UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

/x/QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED APRIL 1, 2006.
Or
/ /TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM ____________ TO ____________.
Commission File No. 0-25662
ANADIGICS, Inc.
(Exact name of registrant as specified in its charter)
Delaware	22-2582106
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
141 Mt. Bethel Road, Warren, New Jersey	07059
(Address of principal executive offices)	(Zip Code)
(908) 668-5000
(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 is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act (check one):

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

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes [ ] No [X]

The number of shares outstanding of the Registrant’s common stock as of April 1, 2006 was 47,184,736 (excluding 113,761 shares held in treasury).

INDEX

ANADIGICS, Inc.

PART I	Financial Information
Item 1.	Financial Statements (unaudited)
	Condensed consolidated balance sheets - April 1, 2006 and December 31, 2005
	Condensed consolidated statements of operations and comprehensive loss - Three months ended April 1, 2006 and April 2, 2005
	Condensed consolidated statements of cash flows - Three months ended April 1, 2006 and April 2, 2005
	Notes to condensed consolidated financial statements - April 1, 2006
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations
Item 3.	Quantitative and Qualitative Disclosures About Market Risk
Item 4.	Controls and Procedures
PART II.	Other Information
Item 1.	Legal Proceedings
Item 6.	Exhibits
	Signatures

PART I - FINANCIAL INFORMATION

ITEM 1.FINANCIAL STATEMENTS (UNAUDITED)

ANADIGICS, Inc.

CONDENSED CONSOLIDATED BALANCE SHEETS

(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

		April 1, 2006			December 31, 2005
		(unaudited)			(Note 1)
ASSETS
Current assets:
Cash and cash equivalents	$	19,282		$	11,891
Marketable securities		114,244			70,364
Accounts receivable, net		20,295			18,755
Inventories		18,428			16,009
Prepaid expenses and other current assets		4,687			2,188
Total current assets		176,936			119,207
Marketable securities		996			4,102
Plant and equipment:
Equipment and furniture		133,914			133,262
Leasehold improvements		38,748			38,748
Projects in process		3,169			1,617
		175,831			173,627
Less accumulated depreciation and amortization		(139,521	)		(137,320	)
		36,310			36,307
Goodwill and other intangibles, net of amortization		6,010			6,044
Other assets		1,831			2,613
Total assets	$	222,083		$	168,273
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	18,720		$	15,519
Accrued liabilities		3,916			4,672
Accrued restructuring costs		27			40
Current maturities of long-term debt		46,700			46,700
Current maturities of capital lease obligations		296			269
Total current liabilities		69,659			67,200
Other long-term liabilities		3,218			3,175
Long-term debt, less current portion		38,000			38,000
Capital lease obligations, less current portion		1,691			1,763
Commitments and contingencies
Stockholders’ equity:
Common stock, $0.01 par value, 144,000 shares authorized, 47,180 and 35,007 issued at April 1, 2006 and December 31, 2005		472			350
Additional paid-in capital		403,339			347,555
Accumulated deficit		(293,833	)		(289,196	)
Accumulated other comprehensive loss		(205	)		(316	)
Treasury stock at cost: 114 shares		(258	)		(258	)
Total stockholders’ equity		109,515			58,135
Total liabilities and stockholders’ equity	$	222,083		$	168,273

See accompanying notes.

ANADIGICS, Inc.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

	Three Months Ended
		April 1, 2006			April 2, 2005
		(unaudited)			(unaudited)
Net sales	$	35,721		$	21,773
Cost of sales		26,284			19,252
Gross profit		9,437			2,521
Research and development expenses		8,159			7,862
Selling and administrative expenses		5,493			5,552
Restructuring and other charges		-			(120	)
Operating loss		(4,215	)		(10,773	)
Interest income		866			577
Interest expense		(1,288	)		(1,249	)
Other expense		-			(6	)
Net loss	$	(4,637	)	$	(11,451	)
Basic and diluted loss per share	$	(0.12	)	$	(0.34	)
Weighted average basic and diluted common shares outstanding		38,376			33,579

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(AMOUNTS IN THOUSANDS)

	Three months ended
		April 1, 2006			April 2, 2005
		(unaudited)			(unaudited)
Net loss	$	(4,637	)	$	(11,451	)
Unrealized gain (loss) on marketable securities		105			(127	)
Foreign currency translation adjustment		6			(21	)
Comprehensive loss	$	(4,526	)	$	(11,599	)

See accompanying notes.

ANADIGICS, Inc.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(AMOUNTS IN THOUSANDS)

	Three months ended
		April 1, 2006			April 2, 2005
		(unaudited)			(unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(4,637	)	$	(11,451	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation		2,114			3,018
Amortization		480			424
Stock-based compensation		1,449			647
Amortization of premium on marketable securities		126			394
Changes in operating assets and liabilities:
Accounts receivable		(1,540	)		243
Inventories		(2,419	)		1,506
Prepaid expenses and other assets		(2,076	)		(1,777	)
Accounts payable		3,201			2,165
Accrued liabilities and other liabilities		(720	)		(1,192	)
Net cash used in operating activities		(4,022	)		(6,023	)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of plant and equipment		(2,204	)		(211	)
Purchases of marketable securities		(69,749	)		(11,847	)
Proceeds from sale of marketable securities		28,954			14,630
Net cash (used in) provided by investing activities		(42,999	)		2,572
CASH FLOWS FROM FINANCING ACTIVITIES
Payment of capital lease obligations		(45	)		(6	)
Issuance of common stock		54,457			4
Net cash provided by (used in) financing activities		54,412			(2	)
Net increase(decrease) in cash and cash equivalents		7,391			(3,453	)
Cash and cash equivalents at beginning of period		11,891			11,171
Cash and cash equivalents at end of period	$	19,282		$	7,718

See accompanying notes.

ANADIGICS, Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - APRIL 1, 2006

(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

1.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 BASIS OF PRESENTATION

 The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals and adjustments) considered necessary for a fair presentation have been included. Operating results for the three month period ended April 1, 2006 are not necessarily indicative of the results that may be expected for the year ending December 31, 2006.

 The condensed consolidated balance sheet at December 31, 2005 has been derived from the audited financial statements at that date but does not include all the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2005.

 The condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation.

 INCOME TAXES

 The Company maintains a full valuation allowance on its deferred tax assets. Accordingly, the Company has not recorded a benefit for income taxes.

 IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS

 Effective January 1, 2006, the Company adopted Financial Accounting Standards Board Statement No. 151 (FAS 151), Inventory Costs, an amendment of Accounting Research Bulletin No. 43 (ARB No. 43), Chapter 4. FAS 151 clarifies that abnormal amounts of idle facility expense, freight, handling costs and wasted materials should be recognized as current period charges. In addition, FAS 151 requires that allocation of fixed production overhead to inventory be based on the normal capacity of the production facilities. The adoption of FAS 151 did not have a material impact on the condensed consolidated financial statements.

 Effective January 1, 2006 the Company adopted Financial Accounting Standards Board (FASB) issued Statement No. 123(R) (FAS 123R), Share-Based Payment, on a modified prospective basis. FAS 123R amended FASB Statement No. 123, Accounting for Stock Based Compensation (FAS 123) and requires that all share-based payments to employees be recognized in the financial statements. Generally, the approach to accounting for share-based payments in FAS 123R is similar to the approach described in FAS 123, however, pro forma footnote disclosure is no longer an alternative to financial statement recognition. The Company will now recognize compensation expense over the remaining vesting period for all awards that remained unvested as of January 1, 2006. As permitted by FAS 123, prior to January 1, 2006, the Company accounted for share-based payments to employees using Accounting Principle Board Opinion No. 25, Accounting for Stock Issued to Employees (APB 25) and related interpretations in accounting for its employee stock option and other stock based compensation plans. Under APB 25’s intrinsic value method, no compensation expense was recognized at the time of option grant when the exercise price of the Company’s employee stock optionsequaled the fair market value of the underlying common stock on the date of grant. As such, the Company generally recognized no compensation cost for employee stock options or the Employee Stock Purchase Plan (ESP Plan).

 WARRANTY

 Based on the examination of historical returns and other information it deems critical, the Company estimates that a current charge to income will need to be provided in order to cover future warranty obligations for products sold during the year. The accrued liability for warranty costs is included in Accrued liabilities in the condensed consolidated balance sheets.Warranty reserve movements in the three months ended April 1, 2006 included $130 in actual charges and $235 in provisions resulting in the balance of $501 at April 1, 2006. Warranty reserve movements in the three months ended April 2, 2005 included $48 in actual charges and $43 increase in the provision.

 RECLASSIFICATIONS

 Certain prior year amounts have been reclassified to conform to the current year presentation.

2.INVENTORIES

 Inventories are stated at the lower of cost (first-in, first-out method) or market.  Inventories consist of the following:

		April 1, 2006			December 31, 2005
Raw materials	$	3,556		$	2,870
Work in process		12,073			10,973
Finished goods		5,895			5,068
		21,524			18,911
Reserves		(3,096	)		(2,902	)
Total	$	18,428		$	16,009

3.LOSS PER SHARE

 The reconciliation of shares used to calculate basic and diluted loss per share consists of the following:

	Three months ended
		April 1, 2006	April 2, 2005
Weighted average common shares outstanding used to calculate basic loss per share		38,376	33,579
Net effect of dilutive securities based upon the treasury stock method using an average market price		-*	-*
Weighted average common and dilutive securities outstanding used to calculate diluted loss per share		38,376	33,579

*   Any dilution arising from the Company's outstanding stock options or shares potentially issuable upon conversion of the Convertible notes, as summarized below, are not included as their effect is anti-dilutive.

	Three months ended
	April 1, 2006			April 2, 2005
	Shares issuable upon exercise or conversion	Exercise or conversion price		Shares issuable upon exercise or conversion	Exercise or conversion price
Stock options outstanding	5,332	$8.04	*	6,819	$7.38	*
5% Convertible notes, due in 2006	2,224	21.00		2,224	21.00
5% Convertible notes, due in 2009	7,600	5.00		7,600	5.00

* Weighted average exercise price

4.REVENUE SOURCES

 The Company classifies its revenues based upon the end application of the product in which its integrated circuits are used. Net sales by end application are regularly reviewed by the chief operating decision maker and are as follows:

	Three months ended
		April 1, 2006		April 2, 2005
Broadband	$	16,503	$	11,232
Wireless		19,218		10,541
Total	$	35,721	$	21,773

The Company primarily sells to three geographic regions: Asia, USA and Canada, and Other. The geographic region is determined by the destination of the shipped product. Net sales to each of the three geographic regions are as follows:

	Three months ended
		April 1, 2006		April 2, 2005
Asia	$	19,114	$	12,205
U.S.A. and Canada		13,526		7,991
Other		3,081		1,577
Total	$	35,721	$	21,773

5. RESTRUCTURING AND OTHER CHARGES

 During the fourth quarter of 2003, the Company recorded restructuring and other charges of $300 associated with obligations for certain redundant leasehold premises. Those obligations were settled during the first quarter of 2005 resulting in a savings to the Company of $120. During the first quarter of 2006, the Company recognized costs of $13 for lease-related restructuring costs. As of April 1, 2006, the accrued restructuring balance of $27 relates to lease-related obligations.

6. LONG-TERM DEBT

 On September 24, 2004, the Company issued $38,000 aggregate principal amount of 5% Convertible Senior Notes (“2009 Notes”) due October 15, 2009. The 2009 Notes are convertible into shares of the Company’s common stock at any time prior to their maturity, at an initial conversion rate, subject to adjustment, of 200 shares for each $1,000 principal amount, which is equivalent to a conversion price of $5.00 per share. Interest on the 2009 Notes is payable semi-annually in arrears on April 15 and October 15 of each year.

 On November 27, 2001, the Company issued $100,000 aggregate principal amount of 5% Convertible Senior Notes ("2006 Notes") due November 15, 2006. During the third quarter of 2002, the Company repurchased and retired $33,300 principal amount of the Convertible notes. In addition, in the third quarter of 2004 and concurrent with the issuance of the 2009 Notes, the Company repurchased and retired $20,000 aggregate principal amount of the 2006 Notes for $19,758 in cash, inclusive of accrued interest of $358. The Company recognized a gain of $327 on the repurchase after adjusting for the write-off of a proportionate share of unamortized offering costs.The $46,700 balance of 2006 Notes outstanding are convertible into shares of common stock at any time prior to their maturity or prior redemption by the Company. The notes are convertible into shares of common stock at a rate of 47.619 shares for each $1,000 principal amount (convertible at a price of $21.00 per share), subject to adjustment. Interest is payable semi-annually on May 15 and November 15.

7. STOCK-BASED COMPENSATION

 Effective January 1, 2006, the Company adopted the provisions of FAS 123R in accounting for share based payments to employees, having previously followed the provisions of APB 25, as permitted by FAS 123. The Company has adopted FAS 123R using the modified-prospective transition method, which requires the recognition of compensation expense over the remaining vesting period for all awards that remain unvested as of January 1, 2006.

Equity Compensation Plans

 The Company had 4 equity compensation plans under which equity securities are authorized for issuance to employees and/or directors:

§   The 1995 Long-Term Incentive and Share Award Plan for Officers and Directors (terminated February 28, 2005) (1995 Plan)

§   The 1997 Long Term Incentive and Share Award Plan (1997 Plan)

§   The 2005 Long Term Incentive and Share Award Plan (2005 Plan, collectively with the 1995 Plan, the 1997 Plan, the Plans)

§   The Employee Stock Purchase Plan (ESP Plan)

 Employees and outside directors have been granted restricted stock and options to purchase shares of common stock under stock option plans adopted in 1995, 1997 and 2005. An aggregate of 4,913, 5,100 and 2,700 shares of common stock were reserved for issuance under the 1995 Plan, the 1997 Plan and the 2005 Plan, respectively. The Plans provide for the granting of stock options, stock appreciation rights, restricted shares and other share based awards to eligible employees and directors, as defined in the Plans. Option grants have terms of ten years and become exercisable in varying amounts over periods of up to three years. To date, no stock appreciation rights have been granted under the Plans.

 In 1995, the Company adopted an Employee Stock Purchase Plan (“ESP Plan”) under Section 423 of the Internal Revenue Code. All full-time employees of ANADIGICS, Inc. and part-time employees, as defined in the ESP Plan, are eligible to participate in the ESP Plan. An aggregate of 2,694 shares of common stock were reserved for offering under the ESP Plan. Offerings are made at the commencement of each calendar year and must be purchased by the end of that calendar year. Pursuant to the terms of ESP Plan, shares purchased and the applicable per share price was 328 ($3.13) for the year ended December 31, 2005.

 Net income for the first quarters of 2006 and 2005 included stock based compensation cost of $1,449 and $647, respectively. Under FAS 123R, stock based compensation expense arises from the amortization of restricted stock grants, unamortized stock option grants and from the ESP Plan whereas in 2005, only amortization of restricted stock grants was required. The Company is using the straight-line basis in calculating stock based compensation expense.

 The table below summarizes stock based compensation by source and by financial statement line item for the three month periods, inclusive of comparative Pro forma disclosure for 2005:

	For the three-month periods ended
		April 1, 2006			April 2, 2005			April 2, 2005
		US GAAP			US GAAP			Pro Forma
		(as reported)			(as reported)			(comparison only)
Amortization of restricted stock awards		($1,316	)		($642	)		($642	)
Amortization of ESPP		(100	)		-			(114	)
Amortization of stock option awards		(33	)		(5	)		(158	)
Total stock based compensation		($1,449	)		($647	)		($914	)
Basic and diluted loss per share
As reported		($0.12	)		($0.34	)		N/A
Pro forma		($0.12	)		N/A			($0.35	)
By Financial Statement line item
Cost of sales	$	309		$	135		$	181
Research and development expenses		571			283			366
Selling and administrative expenses		569			229			367

No tax benefits have been recorded due to the Company’s full valuation allowance position.

Restricted stock awards

 Commencing in August 2004, the Company has granted restricted shares under its Plans. The value of the restricted stock awards are fixed upon the date of grant and amortized over the related vesting period of one to three years. Restricted stock awards are subject to forfeiture if employment terminates prior to vesting. The Company estimates that 2.4 - 2.8% of its restricted stock awards are forfeited annually. The restricted stock awards carry voting and dividend rights commencing upon grant but may not be traded or transferred prior to vest. Grant, vest and forfeit activity and related weighted average (WA) price per share for restricted stock and for share options during the period from January 1, 2005 to April 1, 2006 is presented in table form below:

	Restricted Shares					Stock Options
		Shares			WA price per share		Issuable upon exercise			WA exercise price
Grants outstanding at January 1, 2005		381		$	4.01		6,792		$	7.47
Granted		1,303			2.71		159			3.12
Vested/exercised		(357	) *		4.01		(416	)		2.80
Forfeited		(113	)		2.95		(591	)		7.57
Balance at December 31, 2005		1,214			2.72		5,944			7.67
Granted		1,395			6.64		17			6.49
Vested/exercised		(404	)		2.74		(462	)		2.95
Forfeited		(11	)		3.28		(167	)		8.71
Balance at April 1, 2006		2,194		$	5.21		5,332		$	8.04

* 114 shares were repurchased by the Company to fund withholding tax obligations.

	Weighted average information as of April 1, 2006
Options currently exercisable
Shares issuable upon exercise	5,190
WA exercise price	$8.17
WA remaining life	5.6 years
Intrinsic value of exercised options	$1,677
Remaining life for outstanding options	5.6 years
Intrinsic value of exercisable options	$10,156
Intrinsic value of outstanding options	$10,809
Unrecognized stock based compensation cost
Option plans	$132
Restricted stock	$8,731
WA remaining vest period	1.25 years

Stock options outstanding at April 1, 2006 are summarized as follows:

Range of exercise prices	Outstanding Options at April 1, 2006	Weighted average remaining contractual life	Weighted average exercise price	Exercisable at April 1, 2006	Weighted average exercise price
$1.39 - $3.72	1,208	7.04	$2.72	1,100	$2.73
$4.17 - $7.02	1,149	3.37	$4.80	1,115	$4.77
$7.27	1,552	7.85	$7.27	1,552	$7.27
$7.65 - $53.48	1,423	3.90	$16.03	1,423	$16.03

Valuation method for ESP Plan and Stock option awards

 The fair value of these equity awards was estimated at the date of grant using a Black-Scholes option pricing model. The following weighted average assumptions for stock option grants were used for the three months ended April 2, 2005 and April 1, 2006, respectively: risk-free interest rate of 3.3% and 4.3%; expected volatility, using the Company’s historical volatility of 0.95 and 0.94; expected option life of one year from vesting and an expected dividend yield of 0.0%. The weighted average fair value of options granted during calendar 2005 and the three months ended April 2, 2005 and April 1, 2006 were $1.77 and $3.91, respectively.

8. STOCKHOLDERS’ EQUITY

 In March 2006, the Company completed an underwritten public offering of 10,446 shares of common stock, generating net proceeds to the Company of $53,096.

ANADIGICS, Inc.

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

OVERVIEW

 ANADIGICS, Inc. (“we” or the “Company”) is a leading provider of radio frequency integrated circuits (RFIC) and radio frequency (RF) front end solutions in the rapidly growing wireless handset and broadband communications markets. Our products include power amplifiers (PAs), tuner integrated circuits, active splitters and other components, which can be sold individually or packaged as integrated RF modules. In the wireless handset market, we focus on RFIC and RF front end solutions for wireless handsets operating over various air interface standards. In the broadband market, our focus is on applications for Wireless Local Area Networking (WLAN) systems, cable set-top boxes, cable television infrastructure systems, worldwide interoperability for microwave access (WiMAX) systems and fiber-to-the-premises (FTTP) communications systems. Our integrated solutions enable our customers to improve RF performance, power efficiency, reliability and time-to-market, while reducing the size, weight and cost of their products. We have longstanding customer relationships with several of the industry leaders in their respective markets, including LG Electronics Inc. (LG Electronics), Samsung Electronics Co., Ltd. (Samsung), KYOCERA Corporation (Kyocera) and Research in Motion Limited (RIM) in the wireless handset market; INTEL Corporation (Intel) in the WLAN market; and Scientific-Atlanta, Inc. (Scientific Atlanta) and Motorola, Inc. (Motorola) in the cable set-top box and cable infrastructure markets. Additionally, in the wireless arena, we have been included in reference designs of industry leaders such as Qualcomm Incorporated (Qualcomm), Texas Instruments Incorporated (Texas Instruments), Broadcom Corporation (Broadcom) and Atheros Communications, Inc. (Atheros). We were incorporated in Delaware in 1984. Our corporate headquarters are located at 141 Mt. Bethel Road, Warren, New Jersey 07059, and our telephone number at that address is 908-668-5000.

 We continue to focus on leveraging our technological and manufacturing advantages to remain a leading supplier of RFICs and RF front end solutions. We design, develop and manufacture RFICs primarily using GaAs compound semiconductor substrates with various process technologies, Metal Semiconductor Field Effect Transistors (MESFET), Pseudomorphic High Electron Mobility Transistors (pHEMT), and Heterojunction Bipolar Transistors (HBT). Our proprietary technology, which utilizes InGaP-plus^TM, combines InGaP HBT and pHEMT processes on a single substrate, enabling us to integrate the PA function and the RF active switch function on the same die. Our primary fab, a state-of-the-art six-inch diameter GaAs fab located at our corporate headquarters in Warren, New Jersey, has been operational since 1999. Unlike traditional CMOS silicon fabs that have short technology lifecycles and require frequent capital investments, GaAs fabs are more similar to analog fabs that have long lifecycles and do not become quickly outdated. We anticipate that this facility will enable us to capitalize on the growing demand for RFICs. Our six-inch wafer fab allows us to produce more than twice the RF die per wafer compared with the four-inch wafer fabs still used by some of our competitors. We believe our strong fabrication capability and available capacity, combined with integrated product design and logistics expertise, allow us to quickly develop and manufacture products to meet market and customer requirements.

 We believe that the technical nature of our products and markets demands an extraordinary commitment to building and maintaining close relationships with our customers. Our design and applications engineering staff actively communicate with customers during all phases of design and production. We have highly specialized field application engineering teams near our customers in Korea, Taiwan and China, as well as a system application team in Denmark, which is located near Texas Instruments’ reference design team in Denmark. These contacts are vital to the development of close, long-term working relationships with our customers, and in obtaining regular forecasts, market updates and information regarding technical and market trends. We believe that reference-design manufacturers in the wireless and broadband markets will continue to play an ever-increasing role in the future of these markets. As such, it is essential that we maintain strong relationships in partnering with these companies to penetrate these market opportunities.

 RESULTS OF OPERATIONS

 The following table sets forth unaudited consolidated statements of operations data as a percent of net sales for the periods presented:

	Three months ended
		April 1, 2006		April 2, 2005
Net sales		100.0	%	100.0	%
Cost of sales		73.6	%	88.4	%
Gross margin		26.4	%	11.6	%
Research and development expenses		22.8	%	36.1	%
Selling and administrative expenses		15.4	%	25.5	%
Restructuring and other charges		-		(0.5	%)
Operating loss		(11.8	%)	(49.5	%)
Interest income		2.4	%	2.6	%
Interest expense		(3.6	%)	(5.7	%)
Other expense		-		-
Net loss		(13.0	%)	(52.6	%)

FIRST QUARTER 2006 (ENDED APRIL 1, 2006) COMPARED TO FIRST QUARTER 2005 (ENDED APRIL 2, 2005)

 NET SALES.Net sales increased 64.1% during the first quarter of 2006 to $35.7 million from $21.8 million in the first quarter of 2005.

 Sales of integrated circuits for broadband applications increased 46.9% during the first quarter of 2006 to $16.5 million from $11.2 million in the first quarter of 2005. The increase in sales was primarily due to an increase in demand for WLAN PAs and infrastructure products of $3.5 million and $1.3 million, respectively. Sales of WLAN PAs benefited from the market transition to 802.11a/b/g from 802.11b/g that carries a higher selling price for the increased functionality.

 Sales of integrated circuits for wireless applications increased 82.3% during the first quarter of 2006 to $19.2 million from $10.5 million in the first quarter of 2005. The increase in sales of integrated circuits for wireless applications in the first quarter of 2006 compared with the first quarter of 2005 was primarily due to increased demand for our GSM and 3G (EDGE, WEDGE & WCDMA) PAs amounting to $5.0 million and $3.2 million, respectively.

 GROSS MARGIN. Gross margin during the first quarter of 2006 increased to 26.4% of net sales from 11.6% of net sales in the first quarter of 2005. The increase in gross margin in the three month period ended April 1, 2006 was primarily due to increased sales and production volumes with the consequent absorption of fixed costs, while a decrease in depreciation expense of $0.6 million offset declines in average selling prices.

 RESEARCH AND DEVELOPMENT. Company sponsored research and development expenses increased 3.8% during the first quarter of 2006 to $8.2 million from $7.9 million during the first quarter of 2005. The increase in the three month period ended April 1, 2006 was attributable to increased stock based compensation.

 SELLING AND ADMINISTRATIVE. Selling and administrative expenses were flat during the first quarter of 2006 at $5.5 million consistent with the first quarter of 2005. Stock based compensation increased $0.3 million in the first quarter of 2006 compared with the first quarter of 2005 and was offset by reduced operating expenses.

 RESTRUCTURING AND OTHER CHARGES. The Company incurred no restructuring or other charges in the first quarter of 2006. During the first quarter of 2005, the Company settled an exit obligation for certain redundant leasehold premises resulting in a savings of $0.1 million against a previously recorded restructuring charge.

 INTEREST INCOME.Interest income increased 50.1% to $0.9 million during the first quarter of 2006 from $0.6 million during the first quarter of 2005. The increases in the three months ended April 1, 2006 were primarily due to higher average interest rates.

 INTEREST EXPENSE. Interest expense increased 3.1% to $1.3 million during the first quarter of 2006. The increase relates to interest on our capital lease obligation. The balance of interest was flat and relates to our $46.7 million outstanding balance of our 5% Convertible Senior Notes due in November of 2006 (the “2006 Notes”) and the $38.0 million outstanding balance of our 5% Convertible Senior Notes due in 2009 (the “2009 Notes”).

LIQUIDITY AND CAPITAL RESOURCES

 As of April 1, 2006, we had $19.3 million in cash and cash equivalents and $115.2 million in marketable securities. Included in these amounts are proceeds we received from completion of an underwritten public offering of an aggregate of 10,446,200 shares of common stock in March 2006, which raised $53.1 million, net of underwriting discounts and commissions and related offering expenses. As of April 1, 2006, we had outstanding $46.7 million aggregate principal amount of our 2006 Notes and $38.0 million aggregate principal amount of our 2009 Notes.

 Operating activities used $4.0 million in cash during the three-month period ended April 1, 2006. Investing activities, consisting principally of net purchases of marketable securities of $40.8 million and purchases of fixed assets of $2.2 million, used $43.0 million of cash during the three-month period ended April 1, 2006. Financing activities, consisting primarily of the aforementioned public stock offering provided $54.4 million.

 As of April 1, 2006, we had unconditional purchase obligations of approximately $6.3 million of which $5.2 million relates to capital equipment purchase requirements over the next six months to increase the installed equipment capacity of the Company's manufacturing operations in response to anticipated increases in customer demand for the Company's products.

 We believe that our existing sources of capital, including our existing cash and marketable securities, will be adequate to satisfy operational needs and anticipated capital needs for the next twelve months including the repayment of our 2006 Notes due in November 2006. Our anticipated capital needs may include acquisitions of complimentary businesses or technologies, or investments in other companies or repurchases of our outstanding debt or equity. However, we may elect to finance all or part of our future capital requirements through additional equity or debt financing. Our ability to pay principal and interest on our outstanding 2006 Notes due in November of 2006 and our outstanding 2009 Notes due in October 2009, and our other debt and to fund our planned capital expenditures depends on our future operating performance.

IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS

 Effective January 1, 2006, we adopted Financial Accounting Standards Board Statement No. 151 (FAS 151), Inventory Costs, an amendment of Accounting Research Bulletin No. 43 (ARB No. 43), Chapter 4. FAS 151 clarifies that abnormal amounts of idle facility expense, freight, handling costs and wasted materials should be recognized as current period charges. In addition, FAS 151 requires that allocation of fixed production overhead to inventory be based on the normal capacity of the production facilities. The adoption of FAS 151 did not have a material impact on our condensed consolidated financial statements.

 Effective January 1, 2006 we adopted Financial Accounting Standards Board (FASB) Statement No. 123(R) (FAS 123R), Share-Based Payment, on a modified prospective basis. FAS 123R amended FASB Statement No. 123, Accounting for Stock Based Compensation (FAS 123) and requires that all share-based payments to employees be recognized in the financial statements. Generally, the approach to accounting for share-based payments in FAS 123R is similar to the approach described in FAS 123, however, pro forma footnote disclosure is no longer an alternative to financial statement recognition. We will now recognize compensation expense over the remaining vesting period for all awards that remained unvested as of January 1, 2006. As permitted by FAS 123, prior to January 1, 2006, we accounted for share-based payments to employees using Accounting Principle Board Opinion No. 25, Accounting for Stock Issued to Employees (APB 25) and related interpretations in accounting for our employee stock option and other stock based compensation plans. Under APB 25’s intrinsic value method, no compensation expense was recognized at the time of option grant when the exercise price of our employee stock optionsequaled the fair market value of the underlying common stock on the date of grant. As such, we generally recognized no compensation cost for employee stock options or the Employee Stock Purchase Plan (ESP Plan).

FORWARD-LOOKING STATEMENTS

 This quarterly report on Form 10-Q contains projections and other forward-looking statements (as that term is defined in the Securities Exchange Act of 1934, as amended). These projections and forward-looking statements reflect the Company’s current views with respect to future events and financial performance and can generally be identified as such because the context of the statement will include words such as “believe”, “anticipate”, “expect”, or words of similar import. Similarly, statements that describe our future plans, objectives, estimates or goals are forward-looking statements. No assurances can be given, however, that these events will occur or that these projections will be achieved and actual results and developments could differ materially from those projected as a result of certain factors. Important factors that could cause actual results and developments to be materially different from those expressed or implied by such projections and forward-looking statements include, but are not limited to, the following risks which are described in greater detail in the Company’s Annual Report on Form 10-K referred to below: (i) our history of recent losses and expectation that we will continue to incur losses; (ii) the existence of intense competition in the markets for our products, which could result in a decrease in our products’ prices and sales; (iii) our need to keep pace with rapid product and process development and technological changes as well as product cost reductions to be competitive; (iv) our gallium arsenide semiconductors may cease to be competitive with silicon alternatives; (v) sources for certain components, materials and equipment are limited, which could result in delays or reductions in product shipments; (vi) our dependence on a small number of customers; (vii) the short life cycles of some of our products may leave us with obsolete or excess inventories; (viii) we may face interruptions in our manufacturing processes; (ix) the variability of our manufacturing yields may affect our gross margins; (x) our dependence on foreign semiconductor assembly and test operations contractors could lead to delays in product shipments; (xi) our results of operations can vary significantly due to the cyclical nature of the semiconductor industry and our end markets; (xii) declines in our revenues and the underutilization of our manufacturing capacity have in the past and may continue to adversely affect our gross margins and profitability; (xiii) our products have experienced rapidly declining unit prices; (xiv) capital required for our business may not be available when we need it; (xv) our success depends on our ability to attract and retain qualified personnel; (xvi) risks due to our international customer base and our subcontracting operations; (xvii) stringent environmental laws and regulations both domestically and abroad; (xviii) any failure to protect our intellectual property rights or avoid claims that we have infringed on the intellectual property rights of others; (ixx) any pursuit of selective acquisitions and alliances which dilute the ownership of our current shareholders and the management and integration of additional operations which may be expensive and divert management time; (xx) certain provisions in our governing documents, our shareholders’ rights agreement and of Delaware law could deter, delay or prevent a third party from acquiring us and prevent shareholders from realizing a takeover premium. The foregoing review of important factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included herein or detailed from time to time in our reports filed with the Securities and Exchange Commission, including the Company’s Annual Report on Form 10-K for the year ended December 31, 2005. The Company undertakes no obligation to update publicly or revise any forward-looking statement, whether as a result of new information, future developments or otherwise.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 The Company's market risk has not changed significantly for the risks disclosed in Item 7A of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2005.

ITEM 4. CONTROLS AND PROCEDURES

 Under the supervision and with the participation of our management, including our Chief Executive Officer, or CEO, and Chief Financial Officer, or CFO, we conducted an evaluation of the effectiveness of our disclosure controls and procedures as of April 1, 2006. Based on that evaluation, our management, including our CEO and CFO, concluded that our disclosure controls and procedures were effective to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported as specified within the SEC’s rules and forms.

 There was no change in the Company’s internal control over financial reporting during the Company’s last fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

 Because of their inherent limitations, disclosure controls and procedures and internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

ANADIGICS, Inc.

PART II - OTHER INFORMATION

ITEM1.LEGAL PROCEEDINGS

We are a party to litigation arising in the ordinary course out of the operation of our business. We believe that the ultimate resolution of such litigation should not have a material adverse effect on our financial condition, results of operations or liquidity.

ITEM6.EXHIBITS

31.1 Rule 13a-14(a)/15d-14(a) Certification of Bami Bastani, President and Chief Executive Officer of ANADIGICS, Inc.

31.2 Rule 13a-14(a)/15d-14(a) Certification of Thomas C. Shields, Executive Vice President and Chief Financial Officer of ANADIGICS, Inc.

32.1 Section 1350 Certification of Bami Bastani, President and Chief Executive Officer of ANADIGICS, Inc.

32.2 Section 1350 Certification of Thomas C. Shields, Executive Vice President and Chief Financial Officer of ANADIGICS, Inc.

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.

ANADIGICS, INC.

By:	/s/ Thomas C. Shields
	Thomas C. Shields
	Executive Vice President
	and Chief Financial Officer

Dated: May 11, 2006

             Exhibit 31.1

CERTIFICATION

I, Bami Bastani, certify that:

1.   I have reviewed this quarterly report on Form 10-Q of ANADIGICS, Inc.;

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

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

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

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

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

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

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

5.   The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

a)   All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)   Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:May 11, 2006

By:	/s/ Bami Bastani
	Bami Bastani
	President and Chief Executive Officer

             Exhibit 31.2

CERTIFICATION

I, Thomas C. Shields, certify that:

1.   I have reviewed this quarterly report on Form 10-Q of ANADIGICS, Inc.;

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

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

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

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

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

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

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

5.   The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

a)   All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)   Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:May 11, 2006

By:	/s/ Thomas C. Shields
	Thomas C. Shields
	Executive Vice President and Chief Financial Officer

Exhibit 32.1

CERTIFICATION

The undersigned, Bami Bastani, President and Chief Executive Officer of ANADIGICS, Inc. (the "Company") hereby certifies that the Quarterly Report of the Company on Form 10-Q for the period ended April 1, 2006 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that the information contained in such report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: May 11, 2006

By:	/s/ Bami Bastani
	Bami Bastani
	President and
	Chief Executive Officer

This certification shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934, as amended, and will not be incorporated by reference into any registration statement filed under the Securities Act of 1933, as amended, unless specifically identified therein as being incorporated by reference.

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

Exhibit 32.2

CERTIFICATION

The undersigned, Thomas C. Shields, Senior Vice President and Chief Financial Officer of ANADIGICS, Inc. (the "Company") hereby certifies that the Quarterly Report of the Company on Form 10-Q for the period ended April 1, 2006 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that the information contained in such report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: May 11, 2006

By:	/s/ Thomas C. Shields
	Thomas C. Shields
	Executive Vice President
	and Chief Financial Officer

This certification shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934, as amended, and will not be incorporated by reference into any registration statement filed under the Securities Act of 1933, as amended, unless specifically identified therein as being incorporated by reference.

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