from continuing operations	$ 10,977	$ 11,780	$ 7,927	$ 30,221
Shares:
Weighted-average shares outstanding - basic	87,430	93,762	88,288	95,584
Dilutive potential common shares, using treasury stock method	239	187	432	575
Weighted-average shares outstanding - diluted	87,669	93,949	88,720	96,159
Income from continuing operations per share:
Basic	$ 0.13	$ 0.13	$ 0.09	$ 0.32
Diluted	$ 0.13	$ 0.13	$ 0.09	$ 0.31

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Inventories - Components of Inventories (Detail) (USD $) In Thousands, unless otherwise specified	Sep. 29, 2013	Mar. 31, 2013
Inventory Disclosure [Abstract]
Raw materials	$ 1,555	$ 2,039
Finished goods	15,808	18,121
Total Inventory	$ 17,363	$ 20,160

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Condensed Consolidated Statements of Cash Flows (Unaudited) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Sep. 29, 2013	Sep. 30, 2012
Cash flows from operating activities:
Net income	$ 7,927	$ 30,260
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	15,730	13,524
Stock-based compensation	12,989	16,322
Deferred income taxes	3,632	(3,493)
Impairment of property and equipment	2,429
Other non-cash items	1,698	2,094
Changes in operating assets and liabilities:
Accounts receivable	(1,818)	3,749
Inventories	2,797	(2,064)
Other assets	180	(2,223)
Accounts payable	(102)	2,222
Accrued compensation	(7,141)	(7,270)
Accrued taxes, net	(905)	12,908
Other liabilities	3,249	2,779
Net cash provided by operating activities	40,665	68,808
Cash flows from investing activities:
Purchases of available-for-sale securities	(162,673)	(137,446)
Proceeds from sales and maturities of available-for-sale securities	172,629	129,587
Purchases of property and equipment	(15,389)	(22,029)
Net cash used in investing activities	(5,433)	(29,888)
Cash flows from financing activities:
Proceeds from issuance of common stock under stock-based awards	4,565	4,894
Excess tax benefits from stock-based awards	10	128
Minimum tax withholding paid on behalf of employees for restricted stock units	(4,514)	(5,505)
Purchases of treasury stock	(44,212)	(99,488)
Payments for credit facility commitment fee	(106)
Net cash used in financing activities	(44,257)	(99,971)
Net decrease in cash and cash equivalents	(9,025)	(61,051)
Cash and cash equivalents at beginning of period	95,532	164,516
Cash and cash equivalents at end of period	$ 86,507	$ 103,465

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Marketable Securities

6 Months Ended

Sep. 29, 2013

Investments Debt And Equity Securities [Abstract]

Marketable Securities

Note 2. Marketable Securities

The Company’s portfolio of available-for-sale marketable securities consists of the following:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
	(In thousands)
September 29, 2013
U.S. government and agency securities	$	83,424	$	98	$	(163	)	$	83,359
Corporate debt obligations		166,190		1,027		(162	)		167,055
Mortgage-backed securities		52,583		210		(406	)		52,387
Municipal bonds		41,079		62		(134	)		41,007
Other debt securities		2,696		—		(3	)		2,693
	$	345,972	$	1,397	$	(868	)	$	346,501
March 31, 2013
U.S. government and agency securities	$	113,033	$	327	$	(1	)	$	113,359
Corporate debt obligations		153,460		1,429		(30	)		154,859
Mortgage-backed securities		50,852		473		(44	)		51,281
Municipal bonds		39,661		211		—			39,872
Other debt securities		602		1		—			603
	$	357,608	$	2,441	$	(75	)	$	359,974

The amortized cost and estimated fair value of debt securities as of September 29, 2013, by contractual maturity, are presented below. Expected maturities will differ from contractual maturities because the issuers of securities may have the right to repay obligations without prepayment penalties. Certain debt instruments, although possessing a contractual maturity greater than one year, are classified as short-term marketable securities based on their ability to be traded on active markets and availability for current operations.

	Amortized Cost		Estimated Fair Value
	(In thousands)
Due in one year or less	$	90,782	$	90,923
Due after one year through three years		151,994		152,292
Due after three years through five years		62,462		62,115
Due after five years		40,734		41,171
	$	345,972	$	346,501

The following table presents the Company’s marketable securities with unrealized losses by investment category and length of time that individual securities have been in a continuous unrealized loss position as of September 29, 2013 and March 31, 2013.

	Less Than 12 Months					12 Months or Greater					Total
Description of Securities	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
	(In thousands)
September 29, 2013
U.S. government and agency securities	$	21,116	$	(163	)	$	—	$	—		$	21,116	$	(163	)
Corporate debt obligations		58,338		(162	)		—		—			58,338		(162	)
Mortgage-backed securities		30,290		(392	)		819		(14	)		31,109		(406	)
Municipal bonds		20,380		(134	)		—		—			20,380		(134	)
Other debt securities		2,091		(3	)		—		—			2,091		(3	)
	$	132,215	$	(854	)	$	819	$	(14	)	$	133,034	$	(868	)
March 31, 2013
U.S. government and agency securities	$	4,502	$	(1	)	$	—	$	—		$	4,502	$	(1	)
Corporate debt obligations		24,203		(30	)		—		—			24,203		(30	)
Mortgage-backed securities		10,048		(44	)		—		—			10,048		(44	)
	$	38,753	$	(75	)	$	—	$	—		$	38,753	$	(75	)

As of September 29, 2013 and March 31, 2013, the fair value of certain of the Company’s available-for-sale securities was less than their cost basis. Management reviewed various factors in determining whether to recognize an impairment charge related to these unrealized losses, including the current financial and credit market environment, the financial condition and near-term prospects of the issuer of the security, the magnitude of the unrealized loss compared to the cost of the investment, the length of time the investment had been in a loss position and the Company’s intent and ability to hold the investment for a period of time sufficient to allow for any anticipated recovery of market value. As of September 29, 2013 and March 31, 2013, the Company determined that the unrealized losses were temporary in nature and recorded them as a component of accumulated other comprehensive income.

Realized gains and losses reclassified from accumulated other comprehensive income are included in interest and other income, net, in the condensed consolidated statements of income.

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Stock-Based Compensation

6 Months Ended

Sep. 29, 2013

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Stock-Based Compensation

Note 5. Stock-Based Compensation

During the six months ended September 29, 2013, the Company granted 1.2 million restricted stock units and options to purchase 0.1 million shares of common stock with weighted average grant date fair values of $9.93 and $4.12 per share, respectively. The restricted stock units included 0.1 million restricted stock units with service and market conditions, which were granted to certain senior executives.

A summary of stock-based compensation expense, by functional line item in the condensed consolidated statements of income, is as follows:

	Three Months Ended				Six Months Ended
	September 29, 2013		September 30, 2012		September 29, 2013		September 30, 2012
	(In thousands)
Cost of revenues	$	239	$	540	$	823	$	1,310
Engineering and development		2,257		3,096		6,608		7,414
Sales and marketing		1,230		1,633		3,023		3,598
General and administrative		1,092		1,776		2,535		4,000
	$	4,818	$	7,045	$	12,989	$	16,322

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Fair Value Measurements

6 Months Ended

Sep. 29, 2013

Fair Value Disclosures [Abstract]

Fair Value Measurements

Note 3. Fair Value Measurements

Fair value is the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The fair value hierarchy is based on three levels of inputs that may be used to measure fair value. The first two levels of inputs are considered observable and the last unobservable. A description of the three levels of inputs is as follows:

• Level 1 – Quoted prices in active markets for identical assets or liabilities.

• Level 2 – Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

• Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

Assets measured at fair value on a recurring basis as of September 29, 2013 and March 31, 2013 are as follows:

	Fair Value Measurements Using
	Level 1		Level 2		Level 3		Total
	(In thousands)
September 29, 2013
Cash and cash equivalents	$	86,507	$	—	$	—	$	86,507
Marketable securities:
U.S. government and agency securities		83,359		—		—		83,359
Corporate debt obligations		—		167,055		—		167,055
Mortgage-backed securities		—		52,387		—		52,387
Municipal bonds		—		41,007		—		41,007
Other debt securities		—		2,693		—		2,693
		83,359		263,142		—		346,501
	$	169,866	$	263,142	$	—	$	433,008
March 31, 2013
Cash and cash equivalents	$	95,098	$	434	$	—	$	95,532
Marketable securities:
U.S. government and agency securities		113,359		—		—		113,359
Corporate debt obligations		—		154,859		—		154,859
Mortgage-backed securities		—		51,281		—		51,281
Municipal bonds		—		39,872		—		39,872
Other debt securities		—		603		—		603
		113,359		246,615		—		359,974
	$	208,457	$	247,049	$	—	$	455,506

The Company’s investments classified within Level 2 were primarily valued based on valuations obtained from a third-party pricing service. To estimate fair value, the pricing service utilizes industry-standard valuation models, including both income and market-based approaches for which all significant inputs are observable either directly or indirectly. The Company obtained documentation from the pricing service as to the methodology and summary of inputs used for the various types of securities. The pricing service maximizes the use of relevant observable inputs and minimizes the use of unobservable inputs. These observable inputs include reported trades and broker/dealer quotes of the same or similar securities, issuer credit spreads, benchmark securities and other observable inputs. The Company compares valuation information from the pricing service with other pricing sources to validate the reasonableness of the valuations.

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Special Charges - Additional Information (Detail) (USD $)	1 Months Ended	3 Months Ended	6 Months Ended
	Jun. 30, 2013	Sep. 29, 2013	Sep. 29, 2013
Restructuring Cost and Reserve [Line Items]
Date the company commenced the restructuring plan	Jun. 03, 2013
Date the Company expects to substantially complete the restructuring activities	Mar. 30, 2014
Special charges		$ 4,349,000	$ 16,382,000
Charged to costs and expenses			13,953,000
Asset impairment charges			2,429,000
Unpaid exit costs included in current liabilities		3,500,000	3,500,000
Workforce Reduction [Member]
Restructuring Cost and Reserve [Line Items]
Charged to costs and expenses			11,653,000
Facilities and Other [Member]
Restructuring Cost and Reserve [Line Items]
Charged to costs and expenses			2,300,000
Minimum [Member]
Restructuring Cost and Reserve [Line Items]
Exit costs expected to incur	16,000,000
Minimum [Member] | Workforce Reduction [Member]
Restructuring Cost and Reserve [Line Items]
Exit costs expected to incur	13,000,000
Minimum [Member] | Facilities and Other [Member]
Restructuring Cost and Reserve [Line Items]
Exit costs expected to incur	3,000,000
Maximum [Member]
Restructuring Cost and Reserve [Line Items]
Exit costs expected to incur	18,000,000
Maximum [Member] | Workforce Reduction [Member]
Restructuring Cost and Reserve [Line Items]
Exit costs expected to incur	14,000,000
Maximum [Member] | Facilities and Other [Member]
Restructuring Cost and Reserve [Line Items]
Exit costs expected to incur	$ 4,000,000

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Income Per Share - Additional Information (Detail) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Sep. 29, 2013	Sep. 30, 2012	Sep. 29, 2013	Sep. 30, 2012
Earnings Per Share [Abstract]
Stock-based awards excluded from the diluted per share calculations	15.0	20.0	16.1	18.2

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Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) (USD $) In Thousands, except Share data, unless otherwise specified	Sep. 29, 2013	Mar. 31, 2013
Statement Of Financial Position [Abstract]
Allowance for doubtful accounts	$ 1,209	$ 1,196
Preferred stock, par value	$ 0.001	$ 0.001
Preferred stock, shares authorized	1,000,000	1,000,000
Preferred stock, shares issued
Preferred stock, shares outstanding
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	500,000,000	500,000,000
Common stock, shares issued	213,342,000	212,145,000
Treasury stock, shares	126,332,000	122,185,000

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Income Per Share

6 Months Ended

Sep. 29, 2013

Earnings Per Share [Abstract]

Income Per Share

Note 8. Income Per Share

The following table sets forth the computation of basic and diluted income from continuing operations per share:

	Three Months Ended				Six Months Ended
	September 29, 2013		September 30, 2012		September 29, 2013		September 30, 2012
	(In thousands, except per share amounts)
Income from continuing operations	$	10,977	$	11,780	$	7,927	$	30,221
Shares:
Weighted-average shares outstanding – basic		87,430		93,762		88,288		95,584
Dilutive potential common shares, using treasury stock method		239		187		432		575
Weighted-average shares outstanding – diluted		87,669		93,949		88,720		96,159
Income from continuing operations per share:
Basic	$	0.13	$	0.13	$	0.09	$	0.32
Diluted	$	0.13	$	0.13	$	0.09	$	0.31

Stock-based awards, including stock options and restricted stock units, representing 15.0 million and 16.1 million shares of common stock have been excluded from the diluted per share calculations for the three and six months ended September 29, 2013, respectively, and 20.0 million and 18.2 million shares of common stock have been excluded from the diluted per share calculations for the three and six months ended September 30, 2012, respectively. These stock-based awards have been excluded from the diluted per share calculations because their effect would have been antidilutive.

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Condensed Consolidated Statements of Comprehensive Income (Unaudited) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Sep. 29, 2013	Sep. 30, 2012	Sep. 29, 2013	Sep. 30, 2012
Statement Of Income And Comprehensive Income [Abstract]
Net income	$ 10,977	$ 11,874	$ 7,927	$ 30,260
Changes in fair value of marketable securities:
Changes in unrealized gains	602	1,103	(1,319)	1,349
Net realized losses (gains) reclassified into earnings	135	(84)	(259)	(188)
Total changes in fair value of marketable securities	737	1,019	(1,578)	1,161
Foreign currency translation adjustments	252	292	(42)	74
Total other comprehensive income (loss)	989	1,311	(1,620)	1,235
Comprehensive income	$ 11,966	$ 13,185	$ 6,307	$ 31,495

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Condensed Consolidated Balance Sheets (Unaudited) (USD $) In Thousands, unless otherwise specified	Sep. 29, 2013	Mar. 31, 2013
Current assets:
Cash and cash equivalents	$ 86,507	$ 95,532
Marketable securities	346,501	359,974
Accounts receivable, less allowance for doubtful accounts of $1,209 and $1,196 as of September 29, 2013 and March 31, 2013, respectively	67,934	66,135
Inventories	17,363	20,160
Deferred tax assets	13,341	13,036
Other current assets	27,546	24,381
Total current assets	559,192	579,218
Property and equipment, net	90,942	96,336
Goodwill	110,976	110,976
Purchased intangible assets, net	3,692	4,054
Deferred tax assets	27,272	31,992
Other assets	2,421	2,587
Total assets	794,495	825,163
Current liabilities:
Accounts payable	26,449	29,668
Accrued compensation	20,312	27,453
Accrued taxes	990	4,559
Deferred revenue	4,450	4,676
Other current liabilities	9,378	7,651
Total current liabilities	61,579	74,007
Accrued taxes	16,681	10,772
Other liabilities	7,104	6,107
Total liabilities	85,364	90,886
Stockholders' equity:
Preferred stock, $0.001 par value; 1,000,000 shares authorized; no shares issued and outstanding
Common stock, $0.001 par value; 500,000,000 shares authorized; 213,342,000 and 212,145,000 shares issued as of September 29, 2013 and March 31, 2013, respectively	213	212
Additional paid-in capital	944,564	932,557
Retained earnings	1,698,264	1,690,337
Accumulated other comprehensive income	267	1,887
Treasury stock, at cost: 126,332,000 and 122,185,000 shares as of September 29, 2013 and March 31, 2013, respectively	(1,934,177)	(1,890,716)
Total stockholders' equity	709,131	734,277
Total liabilities and stockholders' equity	$ 794,495	$ 825,163

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Special Charges - Activity and Liability Balances for Exit Costs (Detail) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Sep. 29, 2013
Restructuring Cost and Reserve [Line Items]
Beginning Balance	$ 1,771
Charged to costs and expenses	13,953
Payments	(8,842)
Ending Balance	6,882
Workforce Reduction [Member]
Restructuring Cost and Reserve [Line Items]
Beginning Balance
Charged to costs and expenses	11,653
Payments	(8,385)
Ending Balance	3,268
Facilities and Other [Member]
Restructuring Cost and Reserve [Line Items]
Beginning Balance	1,771
Charged to costs and expenses	2,300
Payments	(457)
Ending Balance	$ 3,614

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Marketable Securities - Schedule of Unrealized Losses by Investment Category (Detail) (USD $) In Thousands, unless otherwise specified	Sep. 29, 2013	Mar. 31, 2013
Schedule of Available-for-sale Securities [Line Items]
Fair value of less than 12 months	$ 132,215	$ 38,753
Unrealized losses of less than 12 months	(854)	(75)
Fair value of 12 months or greater	819
Unrealized losses of 12 months or greater	(14)
Fair value, Total	133,034	38,753
Unrealized losses, Total	(868)	(75)
U.S. government and agency securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Fair value of less than 12 months	21,116	4,502
Unrealized losses of less than 12 months	(163)	(1)
Fair value of 12 months or greater
Unrealized losses of 12 months or greater
Fair value, Total	21,116	4,502
Unrealized losses, Total	(163)	(1)
Corporate debt obligations [Member]
Schedule of Available-for-sale Securities [Line Items]
Fair value of less than 12 months	58,338	24,203
Unrealized losses of less than 12 months	(162)	(30)
Fair value of 12 months or greater
Unrealized losses of 12 months or greater
Fair value, Total	58,338	24,203
Unrealized losses, Total	(162)	(30)
Mortgage-backed securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Fair value of less than 12 months	30,290	10,048
Unrealized losses of less than 12 months	(392)	(44)
Fair value of 12 months or greater	819
Unrealized losses of 12 months or greater	(14)
Fair value, Total	31,109	10,048
Unrealized losses, Total	(406)	(44)
Municipal bonds [Member]
Schedule of Available-for-sale Securities [Line Items]
Fair value of less than 12 months	20,380
Unrealized losses of less than 12 months	(134)
Fair value of 12 months or greater
Unrealized losses of 12 months or greater
Fair value, Total	20,380
Unrealized losses, Total	(134)
Other debt securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Fair value of less than 12 months	2,091
Unrealized losses of less than 12 months	(3)
Fair value of 12 months or greater
Unrealized losses of 12 months or greater
Fair value, Total	2,091
Unrealized losses, Total	$ (3)

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Income Taxes

6 Months Ended

Sep. 29, 2013

Income Tax Disclosure [Abstract]

Income Taxes

Note 7. Income Taxes

The Company’s provision for income taxes from continuing operations was $2.2 million and $3.0 million for the three and six months ended September 29, 2013, respectively, and $2.2 million and $4.8 million for the three and six months ended September 30, 2012, respectively. The provision for income taxes is based on the estimated income for the year, the composition of the estimated income in different tax jurisdictions, and the tax effect, if any, in the applicable quarterly periods of newly enacted tax legislation, resolution of tax audits, changes in uncertain tax positions, and other discrete tax-related items. The allocation of taxable income to domestic and foreign tax jurisdictions impacts the effective tax rate, as the Company’s income tax rate in foreign jurisdictions is generally lower than its income tax rate in the United States.

During the three months ended September 29, 2013, the Company determined that certain positions would be taken on various state income tax returns and recorded liabilities for unrecognized tax benefits of $5.2 million related to these tax positions.

The Company’s federal consolidated income tax returns for fiscal years 2010, 2011 and 2012 are currently under examination by the Internal Revenue Service. Management does not believe that the results of these examinations will have a material impact on the Company’s financial condition or results of operations.

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Income Taxes - Additional Information (Detail) (USD $)	3 Months Ended		6 Months Ended		12 Months Ended
	Sep. 29, 2013	Sep. 30, 2012	Sep. 29, 2013	Sep. 30, 2012	Apr. 01, 2012 Internal Revenue Service (IRS) [Member]	Apr. 03, 2011 Internal Revenue Service (IRS) [Member]	Mar. 28, 2010 Internal Revenue Service (IRS) [Member]
Income Taxes [Line Items]
Provision for income taxes from continuing operations	$ 2,234,000	$ 2,159,000	$ 2,982,000	$ 4,837,000
Unrecognized tax benefits related to various state income tax returns and recorded liabilities	$ 5,200,000
Income tax examination, year					2012	2011	2010

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Fair Value Measurements (Tables)

6 Months Ended

Sep. 29, 2013

Fair Value Disclosures [Abstract]

Schedule of Assets Measured at Fair Value on a Recurring Basis

Assets measured at fair value on a recurring basis as of September 29, 2013 and March 31, 2013 are as follows:

	Fair Value Measurements Using
	Level 1		Level 2		Level 3		Total
	(In thousands)
September 29, 2013
Cash and cash equivalents	$	86,507	$	—	$	—	$	86,507
Marketable securities:
U.S. government and agency securities		83,359		—		—		83,359
Corporate debt obligations		—		167,055		—		167,055
Mortgage-backed securities		—		52,387		—		52,387
Municipal bonds		—		41,007		—		41,007
Other debt securities		—		2,693		—		2,693
		83,359		263,142		—		346,501
	$	169,866	$	263,142	$	—	$	433,008
March 31, 2013
Cash and cash equivalents	$	95,098	$	434	$	—	$	95,532
Marketable securities:
U.S. government and agency securities		113,359		—		—		113,359
Corporate debt obligations		—		154,859		—		154,859
Mortgage-backed securities		—		51,281		—		51,281
Municipal bonds		—		39,872		—		39,872
Other debt securities		—		603		—		603
		113,359		246,615		—		359,974
	$	208,457	$	247,049	$	—	$	455,506

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Special Charges

6 Months Ended

Sep. 29, 2013

Restructuring And Related Activities [Abstract]

Special Charges

Note 6. Special Charges

In June 2013, the Company commenced a restructuring plan designed to enhance product focus and streamline business operations. The restructuring plan includes a workforce reduction and the consolidation and elimination of certain engineering activities. In connection with this plan, the Company ceased development of future switch application-specific integrated circuits (ASICs). The Company expects to incur between $16 million and $18 million of exit costs associated with this restructuring plan, which consists of between $13 million and $14 million related to workforce reductions and between $3 million and $4 million related to facilities and other costs. The Company expects to substantially complete the restructuring activities during fiscal 2014.

During the three and six months ended September 29, 2013, the Company recorded special charges of $4.3 million and $16.4 million, respectively. Special charges for the three months ended September 29, 2013 consisted entirely of exit costs. Special charges for the six months ended September 29, 2013 consisted of $14.0 million of exit costs and $2.4 million of asset impairment charges primarily related to property and equipment. The exit costs include severance and related costs associated with involuntarily terminated employees. Certain employees that were notified of their termination are required to provide services for varying periods in excess of statutory notice periods. Severance costs related to these services are recognized ratably over the estimated requisite service period. Exit costs also include the estimated costs associated with the portion of a facility under a non-cancelable lease that the Company ceased using and other costs.

Activity and liability balances for exit costs, including a liability associated with exit costs related to a portion of the facility the Company ceased using prior to fiscal 2013, are as follows:

	Workforce Reduction			Facilities and Other			Total
	(In thousands)
Balance as of March 31, 2013	$	—		$	1,771		$	1,771
Charged to costs and expenses		11,653			2,300			13,953
Payments		(8,385	)		(457	)		(8,842	)
Balance as of September 29, 2013	$	3,268		$	3,614		$	6,882

The unpaid exit costs are expected to be paid over the terms of the related agreements through fiscal 2018. As of September 29, 2013, unpaid exit costs totaling $3.5 million are included in other current liabilities.

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Basis of Presentation

6 Months Ended

Sep. 29, 2013

Accounting Policies [Abstract]

Basis of Presentation

Note 1. Basis of Presentation

In the opinion of management of QLogic Corporation (QLogic or the Company), the accompanying unaudited condensed consolidated financial statements contain all normal recurring accruals and adjustments necessary to present fairly the Company’s consolidated financial position, results of operations and cash flows. The accompanying condensed consolidated financial statements should be read in conjunction with the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2013. The results of operations for the three and six months ended September 29, 2013 are not necessarily indicative of the results that may be expected for the entire fiscal year. The preparation of financial statements in accordance with U.S. generally accepted accounting principles requires management to make estimates that affect the amounts reported in the Company’s consolidated financial statements and accompanying notes. The Company evaluates its estimates on an ongoing basis using historical experience and other factors, including the current economic environment. Among the significant estimates affecting the consolidated financial statements are those related to revenue recognition, stock-based compensation, income taxes, marketable securities, inventories, goodwill and long-lived assets. The actual results experienced by the Company could differ materially from management’s estimates.

Certain immaterial reclassifications have been made to prior year amounts to conform to the current year presentation.

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Special Charges (Tables)

6 Months Ended

Sep. 29, 2013

Restructuring And Related Activities [Abstract]

Activity and Liability Balances for Exit Costs

Activity and liability balances for exit costs, including a liability associated with exit costs related to a portion of the facility the Company ceased using prior to fiscal 2013, are as follows:

	Workforce Reduction			Facilities and Other			Total
	(In thousands)
Balance as of March 31, 2013	$	—		$	1,771		$	1,771
Charged to costs and expenses		11,653			2,300			13,953
Payments		(8,385	)		(457	)		(8,842	)
Balance as of September 29, 2013	$	3,268		$	3,614		$	6,882

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Marketable Securities (Tables)

6 Months Ended

Sep. 29, 2013

Investments Debt And Equity Securities [Abstract]

Schedule of Available-for-Sale Securities

The Company’s portfolio of available-for-sale marketable securities consists of the following:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
	(In thousands)
September 29, 2013
U.S. government and agency securities	$	83,424	$	98	$	(163	)	$	83,359
Corporate debt obligations		166,190		1,027		(162	)		167,055
Mortgage-backed securities		52,583		210		(406	)		52,387
Municipal bonds		41,079		62		(134	)		41,007
Other debt securities		2,696		—		(3	)		2,693
	$	345,972	$	1,397	$	(868	)	$	346,501
March 31, 2013
U.S. government and agency securities	$	113,033	$	327	$	(1	)	$	113,359
Corporate debt obligations		153,460		1,429		(30	)		154,859
Mortgage-backed securities		50,852		473		(44	)		51,281
Municipal bonds		39,661		211		—			39,872
Other debt securities		602		1		—			603
	$	357,608	$	2,441	$	(75	)	$	359,974

Schedule of Amortized Cost and Estimated Fair Value of Debt Securities

The amortized cost and estimated fair value of debt securities as of September 29, 2013, by contractual maturity, are presented below. Expected maturities will differ from contractual maturities because the issuers of securities may have the right to repay obligations without prepayment penalties. Certain debt instruments, although possessing a contractual maturity greater than one year, are classified as short-term marketable securities based on their ability to be traded on active markets and availability for current operations.

	Amortized Cost		Estimated Fair Value
	(In thousands)
Due in one year or less	$	90,782	$	90,923
Due after one year through three years		151,994		152,292
Due after three years through five years		62,462		62,115
Due after five years		40,734		41,171
	$	345,972	$	346,501

Schedule of Unrealized Losses by Investment Category

The following table presents the Company’s marketable securities with unrealized losses by investment category and length of time that individual securities have been in a continuous unrealized loss position as of September 29, 2013 and March 31, 2013.

	Less Than 12 Months					12 Months or Greater					Total
Description of Securities	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
	(In thousands)
September 29, 2013
U.S. government and agency securities	$	21,116	$	(163	)	$	—	$	—		$	21,116	$	(163	)
Corporate debt obligations		58,338		(162	)		—		—			58,338		(162	)
Mortgage-backed securities		30,290		(392	)		819		(14	)		31,109		(406	)
Municipal bonds		20,380		(134	)		—		—			20,380		(134	)
Other debt securities		2,091		(3	)		—		—			2,091		(3	)
	$	132,215	$	(854	)	$	819	$	(14	)	$	133,034	$	(868	)
March 31, 2013
U.S. government and agency securities	$	4,502	$	(1	)	$	—	$	—		$	4,502	$	(1	)
Corporate debt obligations		24,203		(30	)		—		—			24,203		(30	)
Mortgage-backed securities		10,048		(44	)		—		—			10,048		(44	)
	$	38,753	$	(75	)	$	—	$	—		$	38,753	$	(75	)

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Marketable Securities - Schedule of Amortized Cost and Estimated Fair Value of Debt Securities (Detail) (USD $) In Thousands, unless otherwise specified	Sep. 29, 2013	Mar. 31, 2013
Available For Sale Securities Debt Maturities Fair Value [Abstract]
Due in one year or less, Amortized Cost	$ 90,782
Due after one year through three years, Amortized Cost	151,994
Due after three years through five years, Amortized Cost	62,462
Due after five years, Amortized Cost	40,734
Total amortized cost of debt securities	345,972	357,608
Due in one year or less, Estimated Fair Value	90,923
Due after one year through three years, Estimated Fair Value	152,292
Due after three years through five years, Estimated Fair Value	62,115
Due after five years, Estimated Fair Value	41,171
Available-for-sale securities, Estimated Fair Value	$ 346,501	$ 359,974

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Income Per Share (Tables)

6 Months Ended

Sep. 29, 2013

Earnings Per Share [Abstract]

Computation of Basic and Diluted Income Per Share from Continuing Operations

The following table sets forth the computation of basic and diluted income from continuing operations per share:

	Three Months Ended				Six Months Ended
	September 29, 2013		September 30, 2012		September 29, 2013		September 30, 2012
	(In thousands, except per share amounts)
Income from continuing operations	$	10,977	$	11,780	$	7,927	$	30,221
Shares:
Weighted-average shares outstanding – basic		87,430		93,762		88,288		95,584
Dilutive potential common shares, using treasury stock method		239		187		432		575
Weighted-average shares outstanding – diluted		87,669		93,949		88,720		96,159
Income from continuing operations per share:
Basic	$	0.13	$	0.13	$	0.09	$	0.32
Diluted	$	0.13	$	0.13	$	0.09	$	0.31

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Document and Entity Information	6 Months Ended
	Sep. 29, 2013	Oct. 25, 2013
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 29, 2013
Document Fiscal Year Focus	2014
Document Fiscal Period Focus	Q2
Trading Symbol	QLGC
Entity Registrant Name	QLOGIC CORP
Entity Central Index Key	0000918386
Current Fiscal Year End Date	--03-30
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		86,744,000

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Marketable Securities - Schedule of Available-for-Sale Securities (Detail) (USD $) In Thousands, unless otherwise specified	Sep. 29, 2013	Mar. 31, 2013
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale securities, Amortized Cost	$ 345,972	$ 357,608
Available-for-sale securities, Gross Unrealized Gains	1,397	2,441
Available-for-sale securities, Gross Unrealized Losses	(868)	(75)
Available-for-sale securities, Estimated Fair Value	346,501	359,974
U.S. government and agency securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale securities, Amortized Cost	83,424	113,033
Available-for-sale securities, Gross Unrealized Gains	98	327
Available-for-sale securities, Gross Unrealized Losses	(163)	(1)
Available-for-sale securities, Estimated Fair Value	83,359	113,359
Corporate debt obligations [Member]
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale securities, Amortized Cost	166,190	153,460
Available-for-sale securities, Gross Unrealized Gains	1,027	1,429
Available-for-sale securities, Gross Unrealized Losses	(162)	(30)
Available-for-sale securities, Estimated Fair Value	167,055	154,859
Mortgage-backed securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale securities, Amortized Cost	52,583	50,852
Available-for-sale securities, Gross Unrealized Gains	210	473
Available-for-sale securities, Gross Unrealized Losses	(406)	(44)
Available-for-sale securities, Estimated Fair Value	52,387	51,281
Municipal bonds [Member]
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale securities, Amortized Cost	41,079	39,661
Available-for-sale securities, Gross Unrealized Gains	62	211
Available-for-sale securities, Gross Unrealized Losses	(134)
Available-for-sale securities, Estimated Fair Value	41,007	39,872
Other debt securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale securities, Amortized Cost	2,696	602
Available-for-sale securities, Gross Unrealized Gains		1
Available-for-sale securities, Gross Unrealized Losses	(3)
Available-for-sale securities, Estimated Fair Value	$ 2,693	$ 603