10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended June 30, 2012

or

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

For the transition period from                      to                     

COMMISSION FILE NUMBER 000-26124

IXYS CORPORATION

(Exact name of registrant as specified in its charter)

DELAWARE	77-0140882
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

1590 BUCKEYE DRIVE

MILPITAS, CALIFORNIA 95035-7418

(Address of principal executive offices and Zip Code)

(408) 457-9000

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

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ¨ No þ

The number of shares of the registrant’s common stock, $0.01 par value, outstanding as of July 27, 2012 was 31,390,682.

IXYS CORPORATION

FORM 10-Q

June 30, 2012

INDEX

	Page
PART I — FINANCIAL INFORMATION		3
ITEM 1. FINANCIAL STATEMENTS		3
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS		3
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS		4
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME		5
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS		6
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS		7
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS		16
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK		24
ITEM 4. CONTROLS AND PROCEDURES		24
PART II — OTHER INFORMATION		25
ITEM 1. LEGAL PROCEEDINGS		25
ITEM 1A. RISK FACTORS		25
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS		39
ITEM 3. DEFAULTS UPON SENIOR SECURITIES		39
ITEM 4. MINE SAFETY DISCLOSURES		39
ITEM 5. OTHER INFORMATION		39
ITEM 6. EXHIBITS		39

2

PART I — FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

IXYS CORPORATION

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share data)

	June 30,			March 31,
	2012			2012
ASSETS
Current assets:
Cash and cash equivalents	$	102,831		$	98,604
Restricted cash		557			509
Accounts receivable, net of allowances of $2,744 at June 30, 2012 and $2,473 at March 31, 2012		45,138			48,420
Inventories		85,808			86,240
Prepaid expenses and other current assets		4,885			6,934
Deferred income taxes		8,315			8,450
Total current assets		247,534			249,157
Property, plant and equipment, net		53,149			56,071
Intangible assets, net		4,502			5,144
Deferred income taxes		25,539			25,629
Other assets		11,031			7,909
Total assets	$	341,755		$	343,910
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Current portion of capitalized lease obligations	$	2,573		$	2,873
Current portion of loans payable		939			1,696
Accounts payable		15,551			14,427
Accrued expenses and other current liabilities		19,559			22,023
Total current liabilities		38,622			41,019
Long term income tax payable		6,449			6,456
Capitalized lease obligations, net of current portion		4,735			5,651
Long term loans, net of current portion		21,068			21,676
Pension liabilities		14,140			15,001
Total liabilities		85,014			89,803
Commitments and contingencies (Note 16)
Stockholders’ equity:
Preferred stock, $0.01 par value:
Authorized: 5,000,000 shares; none issued and outstanding		—			—
Common stock, $0.01 par value:
Authorized: 80,000,000 shares; 37,862,045 issued and 31,391,105 outstanding at June 30, 2012 and 37,805,697 issued and 31,323,538 outstanding at March 31, 2012		379			378
Additional paid-in capital		199,870			198,283
Treasury stock, at cost: 6,470,940 common shares at June 30, 2012 and 6,482,159 common shares at March 31, 2012		(56,739	)		(56,838	)
Retained earnings		116,176			110,194
Accumulated other comprehensive income		(2,945	)		2,090
Total stockholders’ equity		256,741			254,107
Total liabilities and stockholders’ equity	$	341,755		$	343,910

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

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IXYS CORPORATION

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

	Three Months Ended
	June 30,
	2012			2011
Net revenues	$	80,857		$	101,778
Cost of goods sold		53,668			66,743
Gross profit		27,189			35,035
Operating expenses:
Research, development and engineering		6,649			6,933
Selling, general and administrative		11,187			11,129
Amortization of acquisition-related intangible assets		640			642
Total operating expenses		18,476			18,704
Operating income		8,713			16,331
Other income (expense):
Interest income		84			69
Interest expense		(257	)		(284	)
Other income (expense), net		701			(394	)
Income before income tax provision		9,241			15,722
Provision for income tax		(3,234	)		(5,746	)
Net income	$	6,007		$	9,976
Net income per share:
Basic	$	0.19		$	0.32
Diluted	$	0.19		$	0.30
Weighted average shares used in per share calculation:
Basic		31,351			31,508
Diluted		32,378			32,806

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

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IXYS CORPORATION

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In thousands)

	Three Months Ended
	June 30,
	2012			2011
	(unaudited)
Net income	$	6,007		$	9,976
Unrealized gain (loss) on available-for-sale investment securities, net of taxes of $35 and $(5) for the three months ended June 30, 2012 and 2011		65			(9	)
Foreign currency translation adjustments		(5,100	)		1,509
Total comprehensive income	$	972		$	11,476

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

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IXYS CORPORATION

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

	Three Months Ended June 30,
	2012			2011
Cash flows from operating activities:
Net income	$	6,007		$	9,976
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		3,277			3,377
Provision for receivable allowances		3,102			2,434
Net change in inventory provision		(1	)		262
Foreign currency adjustments on intercompany amounts		(497	)		471
Stock-based compensation		1,095			784
Loss on investments and disposal of fixed assets		24			127
Changes in operating assets and liabilities:
Accounts receivable		(893	)		(5,060	)
Inventories		(1,897	)		500
Prepaid expenses and other current assets		(376	)		877
Other assets		313			80
Accounts payable		1,475			(925	)
Accrued expenses and other liabilities		369			2,366
Pension liabilities		(218	)		(190	)
Net cash provided by operating activities		11,780			15,079
Cash flows from investing activities:
Change in restricted cash		(48	)		(7	)
Purchases of investments		(3,919	)		(8	)
Purchases of property and equipment		(1,118	)		(3,019	)
Proceeds from sale of investments		387			25
Net cash used in investing activities		(4,698	)		(3,009	)
Cash flows from financing activities:
Principal payments on capital lease obligations		(745	)		(774	)
Repayments of loans and notes payable		(939	)		(340	)
Proceeds from loans		—			423
Proceeds from employee equity plans		567			1,443
Purchases of treasury stock		—			(1,550	)
Net cash used in financing activities		(1,117	)		(798	)
Effect of exchange rate fluctuations on cash and cash equivalents		(1,738	)		384
Net increase in cash and cash equivalents		4,227			11,656
Cash and cash equivalents at beginning of period		98,604			75,406
Cash and cash equivalents at end of period	$	102,831		$	87,062

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

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NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1. Unaudited Condensed Consolidated Financial Statements

The accompanying interim unaudited condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. The unaudited condensed consolidated financial statements include the accounts of IXYS Corporation and its wholly-owned subsidiaries. The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and judgments that affect the amounts reported in the financial statements and accompanying notes. The accounting estimates that require management’s most difficult judgments include, but are not limited to, revenue reserves, inventory valuation, accounting for income taxes, allocation of purchase price in business combinations and restructuring costs. All significant intercompany transactions have been eliminated in consolidation. All adjustments of a normal recurring nature that, in the opinion of management, are necessary for a fair statement of the results for the interim periods have been made. The condensed balance sheet as of March 31, 2012 has been derived from our audited balance sheet as of that date. It is recommended that the interim financial statements be read in conjunction with our audited consolidated financial statements and notes thereto for the fiscal year ended March 31, 2012, or fiscal 2012, contained in our Annual Report on Form 10-K. Interim results are not necessarily indicative of the operating results expected for later quarters or the full fiscal year.

2. Recent Accounting Pronouncements and Accounting Changes

In June 2011, the Financial Accounting Standards Board, or FASB, issued authoritative guidance on the presentation of comprehensive income. Under the guidance, an entity has the option to present the total of comprehensive income, the components of net income and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. The guidance was effective for us in the fiscal year beginning on April 1, 2012. Although adopting the guidance did not impact the accounting for comprehensive income, it affected the presentation of components of comprehensive income by eliminating the historical practice of showing these items within the consolidated statements of stockholders’ equity.

3. Fair Value

We account for certain assets and liabilities at fair value. In determining fair value, we consider its principal or most advantageous market and the assumptions that market participants would use when pricing, such as inherent risk, restrictions on sale and risk of nonperformance. The fair value hierarchy is based upon the observability of inputs used in valuation techniques. Observable inputs (highest level) reflect market data obtained from independent sources, while unobservable inputs (lowest level) reflect internally developed market assumptions. The fair value measurements are classified under the following hierarchy:

Level 1 — Quoted prices for identical instruments in active markets.

Level 2 — Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs or significant value-drivers are observable in active markets.

Level 3 — Model-derived valuations in which one or more significant inputs or significant value-drivers are unobservable.

Assets and liabilities measured at fair value on a recurring basis, excluding accrued interest components, consisted of the following types of instruments as of June 30, 2012 and March 31, 2012 (in thousands):

	June 30, 2012 (1)								March 31, 2012 (1)
	Total			Fair Value Measured at Reporting Date Using					Total			Fair Value Measured at Reporting Date Using
Description				Level 1		Level 2						Level 1		Level 2
	(unaudited)								(unaudited)
Marketable equity securities (2)	$	4,799		$	4,799	$	—		$	1,064		$	1,064	$	—
Auction rate preferred securities (2)		350			—		350			350			—		350
Derivative liabilities (3)		(220	)		—		(220	)		(203	)		—		(203	)
Total	$	4,929		$	4,799	$	130		$	1,211		$	1,064	$	147

(1) We did not have any recurring assets whose fair value was measured using significant unobservable inputs.

(2) Included in “Other assets” on our unaudited condensed consolidated balance sheets.

(3) Included in “Accrued expenses and other current liabilities” on our unaudited condensed consolidated balance sheets.

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We measure our marketable securities and derivative contracts at fair value. Marketable securities are valued using the quoted market prices and are therefore classified as Level 1 estimates.

From time to time, we use derivative instruments to manage exposures to changes in interest rates and currency exchange rates, and the fair values of these instruments are recorded on the balance sheets. We have elected not to designate these instruments as accounting hedges. The changes in the fair value of these instruments are recorded in the current period’s statement of operations and are included in other income (expense), net. All of our derivative instruments are traded on over-the-counter markets where quoted market prices are not readily available. For those derivatives, we measure fair value using prices obtained from the counterparties with whom we have traded. The counterparties price the derivatives based on models that use primarily market observable inputs, such as yield curves and option volatilities. Accordingly, we classify these derivatives as Level 2. See Note 8, “Borrowing Arrangements” for further information regarding the terms of the derivative contract.

Auction rate preferred securities, or ARPS, are stated at par value based upon observable inputs including historical redemptions received from the ARPS issuers. All of our ARPS have AAA credit ratings, are 100% collateralized and continue to pay interest in accordance with their contractual terms. Additionally, the collateralized asset value ranges exceed the value of our ARPS by approximately 300 percent. Accordingly, the remaining ARPS balance of $350,000 is categorized as Level 2 for fair value measurement in accordance with the authoritative guidance provided by FASB and was recorded at full par value on the unaudited condensed consolidated balance sheets as of June 30, 2012 and March 31, 2012. We currently believe that the ARPS values are not impaired and as such, no impairment has been recognized against the investment. If future auctions fail to materialize and the credit rating of the issuers deteriorates, we may be required to record an impairment charge against the value of our ARPS.

Cash and cash equivalents are recognized and measured at fair value in our consolidated financial statements. Accounts receivable and prepaid expenses and other current assets are financial assets with carrying values that approximate fair value. Accounts payable and accrued expenses and other current liabilities are financial liabilities with carrying values that approximate fair value.

Long term loans, which primarily consist of loans from banks, approximate fair value as the interest rates either adjust according to the market rates or the interest rates approximate the market rates. The estimated fair value of our long-term debt was approximately $22.0 million and $23.4 million as of June 30, 2012 and March 31, 2012, respectively. Our long-term debt is categorized as Level 2 for fair value measurement. See Note 10, “Pension Plans” for a discussion of pension liabilities.

4. Other Assets

Other assets consist of the following (in thousands):

	June 30, 2012		March 31, 2012
	(unaudited)
Marketable equity securities	$	4,799	$	1,064
Auction rate preferred securities		350		350
Long term equity investments		5,038		5,340
Other items		844		1,155
Total	$	11,031	$	7,909

5. Inventories

Inventories consist of the following (in thousands):

	June 30, 2012		March 31, 2012
	(unaudited)
Raw materials	$	23,325	$	24,157
Work in process		38,568		40,505
Finished goods		23,915		21,578
Total	$	85,808	$	86,240

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6. Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consist of the following (in thousands):

	June 30, 2012		March 31, 2012
	(unaudited)
Uninvoiced goods and services	$	9,865	$	11,869
Compensation and benefits		6,884		7,214
Restructuring accrual		131		199
Commission, royalties and other		2,679		2,741
Total	$	19,559	$	22,023

7. Intangible Assets

Identified intangible assets consisted of the following as of June 30, 2012 (in thousands):

	Gross Intangible Assets		Accumulated Amortization		Net Intangible Assets
Developed intellectual property	$	4,800	$	1,858	$	2,942
Customer relationships		6,100		5,234		866
Contract backlog		2,000		2,000		—
Other intangible assets		1,187		493		694
Total identifiable intangible assets	$	14,087	$	9,585	$	4,502

Identified intangible assets consisted of the following as of March 31, 2012 (in thousands):

	Gross Intangible Assets		Accumulated Amortization		Net Intangible Assets
Developed intellectual property	$	4,800	$	1,658	$	3,142
Customer relationships		6,100		4,840		1,260
Contract backlog		2,000		2,000		—
Other intangible assets		1,187		445		742
Total identifiable intangible assets	$	14,087	$	8,943	$	5,144

8. Borrowing Arrangements

Bank of the West

On November 13, 2009, we entered into a credit agreement for a revolving line of credit with Bank of the West, or BOW, under which we could borrow up to $15.0 million and all amounts owed under the credit agreement were due and payable on October 31, 2011. On December 29, 2010, we entered into an amendment with BOW to increase the line of credit to $20.0 million and to extend the expiration date to October 31, 2013. Borrowings may be repaid and re-borrowed at any time during the term of the credit agreement. The obligations are guaranteed by two of our subsidiaries. At June 30, 2012, the outstanding principal balance under the credit agreement was $15.0 million.

The credit agreement provides different interest rate alternatives under which we may borrow funds. We may elect to borrow based on LIBOR plus a margin, an alternative base rate plus a margin or a floating rate plus a margin. The margin can range from 150 basis points to 325 basis points, depending on interest rate alternatives and on our leverage of liabilities to effective tangible net worth. The effective interest rate as of June 30, 2012 was 2.97%.

The credit agreement is subject to a set of financial covenants, including minimum effective tangible net worth, the ratio of cash, cash equivalents and accounts receivable to current liabilities, profitability, a ratio of EBITDA to interest expense and a minimum amount of U.S. domestic cash on hand. At June 30, 2012, we complied with all of these financial covenants.

9

The credit agreement also includes a $3.0 million letter of credit subfacility. See Note 16, “Commitments and Contingencies” for further information regarding the terms of the subfacility.

IKB Deutsche Industriebank

On June 10, 2005, IXYS Semiconductor GmbH, our German subsidiary, borrowed €10.0 million, or about $12.2 million at the time, from IKB Deutsche Industriebank for a term of 15 years. The outstanding balance at June 30, 2012 was €5.3 million, or $6.7 million.

The interest rate on the loan is determined by adding the then effective three month Euribor rate and a margin. The margin can range from 70 basis points to 125 basis points, depending on the calculation of a ratio of indebtedness to cash flow for our German subsidiary. In June 2010, we entered into an interest rate swap agreement commencing June 30, 2010. The swap agreement has a fixed interest rate of 1.99% and expires on June 30, 2015. It is not designated as a hedge in the financial statements. See Note 3, “Fair Value” for further information regarding the derivative contract.

During each fiscal quarter, a principal payment of €167,000, or about $210,000, and a payment of accrued interest are required. Financial covenants for a ratio of indebtedness to cash flow, a ratio of equity to total assets and a minimum stockholders’ equity for the German subsidiary must be satisfied for the loan to remain in good standing. The loan may be prepaid in whole or in part at the end of a fiscal quarter without penalty. At June 30, 2012, we complied with the financial covenants. The loan is partially collateralized by a security interest in the facility owned by our company in Lampertheim, Germany.

Note payable issued in acquisition

On September 10, 2008, we issued a note payable with a face value of $2.0 million in connection with the purchase of real property and the acquisition of the shares of Reaction Technology Incorporated, or RTI. The note was repayable in 60 equal monthly installments of $38,666, which included interest at an annual rate of 6.0%. The note was collateralized by a security interest in the property acquired and the current assets of RTI. The note was paid in full in April 2012.

9. Restructuring Charges

In the quarter ended September 30, 2009, we initiated plans to restructure our European manufacturing and assembly operations to align them to current market conditions. The plans primarily involved the termination of employees and centralization of certain positions. Costs related to termination of employees represented severance payments and benefits.

During the quarter ended December 31, 2010, we relocated the Zilog employees to our headquarters in Milpitas and vacated the facility in San Jose, California, as a part of our integration plan to reduce costs.

The costs in connection with the restructuring plan in Europe and Zilog lease and exit costs have been included under “Restructuring charges” in our unaudited condensed consolidated statements of operations. The restructuring accrual as of June 30, 2012 was included under “Accrued expenses and other current liabilities” on our unaudited condensed consolidated balance sheets.

Restructuring activity as of and for the three months ended June 30, 2012 was as follows (in thousands):

	Severance and Related Benefits			Lease Commitment Accrual			Total
Balance at March 31, 2012	$	72		$	127		$	199
Cash payments		—			(64	)		(64	)
Currency translation adjustment		(4	)		—			(4	)
Balance at June 30, 2012	$	68		$	63		$	131

We anticipate that the remaining restructuring obligations of $131,000 as of June 30, 2012 will be paid by December 31, 2013.

10. Pension Plans

We maintain three defined benefit pension plans: one for United Kingdom employees, one for German employees, and one for Philippine employees. These plans cover most of the employees in the United Kingdom, Germany and the Philippines. Benefits are based on years of service and the employees’ compensation. We deposit funds for these plans, consistent with the requirements of local law, with investment management companies, insurance companies, banks or trustees and/or accrue for the unfunded portion of the obligations. The measurement date for the projected benefit obligations and the plan assets is March 31. The United Kingdom and

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German plans have been curtailed. As such, the plans are closed to new entrants and no credit is provided for additional periods of service. The German plan was held by a separate legal entity. As of June 30, 2012, the German defined benefit plan was completely unfunded. We expect to contribute approximately $917,000 to the United Kingdom and the Philippines plans in the fiscal year ending March 31, 2013. This contribution is primarily contractual.

The net periodic pension expense includes the following components (in thousands):

	Three Months Ended June 30,
	2012			2011
	(unaudited)
Service cost	$	24		$	21
Interest cost on projected benefit obligation		471			522
Expected return on plan assets		(379	)		(437	)
Recognized actuarial loss		42			19
Net periodic pension expense	$	158		$	125

11. Employee Equity Incentive Plans

Stock Purchase and Stock Option Plans

The 2011 Equity Incentive Plan and the 2009 Equity Incentive Plan

On September 10, 2009, our stockholders approved the 2009 Equity Incentive Plan, or the 2009 Plan, under which 900,000 shares of our common stock are reserved for the grant of stock options and other equity incentives. On September 16, 2011, our stockholders approved the 2011 Equity Incentive Plan, or the 2011 Plan, under which 600,000 shares of our common stock are reserved for the grant of stock options and other equity incentives. The 2009 Plan and the 2011 Plan are referred to as the Plans.

Stock Options

Under the Plans, nonqualified and incentive stock options may be granted to employees, consultants and non-employee directors. Generally, the per share exercise price shall not be less than 100% of the fair market value of a share on the grant date. The Board of Directors has the full power to determine the provisions of each option issued under the Plans. While we may grant options that become exercisable at different times or within different periods, we have primarily granted options that vest over four years. The options, once granted, expire ten years from the date of grant.

Restricted Stock

Restricted stock awards may be granted to any employee, director or consultant under the Plans. Pursuant to a restricted stock award, we will issue shares of common stock that will be released from restriction if certain requirements, including continued performance of services, are met.

Stock Appreciation Rights

Awards of stock appreciation rights, or SARs, may be granted to employees, consultants and nonemployee directors pursuant to the Plans. A SAR is payable on the difference between the market price at the time of exercise and the exercise price at the date of grant. In any event, the exercise price of a SAR shall not be less than 100% of the fair market value of a share on the grant date and shall expire no later than ten years from the grant date. Upon exercise, the holder of a SAR shall be entitled to receive payment either in cash or a number of shares by dividing such cash amount by the fair market value of a share on the exercise date.

Restricted Stock Units

Restricted stock units, denominated performance units in the 2009 Plan, may be granted to employees, consultants and nonemployee directors under the Plans. Each restricted stock unit shall have a value equal to the fair market value of one share. After the applicable performance period has ended, the holder will be entitled to receive a payment, either in cash or in the form of shares, based on the number of restricted stock units earned over the performance period, to be determined as a function of the extent to which the corresponding performance goals or other vesting provisions have been achieved.

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Zilog 2004 Omnibus Stock Incentive Plan

The Zilog 2004 Omnibus Stock Incentive Plan, or the Zilog 2004 Plan, was approved by the stockholders of Zilog in 2004, and was amended and approved by the stockholders of Zilog in 2007. In connection with the acquisition of Zilog, our Board of Directors approved assumption of the Zilog 2004 Plan. Employees of Zilog and persons first employed by our company after the closing of the acquisition of Zilog may receive grants under the Zilog 2004 Plan. Under the 2004 Plan, incentive stock options, non-statutory stock options, or restricted shares may be granted. At the time of the assumption of the Zilog 2004 Plan by our company, up to 652,963 shares of our common stock were available for grant under the plan.

Zilog 2002 Omnibus Stock Incentive Plan

The Zilog 2002 Omnibus Stock Incentive Plan, or the Zilog 2002 Plan, was adopted in 2002. In connection with the acquisition of Zilog, our Board of Directors approved the assumption of the Zilog 2002 Plan with respect to the shares available for grant as stock options. Employees of Zilog and persons first employed by our company after the closing of the acquisition of Zilog may receive grants under the Zilog 2002 Plan. At the time of the assumption of the Zilog 2002 Plan by our company, up to 366,589 shares of our common stock were available for grant under the plan. The Zilog 2002 Plan expired in May 2012 and no additional grants may be made thereafter.

Employee Stock Purchase Plan

In May 1999, the Board of Directors approved the 1999 Employee Stock Purchase Plan, or the Purchase Plan, and reserved 500,000 shares of common stock for issuance under the Purchase Plan. Under the Purchase Plan, all eligible employees may purchase our common stock at a price equal to 85% of the lower of the fair market value at the beginning of the offer period or the semi-annual purchase date. Stock purchases are limited to 15% of an employee’s eligible compensation. On July 31, 2007 and July 9, 2010, the Board of Directors amended the Purchase Plan and on each occasion reserved an additional 350,000 shares of common stock for issuance under the Purchase Plan. During the three months ended June 30, 2012, there were 55,925 shares purchased under the Purchase Plan, leaving approximately 245,946 shares available for purchase under the plan in the future.

Stock-Based Compensation

The following table summarizes the effects of stock-based compensation charges (in thousands):

	Three Months Ended June 30,
Income Statement Classifications	2012		2011
	(unaudited)
Selling, general and administrative expenses	$	1,095	$	784
Stock-based compensation effect in income before taxes		1,095		784
Provision for income taxes (1)		383		282
Net stock-based compensation effects in net income	$	712	$	502

(1) Estimated at a statutory income tax rate of 35% in fiscal year 2013 and 36% in fiscal year 2012.

During the three months ended June 30, 2012, the unaudited condensed consolidated statements of operations and cash flows do not reflect any tax benefit for the tax deduction from option exercises and other awards. As of June 30, 2012, approximately $6.5 million in stock-based compensation is to be recognized for unvested stock options granted under our equity incentive plans. The unrecognized compensation cost is expected to be recognized over a weighted average period of 2.8 years.

The Black-Scholes option pricing model is used to estimate the fair value of options granted under our equity incentive plans and rights to acquire stock granted under our stock purchase plan. The weighted average estimated fair values of employee stock option grants and rights granted under the 1999 Employee Stock Purchase Plan, as well as the weighted average assumptions that were used in calculating such values during the three months ended June 30, 2012 and 2011, were based on estimates at the date of grant as follows:

	Stock Options						Purchase Plan
	Three Months Ended June 30,						Three Months Ended June 30,
	2012			2011			2012			2011
Weighted average estimated fair value of grant per share	$	5.47		$	6.74		$	3.67		$	2.51
Risk-free interest rate		0.9	%		1.9	%		0.1	%		0.2	%
Expected term in years		6.34			5.95			0.5			0.5
Volatility		55.4	%		55.7	%		46.8	%		44.9	%
Dividend yield		0	%		0	%		0	%		0	%

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Activity with respect to outstanding stock options for the three months ended June 30, 2012 was as follows:

	Number of Shares			Weighted Average Exercise Price Per Share		Intrinsic Value (1)
						(000)
Balance at March 31, 2012		5,472,004		$	9.75
Options granted		90,000		$	10.36
Options exercised		(11,219	)	$	6.49	$	70
Options expired		(12,900	)	$	12.85
Balance at June 30, 2012		5,537,885		$	9.76
Exercisable at June 30, 2012		3,992,010		$	9.49
Exercisable at March 31, 2012		3,833,879		$	9.42

(1) Represents the difference between the exercise price and the value of our common stock at the time of exercise.

12. Accumulated Other Comprehensive Income (Loss)

The components of accumulated other comprehensive income (loss), net of tax, at the end of each period were as follows (in thousands):

	June 30, 2012			March 31, 2012
	(unaudited)
Accumulated net unrealized loss on available-for-sale investments securities, net of taxes of $(2) at June 30, 2012 and $(37) at March 31, 2012	$	(3	)	$	(68	)
Unrecognized actuarial loss, net of tax of $(1,523)		(4,314	)		(4,314	)
Accumulated foreign currency translation adjustments		1,372			6,472
Total accumulated other comprehensive income (loss)	$	(2,945	)	$	2,090

13. Computation of Net Income per Share

Basic and diluted earnings per share are calculated as follows (in thousands, except per share amounts):

	Three Months Ended June 30,
	2012		2011
	(unaudited)
Net income	$	6,007	$	9,976
Weighted average shares—basic		31,351		31,508
Weighted average shares—diluted		32,378		32,806
Net income per share—basic	$	0.19	$	0.32
Net income per share—diluted	$	0.19	$	0.30

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Diluted weighted average shares includes approximately 1,027,000 and 1,298,000 common equivalent shares from stock options for the three months ended June 30, 2012 and 2011.

Basic net income available per common share is computed using net income and the weighted average number of common shares outstanding during the period. Diluted net income per common share is computed using net income and the weighted average number of common shares outstanding, assuming dilution, which includes potentially dilutive common shares outstanding during the period. Potentially dilutive common shares include the assumed exercise of stock options and assumed vesting of restricted stock units using the treasury stock method. During the three months ended June 30, 2012 and 2011, there were outstanding weighted average options to purchase 1,682,804 and 619,173 shares, respectively, that were not included in the computation of diluted net income per share since the exercise prices of the options exceeded the market price of the common stock. These options could dilute earnings per share in future periods if the market price of the common stock increases.

14. Segment Information

We have a single operating segment. This operating segment is comprised of semiconductor products used primarily in power-related applications. While we have separate legal subsidiaries with discrete financial information, we have one chief operating decision maker with highly integrated businesses. Our net revenues by major geographic area (based on destination) were as follows (in thousands):

	Three Months Ended June 30,
	2012		2011
	(unaudited)
United States	$	24,922	$	27,705
Europe and the Middle East
France		1,573		2,031
Germany		9,157		13,416
United Kingdom		7,124		8,002
Other		10,250		14,140
Asia Pacific
China		13,384		18,565
Japan		1,828		2,088
Korea		2,243		3,945
Malaysia		1,303		1,120
Singapore		2,645		2,484
Taiwan		1,224		2,232
Other		1,355		1,369
Rest of the World
India		1,802		2,829
Other		2,047		1,852
Total	$	80,857	$	101,778

The following table sets forth net revenues for each of our product groups for the three months ended June 30, 2012 and 2011 (in thousands):

	Three Months Ended June 30,
	2012		2011
	(unaudited)
Power semiconductors	$	59,582	$	76,464
Integrated circuits		15,599		18,111
Systems and RF power semiconductors		5,676		7,203
Total	$	80,857	$	101,778

For the three months ended June 30, 2012, two distributors accounted for 12.4% and 11.7% of our net revenues, respectively. For the three months ended June 30, 2011, the same two distributors accounted for 11.0% and 12.8% of our net revenues, respectively.

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15. Income Taxes

For the three months ended June 30, 2012, we recorded income tax provisions of $3.2 million, reflecting an effective tax rate of 35.0%. For the three months ended June 30, 2011, we recorded income tax provisions of $5.7 million, reflecting an effective tax rate of 36.5%. For the three months ended June 30, 2012, the effective tax rate reflected estimates of annual income in domestic and foreign jurisdictions, as adjusted by certain tax items. For the three months ended June 30, 2011, the effective tax rate was affected by the changes in the estimates of annual income in foreign jurisdictions and by a valuation allowance release.

16. Commitments and Contingencies

Legal Proceedings

We are currently involved in a variety of legal matters that arise in the normal course of business. Based on information currently available, management does not believe that the ultimate resolution of these matters will have a material adverse effect on our financial condition, results of operations and cash flows. Were an unfavorable ruling to occur, there exists the possibility of a material adverse impact on the results of operations of the period in which the ruling occurs.

Bank of the West

On November 13, 2009, we entered into a credit agreement with BOW. On December 29, 2010, we entered into an amendment with BOW to increase the line of credit to $20.0 million and to extend the expiration date to October 31, 2013. The credit agreement includes a letter of credit subfacility, under which BOW agrees to issue letters of credit of up to $3.0 million. However, borrowing under this subfacility is limited to the extent of availability under the $20.0 million revolving line of credit. At June 30, 2012, the outstanding principal balance under the credit agreement was $15.0 million. See Note 8, “Borrowing Arrangements” for further information regarding the terms of the credit agreement.

Other Commitments and Contingencies

On occasion, we provide limited indemnification to customers against intellectual property infringement claims related to our products. To date, we have not experienced significant activity or claims related to such indemnifications. We also provide in the normal course of business indemnification to our officers, directors and selected parties. We are unable to estimate any potential future liability, if any. Therefore, no liability for these indemnification agreements has been recorded as of June 30, 2012 and March 31, 2012.

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

This discussion contains forward-looking statements, which are subject to certain risks and uncertainties, including, without limitation, those described elsewhere in this Form 10-Q and, in particular, in Item 1A of Part II hereof. Actual results may differ materially from the results discussed in the forward-looking statements. For a discussion of risks that could affect future results, see “Item 1A. Risk Factors.” All forward-looking statements included in this document are made as of the date hereof, based on the information available to us as of the date hereof, and we assume no obligation to update any forward-looking statement, except as may be required by law.

Overview

We are a multi-market integrated semiconductor company. Our three principal product groups are: power semiconductors; integrated circuits, or ICs; and systems and radio frequency, or RF, power semiconductors.

Our power semiconductors improve system efficiency and reliability by converting electricity at relatively high voltage and current levels into the finely regulated power required by electronic products. We focus on the market for power semiconductors that are capable of processing greater than 200 watts of power.

We also design, manufacture and sell integrated circuits for a variety of applications. Our analog and mixed signal ICs are principally used in telecommunications applications. Our mixed signal application specific ICs, or ASICs, address the requirements of the medical imaging equipment and display markets. Our power management and control ICs are used in conjunction with power semiconductors. Our microcontrollers provide application specific, embedded system-on-chip, or SoC, solutions for the industrial and consumer markets.

Our systems include laser diode drivers, high voltage pulse generators and modulators, and high power subsystems, sometimes known as stacks, that are principally based on our high power semiconductor devices. Our RF power semiconductors enable circuitry that amplifies or receives radio frequencies in wireless and other microwave communication applications, medical imaging applications and defense and space applications.

In the quarter ended June 30, 2012, our revenues decreased by approximately $6.3 million as compared to the immediately preceding quarter, largely due to reduced demand for our products. Our revenues from sales of power semiconductors and systems and RF power semiconductors declined, while our revenues from sales of ICs increased slightly. Comparing the same periods, we experienced lower revenues in all of the major geographical areas and in all of the major market segments, except the consumer products market. Gross profit margin fell slightly, principally because of a shift in product mix towards lower margin products. During the quarter ended June 30, 2012, the proportion of our revenues obtained through distribution increased as compared to the quarter ended March 31, 2012, primarily due to the growth of sales to the consumer products market. In addition, our selling, general and administrative expenses, or SG&A expenses, and our research, development and engineering expenses, or R&D expenses, have remained relatively flat. In future periods, both our SG&A and R&D expenses, as expressed in dollars, are expected to continue at approximately these levels. In general, our visibility regarding future performance has declined in the face of the uncertain macroeconomic outlook.

Critical Accounting Policies and Significant Management Estimates

The discussion and analysis of our financial condition and results of operations are based upon our unaudited condensed consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities. On an ongoing basis, management evaluates the reasonableness of its estimates. Management bases its estimates on historical experience and on various assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily available from other sources. Actual results may differ materially from these estimates under different assumptions or conditions.

We believe the following critical accounting policies require that we make significant judgments and estimates in preparing our consolidated financial statements.

Revenue recognition. We sell to distributors and original equipment manufacturers. Approximately 59.4% of our revenues in the three months ended June 30, 2012 and 57.4% of our net revenues in the three months ended June 30, 2011 were from distributors. We provide some of our distributors with the following programs: stock rotation and ship and debit. Ship and debit is a sales incentive program for products previously shipped to distributors. We recognize revenue from product sales upon shipment provided that we have received an executed purchase order, the price is fixed and determinable, the risk of loss has transferred, collection of resulting receivables is reasonably assured, there are no customer acceptance requirements and there are no remaining significant obligations.

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Our shipping terms are generally FOB shipping point. Reserves for allowances are also recorded at the time of shipment. Our management must make estimates of potential future product returns and so called “ship and debit” transactions related to current period product revenue. Our management analyzes historical returns and ship and debit transactions, current economic trends and changes in customer demand and acceptance of our products when evaluating the adequacy of the sales returns and ship and debit allowances. Significant management judgments and estimates must be made and used in connection with establishing the allowances in any accounting period. We have visibility into inventory held by our distributors to aid in our reserve analysis. Different judgments or estimates would result in material differences in the amount and timing of our revenue for any period.

Accounts receivable from distributors are recognized and inventory is relieved when title to inventories transfer, typically upon shipment from our company, at which point we have a legally enforceable right to collection under normal payment terms. Under certain circumstances, where our management is not able to reasonably and reliably estimate the actual returns, revenues and costs relating to distributor sales are deferred until products are sold by the distributors to their end customers. Deferred amounts are presented net and included under accrued expenses and other liabilities.

We state our revenues net of any taxes collected from customers that are required to be remitted to various government agencies. The amount of taxes collected from customers and payable to government agencies is included under accrued expenses and other liabilities. Shipping and handling costs are included in cost of sales.

Allowance for sales returns. We maintain an allowance for sales returns for estimated product returns by our customers. We estimate our allowance for sales returns based on our historical return experience, current economic trends, changes in customer demand, known returns we have not received and other assumptions. If we were to make different judgments or utilize different estimates, the amount and timing of our revenue could be materially different. Given that our revenues consist of a high volume of relatively similar products, to date our actual returns and allowances have not fluctuated significantly from period to period, and our returns provisions have historically been reasonably accurate. This allowance is included as part of the accounts receivable allowance on the balance sheet and as a reduction of revenues in the statement of operations.

Allowance for stock rotation. We also provide “stock rotation” to select distributors. The rotation allows distributors to return a percentage of the previous six months’ sales in exchange for orders of an equal or greater amount. In the three months ended June 30, 2012 and 2011, approximately $731,000 and $440,000, respectively, of products were returned to us under the program. We establish the allowance for all sales to distributors except in cases where the revenue recognition is deferred and recognized upon sale by the distributor of products to the end-customer. The allowance, which is management’s best estimate of future returns, is based upon the historical experience of returns and inventory levels at the distributors. This allowance is included as part of the accounts receivable allowance on the balance sheet and as a reduction of revenues in the statement of operations. Should distributors increase stock rotations beyond our estimates, our statements would be adversely affected.

Allowance for ship and debit. Ship and debit is a program designed to assist distributors in meeting competitive prices in the marketplace on sales to their end customers. Ship and debit requires a request from the distributor for a pricing adjustment for a specific part for a customer sale to be shipped from the distributor’s stock. We have no obligation to accept this request. However, it is our historical practice to allow some companies to obtain pricing adjustments for inventory held. We receive periodic statements regarding our products held by our distributors. Our distributors held approximately $11.2 million in inventory covered by this program at June 30, 2012. Ship and debit authorizations may cover current and future distributor activity for a specific part for sale to distributor’s customer. At the time we record sales to distributors, we provide an allowance for the estimated future distributor activity related to such sales since it is probable that such sales to distributors will result in ship and debit activity. The sales allowance requirement is based on sales during the period, credits issued to distributors, distributor inventory levels, historical trends, market conditions, pricing trends we see in our direct sales activity with original equipment manufacturers and other customers, and input from sales, marketing and other key management. We believe that the analysis of these inputs enable us to make reliable estimates of future credits under the ship and debit program. This analysis requires the exercise of significant judgments. Our actual results to date have approximated our estimates. At the time the distributor ships the part from stock, the distributor debits us for the authorized pricing adjustment. This allowance is included as part of the accounts receivable allowance on the balance sheet and as a reduction of revenues in the statement of operations. If competitive pricing were to decrease sharply and unexpectedly, our estimates might be insufficient, which could significantly adversely affect our operating results.

Additions to the ship and debit allowance are estimates of the amount of expected future ship and debit activity related to sales during the period and reduce revenues and gross profit in the period. The following table sets forth the beginning and ending balances of, additions to, and deductions from, our allowance for ship and debit during the three months ended June 30, 2012 (in thousands):

Balance at March 31, 2012	$	1,101
Additions		1,636
Deductions		(1,556	)
Balance at June 30, 2012	$	1,181

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Allowance for doubtful accounts. We maintain an allowance for doubtful accounts for estimated losses from the inability of our customers to make required payments. We evaluate our allowance for doubtful accounts based on the aging of our accounts receivable, the financial condition of our customers and their payment history, our historical write-off experience and other assumptions. If we were to make different judgments of the financial condition of our customers or the financial condition of our customers were to deteriorate, resulting in an impairment of their ability to make payments, additional allowances may be required. This allowance is reported on the balance sheet as part of the accounts receivable allowance and is included on the statement of operations as part of selling, general and administrative expenses. This allowance is based on historical losses and management’s estimates of future losses.

Inventories. Inventories are recorded at the lower of standard cost, which approximates actual cost on a first-in-first-out basis, or market value. Our accounting for inventory costing is based on the applicable expenditure incurred, directly or indirectly, in bringing the inventory to its existing condition. Such expenditures include acquisition costs, production costs and other costs incurred to bring the inventory to its use. As it is impractical to track inventory from the time of purchase to the time of sale for the purpose of specifically identifying inventory cost, our inventory is, therefore, valued based on a standard cost, given that the materials purchased are identical and interchangeable at various production processes. We review our standard costs on an as-needed basis but in any event at least once a year, and update them as appropriate to approximate actual costs. The authoritative guidance provided by FASB requires certain abnormal expenditures to be recognized as expenses in the current period instead of capitalized in inventory. It also requires that the amount of fixed production overhead allocated to inventory be based on the normal capacity of the production facilities.

We typically plan our production and inventory levels based on internal forecasts of customer demand, which are highly unpredictable and can fluctuate substantially. The value of our inventories is dependent on our estimate of future demand as it relates to historical sales. If our projected demand is overestimated, we may be required to reduce the valuation of our inventories below cost. We regularly review inventory quantities on hand and record an estimated provision for excess inventory based primarily on our historical sales and expectations for future use. We also recognize a reserve based on known technological obsolescence, when appropriate. Actual demand and market conditions may be different from those projected by our management. This could have a material effect on our operating results and financial position. If we were to make different judgments or utilize different estimates, the amount and timing of our write-down of inventories could be materially different. For example, during the fourth quarter of fiscal 2009, we examined our inventory and as a consequence of the dramatic retrenchment in some of our markets, certain of our inventory that normally would not be considered excess was considered as such. Therefore, we booked additional charges of about $14.9 million to recognize this exposure.

Excess inventory frequently remains saleable. When excess inventory is sold, it yields a gross profit margin of up to 100%. Sales of excess inventory have the effect of increasing the gross profit margin beyond that which would otherwise occur, because of previous write-downs. Once we have written down inventory below cost, we do not write it up when it is subsequently sold or scrapped. We do not physically segregate excess inventory nor do we assign unique tracking numbers to it in our accounting systems. Consequently, we cannot isolate the sales prices of excess inventory from the sales prices of non-excess inventory. Therefore, we are unable to report the amount of gross profit resulting from the sale of excess inventory or quantify the favorable impact of such gross profit on our gross profit margin.

The following table provides information on our excess and obsolete inventory reserve charged against inventory at cost (in thousands):

Balance at March 31, 2012	$	28,138
Utilization or sale		(592	)
Scrap		(1,053	)
Additional accrual		607
Foreign currency translation adjustments		(423	)
Balance at June 30, 2012	$	26,677

The practical efficiencies of wafer fabrication require the manufacture of semiconductor wafers in minimum lot sizes. Often, when manufactured, we do not know whether or when all the semiconductors resulting from a lot of wafers will sell. With more than 10,000 different part numbers for semiconductors, excess inventory resulting from the manufacture of some of those semiconductors will be continual and ordinary. Because the cost of storage is minimal when compared to potential value and because our products do not quickly become obsolete, we expect to hold excess inventory for potential future sale for years. Consequently, we have no set time line for the sale or scrapping of excess inventory.

In addition, our inventory is also being written down to the lower of cost or market or net realizable value. We review our inventory listing on a quarterly basis for an indication of losses being sustained for costs that exceed selling prices less direct costs to sell. When it is evident that our selling price is lower than current cost, inventory is marked down accordingly. At June 30, 2012, our lower of cost or market reserve was $549,000.

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Furthermore, we perform an annual inventory count and periodic cycle counts for specific parts that have a high turnover. We also periodically identify any inventory that is no longer usable and write it off.

Income tax. As part of the process of preparing our consolidated financial statements, we are required to estimate our income taxes in each of the jurisdictions in which we operate. This process involves estimating our actual current tax exposure together with assessing temporary differences resulting from differing treatment of items for tax and accounting purposes. These differences result in deferred tax assets and liabilities, which are included within our unaudited condensed consolidated balance sheets. We then assess the likelihood that our deferred tax assets will be recovered from future taxable income and, to the extent we believe that recovery is not likely, we establish a valuation allowance. A valuation allowance reduces our deferred tax assets to the amount that management estimates is more likely than not to be realized. In determining the amount of the valuation allowance, we consider income over recent years, estimated future taxable income, feasible tax planning strategies and other factors in each taxing jurisdiction in which we operate. If we determine that it is more likely than not that we will not realize all or a portion of our remaining deferred tax assets, then we will increase our valuation allowance with a charge to income tax expense. Conversely, if we determine that it is likely that we will ultimately be able to utilize all or a portion of the deferred tax assets for which a valuation allowance has been provided, then the related portion of the valuation allowance will reduce income tax expense. Significant management judgment is required in determining our provision for income taxes and potential tax exposures, our deferred tax assets and liabilities and any valuation allowance recorded against our net deferred tax assets. In the event that actual results differ from these estimates or we adjust these estimates in future periods, we may need to establish a valuation allowance, which could materially impact our financial position and results of operations. Our ability to utilize our deferred tax assets and the need for a related valuation allowance are monitored on an ongoing basis.

Furthermore, computation of our tax liabilities involves examining uncertainties in the application of complex tax regulations. We recognize liabilities for uncertain tax positions based on the two-step process as prescribed by the authoritative guidance provided by FASB. The first step is to evaluate the tax position for recognition by determining if there is sufficient available evidence to indicate if it is more likely than not that the position will be sustained on audit, including resolution of any related appeals or litigation processes. The second step requires us to measure and determine the approximate amount of the tax benefit at the largest amount that is more than 50% likely of being realized upon ultimate settlement with the tax authorities. It is inherently difficult and requires significant judgment to estimate such amounts, as this requires us to determine the probability of various possible outcomes. We reexamine these uncertain tax positions on a quarterly basis. This reassessment is based on various factors during the period including, but not limited to, changes in worldwide tax laws and treaties, changes in facts or circumstances, effectively settled issues under audit and any new audit activity. A change in recognition or measurement would result in the recognition of a tax benefit or an additional charge to the tax provision in the period.

Recent Accounting Pronouncements

For a description of recent accounting pronouncements, including the expected dates of adoption and estimated effects, if any, on our consolidated condensed financial statements, see Note 2, “Recent Accounting Pronouncements and Accounting Changes” in the Notes to Unaudited Condensed Consolidated Financial Statements of this Form 10-Q.

Results of Operations — Three Months Ended June 30, 2012 and 2011

The following table sets forth selected consolidated statements of operations data for the fiscal periods indicated and the percentage change in such data from period to period. These historical operating results may not be indicative of the results for any future period.

	Three Months Ended June 30,
	2012		% change			2011
	(000)					(000)
Net revenues	$	80,857		(20.6	)	$	101,778
Cost of goods sold		53,668		(19.6	)		66,743
Gross profit	$	27,189		(22.4	)	$	35,035
Operating expenses:
Research, development and engineering	$	6,649		(4.1	)	$	6,933
Selling, general and administrative		11,187		0.5			11,129
Amortization of acquisition-related intangible assets		640		(0.3	)		642
Total operating expenses	$	18,476		(1.2	)	$	18,704

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The following table sets forth selected statements of operations data as a percentage of net revenues for the fiscal periods indicated. These historical operating results may not be indicative of the results for any future period.

	% of Net Revenues Three Months Ended June 30,
	2012			2011
Net revenues		100.0			100.0
Cost of goods sold		66.4			65.6
Gross profit		33.6			34.4
Operating expenses:
Research, development and engineering		8.2			6.8
Selling, general and administrative		13.8			10.9
Amortization of acquisition-related intangible assets		0.8			0.6
Total operating expenses		22.8			18.3
Operating income		10.8			16.1
Other income (expense), net		0.6			(0.7	)
Income before income tax		11.4			15.4
Provision for income tax		(4.0	)		(5.6	)
Net income		7.4			9.8

Net Revenues.

The following tables set forth the revenues for each of our product groups for the fiscal periods indicated:

Revenues (1)	Three Months Ended June 30,
	2012		% change			2011
	(000)					(000)
Power semiconductors	$	59,582		(22.1	)	$	76,464
Integrated circuits		15,599		(13.9	)		18,111
Systems and RF power semiconductors		5,676		(21.2	)		7,203
Total	$	80,857		(20.6	)	$	101,778

(1) Includes $688,000 and $862,000 of intellectual property revenues in integrated circuits during the quarters ended June 30, 2012 and 2011, respectively. Includes $2.0 million of intellectual property revenues in power semiconductors during the quarter ended June 30, 2011.

The following tables set forth the average selling prices, or ASPs, and units for the fiscal periods indicated:

Average Selling Prices	Three Months Ended June 30,
	2012		% change			2011
Power semiconductors	$	2.40		18.2		$	2.03
Integrated circuits	$	0.88		(3.3	)	$	0.91
Systems and RF power semiconductors	$	25.45		(6.7	)	$	27.28

Units	Three Months Ended June 30,
	2012		% change			2011
	(000)					(000)
Power semiconductors		24,826		(32.2	)		36,600
Integrated circuits		16,997		(10.5	)		18,981
Systems and RF power semiconductors		223		(15.5	)		264
Total		42,046		(24.7	)		55,845

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The following tables set forth the net revenue by geographic region for the fiscal periods indicated:

	Three Months Ended June 30,
	2012				2011
	Net Revenue		% of Net Revenue		Net Revenue		% of Net Revenue
	(000)				(000)
Europe and Middle East	$	28,104		34.8	$	37,589		37.0
Asia Pacific		23,982		29.7		31,803		31.2
Rest of world		3,849		4.7		4,681		4.6
International revenues	$	55,935		69.2	$	74,073		72.8
USA		24,922		30.8		27,705		27.2
Total	$	80,857		100.0	$	101,778		100.0

The 20.6% decrease in net revenues in the three months ended June 30, 2012 as compared to the three months ended June 30, 2011 reflected a decrease of $16.9 million, or 22.1%, in the sale of power semiconductors, a decrease of $2.5 million, or 13.9%, in the sale of ICs and a decrease of $1.5 million, or 21.2%, in the sale of systems and RF power semiconductors. The decrease in power semiconductors included an $8.1 million decrease in the sale of MOS products, principally from the consumer products market and the industrial and commercial market, and a $6.4 million decrease in the sale of bipolar products, primarily from the industrial and commercial market. The decrease in revenues from the sale of ICs was primarily caused by reduced sales of microcontrollers. The revenues from the sale of systems and RF power semiconductors decreased primarily due to a $1.5 million decrease in the sale of subassemblies to the industrial and commercial market.

For the three months ended June 30, 2012 as compared to the three months ended June 30, 2011, the unit declines in power semiconductors and ICs were broad-based, except for an increase in shipments of solid state relays, or SSRs, to the telecom market. The decrease in unit shipments in systems and RF power semiconductors was largely the result of reduced shipments of RF power semiconductors.

For the three months ended June 30, 2012 as compared to the comparable period of the previous fiscal year, the changes in the ASPs were largely due to changes in the mix of products sold. The ASP of power semiconductors increased, as our sales to the higher-priced medical market were a higher proportion of power semiconductor revenues. The ASP of ICs decreased as a result of fewer shipments of higher-priced products, such as microcontrollers. The ASP of systems and RF power semiconductors decreased because of reduced sales of subassemblies.

Intellectual property revenues, consisting of sales, licensing fees and royalties, decreased from $2.9 million in the quarter ended June 30, 2011 to $688,000 in the quarter ended June 30, 2012. Intellectual property sales and license fees, which were nonrecurring in nature, were $2.0 million in the quarter ended June 30, 2011 and zero in the quarter ended June 30, 2012.

For the three months ended June 30, 2012 as compared to the three months ended June 30, 2011, we experienced reduced sales in all major geographic areas, including the U.S., Europe and the Middle East, and the Asia Pacific area, and to all of our major market segments.

For the three months ended June 30, 2012, two distributors accounted for 12.4% and 11.7% of our net revenues, respectively. For the three months ended June 30, 2011, the same two distributors accounted for 11.0% and 12.8%, respectively, of our net revenues.

Our net revenues were reduced by allowances for sales returns, stock rotations and ship and debit. See “Critical Accounting Policies and Significant Management Estimates” elsewhere in this Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Gross Profit.

Gross profit decreased to $27.2 million in the three months ended June 30, 2012 from $35.0 million in the three months ended June 30, 2011. Gross profit margin decreased to 33.6% in the quarter ended June 30, 2012 from 34.4% in the quarter ended June 30, 2011. Gross profit decreased primarily because of reduced revenues. The lower gross profit margin was primarily related to $2.0 million in one-time intellectual property revenues that occurred in the quarter ended June 30, 2011, which carried a gross profit margin approaching 100%. The absence of these revenues in the 2012 period was partially offset by a shift in product mix, as medical market revenues as a percentage of total net revenues increased slightly in the three months ended June 30, 2012 as compared to the three months ended June 30, 2011.

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Our gross profit and gross profit margin were positively affected by the sale of excess inventory, which had previously been written down. See “Critical Accounting Policies and Significant Management Estimates—Inventories” elsewhere in this Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Research, Development and Engineering.

R&D expenses typically consist of internal engineering efforts for product design and development. As a percentage of net revenues, our R&D expenses for the three months ended June 30, 2012 were 8.2% as compared to 6.8% for the three months ended June 30, 2011. The increase in the percentage primarily resulted from reduced net revenues. Expressed in dollars, for the three months ended June 30, 2012 as compared to the same period of the prior year, our R&D expenses decreased by approximately $284,000, or 4.1%, primarily as a result of a reduction in outside consulting expenses.

Selling, General and Administrative.

As a percentage of net revenues, our SG&A expenses for the three months ended June 30, 2012 were 13.8% as compared to 10.9% for the three months ended June 30, 2011. The increase in the percentage primarily resulted from reduced net revenues. Expressed in dollars, SG&A expenses remained relatively flat in the three months ended June 30, 2012 as compared to the same period in the prior fiscal year.

Amortization of Acquisition-Related Intangible Assets.

We recorded certain intangible assets during fiscal 2010 in connection with the acquisitions of Zilog. For the three months ended June 30, 2012, we recorded amortization expenses on acquisition-related intangible assets of $640,000 as compared to $642,000 for the same period in fiscal 2011.

Other Income (Expense), net.

In the quarter ended June 30, 2012, other income, net, was $701,000 as compared to other expense, net, of $394,000 in the quarter ended June 30, 2011. The difference was primarily related to fluctuations in foreign currency exchange rates. Other income, net, in the three months ended June 30, 2012 principally consisted of $724,000 in gains associated with changes in exchange rates for foreign currency transactions. Other expense, net in the three months ended June 30, 2011 consisted principally of $519,000 in losses associated with changes in exchange rates for foreign currency transactions.

Provision for Income Tax.

For the three months ended June 30, 2012 and 2011, we recorded income tax provisions of $3.2 million and $5.7 million, reflecting effective tax rates of 35.0% and 36.5%, respectively. For the three months ended June 30, 2012, the effective tax rate reflected estimates of annual income in domestic and foreign jurisdictions, as adjusted by certain tax items. For the three months ended June 30, 2011, the effective tax rate was affected by the changes in the estimates of annual income in foreign jurisdictions and by a valuation allowance release.

Liquidity and Capital Resources

At June 30, 2012, cash and cash equivalents were $102.8 million as compared to $98.6 million at March 31, 2012.

Our cash provided by operating activities for the three months ended June 30, 2012 was $11.8 million, a decrease of $3.3 million as compared to the $15.1 million in the comparable period of the prior year. The change in our operating cash flow was primarily due to a decrease of $4.4 million in net income and total adjustments to reconcile net income, partially offset by an increase of $1.1 million in net changes in operating assets and liabilities.

The decrease in net income and total adjustments to reconcile net income was caused by the decline in net revenues. The changes in operating assets and liabilities for the three months ended June 30, 2012 compared to the three months ended June 30, 2011 were primarily caused by the following: accounts receivables decreased because of reduced revenues in June 2012 quarter; accounts payable increased because of differences in the timing of payment; inventory increased because of an increase in raw materials purchased and changing customer demand; and accrued expenses and other liabilities decreased because of a reduced income tax accrual.

Our net cash used in investing activities for the three months ended June 30, 2012 was $4.7 million, as compared to net cash used in investing activities of $3.0 million during the three months ended June 30, 2011. During the three months ended June 30, 2012, cash used in investing activities principally reflected $3.9 million in investments and $1.1 million in purchases of property and equipment. During the three months ended June 30, 2011, we spent $3.0 million on the purchase of property and equipment.

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For the three months ended June 30, 2012, net cash used in financing activities was $1.1 million, as compared to net cash used in financing activities of $798,000 in the three months ended June 30, 2011. During the three months ended June 30, 2012, we used $1.7 million for principal repayment on capital lease and loan obligations, offset by proceeds from employee equity plans of $567,000. During the three months ended June 30, 2011, we used $1.6 million for the purchase of treasury stock and $1.1 million for principal repayment on capital lease and loan obligations, offset by proceeds from employee equity plans of $1.4 million.

At June 30, 2012, capital lease obligations and loans payable totalled $29.3 million. This represented 28.5% of our cash and cash equivalents and 11.4% of our stockholders’ equity.

We are obligated on a €5.3 million, or $6.7 million, loan. The loan has a term ending in June 2020, and bears a variable interest rate, dependent upon the current Euribor rate and the ratio of indebtedness to cash flow for the German subsidiary. Each fiscal quarter a principal payment of €167,000, or about $210,000, and a payment of accrued interest are required. Financial covenants for a ratio of indebtedness to cash flow, a ratio of equity to total assets and a minimum stockholders’ equity for the German subsidiary must be satisfied for the loan to remain in good standing. At June 30, 2012, we complied with all of these financial covenants. The loan may be prepaid in whole or in part at the end of a fiscal quarter without penalty. The loan is collateralized by a security interest in the facility in Lampertheim, Germany, which is owned by our U.S. parent.

On November 13, 2009, we entered into a credit agreement for a revolving line of credit with BOW. Under the original terms, we could borrow up to $15.0 million and all amounts owed under the credit agreement were due and payable on October 31, 2011. On December 29, 2010, we entered into an amendment with BOW to increase the line of credit to $20.0 million and to extend the expiration date to October 31, 2013. Borrowings may be repaid and re-borrowed during the term of the credit agreement. The obligations are guaranteed by two of our subsidiaries. At June 30, 2012, the outstanding principal balance under the credit agreement was $15.0 million. The credit agreement is subject to a set of financial covenants, including minimum effective tangible net worth, the ratio of cash, cash equivalents and accounts receivable to current liabilities, profitability, a ratio of EBITDA to interest expense and a minimum amount of U.S. domestic cash on hand. At June 30, 2012, we complied with all of these financial covenants. See Note 8, “Borrowing Arrangements” in the Notes to Unaudited Condensed Consolidated Financial Statements of this Form 10-Q for further information regarding the credit agreement. The credit agreement also includes a $3.0 million letter of credit subfacility. See Note 16, “Commitments and Contingencies” in the Notes to Unaudited Condensed Consolidated Financial Statements of this Form 10-Q for further information regarding the terms of the subfacility.

Additionally, we maintain three defined benefit pension plans: one in the United Kingdom, one in Germany and one in the Philippines. Benefits are based on years of service and the employees’ compensation. We either deposit funds for these plans, consistent with the requirements of local law, with investment management companies, insurance companies, banks or trustees, or accrue for the unfunded portion of the obligations. The United Kingdom and German plans have been curtailed. As such, the plans are closed to new entrants and no credit is provided for additional periods of service. The total pension liability accrued for the three plans at June 30, 2012 was $14.1 million.

We believe that our cash and cash equivalents, together with cash generated from operations, will be sufficient to meet our anticipated cash requirements for the next 12 months. Our liquidity could be negatively affected by a decline in demand for our products, increases in the cost of materials or labor, investments in new product development or one or more acquisitions. From time to time, we use derivative contracts in the normal course of business to manage our foreign currency exchange and interest rate risks. We did not have any significant open derivative contracts at June 30, 2012. There can be no assurance that additional debt or equity financing will be available when required or, if available, can be secured on terms satisfactory to us.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Our market risk has not changed materially from the market risk disclosed in Item 7A, “Quantitative and Qualitative Disclosures About Market Risk,” of our Annual Report on Form 10-K for the fiscal year ended March  31, 2012.

ITEM 4. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

Based on their evaluation as of June 30, 2012, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended) were effective to ensure that the information required to be disclosed by us in this Quarterly Report on Form 10-Q was recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and regulations. Furthermore, these controls and procedures were also effective to ensure that information required to be disclosed by us in this Quarterly Report on Form 10-Q was accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.

Inherent Limitations on Effectiveness of Controls

Our management, including our Chief Executive Officer and Chief Financial Officer, does not expect that our procedures or our internal controls will prevent or detect all errors and all fraud. An internal control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Because of the inherent limitations in all control systems, no evaluation of our controls can provide absolute assurance that all control issues, errors and instances of fraud, if any, have been detected.

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PART II — OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

We currently are involved in a variety of legal matters that arise in the normal course of business. Based on information currently available, management does not believe that the ultimate resolution of these matters will have a material adverse effect on our financial condition, results of operations and cash flows. Were an unfavorable ruling to occur, there exists the possibility of a material adverse impact on the results of operations of the period in which the ruling occurs.

ITEM 1A. RISK FACTORS

In addition to the other information in this Quarterly Report on Form 10-Q, the following risk factors should be considered carefully in evaluating our business and us. Additional risks not presently known to us or that we currently believe are not serious may also impair our business and its financial condition.

Our operating results fluctuate significantly because of a number of factors, many of which are beyond our control.

Given the nature of the markets in which we participate, we cannot reliably predict future revenues and profitability and unexpected changes may cause us to adjust our operations. Large portions of our costs are fixed, due in part to our significant sales, research and development and manufacturing costs. Thus, small declines in revenues could seriously negatively affect our operating results in any given quarter. Our operating results may fluctuate significantly from quarter-to-quarter and year-to-year. For example, from fiscal 2005 to fiscal 2006 and from fiscal 2008 to fiscal 2009, net income in one year shifted to net loss in the next year. Some of the factors that may affect our quarterly and annual results are:

• changes in business and economic conditions, including a downturn in demand or decrease in the rate of growth in demand, whether in the global economy, a regional economy or the semiconductor industry;

• changes in consumer and business confidence caused by changes in market conditions, potentially including changes in the credit market, or changes in currency exchange rates, expectations for inflation or energy prices;

• the reduction, rescheduling or cancellation of orders by customers;

• fluctuations in timing and amount of customer requests for product shipments;

• changes in the mix of products that our customers purchase;

• changes in the level of customers’ component inventory;

• loss of key customers;

• the availability of production capacity, whether internally or from external suppliers;

• the cyclical nature of the semiconductor industry;

• competitive pressures on selling prices;

• strategic actions taken by our competitors;

• market acceptance of our products and the products of our customers;

• fluctuations in our manufacturing yields and significant yield losses;

• difficulties in forecasting demand for our products and the planning and managing of inventory levels;

• the availability of raw materials, supplies and manufacturing services from third parties;

• the amount and timing of investments in research and development;

• damage awards or injunctions as the result of litigation;

• changes in our product distribution channels and the timeliness of receipt of distributor resale information;

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• the impact of vacation schedules and holidays, largely during the second and third fiscal quarters of our fiscal year; and

• the amount and timing of costs associated with product returns.

As a result of these factors, many of which are difficult to control or predict, as well as the other risk factors discussed in this Quarterly Report on Form 10-Q, we may experience materially adverse fluctuations in our future operating results on a quarterly or annual basis. Changes in demand for our products and in our customers’ product needs could have a variety of negative effects on our competitive position and our financial results, and, in certain cases, may reduce our revenue, increase our costs, lower our gross margin percentage or require us to recognize impairments of our assets. If product demand decreases, our manufacturing or assembly and test capacity could be underutilized, and we may be required to record an impairment on our long-lived assets including facilities and equipment, as well as intangible assets, which would increase our expenses. Factory planning decisions may also shorten the useful lives of long-lived assets, including facilities and equipment, and cause us to accelerate depreciation. In addition, if product demand decreases or we fail to forecast demand accurately, we could be required to write off inventory or record underutilization charges, which would have a negative impact on our gross margin.

Our backlog may not result in future revenues.

Customer orders typically can be cancelled or rescheduled by the customer without penalty to the customer. Cancellations or reschedulings are common in periods of decreasing demand. Further, in periods of increasing demand, particularly when production is allocated or delivery delayed, customers of semiconductor companies have on occasion placed orders without expectation of accepting delivery to increase their share of allocated product or in an effort to improve the timeliness of delivery. While we are attuned to the potential for such behavior and attempt to identify such orders, we could accept orders of this nature and subsequently experience order cancellation unexpectedly.

Our backlog at any particular date is not necessarily indicative of actual revenues for any succeeding period. A reduction of backlog during any particular period, or the failure of our backlog to result in future revenues, could harm our results of operations.

Fluctuations in the mix of products sold may adversely affect our financial results.

Changes in the mix and types of products sold may have a substantial impact on our revenues and gross profit margins. In addition, more recently introduced products tend to have higher associated costs because of initial overall development costs and higher start-up costs. Fluctuations in the mix and types of our products may also affect the extent to which we are able to recover our fixed costs and investments that are associated with a particular product or wafer foundry, and, as a result, can negatively impact our financial results.

Our international operations expose us to material risks.

For the fiscal year ended March 31, 2012, our net revenues by region were approximately 28.0% in the United States, approximately 37.7% in Europe and the Middle East, approximately 30.2% in the Asia Pacific region and approximately 4.1% in Canada and the rest of the world. We expect revenues from foreign markets to continue to represent a majority of total net revenues. We maintain significant business operations in Germany, the United Kingdom and the Philippines and work with subcontractors, suppliers and manufacturers in South Korea, Japan, the Philippines and elsewhere in Europe and the Asia Pacific region. Some of the risks inherent in doing business internationally are:

• foreign currency fluctuations, particularly in the Euro and the British pound;

• longer payment cycles;

• challenges in collecting accounts receivable;

• changes in the laws, regulations or policies of the countries in which we manufacture or sell our products;

• trade restrictions;

• cultural and language differences;

• employment regulations;

• limited infrastructure in emerging markets;

• transportation delays;

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• seasonal reduction in business activities;

• work stoppages;

• labor and union disputes;

• electrical outages;

• terrorist attack or war; and

• economic or political instability.

Our sales of products manufactured in our Lampertheim, Germany facility and our costs at that facility are primarily denominated in Euros, and sales of products manufactured in our Chippenham, U.K. facility and our costs at that facility are primarily denominated in British pounds. Fluctuations in the value of the Euro and the British pound against the U.S. dollar could have a significant adverse impact on our balance sheet and results of operations. We generally do not enter into foreign currency hedging transactions to control or minimize these risks. Reductions in the value of the Euro or British pound would reduce our revenues recognized in U.S. dollars, all other things being equal. Increases in the value of the Euro or the British pound could cause or increase losses associated with changes in exchange rates for foreign currency transactions. Fluctuations in currency exchange rates could cause our products to become more expensive to customers in a particular country, leading to a reduction in sales or profitability in that country. If we expand our international operations or change our pricing practices to denominate prices in other foreign currencies, we could be exposed to even greater risks of currency fluctuations.

Our financial performance is dependent on economic stability and credit availability in international markets. Actions by governments to address deficits or sovereign or bank debt issues, particularly in Europe, could adversely affect gross domestic product or currency exchange rates in countries where we operate, which in turn could adversely affect our financial results. If our customers or suppliers are unable to obtain the credit necessary to fund their operations, we could experience increased bad debts, reduced product orders and interruptions in supplier deliveries leading to delays or stoppages in our production. Conversely, actions in emerging markets, such as China, to limit inflation or to address asset or other “bubbles” could also adversely affect gross domestic products or the growth thereof, and result in reduced product orders or increased bad debt expense for us.

In addition, the laws of certain foreign countries may not protect our products or intellectual property rights to the same extent as do U.S. laws regarding the manufacture and sale of our products in the U.S. Therefore, the risk of piracy of our technology and products may be greater when we manufacture or sell our products in these foreign countries.

Uncertain global macroeconomic conditions could adversely affect our results of operations and financial condition.

Uncertain global macroeconomic conditions that affect the economy and the economic outlook of the United States, Europe and other parts of the world could adversely affect our customers and vendors, which could adversely affect our results of operations and financial condition. These uncertainties, including, among other things, sovereign and foreign bank debt levels, the inability of national or international political institutions to effectively resolve economic or budgetary crises or issues, consumer confidence, unemployment levels (and a corresponding increase in the uninsured and underinsured population), interest rates, availability of capital, fuel and energy costs, tax rates, healthcare costs and the threat or outbreak of terrorism or public unrest, could adversely impact our customers and vendors, which could adversely affect us. Recessionary conditions and depressed levels of consumer and commercial spending may cause customers to reduce, modify, delay or cancel plans to purchase our products and may cause vendors to reduce their output or change their terms of sales. We generally sell products to customers with credit payment terms. If customers’ cash flow or operating and financial performance deteriorates, or if they are unable to make scheduled payments or obtain credit, they may not be able to pay, or may delay payment to us. Likewise, for similar reasons vendors may restrict credit or impose different payment terms. Any inability of current or potential customers to pay us for our products or any demands by vendors for different payment terms may adversely affect our results of operations and financial condition.

Approximately 36.9% of our total consolidated net sales for the fiscal year ended March 31, 2012 were derived from Europe. There have been continuing concerns and uncertainties about the state of the European economies and Europe’s political institutions. Continued difficult or declining economic conditions in Europe may adversely affect our operations in Europe by adversely affecting our European customers and vendors in the ways described above. Additionally, the inability of Europe’s political institutions to deal effectively with actual or perceived currency or budget crises could increase economic uncertainty in Europe, and globally, and may have an adverse effect on our customers’ cash flow or operating performance. Further, debt or budget crises in the European countries may lead to reductions in government spending in certain countries or higher income or corporate taxes, which could depress spending overall. Our results of operations and financial condition could be adversely affected by any of these events.

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The semiconductor industry is cyclical, and an industry downturn could adversely affect our operating results.

Business conditions in the semiconductor industry may rapidly change from periods of strong demand and insufficient production to periods of weakened demand and overcapacity. The industry in general is characterized by:

• changes in product mix in response to changes in demand;

• alternating periods of overcapacity and production shortages, including shortages of raw materials supplies and manufacturing services;

• cyclical demand for semiconductors;

• significant price erosion;

• variations in manufacturing costs and yields;

• rapid technological change and the introduction of new products; and

• significant expenditures for capital equipment and product development.

These factors could harm our business and cause our operating results to suffer.

Our dependence on subcontractors to assemble and test our products subjects us to a number of risks, including an inadequate supply of products and higher materials costs.

We depend on subcontractors for the assembly and testing of our products. The substantial majority of our products are assembled by subcontractors located outside of the United States. Assembly subcontractors generally work on narrow margins and have limited capital. We have experienced assembly subcontractors who have ceased or reduced production because of financial problems. We engage assembly subcontractors who operate while in insolvency proceedings or whose financial stability is uncertain. The unexpected cessation of production or reduction in production by one or more of our assembly subcontractors could adversely affect our production, our customer relations, our revenues and our financial condition. Our reliance on these subcontractors also involves the following significant risks:

• reduced control over delivery schedules and quality;

• the potential lack of adequate capacity during periods of excess demand;

• difficulties selecting and integrating new subcontractors;

• limited or no warranties by subcontractors or other vendors on products supplied to us;

• potential increases in prices due to capacity shortages and other factors;

• potential misappropriation of our intellectual property; and

• economic or political instability in foreign countries.

These risks may lead to delayed product delivery or increased costs, which would harm our profitability and customer relationships.

In addition, we use a limited number of subcontractors to assemble a significant portion of our products. If one or more of these subcontractors experience financial, operational, production or quality assurance difficulties, we could experience a reduction or interruption in supply. Although we believe alternative subcontractors are available, our operating results could temporarily suffer until we engage one or more of those alternative subcontractors. Moreover, in engaging alternative subcontractors in exigent circumstances, our production costs could increase markedly.

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We may not be successful in our acquisitions.

We have in the past made, and may in the future make, acquisitions of other companies and technologies. These acquisitions involve numerous risks, including:

• failure to retain key personnel of the acquired business;

• diversion of management’s attention during the acquisition process;

• disruption of our ongoing business;

• the potential strain on our financial and managerial controls and reporting systems and procedures;

• unanticipated expenses and potential delays related to integration of an acquired business;

• the risk that we will be unable to develop or exploit acquired technologies;

• failure to successfully integrate the operations of an acquired company with our own;

• the challenges in achieving strategic objectives, cost savings and other benefits from acquisitions;

• the risk that our markets do not evolve as anticipated and that the technologies acquired do not prove to be those needed to be successful in those markets;

• the risks of entering new markets in which we have limited experience;

• difficulties in expanding our information technology systems or integrating disparate information technology systems to accommodate the acquired businesses;

• the challenges inherent in managing an increased number of employees and facilities and the need to implement appropriate policies, benefits and compliance programs;

• customer dissatisfaction or performance problems with an acquired company’s products or personnel;

• adverse effects on our relationships with suppliers;

• the reduction in financial stability associated with the incurrence of debt or the use of a substantial portion of our available cash;

• the costs associated with acquisitions, including in-process R&D charges and amortization expenses related to intangible assets, and the integration of acquired operations; and

• assumption of known or unknown liabilities or other unanticipated events or circumstances.

We cannot assure that we will be able to successfully acquire other businesses or product lines or integrate them into our operations without substantial expense, delay in implementation or other operational or financial problems.

As a result of an acquisition, our financial results may differ from the investment community’s expectations in a given quarter. Further, if one or more of the foregoing risks materialize or market conditions or other factors lead us to change our strategic direction, we may not realize the expected value from such transactions. If we do not realize the expected benefits or synergies of such transactions, our consolidated financial position, results of operations, cash flows or stock price could be negatively impacted.

We depend on external foundries to manufacture many of our products.

Of our net revenues for our fiscal year ended March 31, 2012, 35.6% came from wafers manufactured for us by external foundries. Our dependence on external foundries may grow. We currently have arrangements with a number of wafer foundries, four of which produce the wafers for power semiconductors that we purchase from external foundries. Samsung Electronics’ facility in Kiheung, South Korea is our principal external foundry.

Our relationships with our external foundries do not guarantee prices, delivery or lead times or wafer or product quantities sufficient to satisfy current or expected demand. These foundries manufacture our products on a purchase order basis. We provide

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these foundries with rolling forecasts of our production requirements. However, the ability of each foundry to provide wafers to us is limited by the foundry’s available capacity. At any given time, these foundries could choose to prioritize capacity for their own use or other customers or reduce or eliminate deliveries to us on short notice. If growth in demand for our products occurs, these foundries may be unable or unwilling to allocate additional capacity to our needs, thereby limiting our revenue growth. Accordingly, we cannot be certain that these foundries will allocate sufficient capacity to satisfy our requirements. In addition, we cannot be certain that we will continue to do business with these or other foundries on terms as favorable as our current terms. If we are not able to obtain foundry capacity as required, our relationships with our customers could be harmed, we could be unable to fulfill contractual requirements and our revenues could be reduced or our growth limited. Moreover, even if we are able to secure foundry capacity, we may be required, either contractually or as a practical business matter, to utilize all of that capacity or incur penalties or an adverse effect to the business relationship. The costs related to maintaining foundry capacity could be expensive and could harm our operating results. Other risks associated with our reliance on external foundries include:

• the lack of control over delivery schedules;

• the unavailability of, or delays in obtaining access to, key process technologies;

• limited control over quality assurance, manufacturing yields and production costs; and

• potential misappropriation of our intellectual property.

Our requirements typically represent a small portion of the total production of the external foundries that manufacture our wafers and products. One or more of these external foundries may not continue to produce wafers for us or continue to advance the process design technologies on which the manufacturing of our products is based. If we are required to transition production from one foundry to another, we may make large last-time buys of product at the foundry that we are exiting, which could eventually result in substantial inventory write-offs if semiconductors are not sold or utilized. These circumstances could harm our ability to deliver our products or increase our costs.

Our success depends on our ability to manufacture our products efficiently.

We manufacture our products in facilities that are owned and operated by us, as well as in external wafer foundries and subcontract assembly facilities. The fabrication of semiconductors is a highly complex and precise process, and a substantial percentage of wafers could be rejected or numerous dies on each wafer could be nonfunctional as a result of, among other factors:

• contaminants in the manufacturing environment;

• defects in the masks used to print circuits on a wafer;

• manufacturing equipment failure; or

• wafer breakage.

For these and other reasons, we could experience a decrease in manufacturing yields. Additionally, if we increase our manufacturing output, the additional demands placed on existing equipment and personnel or the addition of new equipment or personnel may lead to a decrease in manufacturing yields. As a result, we may not be able to cost-effectively expand our production capacity in a timely manner.

Our gross margin is dependent on a number of factors, including our level of capacity utilization.

Semiconductor manufacturing requires significant capital investment, leading to high fixed costs, including depreciation expense. We are limited in our ability to reduce fixed costs quickly in response to any shortfall in revenues. If we are unable to utilize our manufacturing, assembly and testing facilities at a high level, the fixed costs associated with these facilities will not be fully absorbed, resulting in lower gross margins. Increased competition and other factors may lead to price erosion, lower revenues and lower gross margins for us in the future.

Increasing raw material prices could impact our profitability.

Our products use large amounts of silicon, metals and other materials. In recent periods, we have experienced price increases for many of these items. If we are unable to pass price increases for raw materials onto our customers, our gross margins and profitability could be adversely affected.

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We order materials and commence production in advance of anticipated customer demand. Therefore, revenue shortfalls may also result in inventory write-downs.

We typically plan our production and inventory levels based on our own expectations for customer demand. Actual customer demand, however, can be highly unpredictable and can fluctuate significantly. In response to anticipated long lead times to obtain inventory and materials, we order materials and production in advance of customer demand. This advance ordering and production may result in excess inventory levels or unanticipated inventory write-downs if expected orders fail to materialize. For example, additional inventory write-downs occurred in the quarter ended March 31, 2009.

Semiconductors for inclusion in consumer products have shorter product life cycles.

We believe that consumer products are subject to shorter product life cycles, because of technological change, consumer preferences, trendiness and other factors, than other types of products sold by our customers. Shorter product life cycles result in more frequent design competitions for the inclusion of semiconductors in next generation consumer products, which may not result in design wins for us. Shorter product life cycles may lead to more frequent circumstances where sales of existing products are reduced or ended.

Our debt agreements contain certain restrictions that may limit our ability to operate our business.

The agreements governing our debt contain, and any other future debt agreement we enter into may contain, restrictive covenants that limit our ability to operate our business, including, in each case subject to certain exceptions, restrictions on our ability to:

• incur additional indebtedness;

• grant liens;

• consolidate, merge or sell our assets, unless specified conditions are met;

• acquire other business organizations;

• make investments;

• redeem or repurchase our stock; and

• change the nature of our business.

In addition, our debt agreements contain financial covenants and additional affirmative and negative covenants. Our ability to comply with these covenants is dependent on our future performance, which will be subject to many factors, some of which are beyond our control, including prevailing economic conditions. If we are not able to comply with all of these covenants for any reason and we have debt outstanding at the time of such failure, some or all of our outstanding debt could become immediately due and payable and the incurrence of additional debt under the credit facilities provided by the debt agreements would not be allowed. If our cash is utilized to repay any outstanding debt, depending on the amount of debt outstanding, we could experience an immediate and significant reduction in working capital available to operate our business.

As a result of these covenants, our ability to respond to changes in business and economic conditions and to obtain additional financing, if needed, may be significantly restricted, and we may be prevented from engaging in transactions that might otherwise be beneficial to us, such as strategic acquisitions or joint ventures.

We may not be able to increase production capacity to meet the present and future demand for our products.

The semiconductor industry has been characterized by periodic limitations on production capacity. These limitations may result in longer lead times for product delivery than desired by many of our customers. If we are unable to increase our production capacity to meet future demand, some of our customers may seek other sources of supply, our future growth may be limited or our results of operations may be adversely affected.

Changes in our decisions about restructuring could affect our results of operations and financial condition.

Factors that could cause actual results to differ materially from our expectations about restructuring actions include:

• timing and execution of a plan that may be subject to local labor law requirements, including consultation with appropriate work councils;

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• changes in assumptions related to severance costs;

• changes in employment levels and turnover rates; and

• changes in product demand and the business environment, including changes in global economic conditions.

Our intellectual property revenues are uncertain and unpredictable in amount.

We are unable to discern a pattern in or otherwise predict the amount of any payments for the sale or licensing of intellectual property that we may receive. Consequently, we are unable to plan on the timing of intellectual property revenues and our results of operations may be adversely affected by a reduction in the amount of intellectual property revenues.

Our markets are subject to technological change and our success depends on our ability to develop and introduce new products.

The markets for our products are characterized by:

• changing technologies;

• changing customer needs;

• frequent new product introductions and enhancements;

• increased integration with other functions; and

• product obsolescence.

To develop new products for our target markets, we must develop, gain access to and use leading technologies in a cost-effective and timely manner and continue to expand our technical and design expertise. Failure to do so could cause us to lose our competitive position and seriously impact our future revenues.

Products or technologies developed by others may render our products or technologies obsolete or noncompetitive. A fundamental shift in technologies in our product markets would have a material adverse effect on our competitive position within the industry.

Our revenues are dependent upon our products being designed into our customers’ products.

Many of our products are incorporated into customers’ products or systems at the design stage. The value of any design win largely depends upon the customer’s decision to manufacture the designed product in production quantities, the commercial success of the customer’s product and the extent to which the design of the customer’s electronic system also accommodates incorporation of components manufactured by our competitors. In addition, our customers could subsequently redesign their products or systems so that they no longer require our products. The development of the next generation of products by our customers generally results in new design competitions for semiconductors, which may not result in design wins for us, potentially leading to reduced revenues and profitability. We may not achieve design wins or our design wins may not result in future revenues.

We could be harmed by intellectual property litigation.

As a general matter, the semiconductor industry is characterized by substantial litigation regarding patent and other intellectual property rights. We have been sued for purported patent infringement and have been accused of infringing the intellectual property rights of third parties. We also have certain indemnification obligations to customers and suppliers with respect to the infringement of third party intellectual property rights by our products. We could incur substantial costs defending ourselves and our customers and suppliers from any such claim. Infringement claims or claims for indemnification, whether or not proven to be true, may divert the efforts and attention of our management and technical personnel from our core business operations and could otherwise harm our business. For example, in June 2000, we were sued for patent infringement by International Rectifier Corporation. The case was ultimately resolved in our favor, but not until October 2008. In the interim, the U.S. District Court entered multimillion dollar judgments against us on two different occasions, each of which was subsequently vacated.

In the event of an adverse outcome in any intellectual property litigation, we could be required to pay substantial damages, cease the development, manufacturing, use and sale of infringing products, discontinue the use of certain processes or obtain a license from the third party claiming infringement with royalty payment obligations upon us. An adverse outcome in an infringement action could materially and adversely affect our financial condition, results of operations and cash flows.

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We may not be able to protect our intellectual property rights adequately.

Our ability to compete is affected by our ability to protect our intellectual property rights. We rely on a combination of patents, trademarks, copyrights, trade secrets, confidentiality procedures and non-disclosure and licensing arrangements to protect our intellectual property rights. Despite these efforts, we cannot be certain that the steps we take to protect our proprietary information will be adequate to prevent misappropriation of our technology, or that our competitors will not independently develop technology that is substantially similar or superior to our technology. More specifically, we cannot assure that our pending patent applications or any future applications will be approved, or that any issued patents will provide us with competitive advantages or will not be challenged by third parties. Nor can we assure that, if challenged, our patents will be found to be valid or enforceable, or that the patents of others will not have an adverse effect on our ability to do business. We may also become subject to or initiate interference proceedings in the U.S. Patent and Trademark Office, which can demand significant financial and management resources and could harm our financial results. Also, others may independently develop similar products or processes, duplicate our products or processes or design their products around any patents that may be issued to us.

Because our products typically have lengthy sales cycles, we may experience substantial delays between incurring expenses related to research and development and the generation of revenues.

The time from initiation of design to volume production of new semiconductors often takes 18 months or longer. We first work with customers to achieve a design win, which may take nine months or longer. Our customers then complete the design, testing and evaluation process and begin to ramp up production, a period that may last an additional nine months or longer. As a result, a significant period of time may elapse between our research and development efforts and our realization of revenues, if any, from volume purchasing of our products by our customers.

The markets in which we participate are intensely competitive.

Many of our target markets are intensely competitive. Our ability to compete successfully in our target markets depends on the following factors:

• proper new product definition;

• product quality, reliability and performance;

• product features;

• price;

• timely delivery of products;

• technical support and service;

• design and introduction of new products;

• market acceptance of our products and those of our customers; and

• breadth of product line.

In addition, our competitors or customers may offer new products based on new technologies, industry standards or end-user or customer requirements, including products that have the potential to replace our products or provide lower cost or higher performance alternatives to our products. The introduction of new products by our competitors or customers could render our existing and future products obsolete or unmarketable.

Our primary power semiconductor competitors include Fairchild Semiconductor, Fuji, Hitachi, Infineon, International Rectifier, Microsemi, Mitsubishi, On Semiconductor, Powerex, Renesas Technology, Semikron International, STMicroelectronics, Toshiba and Vishay Intertechnology. Our IC products compete principally with those of Atmel, Cypress Semiconductor, Freescale Semiconductor, Microchip, NEC, Renesas Technology, Silicon Labs and Supertex. Our RF power semiconductor competitors include Microsemi and RF Micro Devices. Many of our competitors have greater financial, technical, marketing and management resources than we have. Some of these competitors may be able to sell their products at prices below which it would be profitable for us to sell our products or benefit from established customer relationships that provide them with a competitive advantage. We cannot assure that we will be able to compete successfully in the future against existing or new competitors or that our operating results will not be adversely affected by increased price competition.

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We rely on our distributors and sales representatives to sell many of our products.

Most of our products are sold to distributors or through sales representatives. Our distributors and sales representatives could reduce or discontinue sales of our products. They may not devote the resources necessary to sell our products in the volumes and within the time frames that we expect. In addition, we depend upon the continued viability and financial resources of these distributors and sales representatives, some of which are small organizations with limited working capital. These distributors and sales representatives, in turn, depend substantially on general economic conditions and conditions within the semiconductor industry. We believe that our success will continue to depend upon these distributors and sales representatives. Foreign distributors are typically granted longer payment terms, resulting in higher accounts receivable balances for a given level of sales than domestic distributors. Our risk of loss from the financial insolvency of distributors is, therefore, disproportionally weighted to foreign distributors. If any significant distributor or sales representative experiences financial difficulties, or otherwise becomes unable or unwilling to promote and sell our products, our business could be harmed. For example, All American Semiconductor, Inc., one of our former distributors, filed for bankruptcy in April 2007.

Our future success depends on the continued service of management and key engineering personnel and our ability to identify, hire and retain additional personnel.

Our success depends upon our ability to attract and retain highly skilled technical, managerial, marketing and finance personnel, and, to a significant extent, upon the efforts and abilities of Nathan Zommer, Ph.D., our Chief Executive Officer, and other members of senior management. The loss of the services of one or more of our senior management or other key employees could adversely affect our business. We do not maintain key person life insurance on any of our officers, employees or consultants. There is intense competition for qualified employees in the semiconductor industry, particularly for highly skilled design, applications and test engineers. We may not be able to continue to attract and retain engineers or other qualified personnel necessary for the development of our business or to replace engineers or other qualified individuals who could leave us at any time in the future. If we grow, we expect increased demands on our resources, and growth would likely require the addition of new management and engineering staff as well as the development of additional expertise by existing management employees. If we lose the services of or fail to recruit key engineers or other technical and management personnel, our business could be harmed.

Acquisitions and expansion place a significant strain on our resources, including our information systems and our employee base.

Presently, because of our acquisitions, we are operating a number of different information systems that are not integrated. In part because of this, we use spreadsheets, which are prepared by individuals rather than automated systems, in our accounting. In our accounting, we perform many manual reconciliations and other manual steps, which result in a high risk of errors. Manual steps also increase the possibility of control deficiencies and material weaknesses.

We are also transferring some accounting functions to our Philippine subsidiary from other locations. These transfers involve changing accounting systems and implementing different software from that previously used.

If we do not adequately manage and evolve our financial reporting and managerial systems and processes, our ability to manage or grow our business may be harmed. Our ability to successfully implement our goals and comply with regulations, including those adopted under the Sarbanes-Oxley Act of 2002, requires an effective planning and management system and process. We will need to continue to improve existing, and implement new, operational and financial systems, procedures and controls to manage our business effectively in the future.

In improving or consolidating our operational and financial systems, procedures and controls, we would expect to periodically implement new or different software and other systems that will affect our internal operations regionally or globally. The conversion process from one system to another is complex and could require, among other things, that data from the existing system be made compatible with the upgraded or different system.

In connection with any of the foregoing, we could experience errors, delays and other inefficiencies, which could adversely affect our business. Any error, delay, disruption, transition or conversion, including with respect to any new or different systems, procedures or controls, could harm our ability to forecast sales demand, manage our supply chain, achieve accuracy in the conversion of electronic data and record and report financial and management information on a timely and accurate basis. In addition, as we add or change functionality, problems could arise that we have not foreseen. Such problems could adversely impact our ability to do the following in a timely manner: provide quotes; take customer orders; ship products; provide services and support to our customers; bill and track our customers; fulfill contractual obligations; and otherwise run our business. Failure to properly or adequately address these issues could result in the diversion of management’s attention and resources, adversely affect our ability to manage our business or adversely affect our results of operations, cash flows or stock price.

Any future growth would also require us to successfully hire, train, motivate and manage new employees. In addition, continued growth and the evolution of our business plan may require significant additional management, technical and administrative resources. We may not be able to effectively manage the growth or the evolution of our current business.

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We depend on a limited number of suppliers for our substrates, most of whom we do not have long term agreements with.

We purchase the bulk of our silicon substrates from a limited number of vendors, most of whom we do not have long term supply agreements with. Any of these suppliers could reduce or terminate our supply of silicon substrates at any time. Our reliance on a limited number of suppliers involves several risks, including potential inability to obtain an adequate supply of silicon substrates and reduced control over the price, timely delivery, reliability and quality of the silicon substrates. We cannot assure that problems will not occur in the future with suppliers.

Costs related to product defects and errata may harm our results of operations and business.

Costs associated with unexpected product defects and errata (deviations from published specifications) due to, for example, unanticipated problems in our manufacturing processes, include the costs of:

• writing off the value of inventory of defective products;

• disposing of defective products;

• recalling defective products that have been shipped to customers;

• providing product replacements for, or modifications to, defective products; and/or

• defending against litigation related to defective products.

These costs could be substantial and may, therefore, increase our expenses and lower our gross margin. In addition, our reputation with our customers or users of our products could be damaged as a result of such product defects and errata, and the demand for our products could be reduced. These factors could harm our financial results and the prospects for our business.

We face the risk of financial exposure to product liability claims alleging that the use of products that incorporate our semiconductors resulted in adverse effects.

Approximately 10.3% of our net revenues for the fiscal year ended March 31, 2012 were derived from sales of products used in medical devices, such as defibrillators. Product liability risks may exist even for those medical devices that have received regulatory approval for commercial sale. We cannot be sure that the insurance that we maintain against product liability will be adequate to cover our losses. Any defects in our semiconductors used in these devices, or in any other product, could result in significant product liability costs to us.

If our long-lived assets become impaired, we may be required to record a significant charge to earnings.

Under generally accepted accounting principles, we review our long-lived assets for impairment when events or changes in circumstances indicate the carrying value may not be recoverable. Factors that may be considered a change in circumstances indicating that the carrying value of long-lived assets may not be recoverable include a decline in future cash flows and slower growth rates in our industry.

We estimate tax liabilities, the final determination of which is subject to review by domestic and international taxation authorities.

We are subject to income taxes and other taxes in both the United States and the foreign jurisdictions in which we currently operate or have historically operated. We are also subject to review and audit by both domestic and foreign taxation authorities. The determination of our worldwide provision for income taxes and current and deferred tax assets and liabilities requires significant judgment and estimation. The provision for income taxes can be adversely affected by a variety of factors, including but not limited to changes in tax laws, regulations and accounting principles, including accounting for uncertain tax positions, or interpretation of those changes. Significant judgment is required to determine the recognition and measurement attributes prescribed in the authoritative guidance issued by FASB in connection with accounting for income taxes. Although we believe our tax estimates are reasonable, the ultimate tax outcome may materially differ from the tax amounts recorded in our consolidated financial statements and may materially affect our income tax provision, net income, goodwill or cash flows in the period or periods for which such determination is made.

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Our results of operations could vary as a result of the methods, estimates, and judgments that we use in applying our accounting policies.

The methods, estimates, and judgments that we use in applying our accounting policies have a significant impact on our results of operations (see “Critical Accounting Policies and Significant Management Estimates” in Part I, Item 2 of this Form 10-Q). Such methods, estimates, and judgments are, by their nature, subject to substantial risks, uncertainties, and assumptions, and factors may arise over time that lead us to change our methods, estimates, and judgments. Changes in those methods, estimates, and judgments could significantly affect our results of operations.

We are exposed to various risks related to the regulatory environment.

We are subject to various risks related to new, different, inconsistent or even conflicting laws, rules and regulations that may be enacted by legislative bodies and/or regulatory agencies in the countries in which we operate; disagreements or disputes between national or regional regulatory agencies; and the interpretation and application of laws, rules and regulations. If we are found by a court or regulatory agency not to be in compliance with applicable laws, rules or regulations, our business, financial condition and results of operations could be materially and adversely affected.

In addition, approximately 10.3% of our net revenues for the fiscal year ended March 31, 2012 were derived from the sale of products included in medical devices that are subject to extensive regulation by numerous governmental authorities in the United States and internationally, including the U.S. Food and Drug Administration, or FDA. The FDA and certain foreign regulatory authorities impose numerous requirements for medical device manufacturers to meet, including adherence to Good Manufacturing Practices, or GMP, regulations and similar regulations in other countries, which include testing, control and documentation requirements. Ongoing compliance with GMP and other applicable regulatory requirements is monitored through periodic inspections by federal and state agencies, including the FDA, and by comparable agencies in other countries. Our failure to comply with applicable regulatory requirements could prevent our products from being included in approved medical devices or result in damages or other compensation payable to medical device manufacturers.

Our business could also be harmed by delays in receiving or the failure to receive required approvals or clearances, the loss of ` obtained approvals or clearances or the failure to comply with existing or future regulatory requirements.

We invest in companies for strategic reasons and may not realize a return on our investments.

We make investments in companies to further our strategic objectives and support our key business initiatives. Such investments include investments in equity securities of public companies and investments in non-marketable equity securities of private companies, which range from early-stage companies that are often still defining their strategic direction to more mature companies whose products or technologies may directly support a product or initiative. The success of these companies is dependent on product development, market acceptance, operational efficiency, and other key business success factors. The private companies in which we invest may fail for operational reasons or because they may not be able to secure additional funding, obtain favorable investment terms for future financings or take advantage of liquidity events such as initial public offerings, mergers, and private sales. If any of these private companies fail, we could lose all or part of our investment in that company. If we determine that an other-than-temporary decline in the fair value exists for the equity securities of the public and private companies in which we invest, we write down the investment to its fair value and recognize the related write-down as an investment loss. Furthermore, when the strategic objectives of an investment have been achieved, or if the investment or business diverges from our strategic objectives, we may decide to dispose of the investment even at a loss. Our investments in non-marketable equity securities of private companies are not liquid, and we may not be able to dispose of these investments on favorable terms or at all. The occurrence of any of these events could negatively affect our results of operations.

Our ability to access capital markets could be limited.

From time to time, we may need to access the capital markets to obtain long term financing. Although we believe that we can continue to access the capital markets on acceptable terms and conditions, our flexibility with regard to long term financing activity could be limited by our existing capital structure, our credit ratings and the health of the semiconductor industry. In addition, many of the factors that affect our ability to access the capital markets, such as the liquidity of the overall capital markets and the current state of the economy, are outside of our control. There can be no assurance that we will continue to have access to the capital markets on favorable terms.

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Geopolitical instability, war, terrorist attacks and terrorist threats, and government responses thereto, may negatively affect all aspects of our operations, revenues, costs and stock price.

Any such event may disrupt our operations or those of our customers or suppliers. Our markets currently include South Korea, Taiwan and Israel, which are currently experiencing political instability. Additionally, we have accounting operations in the Philippines, our principal external foundry is located in South Korea and assembly subcontractors are located in Indonesia, the Philippines and South Korea.

Business interruptions may damage our facilities or those of our suppliers.

Our operations and those of our suppliers are vulnerable to interruption by fire, earthquake, flood and other natural disasters, as well as power loss, telecommunications failure and other events beyond our control. We do not have a detailed disaster recovery plan and do not have backup generators. Our facilities in California are located near major earthquake faults and have experienced earthquakes in the past. For example, the March 2011 earthquake in Japan adversely affected the operations of some of our Japanese suppliers, which limited the availability of certain production inputs to us for a period of time. If a natural disaster occurs, our ability to conduct our operations could be seriously impaired, which could harm our business, financial condition and results of operations and cash flows. We cannot be sure that the insurance we maintain against general business interruptions will be adequate to cover all our losses.

We may be affected by environmental laws and regulations.

We are subject to a variety of laws, rules and regulations in the United States, England and Germany related to the use, storage, handling, discharge and disposal of certain chemicals and gases used in our manufacturing process. Any of those regulations could require us to acquire expensive equipment or to incur substantial other expenses to comply with them. If we incur substantial additional expenses, product costs could significantly increase. Failure to comply with present or future environmental laws, rules and regulations could result in fines, suspension of production or cessation of operations.

Nathan Zommer, Ph.D. owns a significant interest in our common stock.

Nathan Zommer, Ph.D., our Chief Executive Officer, beneficially owned, as of July 27, 2012, approximately 21.4% of the outstanding shares of our common stock. As a result, Dr. Zommer can exercise significant control over all matters requiring stockholder approval, including the election of the board of directors. His holdings could result in a delay of, or serve as a deterrent to, any change in control of our company, which may reduce the market price of our common stock.

Our stock price is volatile.

The market price of our common stock has fluctuated significantly to date. The future market price of our common stock may also fluctuate significantly in the event of:

• variations in our actual or expected quarterly operating results;

• announcements or introductions of new products;

• technological innovations by our competitors or development setbacks by us;

• conditions in the communications and semiconductor markets;

• the commencement or adverse outcome of litigation;

• changes in analysts’ estimates of our performance or changes in analysts’ forecasts regarding our industry, competitors or customers;

• announcements of merger or acquisition transactions or a failure to achieve the expected benefits of an acquisition as rapidly or to the extent anticipated by financial analysts;

• terrorist attack or war;

• sales of our common stock by one or more members of management, including Nathan Zommer, Ph.D., our Chief Executive Officer; or

• general economic and market conditions.

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In addition, the stock market in recent years has experienced extreme price and volume fluctuations that have affected the market prices of many high technology companies, including semiconductor companies. These fluctuations have often been unrelated or disproportionate to the operating performance of companies in our industry, and could harm the market price of our common stock.

The anti-takeover provisions of our certificate of incorporation and of the Delaware General Corporation Law may delay, defer or prevent a change of control.

Our board of directors has the authority to issue up to 5,000,000 shares of preferred stock and to determine the price, rights, preferences, privileges and restrictions, including voting rights, of those shares without any further vote or action by our stockholders. The rights of the holders of common stock will be subject to, and may be harmed by, the rights of the holders of any shares of preferred stock that may be issued in the future. The issuance of preferred stock may delay, defer or prevent a change in control because the terms of any issued preferred stock could potentially prohibit our consummation of any merger, reorganization, sale of substantially all of our assets, liquidation or other extraordinary corporate transaction, without the approval of the holders of the outstanding shares of preferred stock. In addition, the issuance of preferred stock could have a dilutive effect on our stockholders.

Our stockholders must give substantial advance notice prior to the relevant meeting to nominate a candidate for director or present a proposal to our stockholders at a meeting. These notice requirements could inhibit a takeover by delaying stockholder action. The Delaware anti-takeover law restricts business combinations with some stockholders once the stockholder acquires 15% or more of our common stock. The Delaware statute makes it more difficult for us to be acquired without the consent of our board of directors and management.

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

Not applicable.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

Not applicable.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

On July 30, 2012, the Compensation Committee of the Board of Directors of our company, or the Committee, made certain determinations regarding the fiscal 2013 cash performance compensation program for Dr. Nathan Zommer, the Chief Executive Officer of our company, and Mr. Uzi Sasson, the President of our company. For Dr. Zommer, the Committee established a target award of $725,000. For Mr. Sasson, the target award is $443,750. For each executive, his potential maximum award is 1.4 times the amount of his target award and his potential threshold award is 0.4 times the amount of his target award.

The fiscal 2013 objectives are as follows:

1. Net revenues;

2. Gross margin;

3. Cash flow from operations; and

4. Discretionary.

Weights are accorded each objective. The first three objectives will be quantitative in nature and the fourth objective will involve a qualitative assessment. Each of the quantitative objectives will consist of three numbers, with a number corresponding to each of the concepts of threshold, target and maximum. While the discretionary objective is to be evaluated individually, the quantitative objectives for the two executives are the same.

In setting the potential cash performance compensation, objectives and weights, the Committee approved the following language:

“The potential cash performance compensation and objectives, along with the weights accorded the objectives, represent guidelines for the Committee to use in evaluating the performance compensation to be paid to an executive and for the executive to use in understanding the goals of the Compensation Committee for performance. As guidelines, the potential cash performance compensation, objectives and weights are not determinative in and of themselves of the amount of the cash performance compensation. The amount of cash performance compensation will be determined by the Committee in light of its evaluation of the executive’s performance in total and not based on the mechanical application of any formula. The Committee may decide to award additional amounts for performance in excess of an objective or award lesser amounts for partial performance of an objective. The Committee may also consider factors not set forth below in ultimately determining the amount of the cash performance compensation. Thus, the amount of the cash performance compensation to be paid is in the discretion of the Committee, to be determined after completion of the fiscal year.”

ITEM 6. EXHIBITS

See the Index to Exhibits, which is incorporated by reference herein.

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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.

IXYS CORPORATION
By:	/s/ Uzi Sasson
	Uzi Sasson, President and Chief Financial Officer
	(Principal Financial Officer)

Date: August 3, 2012

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EXHIBIT INDEX

Exhibit No.	Description
10.1	Fifth Amended Executive Employment Agreement by and between IXYS Corporation and Nathan Zommer, effective as of July 16, 2012.
10.2	Second Amended Executive Employment Agreement by and between IXYS Corporation and Uzi Sasson, effective as of July 16, 2012.
31.1	Certificate of Chief Executive Officer required under Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certificate of Chief Financial Officer required under Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification required under Section 906 of the Sarbanes-Oxley Act of 2002. (1)
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.

(1) This exhibit is furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities and Exchange Act of 1933, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities and Exchange Act of 1993, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

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EX-10.1

Exhibit 10.1

FIFTH AMENDED EXECUTIVE EMPLOYMENT AGREEMENT

This Fifth Amended Executive Employment Agreement (the “Agreement”) is entered into by and between IXYS Corporation (the “Company”), a Delaware corporation, and Nathan Zommer (“Executive”), effective as of July 16, 2012 (the “Effective Date”).

W I T N E S S E T H

WHEREAS, the Company and the Executive are parties to that certain Fourth Amended Executive Employment Agreement effective as of August 1, 2009, which is modified and superseded by this Fifth Amended Executive Employment Agreement; and

WHEREAS, the Company desires to continue and extend the employment of Executive under mutually satisfactory terms and conditions, and the Executive desires to be employed by the Company, under the terms and conditions herein.

NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

1. EMPLOYMENT BY THE COMPANY. The Company hereby employs Executive to render full-time services to the Company as its Chief Executive Officer. Executive shall have responsibilities, duties and authorities that are customarily associated with such position, and such duties that are assigned by the Company’s Board of Directors (the “Board”). The Executive acknowledges that the Board may delegate to a committee of the Board any matter referred to in this Agreement as being for the Board’s determination.

2. COMPENSATION, VACATION AND BENEFITS.

2.1 The Company agrees to pay Executive an annual base salary in the amount of $580,000.00, payable every two weeks. Notwithstanding the foregoing, with the Executive’s consent, such salary may be temporarily reduced as part of a salary reduction program affecting multiple employees. The Executive shall be considered for an annual performance bonus on such terms and conditions as the Board shall determine in its sole discretion. The Executive’s performance, and his base salary and bonus arrangement will be reviewed by the Board from time to time, as the Board determines in its sole discretion.

2.2 Executive’s paychecks will be distributed pursuant to ordinary business practice, and shall be subject to ordinary payroll deductions and tax withholdings. The Company also agrees to provide Executive with benefits consistent with Company policy for senior executives. Details about these benefits are set forth in the employee handbook and summary plan descriptions, copies of which have been provided to Executive. Unless the context otherwise requires, as used in this Agreement, “benefits” does not include any rights to the Company’s equity securities (whether stock options, restricted stock units, stock awards or other).

2.3 In addition to the benefits provided to Executive pursuant to subsections 2.1 and 2.2 hereof, the Company shall:

(a) pay, or reimburse Executive, for all reasonable costs of a yearly medical exam of Executive by a physician of his choice prior to the 15^th day of the third month following the end of the applicable fiscal year with respect to which such amount is payable;

(b) maintain term life insurance (without a buildup of equity) in the amount of $2,000,000 on the life of the Executive payable to such beneficiary or beneficiaries as Executive may designate from time to time;

(c) pay, or reimburse Executive, for the services of a personal tax and/or investment advisor, not to exceed $2,000 per year, prior to the 15^th day of the third month following the end of the applicable fiscal year with respect to which such amount is payable;

(d) at the Board’s discretion, either (i) provide Executive with a car of such make and model as Executive and Board shall agree is commensurate with Executive’s position with the Company, including gas, insurance for such car and reasonable maintenance thereof or (ii) pay Executive a monthly allowance for a car on an economic basis comparable to (i); provided, however, that Executive shall at all times (x) comply with all policies of the Company from time to time in effect with respect to the maintenance and operation of motor vehicles, and (y) maintain a valid driver’s license;

(e) provide Executive with up to 10 hours per month of bill paying and bookkeeping services in connection with the payment of the personal bills of Executive (but in no event shall the funds of the Company be used to pay the personal bills of Executive): and

(f) provide Executive with annual vacation during each year in an amount equal to the sum of (i) 15 working days and (ii)  ¹/₂ working day for each full year of service by the Executive at the Company after June 1, 2003.

3. EMPLOYEE HANDBOOK. By signing this Agreement, Executive acknowledges that he has received and read the Company’s employee handbook. Executive agrees to abide by all company policies and procedures. Notwithstanding the foregoing, if there shall be any conflict between this Agreement and such employee handbook, the terms of this Agreement shall govern.

4. TERMINATION OF EMPLOYMENT.

4.1 AT WILL. This Agreement does not provide for a minimum term of employment and Executive may be terminated by the Company at will.

4.2 COMPANY INITIATED TERMINATION.

(a) In the event the Company terminates Executive’s employment without cause, but not for reasons of Disability or death, Executive shall receive as severance a one-time payment equal to one month of his then annual salary multiplied by the number of calendar years (a fraction of a year shall be paid on a prorated basis), but not to exceed a total of eighteen months, of Executive’s service with the Company, payable within fifteen (15) days of such termination or such longer period of time that Executive has to make effective the release required by this Section 4.2 (a). In addition, the Company shall pay in one

2.

lump sum the amounts payable pursuant to COBRA for Executive’s health insurance for the eighteen calendar months following such termination. No other benefits or payments shall be provided. The Company’s obligation to make any payment or provide any benefit under this Section 4.2 (a) is conditioned upon the execution and delivery by the Executive of a release in favor of the Company. For purposes of this Agreement, termination of Executive’s employment shall mean “separation from service” within the meaning of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), and Section 1.409A-1(h) of the regulations promulgated under the Code or any successor regulations.

(b) In the event Executive’s employment is terminated at any time with cause, all of Executive’s compensation and benefits will cease immediately, and Executive shall not be entitled to any severance benefits and all other benefits provided hereunder shall cease as of such termination. For purposes of this Agreement, “cause” shall mean (i) conviction of any felony or any crime involving moral turpitude or dishonesty; (ii) participation in a fraud or act of dishonesty against the Company; (iii) willful breach of the Company’s policies; (iv) intentional damage to the Company’s property; or (v) breach of this Agreement, the Proprietary Information Agreement, or any other agreements with the Company including, but not limited to agreements regarding confidentiality or proprietary information. Physical or mental disability shall not constitute “cause”. Failure to accomplish corporate financial and management goals shall not constitute “cause”.

(c) In the event Executive suffers and continues to suffer a disability that renders him unable to perform the essential functions of his position, for three months within any six-month period (“Disability”), the Company shall, for eighteen months commencing at the conclusion of such three-month period of disability, (i) continue to pay Executive his annual base salary, (ii) continue to provide Executive’s health insurance and (ii) maintain life insurance in the manner and in the amount set forth in Section 2.3(b) hereof. If upon the conclusion of the eighteen-month period, Executive remains unable to perform the essential functions of the job, or the Company has no suitable vacant position for him, Executive’s employment shall be terminated.

4.3 EXECUTIVE INITIATED TERMINATION. Executive may voluntarily terminate his employment with the Company at any time by giving the Board 60 days written notice. In the event Executive voluntarily terminates his employment with the Company, all of Executive’s compensation and benefits will cease as of such termination date. Executive acknowledges that he will not receive any severance pay or benefits, except as defined in the Employee Handbook, and except as specified in this Agreement at Section 5.2 if applicable, upon such voluntary termination.

4.4 LIMITATION ON COMPENSATION. Except as expressly provided in Section 4.2 or Section 5.2, Executive will not be entitled to any other compensation, severance, pay-in-lieu of notice or any such compensation.

3.

5. CHANGE OF CONTROL.

5.1 DEFINITIONS.

For purposes of this Agreement, a “Change of Control” shall mean:

(a) any reorganization, consolidation or merger of the Company in which the Company is not the surviving corporation or pursuant to which shares of the Company’s voting stock would be converted into cash, securities or other property, in either case other than a merger of the Company in which the holders of the Company’s voting stock immediately prior to the merger have the same proportionate ownership of voting stock of the surviving corporation immediately after the merger;

(b) the sale, exchange or other transfer (in one transaction or a series of related transactions) to a third party not affiliated as of the date of this Agreement with the Company of at least a majority of the voting stock of the Company; or

(c) the sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all, or substantially all, of the assets of the Company.

For purposes of this Agreement, “good reason” for voluntary termination shall mean: (i) reduction of Executive’s rate of salary compensation as in effect immediately prior to the Change of Control by more than five percent; (ii) failure to provide a package of welfare benefit plans which, taken as a whole, provide substantially similar benefits to those in which Executive is entitled to participate immediately prior to the Change of Control (except that employee contributions may be raised to the extent of any cost increases imposed by third parties) or any action by the Company which would adversely affect Executive’s participation or reduce Executive’s benefits under any of such plans; (iii) change in Executive’s responsibilities, authority, titles or offices resulting in diminution of position, excluding for this purpose an isolated, insubstantial and inadvertent action not taken in bad faith which is remedied by the Company promptly after notice thereof is given by Executive (it being understood that the fact that the Company is no longer a public company or an ultimate parent entity shall not be a basis for diminution); (iv) request that Executive relocate to a worksite that is more than 35 miles from his prior worksite, unless Executive accepts such relocation opportunity; (vi) failure or refusal of the successor company to assume the Company’s obligations under this Agreement; or (vii) material breach by the Company or any successor company of any of the material provisions of this Agreement.

5.2 OPERATIVE PROVISIONS

(a) In the event of Executive’s termination of employment hereunder either by the Company without cause, or by Executive for good reason, but not for reasons of Disability or death, within one year following a Change of Control and Executive has provided notice to the Company of such good reason within ninety (90) days of its initial occurrence and the Company has had at least thirty (30) days thereafter to cure the good reason event and has failed to do so, he shall be entitled to receive a cash payment in one lump sum, payable within 15 days of such termination or such longer period of time that Executive has to make effective the release required by Section 5.2 (e) of this Agreement (the “Section 5.2 Payment Date”), equal to three times his average total annual cash compensation, including base salary and bonus, of the prior three years. The average of the prior three years (“Average”) shall be computed by dividing by three the sum of all cash compensation he received from the Company during the three years prior to the termination. Section 4.2 (a) shall not have any application in the event of a termination covered by this Section 5.2(a).

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(b) In the event of Executive’s termination of employment hereunder either by the Company without cause, or by Executive for good reason, but not for reasons of Disability or death, within one year following a Change of Control and Executive has provided notice to the Company of such good reason within ninety (90) days of its initial occurrence and the Company has had at least thirty (30) days thereafter to cure the good reason event and has failed to do so, Executive shall continue to receive all employment benefits as defined in Sections 2.2 and 2.3 above (excluding 2.3 (e) and 2.3(f)), or their equivalent where benefit plan participation by Executive is not available, for eighteen (18) months following the termination.

(c) In the event of Executive’s termination of employment hereunder either by the Company without cause, or by Executive for good reason, but not for reasons of Disability or death, within one year following a Change of Control and Executive has provided notice to the Company of such good reason within ninety (90) days of its initial occurrence and the Company has had at least thirty (30) days thereafter to cure the good reason event and has failed to do so, the vesting of all shares of Company stock covered by options granted to Executive to purchase such Company shares, shall be accelerated on the Section 5.2 Payment Date such that all unvested such shares shall become vested as of such date.

(d) For purposes of this Agreement, termination of Executive’s employment shall mean “separation from service” within the meaning of Section 409A of the Code and Section 1.409A-1(h) of the regulations promulgated under the Code or any successor regulations.

(e) The Company’s obligation to make any payment or provide any benefit or vest any options or other stock rights under this Section 5.2 is conditioned upon the execution and delivery by the Executive of a release in favor of the Company.

6. NOTICES. All notices, requests, consents and other communications required or permitted to be given hereunder shall be in writing and shall be deemed to have been duly given if personally delivered or delivered by registered or certified mail (return receipt requested), or private overnight mail (delivery confirmed by such service, to the address listed below, or to such other address as either party shall designate by notice in writing to the other in accordance herein):

    If to the Company:

IXYS Corporation

1590 Buckeye Drive

Milpitas, CA 95035

Attention: Chairman of the Compensation

            Committee of the Board of Directors

    If to Executive:

Nathan Zommer

c/o 1590 Buckeye Drive

Milpitas, CA 95035

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7. ARBITRATION. To ensure rapid and economical resolution of any and all disputes which may arise under this Agreement, the Company and Executive each agree that any and all disputes or controversies, whether of law or fact of any nature whatsoever (including, but not limited to, all state and federal statutory and discrimination claims), arising from or regarding the interpretation, performance, enforcement or breach of this Agreement shall be resolved by final and binding arbitration under the procedures set forth in Exhibit A to this Agreement and the then existing Judicial Arbitration and Mediation Services Rules of Practice and Procedure (except insofar as they are inconsistent with the procedures set forth in Exhibit A).

8. CERTAIN REDUCTIONS IN PAYMENTS OR BENEFITS. Executive and the Company hereby agree as follows:

8.1 Anything in this Agreement to the contrary notwithstanding, in the event that any payment, distribution or other benefit provided by the Company to or for the benefit of Executive (whether paid or payable or provided or to be provided pursuant to the terms of this Agreement or otherwise) (“Payments”) would (i) constitute a “parachute payment” within the meaning of Section 280G of the Code, and (ii) but for this Section 8, be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then, in accordance with this Section 8, such Payments shall be reduced to the maximum amount that would result in no portion of the payments being subject to the Excise Tax, but only if and to the extent that such a reduction would result in Executive’s receipt of Payments that are greater than the net amount Executive would receive (after application of the Excise Tax) if no reduction is made. The amount of required reduction, if any, shall be the smallest amount so that Executive’s net proceeds with respect to the Payments (after taking into account payment of any Excise Tax and all federal, state and local income, employment or other taxes) shall be maximized. If, notwithstanding any reduction described in this Section 8 (or in the absence of any such reduction), the IRS determines that a Payment is subject to the Excise Tax (or subject to a different amount of the Excise Tax than determined by the Company or Executive), then Section 8.3 shall apply. If the Excise Tax is not eliminated pursuant to this Section 8, Executive shall pay the Excise Tax.

8.2 All determinations required to be made under this Section 8 shall be made by the Company’s independent auditors. Such auditors shall provide detailed supporting calculations both to the Company and Executive. Any such determination by the Company’s independent auditors shall be binding upon the Company and Executive. The Payments, including without limitation any option acceleration benefits provided under this Agreement or otherwise (“Option Benefits”), shall be eliminated or reduced consistent with the requirements of this Section 8, first by eliminating or reducing cash payments and then by eliminating or reducing the number of Company shares or options that vest. Within five business days following a determination pursuant to this Section 8.2, the Company shall pay to or distribute to or for the benefit of Executive such amounts as are then due to Executive under this Agreement.

8.3 As a result of the uncertainty in the application of Section 280G of the Code at the time of the initial determination by the Company’s independent auditors hereunder, it is possible that Option Benefits or other Payments, as the case may be, will have been made by the Company which should not have been made (“Overpayment”) or that additional Option Benefits or other Payments, as the case may be, which will not have been made by the Company could have been made (“Underpayment”), in each case, consistent with the calculations required to be made hereunder. In the event that the Company’s independent auditors, based upon the assertion of a deficiency by the IRS against Executive or the Company which the Company’s independent auditors believe

6.

has a high probability of success, determine that an Overpayment has been made, any such Overpayment paid or distributed by the Company to or for the benefit of Executive shall be repaid to the Company; provided, however, that no amount shall be payable by Executive to the Company if and to the extent such payment would not either reduce the amount on which Executive is subject to tax under Section 1 and Section 4999 of the Code or generate a refund of such taxes. In the event that the Company’s independent auditors, based upon controlling precedent or other substantial authority, determine that an Underpayment has occurred, any such Underpayment shall be promptly paid by the Company to or for the benefit of Executive.

9. CERTAIN DEFERRAL OF PAYMENTS. Notwithstanding the other provisions of this Agreement, to the extent that any amounts payable to Executive pursuant to this Agreement would not be deductible by the Company for federal income tax purposes on account of the limitations of Section 162(m) of the Code, the Company may defer payment of such amounts to the earliest subsequent calendar year in which the Company reasonably anticipates that payment of such amounts would be deductible by the Company in accordance with Section 409A of the Code and Section 1.409A-2(b)(7)(i) of the regulations thereunder.

10. TERM. The term of this Agreement is from the date hereof until July 31, 2015.

11. GENERAL.

11.1 ENTIRE AGREEMENT. This Agreement sets forth the complete, final and exclusive embodiment of the entire agreement between Executive and the Company with respect to the subject matter hereof. This Agreement is entered into without reliance upon any promise, warranty or representation, written or oral, other than those expressly contained herein, and it supersedes any other such promises, warranties, representations or agreements.

11.2 SEVERABILITY. If any provision of this Agreement shall be held by a court of competent jurisdiction to be excessively broad as to duration, activity or subject, it shall be deemed to extend only over the maximum duration, activity and/or subject as to which such provision shall be valid and enforceable under applicable law. If any provisions shall, for any reason, be held by a court of competent jurisdiction to be invalid, illegal or unenforceable, such invalidity, illegality or unenforceability shall not affect any other provision of this agreement, but this agreement shall be construed as if such invalid, illegal or unenforceable provision had never been contained herein.

11.3 SUCCESSORS AND ASSIGNS. This Agreement shall bind the heirs, personal representatives, assigns, executors and administrators of each party, and inure to the benefit of each party, its heirs, successors and assigns. However, because of the unique and personal nature of Executive’s duties under this Agreement, Executive agrees not to delegate the performance of his duties under this Agreement without the prior consent of the Board.

11.4 APPLICABLE LAW. This Agreement shall be deemed to have been entered into and shall be construed in accordance with the laws of the state of California as applied to contracts made and to be performed entirely within California.

11.5 HEADINGS. The section headings contained herein are for reference purposes only and shall not in any way affect the meaning or interpretation of this Agreement.

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11.6 COUNTERPARTS. This Agreement may be executed in two counterparts, each of which shall be deemed an original, all of which together shall constitute one and the same instrument.

8.

IN WITNESS WHEREOF, the parties have duly authorized and caused this Executive Employment Agreement to be executed as follows:

Nathan Zommer,		IXYS Corporation,
An individual		a Delaware Corporation
/s/ Nathan Zommer		By:	/s/ Samuel Kory
			Samuel Kory, Chairman of the Compensation Committee of the Board of Directors
Date:	7-13-2012	Date:	7-11-2012

9.

Exhibit A

ARBITRATION PROCEDURE

1. The parties agree that any dispute that arises in connection with this Agreement or the termination of this Agreement shall be resolved by binding arbitration in the manner described below.

2. A party intending to seek resolution of any dispute under the Agreement by arbitration shall provide a written demand for arbitration to the other party, which demand shall contain a brief statement of the issues to be resolved.

3. The arbitration shall be conducted by a mutually acceptable retired judge from the panel of Judicial Arbitration and Mediation Services, Inc. (“JAMS”). At the request of either party, arbitration proceedings will be conducted in the utmost secrecy and, in such case, all documents, testimony and records shall be received, heard and maintained by the arbitrator in secrecy under seal, available for inspection only by the parties to the arbitration, their respective attorneys, and their respective expert consultants or witnesses who shall agree, in advance and in writing, to receive all such information confidentially and to maintain such information in secrecy, and make no use of such information except for the purposes of arbitration, unless compelled by legal process.

4. The arbitrator is required to disclose any circumstances that might preclude the arbitrator from rendering an objective and impartial determination. In the event the parties cannot mutually agree upon the selection of a JAMS arbitrator, the President and vice president of JAMS shall designate the arbitrator.

5. The party demanding arbitration shall promptly request that JAMS conduct a scheduling conference within 15 days of the date of that party’s written demand for arbitration or on the first available date thereafter on the arbitrator’s calendar. The arbitration hearing shall be held within 30 available date thereafter on the arbitrator’s calendar. Nothing in this paragraph shall prevent a party from seeking temporary equitable relief at any time, from JAMS or any court of competent jurisdiction, to prevent irreparable harm pending the resolution of the arbitration.

6. Discovery shall be conducted as follows: (a) prior to the arbitration any party may make a written demands for lists of the witnesses to be called and the documents to be introduced at the hearing; (b) the lists must be served within 15 days of the date of receipt of the demand, or one day prior to the arbitration, whichever is earlier; and (c) each party may take no more than two depositions (pursuant to the procedure set forth in the California Code of Civil Procedure) with a maximum of five hours of examination time per deposition, and no other form of pre-arbitration discovery shall be permitted.

7. It is the intent of the parties that the Federal Arbitration Act (“FAA”) shall apply to the enforcement of this provision unless it is held inapplicable by a court with jurisdiction over the dispute, in which event the California Arbitration Act (“CAA”) shall apply.

8. The arbitrator shall apply California law, including the California Evidence Code, and shall be able to decree any and all relief of an equitable nature, including but not limited to such relief as a temporary restraining order, a preliminary injunction, a permanent injunction, or replevin of Company property. The arbitrator shall also be able to award actual, general or consequential damages, but shall not award any other form of damage (e.g., punitive damages).

9. Each party shall pay its pro rata share of the arbitrator’s fees and expenses, in addition to other expenses of the arbitration approved by the arbitrator, pending the resolution of the arbitration. The arbitrator shall have authority to award the payment of such fees and expenses to the prevailing party, as appropriate in the discretion of the arbitrator. Notwithstanding the foregoing, in no event shall the cost to Executive exceed the cost in a court of law or equity. Each party shall pay its own attorneys’ fees, witness fees and other expenses incurred for its own benefit.

10. The arbitrator shall render a written award setting forth the reasons for his or her decision. The decree or judgment of an award by the arbitrator may be entered and enforced in any court having jurisdiction over the parties. The award of the arbitrator shall be final and binding upon the parties without appeal or review except as permitted by the FAA, or if the FAA is not applicable, as permitted by the CAA.

2.

EX-10.2

Exhibit 10.2

SECOND AMENDED EXECUTIVE EMPLOYMENT AGREEMENT

This Second Amended Executive Employment Agreement (the “Agreement”) is entered into by and between IXYS Corporation (the “Company”), a Delaware corporation, and Uzi Sasson (“Executive”), effective as of July 16, 2012 (the “Effective Date”).

W I T N E S S E T H

WHEREAS, the Company and the Executive are parties to that certain First Amended Executive Employment Agreement effective as of August 1, 2009, which is modified and superseded by this Second Amended Executive Employment Agreement; and

WHEREAS, the Company desires to continue and extend the employment of Executive under mutually satisfactory terms and conditions, and the Executive desires to be employed by the Company, under the terms and conditions herein.

NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

1. EMPLOYMENT BY THE COMPANY. The Company hereby employs Executive to render full-time services to the Company as its President. Executive shall have responsibilities, duties and authorities that are customarily associated with such position, and such duties that are assigned by the Company’s Board of Directors (the “Board”). The Executive acknowledges that the Board may delegate to a committee of the Board any matter referred to in this Agreement as being for the Board’s determination.

2. COMPENSATION, VACATION AND BENEFITS.

2.1 The Company agrees to pay Executive an annual base salary in the amount of $355,000.00, payable every two weeks. Notwithstanding the foregoing, with the Executive’s consent, such salary may be temporarily reduced as part of a salary reduction program affecting multiple employees. The Executive shall be considered for an annual performance bonus on such terms and conditions as the Board shall determine in its sole discretion. The Executive’s performance, and his base salary and bonus arrangement will be reviewed by the Board from time to time, as the Board determines in its sole discretion.

2.2 Executive’s paychecks will be distributed pursuant to ordinary business practice, and shall be subject to ordinary payroll deductions and tax withholdings. The Company also agrees to provide Executive with benefits consistent with Company policy for senior executives. Details about these benefits are set forth in the employee handbook and summary plan descriptions, copies of which have been provided to Executive. Unless the context otherwise requires, as used in this Agreement, “benefits” does not include any rights to the Company’s equity securities (whether stock options, restricted stock units, stock awards or other).

2.3 In addition to the benefits provided to Executive pursuant to subsections 2.1 and 2.2 hereof, the Company shall:

(a) pay, or reimburse Executive, for all reasonable costs of a yearly medical exam of Executive by a physician of his choice prior to the 15^th day of the third month following the end of the applicable fiscal year with respect to which such amount is payable;

(b) maintain term life insurance (without a buildup of equity) in the amount of $2,000,000 on the life of the Executive payable to such beneficiary or beneficiaries as Executive may designate from time to time;

(c) pay, or reimburse Executive, for the services of a personal tax and/or investment advisor, not to exceed $2,000 per year, prior to the 15^th day of the third month following the end of the applicable fiscal year with respect to which such amount is payable;

(d) at the Board’s discretion, either (i) provide Executive with a car of such make and model as Executive and Board shall agree is commensurate with Executive’s position with the Company, including gas, insurance for such car and reasonable maintenance thereof or (ii) pay Executive a monthly allowance for a car on an economic basis comparable to (i); provided, however, that Executive shall at all times (x) comply with all policies of the Company from time to time in effect with respect to the maintenance and operation of motor vehicles, and (y) maintain a valid driver’s license; and

(e) provide Executive with 15 working days of annual vacation during each year.

3. EMPLOYEE HANDBOOK. By signing this Agreement, Executive acknowledges that he has received and read the Company’s employee handbook. Executive agrees to abide by all company policies and procedures. Notwithstanding the foregoing, if there shall be any conflict between this Agreement and such employee handbook, the terms of this Agreement shall govern.

4. TERMINATION OF EMPLOYMENT.

4.1 AT WILL. This Agreement does not provide for a minimum term of employment and Executive may be terminated by the Company at will.

4.2 COMPANY INITIATED TERMINATION.

(a) In the event the Company terminates Executive’s employment without cause, but not for reasons of Disability or death, Executive shall receive as severance a one-time payment equal to one month of his then annual salary multiplied by the number of calendar years (a fraction of a year shall be paid on a prorated basis), but not to exceed a total of eighteen months, of Executive’s service with the Company, payable within fifteen (15) days of such termination or such longer period of time that Executive has to make effective the release required by this Section 4.2 (a). In addition, the Company shall pay in one lump sum the amounts payable pursuant to COBRA for Executive’s health insurance for the eighteen calendar months following such termination. No other benefits or payments shall be provided. The Company’s obligation to make any payment or provide any benefit under this Section 4.2 (a) is conditioned upon the execution and delivery by the Executive of a release in favor of the Company. For purposes of this Agreement, termination of

2.

Executive’s employment shall mean “separation from service” within the meaning of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), and Section 1.409A-1(h) of the regulations promulgated under the Code or any successor regulations.

(b) In the event Executive’s employment is terminated at any time with cause, all of Executive’s compensation and benefits will cease immediately, and Executive shall not be entitled to any severance benefits and all other benefits provided hereunder shall cease as of such termination. For purposes of this Agreement, “cause” shall mean (i) conviction of any felony or any crime involving moral turpitude or dishonesty; (ii) participation in a fraud or act of dishonesty against the Company; (iii) willful breach of the Company’s policies; (iv) intentional damage to the Company’s property; or (v) breach of this Agreement, the Proprietary Information Agreement, or any other agreements with the Company including, but not limited to agreements regarding confidentiality or proprietary information. Physical or mental disability shall not constitute “cause”. Failure to accomplish corporate financial and management goals shall not constitute “cause”.

(c) In the event Executive suffers and continues to suffer a disability that renders him unable to perform the essential functions of his position, for three months within any six-month period (“Disability”), the Company shall, for eighteen months commencing at the conclusion of such three-month period of disability, (i) continue to pay Executive his annual base salary, (ii) continue to provide Executive’s health insurance and (ii) maintain life insurance in the manner and in the amount set forth in Section 2.3(b) hereof. If upon the conclusion of the eighteen-month period, Executive remains unable to perform the essential functions of the job, or the Company has no suitable vacant position for him, Executive’s employment shall be terminated.

4.3 EXECUTIVE INITIATED TERMINATION. Executive may voluntarily terminate his employment with the Company at any time by giving the Board 60 days written notice. In the event Executive voluntarily terminates his employment with the Company, all of Executive’s compensation and benefits will cease as of such termination date. Executive acknowledges that he will not receive any severance pay or benefits, except as defined in the Employee Handbook, and except as specified in this Agreement at Section 5.2 if applicable, upon such voluntary termination.

4.4 LIMITATION ON COMPENSATION. Except as expressly provided in Section 4.2 or Section 5.2, Executive will not be entitled to any other compensation, severance, pay-in-lieu of notice or any such compensation.

5. CHANGE OF CONTROL.

5.1 DEFINITIONS.

For purposes of this Agreement, a “Change of Control” shall mean:

(a) any reorganization, consolidation or merger of the Company in which the Company is not the surviving corporation or pursuant to which shares of the Company’s voting stock would be converted into cash, securities or other property, in either case other than a merger of the Company in which the holders of the Company’s voting stock immediately prior to the merger have the same proportionate ownership of voting stock of the surviving corporation immediately after the merger;

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(b) the sale, exchange or other transfer (in one transaction or a series of related transactions) to a third party not affiliated as of the date of this Agreement with the Company of at least a majority of the voting stock of the Company; or

(c) the sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all, or substantially all, of the assets of the Company.

For purposes of this Agreement, “good reason” for voluntary termination shall mean: (i) reduction of Executive’s rate of salary compensation as in effect immediately prior to the Change of Control by more than five percent; (ii) failure to provide a package of welfare benefit plans which, taken as a whole, provide substantially similar benefits to those in which Executive is entitled to participate immediately prior to the Change of Control (except that employee contributions may be raised to the extent of any cost increases imposed by third parties) or any action by the Company which would adversely affect Executive’s participation or reduce Executive’s benefits under any of such plans; (iii) change in Executive’s responsibilities, authority, titles or offices resulting in diminution of position, excluding for this purpose an isolated, insubstantial and inadvertent action not taken in bad faith which is remedied by the Company promptly after notice thereof is given by Executive (it being understood that the fact that the Company is no longer a public company or an ultimate parent entity shall not be a basis for diminution) and excluding for this purpose those duties that Executive may be performing that are in the nature of duties performed by a chief financial officer; (iv) request that Executive relocate to a worksite that is more than 35 miles from his prior worksite, unless Executive accepts such relocation opportunity; (vi) failure or refusal of the successor company to assume the Company’s obligations under this Agreement; or (vii) material breach by the Company or any successor company of any of the material provisions of this Agreement.

5.2 OPERATIVE PROVISIONS

(a) In the event of Executive’s termination of employment hereunder either by the Company without cause, or by Executive for good reason, but not for reasons of Disability or death, within one year following a Change of Control and Executive has provided notice to the Company of such good reason within ninety (90) days of its initial occurrence and the Company has had at least thirty (30) days thereafter to cure the good reason event and has failed to do so, he shall be entitled to receive a cash payment in one lump sum, payable within 15 days of such termination or such longer period of time that Executive has to make effective the release required by Section 5.2 (e) of this Agreement (the “Section 5.2 Payment Date”), equal to two times his average total annual cash compensation, including base salary and bonus, of the prior three years. The average of the prior three years (“Average”) shall be computed by dividing by three the sum of all cash compensation he received from the Company during the three years prior to the termination. Section 4.2 (a) shall not have any application in the event of a termination covered by this Section 5.2(a).

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(b) In the event of Executive’s termination of employment hereunder either by the Company without cause, or by Executive for good reason, but not for reasons of Disability or death, within one year following a Change of Control and Executive has provided notice to the Company of such good reason within ninety (90) days of its initial occurrence and the Company has had at least thirty (30) days thereafter to cure the good reason event and has failed to do so, Executive shall continue to receive all employment benefits as defined in Sections 2.2 and 2.3 above (excluding 2.3 (e)), or their equivalent where benefit plan participation by Executive is not available, for eighteen (18) months following the termination.

(c) In the event of Executive’s termination of employment hereunder either by the Company without cause, or by Executive for good reason, but not for reasons of Disability or death, within one year following a Change of Control and Executive has provided notice to the Company of such good reason within ninety (90) days of its initial occurrence and the Company has had at least thirty (30) days thereafter to cure the good reason event and has failed to do so, the vesting of all shares of Company stock covered by options granted to Executive to purchase such Company shares, shall be accelerated on the Section 5.2 Payment Date such that all unvested such shares shall become vested as of such date.

(d) For purposes of this Agreement, termination of Executive’s employment shall mean “separation from service” within the meaning of Section 409A of the Code and Section 1.409A-1(h) of the regulations promulgated under the Code or any successor regulations.

(e) The Company’s obligation to make any payment or provide any benefit or vest any options or other stock rights under this Section 5.2 is conditioned upon the execution and delivery by the Executive of a release in favor of the Company.

6. NOTICES. All notices, requests, consents and other communications required or permitted to be given hereunder shall be in writing and shall be deemed to have been duly given if personally delivered or delivered by registered or certified mail (return receipt requested), or private overnight mail (delivery confirmed by such service, to the address listed below, or to such other address as either party shall designate by notice in writing to the other in accordance herein):

    If to the Company:

IXYS Corporation

1590 Buckeye Drive

Milpitas, CA 95035

Attention: Chairman of the Compensation

            Committee of the Board of Directors

    If to Executive:

Uzi Sasson

c/o 1590 Buckeye Drive

Milpitas, CA 95035

7. ARBITRATION. To ensure rapid and economical resolution of any and all disputes which may arise under this Agreement, the Company and Executive each agree that any and all

5.

disputes or controversies, whether of law or fact of any nature whatsoever (including, but not limited to, all state and federal statutory and discrimination claims), arising from or regarding the interpretation, performance, enforcement or breach of this Agreement shall be resolved by final and binding arbitration under the procedures set forth in Exhibit A to this Agreement and the then existing Judicial Arbitration and Mediation Services Rules of Practice and Procedure (except insofar as they are inconsistent with the procedures set forth in Exhibit A).

8. CERTAIN REDUCTIONS IN PAYMENTS OR BENEFITS. Executive and the Company hereby agree as follows:

8.1 Anything in this Agreement to the contrary notwithstanding, in the event that any payment, distribution or other benefit provided by the Company to or for the benefit of Executive (whether paid or payable or provided or to be provided pursuant to the terms of this Agreement or otherwise) (“Payments”) would (i) constitute a “parachute payment” within the meaning of Section 280G of the Code, and (ii) but for this Section 8, be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then, in accordance with this Section 8, such Payments shall be reduced to the maximum amount that would result in no portion of the payments being subject to the Excise Tax, but only if and to the extent that such a reduction would result in Executive’s receipt of Payments that are greater than the net amount Executive would receive (after application of the Excise Tax) if no reduction is made. The amount of required reduction, if any, shall be the smallest amount so that Executive’s net proceeds with respect to the Payments (after taking into account payment of any Excise Tax and all federal, state and local income, employment or other taxes) shall be maximized. If, notwithstanding any reduction described in this Section 8 (or in the absence of any such reduction), the IRS determines that a Payment is subject to the Excise Tax (or subject to a different amount of the Excise Tax than determined by the Company or Executive), then Section 8.3 shall apply. If the Excise Tax is not eliminated pursuant to this Section 8, Executive shall pay the Excise Tax.

8.2 All determinations required to be made under this Section 8 shall be made by the Company’s independent auditors. Such auditors shall provide detailed supporting calculations both to the Company and Executive. Any such determination by the Company’s independent auditors shall be binding upon the Company and Executive. The Payments, including without limitation any option acceleration benefits provided under this Agreement or otherwise (“Option Benefits”), shall be eliminated or reduced consistent with the requirements of this Section 8, first by eliminating or reducing cash payments and then by eliminating or reducing the number of Company shares or options that vest. Within five business days following a determination pursuant to this Section 8.2, the Company shall pay to or distribute to or for the benefit of Executive such amounts as are then due to Executive under this Agreement.

8.3 As a result of the uncertainty in the application of Section 280G of the Code at the time of the initial determination by the Company’s independent auditors hereunder, it is possible that Option Benefits or other Payments, as the case may be, will have been made by the Company which should not have been made (“Overpayment”) or that additional Option Benefits or other Payments, as the case may be, which will not have been made by the Company could have been made (“Underpayment”), in each case, consistent with the calculations required to be made hereunder. In the event that the Company’s independent auditors, based upon the assertion of a deficiency by the IRS against Executive or the Company which the Company’s independent auditors believe has a high probability of success, determine that an Overpayment has been made, any such Overpayment paid or distributed by the Company to or for the benefit of Executive

6.

shall be repaid to the Company; provided, however, that no amount shall be payable by Executive to the Company if and to the extent such payment would not either reduce the amount on which Executive is subject to tax under Section 1 and Section 4999 of the Code or generate a refund of such taxes. In the event that the Company’s independent auditors, based upon controlling precedent or other substantial authority, determine that an Underpayment has occurred, any such Underpayment shall be promptly paid by the Company to or for the benefit of Executive.

9. CERTAIN DEFERRAL OF PAYMENTS. Notwithstanding the other provisions of this Agreement, to the extent that any amounts payable to Executive pursuant to this Agreement would not be deductible by the Company for federal income tax purposes on account of the limitations of Section 162(m) of the Code, the Company may defer payment of such amounts to the earliest subsequent calendar year in which the Company reasonably anticipates that payment of such amounts would be deductible by the Company in accordance with Section 409A of the Code and Section 1.409A-2(b)(7)(i) of the regulations thereunder.

10. TERM. The term of this Agreement is from the date hereof until July 31, 2015.

11. GENERAL.

11.1 ENTIRE AGREEMENT. This Agreement sets forth the complete, final and exclusive embodiment of the entire agreement between Executive and the Company with respect to the subject matter hereof. This Agreement is entered into without reliance upon any promise, warranty or representation, written or oral, other than those expressly contained herein, and it supersedes any other such promises, warranties, representations or agreements.

11.2 SEVERABILITY. If any provision of this Agreement shall be held by a court of competent jurisdiction to be excessively broad as to duration, activity or subject, it shall be deemed to extend only over the maximum duration, activity and/or subject as to which such provision shall be valid and enforceable under applicable law. If any provisions shall, for any reason, be held by a court of competent jurisdiction to be invalid, illegal or unenforceable, such invalidity, illegality or unenforceability shall not affect any other provision of this agreement, but this agreement shall be construed as if such invalid, illegal or unenforceable provision had never been contained herein.

11.3 SUCCESSORS AND ASSIGNS. This Agreement shall bind the heirs, personal representatives, assigns, executors and administrators of each party, and inure to the benefit of each party, its heirs, successors and assigns. However, because of the unique and personal nature of Executive’s duties under this Agreement, Executive agrees not to delegate the performance of his duties under this Agreement without the prior consent of the Board.

11.4 APPLICABLE LAW. This Agreement shall be deemed to have been entered into and shall be construed in accordance with the laws of the state of California as applied to contracts made and to be performed entirely within California.

11.5 HEADINGS. The section headings contained herein are for reference purposes only and shall not in any way affect the meaning or interpretation of this Agreement.

11.6 COUNTERPARTS. This Agreement may be executed in two counterparts, each of which shall be deemed an original, all of which together shall constitute one and the same instrument.

7.

IN WITNESS WHEREOF, the parties have duly authorized and caused this Executive Employment Agreement to be executed as follows:

Uzi Sasson,		IXYS Corporation,
An individual		a Delaware Corporation
/s/ Uzi Sasson		By:	/s/ Samuel Kory
			Samuel Kory, Chairman of the Compensation Committee of the Board of Directors
Date:	7-13-12	Date:	7-11-12

8.

Exhibit A

ARBITRATION PROCEDURE

1. The parties agree that any dispute that arises in connection with this Agreement or the termination of this Agreement shall be resolved by binding arbitration in the manner described below.

2. A party intending to seek resolution of any dispute under the Agreement by arbitration shall provide a written demand for arbitration to the other party, which demand shall contain a brief statement of the issues to be resolved.

3. The arbitration shall be conducted by a mutually acceptable retired judge from the panel of Judicial Arbitration and Mediation Services, Inc. (“JAMS”). At the request of either party, arbitration proceedings will be conducted in the utmost secrecy and, in such case, all documents, testimony and records shall be received, heard and maintained by the arbitrator in secrecy under seal, available for inspection only by the parties to the arbitration, their respective attorneys, and their respective expert consultants or witnesses who shall agree, in advance and in writing, to receive all such information confidentially and to maintain such information in secrecy, and make no use of such information except for the purposes of arbitration, unless compelled by legal process.

4. The arbitrator is required to disclose any circumstances that might preclude the arbitrator from rendering an objective and impartial determination. In the event the parties cannot mutually agree upon the selection of a JAMS arbitrator, the President and vice president of JAMS shall designate the arbitrator.

5. The party demanding arbitration shall promptly request that JAMS conduct a scheduling conference within 15 days of the date of that party’s written demand for arbitration or on the first available date thereafter on the arbitrator’s calendar. The arbitration hearing shall be held within 30 available date thereafter on the arbitrator’s calendar. Nothing in this paragraph shall prevent a party from seeking temporary equitable relief at any time, from JAMS or any court of competent jurisdiction, to prevent irreparable harm pending the resolution of the arbitration.

6. Discovery shall be conducted as follows: (a) prior to the arbitration any party may make a written demands for lists of the witnesses to be called and the documents to be introduced at the hearing; (b) the lists must be served within 15 days of the date of receipt of the demand, or one day prior to the arbitration, whichever is earlier; and (c) each party may take no more than two depositions (pursuant to the procedure set forth in the California Code of Civil Procedure) with a maximum of five hours of examination time per deposition, and no other form of pre-arbitration discovery shall be permitted.

7. It is the intent of the parties that the Federal Arbitration Act (“FAA”) shall apply to the enforcement of this provision unless it is held inapplicable by a court with jurisdiction over the dispute, in which event the California Arbitration Act (“CAA”) shall apply.

8. The arbitrator shall apply California law, including the California Evidence Code, and shall be able to decree any and all relief of an equitable nature, including but not limited to such relief as a temporary restraining order, a preliminary injunction, a permanent injunction, or replevin of Company property. The arbitrator shall also be able to award actual, general or consequential damages, but shall not award any other form of damage (e.g., punitive damages).

9. Each party shall pay its pro rata share of the arbitrator’s fees and expenses, in addition to other expenses of the arbitration approved by the arbitrator, pending the resolution of the arbitration. The arbitrator shall have authority to award the payment of such fees and expenses to the prevailing party, as appropriate in the discretion of the arbitrator. Notwithstanding the foregoing, in no event shall the cost to Executive exceed the cost in a court of law or equity. Each party shall pay its own attorneys’ fees, witness fees and other expenses incurred for its own benefit.

10. The arbitrator shall render a written award setting forth the reasons for his or her decision. The decree or judgment of an award by the arbitrator may be entered and enforced in any court having jurisdiction over the parties. The award of the arbitrator shall be final and binding upon the parties without appeal or review except as permitted by the FAA, or if the FAA is not applicable, as permitted by the CAA.

2.

EX-31.1

Exhibit 31.1

CERTIFICATION

I, Nathan Zommer, certify that:

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

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

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

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

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

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

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

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

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

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

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

Date: August 3, 2012

/s/ Nathan Zommer        

Nathan Zommer

Chairman of the Board and Chief Executive Officer

(Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION

I, Uzi Sasson, certify that:

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

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

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

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

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

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

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

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

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

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

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

Date: August 3, 2012

/s/ Uzi Sasson         

Uzi Sasson

President and Chief Financial Officer

(Principal Financial Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION

Pursuant to 18 U.S.C. 1350, Nathan Zommer, the Chief Executive Officer of IXYS Corporation (the “Company”), and Uzi Sasson, the Chief Financial Officer of the Company, each hereby certifies that, to his knowledge:

1. The Company’s Quarterly Report on Form 10-Q for the period ended June 30, 2012, to which this Certification is attached as Exhibit 32.1 (the “Periodic Report”), fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934, as amended; and

2. The information contained in the Periodic Report fairly presents, in all material respects, the financial condition of the Company at the end of the periods covered by the Periodic Report and results of operations of the Company for the periods covered by the Periodic Report.

Dated: August 3, 2012

/s/ Nathan Zommer        

Nathan Zommer

Chief Executive Officer

/s/ Uzi Sasson        

Uzi Sasson

Chief Financial Officer

XML

Note 13 Computation of Earnings Per Share (Tables)

3 Months Ended

Jun. 30, 2012

Earnings Per Share Reconciliation [Abstract]

Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]

	Three Months Ended
		June 30,
	2012		2011
	(unaudited)
Net income	$	6,007	$	9,976
Weighted average shares - basic		31,351		31,508
Weighted average shares - diluted		32,378		32,806
Net income per share - basic	$	0.19	$	0.32
Net income per share - diluted	$	0.19	$	0.30

XML

Note 11 Employee Equity Incentive Plans (Weighted Average Estimates and Assumptions) (Details) (USD $)	3 Months Ended
	Jun. 30, 2012 Y	Jun. 30, 2011 Y
Stock Options [Member]
Share-based Compensation Arrangement by Share-based Payment Award Fair Value Assumptions and Methodology [Line Items]
Weighted Average Estimated Fair Value of Grant Per Share	$ 5.47	$ 6.74
Risk-free Interest Rate	0.90%	1.90%
Expected Term in Years	6.34	5.95
Volatility	55.40%	55.70%
Dividend Yield	0.00%	0.00%
Employee Stock Purchase Plan 1999 [Member]
Share-based Compensation Arrangement by Share-based Payment Award Fair Value Assumptions and Methodology [Line Items]
Weighted Average Estimated Fair Value of Grant Per Share	$ 3.67	$ 2.51
Risk-free Interest Rate	0.10%	0.20%
Expected Term in Years	0.5	0.5
Volatility	46.80%	44.90%
Dividend Yield	0.00%	0.00%

XML

Note 9 Restructuring Charges (Narratives) (Details)	3 Months Ended
	Jun. 30, 2012
Restructuring Charges [Abstract]
Restructuring and Related Costs Payment Date	Dec. 31, 2013

XML

Note 11 Employee Equity Incentive Plans (Option Outstanding) (Details) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended
	Jun. 30, 2012		Mar. 31, 2012
Options Exercised Intrinsic Value [Abstract]
Aggregate Intrinsic Value, Exercised	$ 70	[1]
Share-based Compensation Arrangement by Share-based Payment Award Options Outstanding Weighted Average Exercise Price Per Share [Abstract]
Options Outstanding	$ 9.76		$ 9.75
Options Granted	$ 10.36
Options Exercised	$ 6.49
Options Expired	$ 12.85
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract]
Number of Shares, Exercisable	3,992,010		3,833,879
Weighted Average Exercise Price Per Share, Exercisable	$ 9.49		$ 9.42
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward]
Balance at March 31, 2012	5,472,004
Options Granted	90,000
Options Exercised	(11,219)
Options Expired	(12,900)
Balance at June 30, 2012	5,537,885

[1] Represents the difference between the exercise price and the value of our common stock at the time of exercise.

XML

Note 7 Intangible Assets (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2012	Mar. 31, 2012
Finite-Lived Intangible Assets [Line Items]
Gross Intangible Assets	$ 14,087	$ 14,087
Accumulated Amortization	9,585	8,943
Net Intangible Assets	4,502	5,144
Developed Intellectual Property [Member]
Finite-Lived Intangible Assets [Line Items]
Gross Intangible Assets	4,800	4,800
Accumulated Amortization	1,858	1,658
Net Intangible Assets	2,942	3,142
Customer Relationships [Member]
Finite-Lived Intangible Assets [Line Items]
Gross Intangible Assets	6,100	6,100
Accumulated Amortization	5,234	4,840
Net Intangible Assets	866	1,260
Contract Backlog [Member]
Finite-Lived Intangible Assets [Line Items]
Gross Intangible Assets	2,000	2,000
Accumulated Amortization	2,000	2,000
Net Intangible Assets	0	0
Other Intangible Assets [Member]
Finite-Lived Intangible Assets [Line Items]
Gross Intangible Assets	1,187	1,187
Accumulated Amortization	493	445
Net Intangible Assets	$ 694	$ 742

XML

Note 6 Accrued Expenses and Other Current Liabilities (Tables)

3 Months Ended

Jun. 30, 2012

Accrued Expenses and Other Current Liabilities [Abstract]

Schedule of Accrued Liabilities [Table Text Block]

		2012		2012
		(unaudited)
Uninvoiced goods and services		$	9,865	$	11,869
Compensation and benefits			6,884		7,214
Restructuring accrual			131		199
Commission, royalties and other			2,679		2,741
	Total	$	19,559	$	22,023

XML

Note 13 Computation of Earnings Per Share (Narratives) (Details)	3 Months Ended
	Jun. 30, 2012	Jun. 30, 2011
Earnings Per Share Reconciliation [Abstract]
Weighted Average Number Diluted Shares Outstanding Adjustment	1,027,000	1,298,000
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	1,682,804	619,173

XML

Fair Value (Policy)

3 Months Ended

Jun. 30, 2012

Fair Value Disclosures [Abstract]

Fair Value of Financial Instruments, Policy [Policy Text Block]

We account for certain assets and liabilities at fair value. In determining fair value, we consider its principal or most advantageous market and the assumptions that market participants would use when pricing, such as inherent risk, restrictions on sale and risk of nonperformance. The fair value hierarchy is based upon the observability of inputs used in valuation techniques. Observable inputs (highest level) reflect market data obtained from independent sources, while unobservable inputs (lowest level) reflect internally developed market assumptions. The fair value measurements are classified under the following hierarchy:

Level 1 — Quoted prices for identical instruments in active markets.

Level 2 — Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs or significant value-drivers are observable in active markets.

Level 3 — Model-derived valuations in which one or more significant inputs or significant value-drivers are unobservable.

We measure our marketable securities and derivative contracts at fair value. Marketable securities are valued using the quoted market prices and are therefore classified as Level 1 estimates.

From time to time, we use derivative instruments to manage exposures to changes in interest rates and currency exchange rates, and the fair values of these instruments are recorded on the balance sheets. We have elected not to designate these instruments as accounting hedges. The changes in the fair value of these instruments are recorded in the current period's statement of operations and are included in other income (expense), net. All of our derivative instruments are traded on over-the-counter markets where quoted market prices are not readily available. For those derivatives, we measure fair value using prices obtained from the counterparties with whom we have traded. The counterparties price the derivatives based on models that use primarily market observable inputs, such as yield curves and option volatilities. Accordingly, we classify these derivatives as Level 2.

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Note 10 Pension Plans (Narratives) (Details) (USD $)	3 Months Ended
	Jun. 30, 2012 N
Pension and Other Postretirement Benefits Disclosure [Abstract]
Number of Defined Benefit Plans	3
Defined Benefit Plan, Measurement Date	March 31
Defined Benefit Plan, Estimated Future Employer Contributions in Next Fiscal Year	$ 917,000

XML

Note 3 Fair Value (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2012		Mar. 31, 2012
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable Equity Securities	$ 4,799	[1],[2]	$ 1,064	[1],[2]
Auction Rate Preferred Securities	350	[1],[2]	350	[1],[2]
Derivative Liabilities	(220)	[1],[3]	(203)	[1],[3]
Net Assets Fair Value, Total	4,929	[1]	1,211	[1]
Fair Value, Inputs, Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable Equity Securities	4,799	[1],[2]	1,064	[1],[2]
Auction Rate Preferred Securities	0		0
Derivative Liabilities	0		0
Net Assets Fair Value, Total	4,799	[1]	1,064	[1]
Fair Value, Inputs, Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable Equity Securities	0		0
Auction Rate Preferred Securities	350	[1],[2]	350	[1],[2]
Derivative Liabilities	(220)	[1],[3]	(203)	[1],[3]
Net Assets Fair Value, Total	$ 130	[1]	$ 147	[1]

[1] We did not have any recurring assets whose fair value was measured using significant unobservable inputs.

[2] Included in "Other assets" on our unaudited condensed consolidated balance sheets.

[3] Included in "Accrued expenses and other current liabilities" on our unaudited condensed consolidated balance sheets.

XML

Note 11 Employee Equity Incentive Plans (Tables)

3 Months Ended

Jun. 30, 2012

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Schedule of Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Table Text Block]

	Three Months Ended June 30,
Income Statement Classifications		2012		2011
	(unaudited)
Selling, general and administrative expenses	$	1,095	$	784
Stock-based compensation effect in income before taxes		1,095		784
Provision for income taxes (1)		383		282
Net stock-based compensation effects in net income	$	712	$	502
________________
(1) Estimated at a statutory income tax rate of 35% in fiscal year 2013 and 36% in fiscal year 2012.

Schedule of Employee Service Share-based Compensation, Fair Value Assumptions and Methodology [Table Text Block]

		Stock Options				Purchase Plan
		Three Months				Three Months
		Ended June 30,				Ended June 30,
		2012		2011		2012		2011
Weighted average estimated fair
	value of grant per share	$	5.47	$	6.74	$	3.67	$	2.51
Risk-free interest rate			0.9%		1.9%		0.1%		0.2%
Expected term in years			6.34		5.95		0.5		0.5
Volatility			55.4%		55.7%		46.8%		44.9%
Dividend yield			0%		0%		0%		0%

Schedule of Share-based Compensation, Stock Options, Activity [Table Text Block]

			Weighted Average
		Number of	Exercise Price			Intrinsic Value (1)
		Shares	Per Share
						(000)
Balance at March 31, 2012		5,472,004	$	9.75
	Options granted	90,000	$	10.36
	Options exercised	(11,219)	$	6.49	$	70
	Options expired	(12,900)	$	12.85
Balance at June 30, 2012		5,537,885	$	9.76
Exercisable at June 30, 2012		3,992,010	$	9.49
Exercisable at March 31, 2012		3,833,879	$	9.42
(1) Represents the difference between the exercise price and the value of our common stock at the time of exercise.

XML

Note 11 Employee Equity Incentive Plans (Narratives) (Details) (USD $) In Millions, except Share data, unless otherwise specified	3 Months Ended
	Jun. 30, 2012
Plan 2009 [Member]
Employee Equity Incentive Plans [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized	900,000
Plan 2011 [Member]
Employee Equity Incentive Plans [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized	600,000
Stock Options of Plans 2009 and 2011 [Member]
Employee Equity Incentive Plans [Line Items]
Percent of Fair Market Value on Grant Date Not Less Than	100.00%
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period	over four years
Share-based Compensation Arrangement by Share-based Payment Award Expiration Date	ten years from the date of grant
Stock Appreciation Rights of Plans 2009 and 2011 [Member]
Employee Equity Incentive Plans [Line Items]
Percent of Fair Market Value on Grant Date Not Less Than	100.00%
Share-based Compensation Arrangement by Share-based Payment Award Expiration Date	no later than 10 years from the grant date
Zilog 2004 Plan [Member]
Employee Equity Incentive Plans [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award Number Of Shares Assumed	652,963
Zilog 2002 Plan [Member]
Employee Equity Incentive Plans [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award Number Of Shares Assumed	366,589
Employee Stock Purchase Plan 1999 [Member]
Employee Equity Incentive Plans [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized	500,000
ESPP Discounted Purchase Price Percentage	85.00%
ESPP Offering Period	semi-annual
Share-based Compensation Arrangement by Share-based Payment Award, Maximum Employee Subscription Rate	15.00%
Stock Issued During Period, Shares, Employee Stock Purchase Plans	55,925
Number of Employee Stock Purchase Plan Shares Available For Future Issuance	245,946
Subsequent ESPP Purchase Approval on July 31, 2007 [Member]
Employee Equity Incentive Plans [Line Items]
Number of Shares Approved in Subsequent Amendments of Original Purchase Plan	350,000
Subsequent ESPP Purchase Approval on July 9, 2010 [Member]
Employee Equity Incentive Plans [Line Items]
Number of Shares Approved in Subsequent Amendments of Original Purchase Plan	350,000
Equity Incentive Plans Total [Member]
Employee Equity Incentive Plans [Line Items]
Unrecognized Compensation Cost of Stock Option Granted	6.5
Weighted Average Period of the Unrecognized Compensation Cost to be Recognized	2.8

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Note 15 Income Taxes (Narratives) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Jun. 30, 2012	Jun. 30, 2011
Income Tax Expense Benefit [Abstract]
Total Income Tax Provision	$ 3,234	$ 5,746
Effective Tax Provision Rate	35.00%	36.50%

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Note 8 Borrowing Arrangements (narratives) (Details)	3 Months Ended
	Jun. 30, 2012 IKB Deutshe Industriebank Loan Payable [Member] USD ($)	Jun. 30, 2012 IKB Deutshe Industriebank Loan Payable [Member] EUR (€)	Jun. 30, 2012 Notes Payable, Other Payables [Member] USD ($) N	Jun. 30, 2012 Bank of West Original Arrangement November 13 2009 [Member] USD ($)	Jun. 30, 2012 Bank of West Extended Arrangement December 29 2010 [Member] USD ($)	Jun. 30, 2012 Bank of West [Member] USD ($)
Line of Credit Facility [Line Items]
Line of Credit Facility, Expiration Date				October 31, 2011	October 31, 2013	October 31, 2013
Line of Credit Facility, Amount Outstanding						$ 15,000,000
Line of Credit Facility, Maximum Borrowing Capacity				15,000,000	20,000,000	20,000,000
Line of Credit, Variable Rate Basis Spread						150 to 325 basis points
Debt Instrument, Interest Rate at Period End						2.97%
Available Credit Line for Letter of Credit						3,000,000
Debt Instrument [Line Items]
Debt Instrument, Face Amount	12,200,000	10,000,000	2,000,000
Debt Instrument, Issuance Date	June 10, 2005	June 10, 2005	September 10, 2008
Debt Instrument, Maturity Date	Jun. 20, 2020	Jun. 20, 2020
Debt Instrument, Number of Equal Monthly Installment			60
Debt Instrument, Frequency of Periodic Payment	each fiscal quarter	each fiscal quarter	monthly
Debt Instrument, Basis for Effective Rate	three month Euribor rate	three month Euribor rate
Debt Instrument, Variable Rate Basis Spread	70 to 125 basis points	70 to 125 basis points
Debt Instrument, Interest Rate, Stated Percentage			6.00%
Debt Instrument, Periodic Payment, Principal	210,000	167,000
Debt Instrument, Periodic Payment			38,666
Long-term Debt, Gross	$ 6,700,000	€ 5,300,000
Derivative, Inception Date	Jun. 30, 2010	Jun. 30, 2010
Derivative, Maturity Date	Jun. 30, 2015	Jun. 30, 2015
Derivative, Swaption Interest Rate	1.99%	1.99%
Debt Instrument, Payoff Date			April 2012

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Note 2 Recent Accounting Pronouncements and Accounting Changes

3 Months Ended

Jun. 30, 2012

New Accounting Pronouncements and Changes In Accounting Principles [Abstract]

Recent Accounting Pronouncements and Accounting Changes [Text Block]

2. Recent Accounting Pronouncements and Accounting Changes

In June 2011, the Financial Accounting Standards Board, or FASB, issued authoritative guidance on the presentation of comprehensive income. Under the guidance, an entity has the option to present the total of comprehensive income, the components of net income and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. The guidance was effective for us in the fiscal year beginning on April 1, 2012. Although adopting the guidance did not impact the accounting for comprehensive income, it affected the presentation of components of comprehensive income by eliminating the historical practice of showing these items within the consolidated statements of stockholders' equity.

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Note 16 Commitments and Contingencies (Narratives) (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Jun. 30, 2012
Bank of West Original Arrangement November 13 2009 [Member]
Line of Credit Facility [Line Items]
Line of Credit Facility, Expiration Date	October 31, 2011
Line of Credit Facility, Maximum Borrowing Capacity	$ 15.0
Bank of West Extended Arrangement December 29 2010 [Member]
Line of Credit Facility [Line Items]
Line of Credit Facility, Expiration Date	October 31, 2013
Line of Credit Facility, Maximum Borrowing Capacity	20.0
Bank of West [Member]
Line of Credit Facility [Line Items]
Line of Credit Facility, Expiration Date	October 31, 2013
Line of Credit Facility, Amount Outstanding	15.0
Line of Credit Facility, Maximum Borrowing Capacity	20.0
Available Credit Line for Letter of Credit	$ 3.0

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Note 4 Other Assets (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2012		Mar. 31, 2012
Other Assets Noncurrent Disclosure [Abstract]
Marketable Equity Securities	$ 4,799	[1],[2]	$ 1,064	[1],[2]
Auction Rate Preferred Securities	350	[1],[2]	350	[1],[2]
Long Term Equity Investments	5,038		5,340
Other Items	844		1,155
Other Assets, Total	$ 11,031		$ 7,909

[1] We did not have any recurring assets whose fair value was measured using significant unobservable inputs.

[2] Included in "Other assets" on our unaudited condensed consolidated balance sheets.

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Segment Information (Policy)

3 Months Ended

Jun. 30, 2012

Segment Reporting [Abstract]

Segment Reporting, Policy [Policy Text Block]

We have a single operating segment. This operating segment is comprised of semiconductor products used primarily in power-related applications. While we have separate legal subsidiaries with discrete financial information, we have one chief operating decision maker with highly integrated businesses.

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Computation of Earnings Per Share (Policy)

3 Months Ended

Jun. 30, 2012

Earnings Per Share Reconciliation [Abstract]

Earnings Per Share, Policy [Policy Text Block]

Basic net income available per common share is computed using net income and the weighted average number of common shares outstandingduring the period. Diluted net income per common share is computed using net income and the weighted average number of common shares outstanding, assuming dilution, which includes potentially dilutive common shares outstanding during the period. Potentially dilutive common shares include the assumed exercise of stock options and assumed vesting of restricted stock units using the treasury stock method.

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Note 12 Accumulated Other Comprehensive Income (Loss) (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2012	Mar. 31, 2012
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]
Accumulated Net Unrealized Loss on Available-for-sale Investments Securities, Net of Taxes of $(2) at June 30, 2012 and $(37) at March 31, 2012	$ (3)	$ (68)
Unrecognized Actuarial Loss, Net of Tax of $(1,523)	(4,314)	(4,314)
Accumulated Foreign Currency Translation Adjustments	1,372	6,472
Total Accumulated Other Comprehensive Income (Loss)	(2,945)	2,090
Accumulated Other Comprehensive Income (Loss), Available-for-sale Securities, Tax	(2)	(37)
Accumulated Other Comprehensive Income (Loss), Pension, Tax	$ (1,523)	$ (1,523)

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Note 5 Inventories (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2012	Mar. 31, 2012
Inventory Net [Abstract]
Raw Materials	$ 23,325	$ 24,157
Work in Process	38,568	40,505
Finished Goods	23,915	21,578
Inventory Net, Total	$ 85,808	$ 86,240

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Note 3 Fair Value (Tables)

3 Months Ended

Jun. 30, 2012

Fair Value Disclosures [Abstract]

Fair Value, Measurement Inputs, Disclosure [Table Text Block]

			June 30, 2012 (1)						March 31, 2012 (1)
					Fair Value Measured at						Fair Value Measured at
					Reporting Date Using						Reporting Date Using
Description			Total		Level 1		Level 2		Total		Level 1		Level 2
			(unaudited)						(unaudited)
Marketable equity securities (2)			$	4,799	$	4,799	$	-	$	1,064	$	1,064	$	-
Auction rate preferred securities (2)				350		-		350		350		-		350
Derivative liabilities (3)				(220)		-		(220)		(203)		-		(203)
	Total		$	4,929	$	4,799	$	130	$	1,211	$	1,064	$	147
(1)		We did not have any recurring assets whose fair value was measured using significant unobservable inputs.
(2)		Included in "Other assets" on our unaudited condensed consolidated balance sheets.
(3)		Included in "Accrued expenses and other current liabilities" on our unaudited condensed consolidated balance sheets.

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Note 4 Other Assets (Tables)

3 Months Ended

Jun. 30, 2012

Other Assets Noncurrent Disclosure [Abstract]

Schedule of Other Assets, Noncurrent [Table Text Block]

	2012		2012
	(unaudited)
Marketable equity securities	$	4,799	$	1,064
Auction rate preferred securities		350		350
Long term equity investments		5,038		5,340
Other items		844		1,155
Total	$	11,031	$	7,909

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Note 1 Unaudited Condensed Consolidated Financial Statements

3 Months Ended

Jun. 30, 2012

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of Accounting [Text Block]

1. Unaudited Condensed Consolidated Financial Statements

The accompanying interim unaudited condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. The unaudited condensed consolidated financial statements include the accounts of IXYS Corporation and its wholly-owned subsidiaries. The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and judgments that affect the amounts reported in the financial statements and accompanying notes. The accounting estimates that require management's most difficult judgments include, but are not limited to, revenue reserves, inventory valuation, accounting for income taxes, allocation of purchase price in business combinations and restructuring costs. All significant intercompany transactions have been eliminated in consolidation. All adjustments of a normal recurring nature that, in the opinion of management, are necessary for a fair statement of the results for the interim periods have been made. The condensed balance sheet as of March 31,2012 has been derived from our audited balance sheet as of that date. It is recommended that the interim financial statements be read in conjunction with our audited consolidated financial statements and notes thereto for the fiscal year ended March 31, 2012, or fiscal 2012,contained in our Annual Report on Form 10-K. Interim results are not necessarily indicative of the operating results expected for later quarters or the full fiscal year.

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Note 5 Inventories (Tables)

3 Months Ended

Jun. 30, 2012

Inventory Net [Abstract]

Schedule of Inventory, Current [Table Text Block]

	2012		2012
	(unaudited)
Raw materials	$	23,325	$	24,157
Work in process		38,568		40,505
Finished goods		23,915		21,578
Total	$	85,808	$	86,240

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Note 14 Segment Information (Tables)

3 Months Ended

Jun. 30, 2012

Segment Reporting [Abstract]

Schedule of Revenue from External Customers by Geographic Area [Table Text Block]

		Three Months Ended June 30,
			2012		2011
		(unaudited)
United States		$	24,922	$	27,705
Europe and the Middle East
	France		1,573		2,031
	Germany		9,157		13,416
	United Kingdom		7,124		8,002
	Other		10,250		14,140
Asia Pacific
	China		13,384		18,565
	Japan		1,828		2,088
	Korea		2,243		3,945
	Malaysia		1,303		1,120
	Singapore		2,645		2,484
	Taiwan		1,224		2,232
	Other		1,355		1,369
Rest of the World
	India		1,802		2,829
	Other		2,047		1,852
Total		$	80,857	$	101,778

Revenue from External Customers by Products and Services [Table Text Block]

	Three Months Ended June 30,
	2012		2011
		(unaudited)
Power semiconductors	$	59,582	$	76,464
Integrated circuits		15,599		18,111
Systems and RF power semiconductors		5,676		7,203
Total	$	80,857	$	101,778

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Note 11 Employee Equity Incentive Plans (Share-based Compensation) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended				12 Months Ended
	Jun. 30, 2012		Jun. 30, 2011		Mar. 31, 2013	Mar. 31, 2012
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Selling, General and Administrative Expenses	$ 1,095		$ 784
Stock-based Compensation Effect in Income Before Taxes	1,095		784
Provision for Income Taxes	383	[1]	282	[1]
Net Stock-based Compensation Effects in Net Income	$ 712		$ 502
Estimated Statutory Income Tax Rate					35.00%	36.00%

[1] Estimated at a statutory income tax rate of 35% in fiscal year 2013 and 36% in fiscal year 2012.

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Statement of Earnings (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended
	Jun. 30, 2012	Jun. 30, 2011
Income Statement [Abstract]
Net revenues	$ 80,857	$ 101,778
Cost of goods sold	53,668	66,743
Gross profit	27,189	35,035
Operating expenses:
Research, development and engineering	6,649	6,933
Selling, general and administrative	11,187	11,129
Amortization of acquisition-related intangible assets	640	642
Total operating expenses	18,476	18,704
Operating income	8,713	16,331
Other income (expense):
Interest income	84	69
Interest expense	(257)	(284)
Other income (expense), net	701	(394)
Income before income tax provision	9,241	15,722
Provision for income tax	(3,234)	(5,746)
Net income	$ 6,007	$ 9,976
Net income per share:
Basic	$ 0.19	$ 0.32
Diluted	$ 0.19	$ 0.30
Weighted average shares used in per share calculation:
Basic	31,351	31,508
Diluted	32,378	32,806

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Note 6 Accrued Expenses and Other Current Liabilities (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2012	Mar. 31, 2012
Accrued Expenses and Other Current Liabilities [Abstract]
Uninvoiced Goods and Services	$ 9,865	$ 11,869
Compensation and Benefits	6,884	7,214
Restructuring Accrual	131	199
Commission, Royalties and Other	2,679	2,741
Accrued Liabilities Current, Total	$ 19,559	$ 22,023

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Statement of Comprehensive Income (Parenthetical) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Jun. 30, 2012	Jun. 30, 2011
Statement of Income and Comprehensive Income [Abstract]
Taxes on net unrealized gain (loss) arising during period from unsold securities	$ 35	$ (5)

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Note 14 Segment Information (Narratives) (Details)	3 Months Ended
	Jun. 30, 2012 N	Jun. 30, 2011 N
Segment Reporting [Abstract]
Top Customer Percentage More Than 10% of Total Revenue	12.40%	12.80%
Second Customer Percentage More Than 10% of Total Revenue	11.70%	11.00%
Number of Major Customers	2	2

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Note 9 Restructuring Charges (Tables)

3 Months Ended

Jun. 30, 2012

Restructuring Charges [Abstract]

Schedule of Restructuring Reserve by Type of Cost [Table Text Block]

	Severance and Related Benefits		Lease Commitment Accrual		Total
Balance at March 31, 2012	$	72	$	127	$	199
Cash payments		-		(64)		(64)
Currency translation adjustment		(4)		-		(4)
Balance at June 30, 2012	$	68	$	63	$	131

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Note 15 Income Taxes

3 Months Ended

Jun. 30, 2012

Income Tax Expense Benefit [Abstract]

Income Tax Disclosure [Text Block]

15. Income Taxes

For the three months ended June 30, 2012, we recorded income tax provisions of $3.2million, reflecting an effective tax rate of 35.0%. For the three months ended June 30, 2011, we recorded income tax provisions of $5.7 million, reflecting an effective tax rate of 36.5%. For the three months ended June 30, 2012, the effective tax rate reflected estimates of annual income in domestic and foreign jurisdictions, as adjusted by certain tax items.For the three months ended June 30, 2011, the effective tax rate was affected by the changes in the estimates of annual income in foreign jurisdictions and by a valuation allowance release.

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Note 10 Pension Plans (Tables)

3 Months Ended

Jun. 30, 2012

Pension and Other Postretirement Benefits Disclosure [Abstract]

Schedule of Net Benefit Costs [Table Text Block]

	Three Months Ended
	June 30,
	2012		2011
	(unaudited)
Service cost	$	24	$	21
Interest cost on projected benefit obligation		471		522
Expected return on plan assets		(379)		(437)
Recognized actuarial loss		42		19
Net periodic pension expense	$	158	$	125

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Unaudited Condensed Consolidated Financial Statements (Policy)

3 Months Ended

Jun. 30, 2012

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of Accounting [Policy Text Block]

The accompanying interim unaudited condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. The unaudited condensed consolidated financial statements include the accounts of IXYS Corporation and its wholly-owned subsidiaries. The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and judgments that affect the amounts reported in the financial statements and accompanying notes. The accounting estimates that require management's most difficult judgments include, but are not limited to, revenue reserves, inventory valuation, accounting for income taxes, allocation of purchase price in business combinations and restructuring costs. All significant intercompany transactions have been eliminated in consolidation. All adjustments of a normal recurring nature that, in the opinion of management, are necessary for a fair statement of the results for the interim periods have been made. The condensed balance sheet as of March 31,2012 has been derived from our audited balance sheet as of that date. It is recommended that the interim financial statements be read in conjunction with our audited consolidated financial statements and notes thereto for the fiscal year ended March 31, 2012, or fiscal 2012,contained in our Annual Report on Form 10-K. Interim results are not necessarily indicative of the operating results expected for later quarters or the full fiscal year.

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Statement of Cash Flows (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Jun. 30, 2012	Jun. 30, 2011
Cash flows from operating activities:
Net income	$ 6,007	$ 9,976
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	3,277	3,377
Provision for receivable allowances	3,102	2,434
Net change in inventory provision	(1)	262
Foreign currency adjustments on intercompany amounts	(497)	471
Stock-based compensation	1,095	784
Loss on investments and disposal of fixed assets	24	127
Changes in operating assets and liabilities:
Accounts receivable	(893)	(5,060)
Inventories	(1,897)	500
Prepaid expenses and other current assets	(376)	877
Other assets	313	80
Accounts payable	1,475	(925)
Accrued expenses and other liabilities	369	2,366
Pension liabilities	(218)	(190)
Net cash provided by operating activities	11,780	15,079
Cash flows from investing activities:
Change in restricted cash	(48)	(7)
Purchases of investments	(3,919)	(8)
Purchases of property and equipment	(1,118)	(3,019)
Proceeds from sale of investments	387	25
Net cash used in investing activities	(4,698)	(3,009)
Cash flows from financing activities:
Principal payments on capital lease obligations	(745)	(774)
Repayments of loans and notes payable	(939)	(340)
Proceeds from loans	0	423
Proceeds from employee equity plans	567	1,443
Purchases of treasury stock	0	(1,550)
Net cash used in financing activities	(1,117)	(798)
Effect of exchange rate fluctuations on cash and cash equivalents	(1,738)	384
Net increase in cash and cash equivalents	4,227	11,656
Cash and cash equivalents at beginning of period	98,604	75,406
Cash and cash equivalents at end of period	$ 102,831	$ 87,062

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Statement of Financial Position (USD $) In Thousands, unless otherwise specified	Jun. 30, 2012	Mar. 31, 2012
Current assets:
Cash and cash equivalents	$ 102,831	$ 98,604
Restricted cash	557	509
Accounts receivable, net of allowances of $2,744 at June 30, 2012 and $2,473 at March 31, 2012	45,138	48,420
Inventories	85,808	86,240
Prepaid expenses and other current assets	4,885	6,934
Deferred income taxes	8,315	8,450
Total current assets	247,534	249,157
Property, plant and equipment, net	53,149	56,071
Intangible assets, net	4,502	5,144
Deferred income taxes	25,539	25,629
Other assets	11,031	7,909
Total assets	341,755	343,910
Current liabilities:
Current portion of capitalized lease obligations	2,573	2,873
Current portion of loans payable	939	1,696
Accounts payable	15,551	14,427
Accrued expenses and other current liabilities	19,559	22,023
Total current liabilities	38,622	41,019
Long term income tax payable	6,449	6,456
Capitalized lease obligations, net of current portion	4,735	5,651
Long term loans, net of current portion	21,068	21,676
Pension liabilities	14,140	15,001
Total liabilities	85,014	89,803
Commitments and contingencies (Note 16)
Stockholders' equity:
Preferred stock, $0.01 par value:(Authorized: 5,000,000 shares; none issued and outstanding)	0	0
Common stock, $0.01 par value:(Authorized: 80,000,000 shares; 37,862,045 issued and 31,391,105 outstanding at June 30, 2012 and 37,805,697 issued and 31,323,538 outstanding at March 31, 2012)	379	378
Additional paid-in capital	199,870	198,283
Treasury stock, at cost: 6,470,940 common shares at June 30, 2012 and 6,482,159 common shares at March 31, 2012	(56,739)	(56,838)
Retained earnings	116,176	110,194
Accumulated other comprehensive income	(2,945)	2,090
Total stockholders' equity	256,741	254,107
Total liabilities and stockholders' equity	$ 341,755	$ 343,910

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Note 10 Pension Plans

3 Months Ended

Jun. 30, 2012

Pension and Other Postretirement Benefits Disclosure [Abstract]

Pension Plans [Text Block]

10. Pension Plans

We maintain three defined benefit pension plans: one for United Kingdom employees, one for German employees, and one for Philippine employees. These plans cover most of the employees in the United Kingdom, Germany and the Philippines. Benefits are based on years of service and the employees' compensation. We deposit funds for these plans, consistent with the requirements of local law, with investment management companies, insurance companies, banks or trustees and/or accrue for the unfunded portion of the obligations. The measurement date for the projected benefit obligations and the plan assets is March 31. The United Kingdom and German plans have been curtailed. As such, the plans are closed to new entrants and no credit is provided for additional periods of service. The German plan was held by a separate legal entity. As of June 30, 2012, the German defined benefit plan was completely unfunded. We expect to contribute approximately $917,000 to the United Kingdom and the Philippines plans in the fiscal year ending March 31, 2013. This contribution is primarily contractual.

The net periodic pension expense includes the following components (in thousands):

	Three Months Ended
	June 30,
	2012		2011
	(unaudited)
Service cost	$	24	$	21
Interest cost on projected benefit obligation		471		522
Expected return on plan assets		(379)		(437)
Recognized actuarial loss		42		19
Net periodic pension expense	$	158	$	125

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Document and Entity Information	3 Months Ended
	Jun. 30, 2012	Jul. 27, 2012
Document and Entity Information [Abstract]
Entity Registrant Name	IXYS CORP /DE/
Entity Central Index Key	0000945699
Document Type	10-Q
Document Period End Date	Jun. 30, 2012
Amendment Flag	false
Current Fiscal Year End Date	--03-31
Entity Well Known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Accelerated Filer
Entity Common Stock Shares Outstanding		31,390,682
Document Fiscal Year Focus	2013
Document Fiscal Period Focus	Q1

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Note 11 Employee Equity Incentive Plans

3 Months Ended

Jun. 30, 2012

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Disclosure of Compensation Related Costs, Share-based Payments [Text Block]

11. Employee Equity Incentive Plans

Stock Purchase and Stock Option Plans

The 2011 Equity Incentive Plan and the 2009 Equity Incentive Plan

On September 10, 2009, our stockholders approved the 2009 Equity Incentive Plan, or the 2009 Plan, under which 900,000 shares of our common stock are reserved for the grant of stock options and other equity incentives. On September 16, 2011, our stockholders approved the 2011 Equity Incentive Plan, or the 2011 Plan, under which 600,000 shares of our common stock are reserved for the grant of stock options and other equity incentives. The 2009 Plan and the 2011 Plan are referred to as the Plans.

Stock Options

Under the Plans, nonqualified and incentive stock options may be granted to employees, consultants and non-employee directors. Generally, the per share exercise price shall not be less than 100% of the fair market value of a share on the grant date. The Board of Directors has the full power to determine the provisions of each option issued under the Plans. While we may grant options that become exercisable at different times or within different periods, we have primarily granted options that vest over four years. The options, once granted, expire ten years from the date of grant.

Restricted Stock

Restricted stock awards may be granted to any employee, director or consultant under the Plans. Pursuant to a restricted stock award, we will issue shares of common stock that will be released from restriction if certain requirements, including continued performance of services, are met.

Stock Appreciation Rights

Awards of stock appreciation rights, or SARs, may be granted to employees, consultants and nonemployee directors pursuant to the Plans. A SAR is payable on the difference between the market price at the time of exercise and the exercise price at the date of grant. In any event, the exercise price of a SAR shall not be less than 100% of the fair market value of a share on the grant date and shall expire no later than ten years from the grant date. Upon exercise, the holder of a SAR shall be entitled to receive payment either in cash or a number of shares by dividing such cash amount by the fair market value of a share on the exercise date.

Restricted Stock Units

Restricted stock units, denominated performance units in the 2009 Plan, may be granted to employees, consultants and nonemployee directors under the Plans. Each restricted stock unit shall have a value equal to the fair market value of one share. After the applicable performance period has ended, the holder will be entitled to receive a payment, either in cash or in the form of shares, based on the number of restricted stock units earned over the performance period, to be determined as a function of the extent to which the corresponding performance goals or other vesting provisions have been achieved.

Zilog 2004 Omnibus Stock Incentive Plan

The Zilog 2004 Omnibus Stock Incentive Plan, or the Zilog 2004 Plan, was approved by the stockholders of Zilog in 2004, and was amended and approved by the stockholders of Zilog in 2007. In connection with the acquisition of Zilog, our Board of Directors approved assumption of the Zilog 2004 Plan. Employees of Zilog and persons first employed by our company after the closing of the acquisition of Zilog may receive grants under the Zilog 2004 Plan. Under the 2004 Plan, incentive stock options, non-statutory stock options, or restricted shares may be granted. At the time of the assumption of the Zilog 2004 Plan by our company, up to 652,963 shares of our common stock were available for grant under the plan.

Zilog 2002 Omnibus Stock Incentive Plan

The Zilog 2002 Omnibus Stock Incentive Plan, or the Zilog 2002 Plan, was adopted in 2002. In connection with the acquisition of Zilog, our Board of Directors approved the assumption of the Zilog 2002 Plan with respect to the shares available for grant as stock options. Employees of Zilog and persons first employed by our company after the closing of the acquisition of Zilog may receive grants under the Zilog 2002 Plan. At the time of the assumption of the Zilog 2002 Plan by our company, up to 366,589 shares of our common stock were available for grant under the plan. The Zilog 2002 Plan expired in May 2012 and no additional grants may be made thereafter.

Employee Stock Purchase Plan

In May 1999, the Board of Directors approved the 1999 Employee Stock Purchase Plan, or the Purchase Plan, and reserved 500,000 shares of common stock for issuance under the Purchase Plan. Under the Purchase Plan, all eligible employees may purchase our common stock at a price equal to 85% of the lower of the fair market value at the beginning of the offer period or the semi-annual purchase date. Stock purchases are limited to 15% of an employee's eligible compensation. On July 31, 2007 and July 9, 2010, the Board of Directors amended the Purchase Plan and on each occasion reserved an additional 350,000 shares of common stock for issuance under the Purchase Plan. During the three months ended June 30, 2012, there were 55,925 shares purchased under the Purchase Plan, leaving approximately 245,946 shares available for purchase under the plan in the future.

Stock-Based Compensation

The following table summarizes the effects of stock-based compensation charges (in thousands):

	Three Months Ended June 30,
Income Statement Classifications		2012		2011
	(unaudited)
Selling, general and administrative expenses	$	1,095	$	784
Stock-based compensation effect in income before taxes		1,095		784
Provision for income taxes (1)		383		282
Net stock-based compensation effects in net income	$	712	$	502
________________
(1) Estimated at a statutory income tax rate of 35% in fiscal year 2013 and 36% in fiscal year 2012.

During the three months endedJune 30,2012, the unaudited condensed consolidated statements of operations and cash flows do not reflect any tax benefit for the tax deduction from option exercises and other awards. As of June 30, 2012, approximately $6.5 million in stock-based compensation is to be recognized for unvested stock options granted under our equity incentive plans. The unrecognized compensation cost is expected to be recognized over a weighted average period of 2.8 years.

The Black-Scholes option pricing model is used to estimate the fair value of options granted under our equity incentive plans and rights to acquire stock granted under our stock purchase plan. The weighted average estimated fair values of employee stock option grants and rights granted under the 1999 Employee Stock Purchase Plan, as well as the weighted average assumptions that were used in calculating such values during the three months ended June 30, 2012 and 2011, were based on estimates at the date of grant as follows:

		Stock Options				Purchase Plan
		Three Months				Three Months
		Ended June 30,				Ended June 30,
		2012		2011		2012		2011
Weighted average estimated fair
	value of grant per share	$	5.47	$	6.74	$	3.67	$	2.51
Risk-free interest rate			0.9%		1.9%		0.1%		0.2%
Expected term in years			6.34		5.95		0.5		0.5
Volatility			55.4%		55.7%		46.8%		44.9%
Dividend yield			0%		0%		0%		0%

Activity with respect to outstanding stock options for the three months endedJune 30, 2012 was as follows:

			Weighted Average
		Number of	Exercise Price			Intrinsic Value (1)
		Shares	Per Share
						(000)
Balance at March 31, 2012		5,472,004	$	9.75
	Options granted	90,000	$	10.36
	Options exercised	(11,219)	$	6.49	$	70
	Options expired	(12,900)	$	12.85
Balance at June 30, 2012		5,537,885	$	9.76
Exercisable at June 30, 2012		3,992,010	$	9.49
Exercisable at March 31, 2012		3,833,879	$	9.42
(1) Represents the difference between the exercise price and the value of our common stock at the time of exercise.

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Statement of Financial Position (Parenthetical) (USD $) In Thousands, except Share data, unless otherwise specified	Jun. 30, 2012	Mar. 31, 2012
Current assets:
Accounts receivable allowance for doubtful accounts	$ 2,744	$ 2,473
Stockholders' equity:
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized	5,000,000	5,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized	80,000,000	80,000,000
Common stock, shares issued	37,862,045	37,805,697
Common stock, shares outstanding	31,391,105	31,323,538

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Note 5 Inventories

3 Months Ended

Jun. 30, 2012

Inventory Net [Abstract]

Inventory Disclosure [Text Block]

5. Inventories

Inventories consist of the following (in thousands):

	2012		2012
	(unaudited)
Raw materials	$	23,325	$	24,157
Work in process		38,568		40,505
Finished goods		23,915		21,578
Total	$	85,808	$	86,240

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Note 4 Other Assets

3 Months Ended

Jun. 30, 2012

Other Assets Noncurrent Disclosure [Abstract]

Other Assets Noncurrent [Text Block]

4.Other Assets

Other assets consist of the following (in thousands):

	2012		2012
	(unaudited)
Marketable equity securities	$	4,799	$	1,064
Auction rate preferred securities		350		350
Long term equity investments		5,038		5,340
Other items		844		1,155
Total	$	11,031	$	7,909

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Note 16 Commitments and Contingencies

3 Months Ended

Jun. 30, 2012

Commitments and Contingencies [Abstract]

Commitments and Contingencies Disclosure [Text Block]

16. Commitments and Contingencies

Legal Proceedings

We are currently involved in a variety of legal matters that arise in the normal course of business. Based on information currently available, management does not believe that the ultimate resolution of these matters will have a material adverse effect on our financial condition, results of operations and cash flows. Were an unfavorable ruling to occur, there exists the possibility of a material adverse impact on the results of operations of the period in which the ruling occurs.

Bank of the West

On November 13, 2009, we entered into a credit agreement with BOW. On December 29, 2010, we entered into an amendment with BOW to increase the line of credit to $20.0 million and to extend the expiration date to October 31, 2013. The credit agreement includes a letter of credit subfacility, under which BOW agrees to issue letters of credit of up to $3.0 million. However, borrowing under this subfacility is limited to the extent of availability under the $20.0 million revolving line of credit.At June 30,2012, the outstanding principal balance under the credit agreement was $15.0 million. See Note 8, “Borrowing Arrangements” for further information regarding the terms of the credit agreement.

Other Commitments and Contingencies

On occasion, we provide limited indemnification to customers against intellectual property infringement claims related to our products. To date, we have not experienced significant activity or claims related to such indemnifications. We also provide in the normal course of business indemnification to our officers, directors and selected parties. We are unable to estimate any potential future liability, if any. Therefore, no liability for these indemnification agreements has been recorded as of June 30, 2012 and March 31, 2012.

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Note 12 Accumulated Other Comprehensive Income (Loss)

3 Months Ended

Jun. 30, 2012

Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]

Accumulated Other Comprehensive Income (Loss) [Text Block]

12. Accumulated Other Comprehensive Income (Loss)

The components of accumulated other comprehensive income (loss), net of tax, at the end of each period were as follows (in thousands):

		June 30,		March 31,
		2012		2012
			(unaudited)
Accumulated net unrealized loss on available-for-sale investments securities,
	net of taxes of $(2) at June 30, 2012 and $(37) at March 31, 2012	$	(3)	$	(68)
Unrecognized actuarial loss, net of tax of $(1,523)			(4,314)		(4,314)
Accumulated foreign currency translation adjustments			1,372		6,472
Total accumulated other comprehensive income (loss)		$	(2,945)	$	2,090

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Note 8 Borrowing Arrangements

3 Months Ended

Jun. 30, 2012

Debt Disclosure [Abstract]

Debt Disclosure [Text Block]

8. Borrowing Arrangements

Bank of the West

On November 13, 2009, we entered into a credit agreement for a revolving line of credit with Bank of the West, or BOW, under which we could borrow up to $15.0 million and all amounts owed under the credit agreement were due and payable on October 31, 2011. On December 29, 2010, we entered into an amendment with BOW to increase the line of credit to $20.0 million and to extend the expiration date to October 31, 2013. Borrowings may be repaid and re-borrowed at any time during the term of the credit agreement. The obligations are guaranteed by two of our subsidiaries. At June 30, 2012,the outstanding principal balance under the credit agreement was$15.0 million.

The credit agreement provides different interest rate alternatives under which we may borrow funds. We may elect to borrow based on LIBOR plus a margin, an alternative base rate plus a margin or a floating rate plus a margin. The margin can range from 150 basis points to 325 basis points, depending on interest rate alternatives and on our leverage of liabilities to effective tangible net worth. The effective interest rate as of June 30, 2012was 2.97%.

The credit agreement is subject to a set of financial covenants, including minimum effective tangible net worth, the ratio of cash, cash equivalents and accounts receivable to current liabilities, profitability, a ratio of EBITDA to interest expense and a minimum amount of U.S. domestic cash on hand. At June 30, 2012, we complied with all of these financial covenants.

The credit agreement also includes a $3.0 million letter of credit subfacility. See Note 16, “Commitments and Contingencies” for further information regarding the terms of the subfacility.

IKB Deutsche Industriebank

On June 10, 2005, IXYS Semiconductor GmbH, our German subsidiary, borrowed €10.0 million, or about $12.2 million at the time, from IKB Deutsche Industriebank for a term of 15 years. The outstanding balance at June 30, 2012was €5.3 million, or $6.7 million.

The interest rate on the loan is determined by adding the then effective three month Euribor rate and a margin. The margin can range from 70 basis points to 125 basis points, depending on the calculation of a ratio of indebtedness to cash flow for our German subsidiary. In June 2010, we entered into an interest rate swap agreement commencing June 30, 2010. The swap agreement has a fixed interest rate of 1.99% and expires on June 30, 2015. It is not designated as a hedge in the financial statements. See Note 3, “Fair Value” for further information regarding the derivative contract.

During each fiscal quarter, a principal payment of €167,000, or about $210,000, and a payment of accrued interest are required.Financial covenants for a ratio of indebtedness to cash flow, a ratio of equity to total assets and a minimum stockholders' equity for the German subsidiary must be satisfied for the loan to remain in good standing. The loan may be prepaid in whole or in part at the end of a fiscal quarter without penalty. At June 30, 2012, we complied with the financial covenants. The loan is partially collateralized by a security interest in the facility owned by our company in Lampertheim, Germany.

Note payable issued in acquisition

On September 10, 2008, we issued a note payable with a face value of $2.0 million in connection with the purchase of real property and the acquisition of the shares of Reaction Technology Incorporated, or RTI. The note was repayable in 60 equal monthly installments of $38,666, which included interest at an annual rate of 6.0%. The note was collateralized by a security interest in the property acquired and the current assets of RTI. The note was paid in full in April 2012.

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Note 14 Segment Information (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Jun. 30, 2012	Jun. 30, 2011
Segment Reporting Information [Line Items]
Net Revenues	$ 80,857	$ 101,778
Power Semiconductors [Member]
Segment Reporting Information [Line Items]
Net Revenues	59,582	76,464
Integrated Circuits [Member]
Segment Reporting Information [Line Items]
Net Revenues	15,599	18,111
System and RF Semiconductors [Member]
Segment Reporting Information [Line Items]
Net Revenues	5,676	7,203
United States [Member]
Segment Reporting Information [Line Items]
Net Revenues	24,922	27,705
France [Member] | Europe and Middle East [Member]
Segment Reporting Information [Line Items]
Net Revenues	1,573	2,031
Germany [Member] | Europe and Middle East [Member]
Segment Reporting Information [Line Items]
Net Revenues	9,157	13,416
United Kingdom [Member] | Europe and Middle East [Member]
Segment Reporting Information [Line Items]
Net Revenues	7,124	8,002
China [Member] | Asia Pacific [Member]
Segment Reporting Information [Line Items]
Net Revenues	13,384	18,565
Japan [Member] | Asia Pacific [Member]
Segment Reporting Information [Line Items]
Net Revenues	1,828	2,088
Korea [Member] | Asia Pacific [Member]
Segment Reporting Information [Line Items]
Net Revenues	2,243	3,945
Malaysia [Member] | Asia Pacific [Member]
Segment Reporting Information [Line Items]
Net Revenues	1,303	1,120
Singapore [Member] | Asia Pacific [Member]
Segment Reporting Information [Line Items]
Net Revenues	2,645	2,484
Taiwan [Member] | Asia Pacific [Member]
Segment Reporting Information [Line Items]
Net Revenues	1,224	2,232
India [Member] | Rest of the World [Member]
Segment Reporting Information [Line Items]
Net Revenues	1,802	2,829
Other Geographic Regions [Member] | Europe and Middle East [Member]
Segment Reporting Information [Line Items]
Net Revenues	10,250	14,140
Other Geographic Regions [Member] | Asia Pacific [Member]
Segment Reporting Information [Line Items]
Net Revenues	1,355	1,369
Other Geographic Regions [Member] | Rest of the World [Member]
Segment Reporting Information [Line Items]
Net Revenues	$ 2,047	$ 1,852

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Note 6 Accrued Expenses and Other Current Liabilities

3 Months Ended

Jun. 30, 2012

Accrued Expenses and Other Current Liabilities [Abstract]

Accrued Expenses and Other Current Liabilities [Text Block]

6. Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consist of the following (in thousands):

		2012		2012
		(unaudited)
Uninvoiced goods and services		$	9,865	$	11,869
Compensation and benefits			6,884		7,214
Restructuring accrual			131		199
Commission, royalties and other			2,679		2,741
	Total	$	19,559	$	22,023

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Note 7 Intangible Assets

3 Months Ended

Jun. 30, 2012

Finite-Lived Intangible Assets [Abstract]

Intangible Assets Disclosure [Text Block]

7. Intangible Assets

	Identified intangible assets consisted of the following as of June 30, 2012 (in thousands):
		Gross Intangible Assets		Accumulated Amortization			Net Intangible Assets
Developed intellectual property		$	4,800	$	1,858	$	2,942
Customer relationships			6,100		5,234		866
Contract backlog			2,000		2,000		-
Other intangible assets			1,187		493		694
Total identifiable intangible assets		$	14,087	$	9,585	$	4,502
	Identified intangible assets consisted of the following as of March 31, 2012 (in thousands):
		Gross Intangible Assets		Accumulated Amortization			Net Intangible Assets
Developed intellectual property		$	4,800	$	1,658	$	3,142
Customer relationships			6,100		4,840		1,260
Contract backlog			2,000		2,000		-
Other intangible assets			1,187		445		742
Total identifiable intangible assets		$	14,087	$	8,943	$	5,144

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Note 9 Restructuring Charges

3 Months Ended

Jun. 30, 2012

Restructuring Charges [Abstract]

Restructuring Charges Disclosure [Text Block]

9. Restructuring Charges

In the quarter ended September 30, 2009, we initiated plans to restructure our European manufacturing and assembly operations to align them to current market conditions. The plans primarily involved the termination of employees and centralization of certain positions. Costs related to termination of employees represented severance payments and benefits.

During the quarter ended December 31, 2010, we relocated the Zilog employees to our headquarters in Milpitas and vacated the facility in San Jose, California, as a part of our integration plan to reduce costs.

The costs in connection with the restructuring plan in Europe and Zilog lease and exit costs have been included under “Restructuring charges” in our unaudited condensed consolidated statements of operations. The restructuring accrual as of June 30, 2012 was included under “Accrued expenses and other current liabilities” on our unaudited condensed consolidated balance sheets.

Restructuring activity as of and for the three months endedJune 30, 2012 was as follows (in thousands):

	Severance and Related Benefits		Lease Commitment Accrual		Total
Balance at March 31, 2012	$	72	$	127	$	199
Cash payments		-		(64)		(64)
Currency translation adjustment		(4)		-		(4)
Balance at June 30, 2012	$	68	$	63	$	131

We anticipate that the remaining restructuring obligations of $131,000 as of June 30, 2012will be paid by December31, 2013.

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Note 7 Intangible Assets (Tables)

3 Months Ended

Jun. 30, 2012

Finite-Lived Intangible Assets [Abstract]

Schedule of Finite-Lived Intangible Assets by Major Class [Table Text Block]

	Identified intangible assets consisted of the following as of June 30, 2012 (in thousands):
		Gross Intangible Assets		Accumulated Amortization			Net Intangible Assets
Developed intellectual property		$	4,800	$	1,858	$	2,942
Customer relationships			6,100		5,234		866
Contract backlog			2,000		2,000		-
Other intangible assets			1,187		493		694
Total identifiable intangible assets		$	14,087	$	9,585	$	4,502
	Identified intangible assets consisted of the following as of March 31, 2012 (in thousands):
		Gross Intangible Assets		Accumulated Amortization			Net Intangible Assets
Developed intellectual property		$	4,800	$	1,658	$	3,142
Customer relationships			6,100		4,840		1,260
Contract backlog			2,000		2,000		-
Other intangible assets			1,187		445		742
Total identifiable intangible assets		$	14,087	$	8,943	$	5,144

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Note 10 Pension Plans (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Jun. 30, 2012	Jun. 30, 2011
Defined Benefit Plan, Net Periodic Benefit Cost [Abstract]
Service Cost	$ 24	$ 21
Interest Cost on Projected Benefit Obligation	471	522
Expected Return on Plan Assets	(379)	(437)
Recognized Actuarial Loss	42	19
Net Periodic Pension Expense	$ 158	$ 125

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Note 14 Segment Information

3 Months Ended

Jun. 30, 2012

Segment Reporting [Abstract]

Segment Reporting Disclosure [Text Block]

14. Segment Information

We have a single operating segment. This operating segment is comprised of semiconductor products used primarily in power-related applications. While we have separate legal subsidiaries with discrete financial information, we have one chief operating decision maker with highly integrated businesses. Our net revenues by major geographic area (based on destination) were as follows (in thousands):

		Three Months Ended June 30,
			2012		2011
		(unaudited)
United States		$	24,922	$	27,705
Europe and the Middle East
	France		1,573		2,031
	Germany		9,157		13,416
	United Kingdom		7,124		8,002
	Other		10,250		14,140
Asia Pacific
	China		13,384		18,565
	Japan		1,828		2,088
	Korea		2,243		3,945
	Malaysia		1,303		1,120
	Singapore		2,645		2,484
	Taiwan		1,224		2,232
	Other		1,355		1,369
Rest of the World
	India		1,802		2,829
	Other		2,047		1,852
Total		$	80,857	$	101,778

The following table sets forth net revenues for each of our product groups for the three months endedJune 30,2012 and 2011 (in thousands):

	Three Months Ended June 30,
	2012		2011
		(unaudited)
Power semiconductors	$	59,582	$	76,464
Integrated circuits		15,599		18,111
Systems and RF power semiconductors		5,676		7,203
Total	$	80,857	$	101,778

For the three months ended June 30, 2012, two distributors accounted for 12.4% and 11.7% of our net revenues, respectively. For thethree months ended June 30, 2011, the same two distributors accounted for 11.0% and 12.8% of our net revenues, respectively.

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Pension Plans (Policy)

3 Months Ended

Jun. 30, 2012

Pension and Other Postretirement Benefits Disclosure [Abstract]

Pension and Other Postretirement Plans, Pensions, Policy [Policy Text Block]

We maintain three defined benefit pension plans: one for United Kingdom employees, one for German employees, and one for Philippine employees. These plans cover most of the employees in the United Kingdom, Germany and the Philippines. Benefits are based on years of service and the employees' compensation. We deposit funds for these plans, consistent with the requirements of local law, with investment management companies, insurance companies, banks or trustees and/or accrue for the unfunded portion of the obligations. The measurement date for the projected benefit obligations and the plan assets is March 31. The United Kingdom and German plans have been curtailed. As such, the plans are closed to new entrants and no credit is provided for additional periods of service. The German plan was held by a separate legal entity.

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Note 9 Restructuring Charges (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Jun. 30, 2012
Restructuring Reserve [Roll Forward]
Balance at March 31, 2012	$ 199
Charges	0
Cash Payments	(64)
Currency Translation Adjustment	(4)
Balance at June 30, 2012	131
Fiscal 2010 Severance and Related Benefit [Member]
Restructuring Reserve [Roll Forward]
Balance at March 31, 2012	72
Charges	0
Cash Payments	0
Currency Translation Adjustment	(4)
Balance at June 30, 2012	68
Fiscal 2011 Lease Commitment Accrual [Member]
Restructuring Reserve [Roll Forward]
Balance at March 31, 2012	127
Charges	0
Cash Payments	(64)
Currency Translation Adjustment	0
Balance at June 30, 2012	$ 63

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Note 3 Fair Value (Narrative) (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Jun. 30, 2012	Mar. 31, 2012
Auction Market Preferred Securities [Abstract]
Collateralized Asset Value Exceeding Value of ARPS Percentage	300.00%
Auction Rate Preferred Securities Credit Ratings	AAA
Auction Rate Preferred Securities Percentage Collateralized	100.00%
Debt, Long-term and Short-term, Combined Amount [Abstract]
Long-term Debt, Fair Value	$ 22.0	$ 23.4

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Statement of Comprehensive Income (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Jun. 30, 2012	Jun. 30, 2011
Statement of Income and Comprehensive Income [Abstract]
Net income	$ 6,007	$ 9,976
Unrealized gain (loss) on available-for-sale investment securities, net of taxes of $35 and $(5) for the three months ended June 30, 2012 and 2011	65	(9)
Foreign currency translation adjustments	(5,100)	1,509
Total comprehensive income	$ 972	$ 11,476

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Note 3 Fair Value

3 Months Ended

Jun. 30, 2012

Fair Value Disclosures [Abstract]

Fair Value Disclosure [Text Block]

3. Fair Value

We account for certain assets and liabilities at fair value. In determining fair value, we consider its principal or most advantageous market and the assumptions that market participants would use when pricing, such as inherent risk, restrictions on sale and risk of nonperformance. The fair value hierarchy is based upon the observability of inputs used in valuation techniques. Observable inputs (highest level) reflect market data obtained from independent sources, while unobservable inputs (lowest level) reflect internally developed market assumptions. The fair value measurements are classified under the following hierarchy:

Level 1 — Quoted prices for identical instruments in active markets.

Level 2 — Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs or significant value-drivers are observable in active markets.

Level 3 — Model-derived valuations in which one or more significant inputs or significant value-drivers are unobservable.

Assets and liabilities measured at fair value on a recurring basis, excluding accrued interest components, consisted of the following types of instruments as of June 30, 2012and March 31, 2012 (in thousands):

			June 30, 2012 (1)						March 31, 2012 (1)
					Fair Value Measured at						Fair Value Measured at
					Reporting Date Using						Reporting Date Using
Description			Total		Level 1		Level 2		Total		Level 1		Level 2
			(unaudited)						(unaudited)
Marketable equity securities (2)			$	4,799	$	4,799	$	-	$	1,064	$	1,064	$	-
Auction rate preferred securities (2)				350		-		350		350		-		350
Derivative liabilities (3)				(220)		-		(220)		(203)		-		(203)
	Total		$	4,929	$	4,799	$	130	$	1,211	$	1,064	$	147
(1)		We did not have any recurring assets whose fair value was measured using significant unobservable inputs.
(2)		Included in "Other assets" on our unaudited condensed consolidated balance sheets.
(3)		Included in "Accrued expenses and other current liabilities" on our unaudited condensed consolidated balance sheets.

We measure our marketable securities and derivative contracts at fair value. Marketable securities are valued using the quoted market prices and are therefore classified as Level 1 estimates.

From time to time, we use derivative instruments to manage exposures to changes in interest rates and currency exchange rates, and the fair values of these instruments are recorded on the balance sheets. We have elected not to designate these instruments as accounting hedges. The changes in the fair value of these instruments are recorded in the current period's statement of operations and are included in other income (expense), net. All of our derivative instruments are traded on over-the-counter markets where quoted market prices are not readily available. For those derivatives, we measure fair value using prices obtained from the counterparties with whom we have traded. The counterparties price the derivatives based on models that use primarily market observable inputs, such as yield curves and option volatilities. Accordingly, we classify these derivatives as Level 2. See Note 8, “Borrowing Arrangements” for further information regarding the terms of the derivative contract.

Auction rate preferred securities, or ARPS, are stated at par value based upon observable inputs including historical redemptions received from the ARPS issuers. All of our ARPS have AAA credit ratings, are 100% collateralized and continue to pay interest in accordance with their contractual terms. Additionally, the collateralized asset value ranges exceed the value of our ARPS by approximately 300 percent. Accordingly, the remaining ARPS balance of $350,000 is categorized as Level 2 for fair value measurement in accordance with the authoritative guidance provided by FASB and was recorded at full par value on the unaudited condensed consolidated balance sheets as of June 30, 2012and March 31, 2012. We currently believe that the ARPS values are not impaired and as such, no impairment has been recognized against the investment. If future auctions fail to materialize and the credit rating of the issuers deteriorates, we may be required to record an impairment charge against the value of our ARPS.

Cash and cash equivalents are recognized and measured at fair value in our consolidated financial statements. Accounts receivable and prepaid expenses and other current assets are financial assets with carrying values that approximate fair value. Accounts payable and accrued expenses and other current liabilities are financial liabilities with carrying values that approximate fair value.

Long term loans, which primarily consist of loans from banks, approximate fair value as the interest rates either adjust according to the market rates or the interest rates approximate the market rates. The estimated fair value of our long-term debt was approximately $22.0 million and $23.4 million as of June 30, 2012 and March 31, 2012, respectively. Our long-term debt is categorized as Level 2 for fair value measurement. See Note 10, “Pension Plans” for a discussion of pension liabilities.

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Note 13 Computation Earnings Per Share (Details) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended
	Jun. 30, 2012	Jun. 30, 2011
Earnings Per Share Reconciliation [Abstract]
Net Income	$ 6,007	$ 9,976
Weighted Average Shares - Basic	31,351	31,508
Weighted Average Shares - Diluted	32,378	32,806
Net Income Per Share - Basic	$ 0.19	$ 0.32
Net Income Per Share - Diluted	$ 0.19	$ 0.30

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Employee Equity Incentive Plans (Policy)

3 Months Ended

Jun. 30, 2012

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Share-based Compensation, Option and Incentive Plans Policy [Policy Text Block]

Stock Purchase and Stock Option Plans

The 2011 Equity Incentive Plan and the 2009 Equity Incentive Plan

On September 10, 2009, our stockholders approved the 2009 Equity Incentive Plan, or the 2009 Plan, under which 900,000 shares of our common stock are reserved for the grant of stock options and other equity incentives. On September 16, 2011, our stockholders approved the 2011 Equity Incentive Plan, or the 2011 Plan, under which 600,000 shares of our common stock are reserved for the grant of stock options and other equity incentives. The 2009 Plan and the 2011 Plan are referred to as the Plans.

Stock Options

Under the Plans, nonqualified and incentive stock options may be granted to employees, consultants and non-employee directors. Generally, the per share exercise price shall not be less than 100% of the fair market value of a share on the grant date. The Board of Directors has the full power to determine the provisions of each option issued under the Plans. While we may grant options that become exercisable at different times or within different periods, we have primarily granted options that vest over four years. The options, once granted, expire ten years from the date of grant.

Restricted Stock

Restricted stock awards may be granted to any employee, director or consultant under the Plans. Pursuant to a restricted stock award, we will issue shares of common stock that will be released from restriction if certain requirements, including continued performance of services, are met.

Stock Appreciation Rights

Awards of stock appreciation rights, or SARs, may be granted to employees, consultants and nonemployee directors pursuant to the Plans. A SAR is payable on the difference between the market price at the time of exercise and the exercise price at the date of grant. In any event, the exercise price of a SAR shall not be less than 100% of the fair market value of a share on the grant date and shall expire no later than ten years from the grant date. Upon exercise, the holder of a SAR shall be entitled to receive payment either in cash or a number of shares by dividing such cash amount by the fair market value of a share on the exercise date.

Restricted Stock Units

Restricted stock units, denominated performance units in the 2009 Plan, may be granted to employees, consultants and nonemployee directors under the Plans. Each restricted stock unit shall have a value equal to the fair market value of one share. After the applicable performance period has ended, the holder will be entitled to receive a payment, either in cash or in the form of shares, based on the number of restricted stock units earned over the performance period, to be determined as a function of the extent to which the corresponding performance goals or other vesting provisions have been achieved.

Zilog 2004 Omnibus Stock Incentive Plan

The Zilog 2004 Omnibus Stock Incentive Plan, or the Zilog 2004 Plan, was approved by the stockholders of Zilog in 2004, and was amended and approved by the stockholders of Zilog in 2007. In connection with the acquisition of Zilog, our Board of Directors approved assumption of the Zilog 2004 Plan. Employees of Zilog and persons first employed by our company after the closing of the acquisition of Zilog may receive grants under the Zilog 2004 Plan. Under the 2004 Plan, incentive stock options, non-statutory stock options, or restricted shares may be granted. At the time of the assumption of the Zilog 2004 Plan by our company, up to 652,963 shares of our common stock were available for grant under the plan.

Zilog 2002 Omnibus Stock Incentive Plan

The Zilog 2002 Omnibus Stock Incentive Plan, or the Zilog 2002 Plan, was adopted in 2002. In connection with the acquisition of Zilog, our Board of Directors approved the assumption of the Zilog 2002 Plan with respect to the shares available for grant as stock options. Employees of Zilog and persons first employed by our company after the closing of the acquisition of Zilog may receive grants under the Zilog 2002 Plan. At the time of the assumption of the Zilog 2002 Plan by our company, up to 366,589 shares of our common stock were available for grant under the plan. The Zilog 2002 Plan expired in May 2012 and no additional grants may be made thereafter.

Employee Stock Purchase Plan

In May 1999, the Board of Directors approved the 1999 Employee Stock Purchase Plan, or the Purchase Plan, and reserved 500,000 shares of common stock for issuance under the Purchase Plan. Under the Purchase Plan, all eligible employees may purchase our common stock at a price equal to 85% of the lower of the fair market value at the beginning of the offer period or the semi-annual purchase date. Stock purchases are limited to 15% of an employee's eligible compensation. On July 31, 2007 and July 9, 2010, the Board of Directors amended the Purchase Plan and on each occasion reserved an additional 350,000 shares of common stock for issuance under the Purchase Plan.

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Note 12 Accumulated Other Comprehensive Income (Loss) (Tables)

3 Months Ended

Jun. 30, 2012

Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]

Schedule of Accumulated Other Comprehensive Income (Loss) [Table Text Block]

		June 30,		March 31,
		2012		2012
			(unaudited)
Accumulated net unrealized loss on available-for-sale investments securities,
	net of taxes of $(2) at June 30, 2012 and $(37) at March 31, 2012	$	(3)	$	(68)
Unrecognized actuarial loss, net of tax of $(1,523)			(4,314)		(4,314)
Accumulated foreign currency translation adjustments			1,372		6,472
Total accumulated other comprehensive income (loss)		$	(2,945)	$	2,090

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Note 13 Computation of Earnings Per Share

3 Months Ended

Jun. 30, 2012

Earnings Per Share Reconciliation [Abstract]

Earnings Per Share [Text Block]

13. Computation of Net Income per Share

Basic and diluted earnings per share are calculated as follows (in thousands, except per share amounts):

	Three Months Ended
		June 30,
	2012		2011
	(unaudited)
Net income	$	6,007	$	9,976
Weighted average shares - basic		31,351		31,508
Weighted average shares - diluted		32,378		32,806
Net income per share - basic	$	0.19	$	0.32
Net income per share - diluted	$	0.19	$	0.30

Diluted weighted average shares includes approximately 1,027,000 and 1,298,000 common equivalent shares from stock options for the three months ended June 30, 2012 and 2011.

Basic net income available per common share is computed using net income and the weighted average number of common shares outstandingduring the period. Diluted net income per common share is computed using net income and the weighted average number of common shares outstanding, assuming dilution, which includes potentially dilutive common shares outstanding during the period. Potentially dilutive common shares include the assumed exercise of stock options and assumed vesting of restricted stock units using the treasury stock method. During the three months endedJune 30, 2012 and 2011, there were outstanding weighted average options to purchase 1,682,804and 619,173shares, respectively, that were not included in the computation of diluted net income per share since the exercise prices of the options exceeded the market price of the common stock. These options could dilute earnings per share in future periodsif the market price of the common stock increases.