Intersil (ISIL) 10-Q 2011 Q3 Quarterly report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

OF 1934

For the quarterly period ended September 30, 2011

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: 000-29617

INTERSIL CORPORATION

(Exact name of registrant as specified in its charter)

Delaware	59-3590018
State or other jurisdiction of incorporation or organization	(I.R.S. Employer Identification No.)
1001 Murphy Ranch Road Milpitas, California	95035
(Address of principal executive offices)	(Zip Code)

408-432-8888

(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.        [x]    Yes        [  ]    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 the registrant was required to submit and post such files).

        [x]    Yes        [  ]    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 (as defined in Rule 12b-2 of the Exchange Act).

Large accelerated filer    [x]	Accelerated filer  [  ]
Non-accelerated filer      [  ]	Smaller Reporting Company  [  ]

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

        [  ]    Yes         [x]    No

The number of shares outstanding of the issuer’s classes of common stock as of the close of business on October 27, 2011:

Title of Each Class	Number of Shares
Class A common stock par value $.01 per share	126,420,996

INTERSIL CORPORATION

INDEX

		Page
	PART I-FINANCIAL INFORMATION
Item 1.	Financial Statements.
	Unaudited Condensed Consolidated Statements of Operations for the quarter and three quarters ended September 30, 2011 and October 1, 2010		3
	Unaudited Condensed Consolidated Balance Sheets as of September 30, 2011 and December 31, 2010		4
	Unaudited Condensed Consolidated Statements of Cash Flows for the three quarters ended September 30, 2011 and October 1, 2010		5
	Notes to Unaudited Condensed Consolidated Financial Statements.		6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.		20
Item 3.	Quantitative and Qualitative Disclosures About Market Risk.		28
Item 4.	Controls and Procedures.		28
	PART II-OTHER INFORMATION
Item 1.	Legal Proceedings.		29
Item 1A.	Risk Factors.		29
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.		29
Item 3.	Defaults Upon Senior Securities.		29
Item 4.	(Removed and Reserved).		29
Item 5.	Other Information.		29
Item 6.	Exhibits.		30
SIGNATURES			31
CERTIFICATIONS			32

2

PART I-FINANCIAL INFORMATION

Item 1. Financial Statements.

INTERSIL CORPORATION

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

	Quarter ended				Three quarters ended
	September 30,             2011		October 1, 2010		September 30, 2011		October 1, 2010
	($ in thousands, except share data)
Revenue	$	186,788	$	219,140	$	594,724	$	628,421
Cost of revenue		80,240		90,083		251,366		264,214
Gross profit		106,548		129,057		343,358		364,207
Operating costs and expenses:
Research and development		45,651		47,491		143,139		136,370
Selling, general and administrative		34,225		33,390		105,474		100,581
Amortization of purchased intangibles		6,528		9,346		20,136		20,323
Restructuring		13		—		2,413		(3)
Acquisition-related costs		—		403		273		7,900
Operating income		20,131		38,427		71,923		99,036
Interest income		681		757		2,160		2,303
Interest expense and fees		(3,789)		(4,196)		(12,504)		(7,574)
Loss on extinguishment of debt		(8,399)		—		(8,399)		—
(Loss) gain on deferred compensation investments, net		(1,107)		231		(937)		308
Other-than-temporary impairment losses		—		—		—		(1,181)
Income before income taxes		7,517		35,219		52,243		92,892
Income tax expense		305		3,151		9,138		92,553
Net income	$	7,212	$	32,068	$	43,105	$	339
Earnings per share:
Basic	$	0.06	$	0.26	$	0.34	$	—
Diluted	$	0.06	$	0.26	$	0.34	$	—
Cash dividends declared per common share	$	0.12	$	0.12	$	0.36	$	0.36
Weighted average common shares outstanding (in millions):
Basic		125.9		123.9		125.7		123.5
Diluted		126.0		124.0		126.0		124.5

See notes to unaudited condensed consolidated financial statements.

3

INTERSIL CORPORATION

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

	September 30,             2011		December 31, 2010
	(in thousands, except share data)
ASSETS
Current Assets:
Cash and cash equivalents	$	394,324	$	383,016
Short-term investments		26,516		—
Trade receivables, net of allowances ($13,735 as of September 30, 2011 and $6,985 as of December 31, 2010)		68,474		88,723
Inventories		103,462		101,967
Prepaid expenses and other current assets		16,555		17,079
Income taxes receivable		4,462		3,550
Deferred income tax assets		19,233		19,233
Total Current Assets		633,026		613,568
Non-current Assets:
Property, plant and equipment, net of accumulated depreciation ($217,521 as of September 30, 2011 and $207,530 as of December 31, 2010)		94,767		103,495
Purchased intangibles, net of accumulated amortization ($60,566 as of September 30, 2011 and $68,343 as of December 31, 2010)		118,877		139,013
Goodwill		566,475		565,132
Deferred income tax assets		88,998		93,913
Long-term investments		63,779		69,295
Other		87,022		88,053
Total Non-current Assets		1,019,918		1,058,901
Total Assets	$	1,652,944	$	1,672,469
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities:
Trade payables	$	32,123	$	40,674
Accrued compensation		36,647		42,774
Deferred net revenue		9,297		13,005
Other accrued expenses		27,944		27,451
Non-income taxes payable		3,439		2,842
Long-term debt – current portion		—		23,508
Total Current Liabilities		109,450		150,254
Non-current Liabilities:
Long-term debt		278,195		274,992
Income taxes payable		167,076		166,807
Other non-current liabilities		30,009		36,219
Total Non-current Liabilities		475,280		478,018
Shareholders’ Equity:
Preferred stock, $0.01 par value, 2 million shares authorized; no shares issued or outstanding		—		—
Class A common stock, $0.01 par value, voting; 600 million shares authorized; 126,372,406 shares issued and outstanding as of September 30, 2011 and 124,552,206 shares issued and outstanding as of December 31, 2010		1,264		1,246
Additional paid-in capital		1,723,118		1,741,802
Accumulated deficit		(656,200)		(699,305)
Accumulated other comprehensive income		32		454
Total Shareholders’ Equity		1,068,214		1,044,197
Total Liabilities and Shareholders’ Equity	$	1,652,944	$	1,672,469

See notes to unaudited condensed consolidated financial statements.

4

INTERSIL CORPORATION

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

	Three quarters ended
	September 30,             2011		October 1, 2010
	(in thousands)
OPERATING ACTIVITIES
Net income	$	43,105	$	339
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		37,134		35,883
Gain on assets reclassified from held for sale status		—		(1,078)
Equity-based compensation		23,404		23,279
Provisions for inventory obsolescence		5,705		2,469
Tax effect of stock options and awards exercised		188		—
Excess tax benefit received on exercise of equity-based awards		(305)		(70)
(Gain) loss on sale of property and equipment		(28)		586
Settlement of interest rate swap		(2,965)		—
Loss on extinguishment of debt		8,399		—
Other-than-temporary impairment losses		—		1,181
Deferred income taxes		4,069		(51,675)
Changes in operating assets and liabilities:
Trade receivables		20,249		(26,528)
Inventories		(7,200)		(8,467)
Prepaid expenses and other current assets		3,795		(6,254)
Trade payables and accrued liabilities		(14,810)		13,779
Income taxes		(643)		149,837
Other, net		(11,646)		(24,704)
Net cash provided by operating activities		108,451		108,577
INVESTING ACTIVITIES
Proceeds from sales or maturities of short-term investments		—		43,033
Proceeds from sales or issuer calls of long-term investments		10,110		52,436
Purchases of long-term investments		(7,253)		(8,737)
Purchases of short-term investments		(26,529)		(2,106)
Cash paid for acquired businesses, net of acquired cash		—		(404,912)
Proceeds from sales of property, plant and equipment		36		52
Purchases of property, plant and equipment		(8,770)		(13,288)
Net cash used in investing activities		(32,406)		(333,522)
FINANCING ACTIVITIES
Proceeds from exercise of equity-based awards		3,970		6,456
Excess tax benefit received on exercise of equity-based awards		305		70
Proceeds from long-term debt		278,195		300,000
Repayments of long-term debt		(298,500)		(750)
Debt issuance costs		—		(10,751)
Credit facility commitment fee		(3,167)		(1,125)
Dividends paid		(46,163)		(45,023)
Net cash (used in) provided by financing activities		(65,360)		248,877
Effect of exchange rates on cash and cash equivalents		623		(1,164)
Net increase in cash and cash equivalents		11,308		22,768
Cash and cash equivalents as of the beginning of the period		383,016		347,667
Cash and cash equivalents as of the end of the period	$	394,324	$	370,435

See notes to unaudited condensed consolidated financial statements.

5

INTERSIL CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 1—Basis of Presentation

Intersil Corporation (“Intersil”) is a global designer and manufacturer of high-performance analog and mixed-signal integrated circuits (“ICs”) for applications in the industrial, computing, communications and consumer markets.

In our opinion, these interim unaudited condensed consolidated financial statements include all adjustments necessary to present fairly, in all material respects, the financial position, results of operations and cash flows for all periods presented. We prepared these unaudited condensed consolidated financial statements in accordance with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X, using management estimates where necessary. We derived the December 31, 2010 consolidated balance sheet from our audited consolidated year-end financial statements. You should read this interim report in conjunction with our Annual Report on Form 10-K for the fiscal year ended December 31, 2010.

We utilize a 52/53 week fiscal year, ending on the nearest Friday to December 31. The next 53 week period will be in 2013. Quarterly or annual periods vary from exact calendar quarters or years.

Past financial performance may not be indicative of future financial performance for any other interim period or for the full fiscal year. For example, sales in the consumer and computing markets have historically experienced weaker demand in the first and second fiscal quarters and stronger demand in the third and fourth fiscal quarters. However, recent economic events, acquisitions and the cyclical nature of the industry in which we operate have had a greater impact on quarterly fluctuations in recent years.

Certain amounts presented in prior periods have been reclassified to conform to current year presentation.

Note 2—Investments

Investments designated as available for sale (“AFS”) are reported at fair value. We record the unrealized gains and losses, net of tax, as a component of other comprehensive income (“OCI”). We determine the cost of securities sold based on the specific identification method. Realized gains or losses and impairment losses, such as other-than-temporary losses on equity securities and the credit component of other-than-temporary losses on debt securities, are recorded in other-than-temporary impairment losses on the accompanying financial statements.

We classify all investments maturing in one year or less as short-term and all investments maturing in more than one year as long-term.

	As of September 30, 2011
	Amortized             Cost		Gross unrealized gains		Gross unrealized losses			Fair value		Maturity     range     (in years)
	(in millions)
Short-term Investments
Bank time deposits (AFS)	$	26.5	$	—	$	—		$	26.5		<1
Total Short-term Investments	$	26.5	$	—	$	—		$	26.5
Long-term Investments
Debt securities
Auction rate securities (AFS)	$	63.5	$	6.6	$	(11.1	)	$	59.0		10-41
Bank time deposits (AFS)		4.8		—		—			4.8		1-2
Total Long-term Investments	$	68.3	$	6.6	$	(11.1	)	$	63.8

6

	As of December 31, 2010
	Amortized                 cost		Gross unrealized gains		Gross unrealized losses		Fair value		Maturity     range     (in years)
	(in millions)
Long-term Investments
Debt securities
Auction rate securities (AFS)	$	73.6	$	7.9	$	(12.2)	$	69.3		11-41

We classify auction rate securities (“ARS”) and bank time deposits as AFS and record them at fair value. During the three quarters ended October 1, 2010, we determined that certain of our equity securities had declines in value that were other-than-temporary and we recorded a $1.1 million impairment charge on the securities. Impairment charges are included in other-than-temporary impairment losses in the accompanying financial statements. The amortized cost of these securities has been reduced by the recognized losses.

We recognize the credit component of an other-than-temporary impairment of a debt security in earnings and the non-credit component in OCI when we do not intend to sell the security and it is more likely than not that we will not be required to sell the security prior to recovery. In determining whether an other-than-temporary loss is due to credit loss, we consider many factors including the adverse conditions related to a security, industry or geographic region, the failure of an issuer to make interest or principal payments, and rating changes of the security or issuer made by rating agencies. We did not recognize a non-credit component of an other-than-temporary impairment of a debt security in OCI in the quarter or three quarters ended September 30, 2011.

The following table summarizes our securities with unrealized losses and the length of time these securities have been in a loss position as of September 30, 2011 and December 31, 2010 (in millions).

	Less than 12 months				Greater than 12 months				Total
	Fair value		Gross unrealized losses		Fair value		Gross unrealized losses		Fair value		Gross   unrealized   losses
ARS as of September 30, 2011	$	—	$	—	$	41.8	$	11.1	$	41.8	$	11.1
ARS as of December 31, 2010	$	—	$	—	$	50.7	$	12.2	$	50.7	$	12.2

During the three quarters ended September 30, 2011, approximately $10.1 million of our ARS were called at par. There were no recognized gains or losses included in income during the quarter or three quarters ended September 30, 2011. During the quarter and three quarters ended October 1, 2010, we recognized a $0.1 million loss on the sale of certain investments included with the acquisition of Techwell, Inc. (“Techwell”), which occurred in the second fiscal quarter of 2010.

As of September 30, 2011, we had recorded a net unrealized loss of $4.5 million and a related deferred tax benefit of $1.1 million. We have concluded that the unrealized losses are temporary for the following reasons:

• we do not intend to sell the securities;

• we believe it is more likely than not that we will not be required to sell the securities prior to the recovery of amortized cost; and

• the unrealized losses are due to conditions other than a credit loss.

We may be required to record additional impairment charges if further declines in value are determined to be other-than-temporary. The fair value of these securities has been estimated based on our fair value estimates, which could change significantly based on market conditions.

7

Trading Investments

Trading investments consist exclusively of a portfolio of marketable mutual funds and corporate-owned life insurance in an employee non-qualified deferred compensation plan. We have an offsetting liability recorded for the investments. The funds are recorded at fair value. We recognize changes in fair value currently in gain on deferred compensation investments and we record changes in the liability in selling, general and administrative expense. We classify these investments as other non-current assets since we have no plan or intent to liquidate or otherwise use these securities in our business operations. We classify the deferred compensation liability as a component of accrued compensation.

	Quarter ended					Three quarters ended
	September 30,   2011			October 1, 2010		September 30, 2011			October 1,   2010
	(in millions)
By consolidated statement of operations line item
(Loss) gain on deferred compensation investments, net	$	(1.1	)	$	0.2	$	(0.9	)	$	0.3
Selling, general and administrative (benefit) expense	$	(1.0	)	$	0.3	$	(0.6	)	$	0.4

	September 30,   2011		December 31,   2010
	(in millions)
Balance sheet impact
Deferred compensation assets (trading)	$	11.1	$	11.5
Deferred compensation liability	$	11.8	$	11.9

Note 3—Fair Value Measurements

In order to determine the fair value of our assets and liabilities, we utilize three levels of inputs, focusing on the most observable inputs when available. Observable inputs are generally developed based on market data obtained from independent sources, whereas unobservable inputs reflect our assumptions about what market participants would use to value the asset or liability, based on the best information available in the circumstances.

Level 1 – Quoted prices in active markets which are unadjusted and accessible at the measurement date for identical, unrestricted assets or liabilities;

Level 2 – Quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly;

Level 3 – Prices or valuations that require inputs that are unobservable and significant to the overall fair value measurement.

8

We determine fair value on the following assets and liabilities using these input levels (in millions):

	Fair value as of September 30, 2011 using:
	Total		Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Assets
Short-term investments:
Bank time deposits	$	26.5	$	—	$	26.5	$	—
Prepaid expenses and other current assets:
Foreign exchange options		1.0		—		1.0		—
Long-term investments:
Auction rate securities		59.0		—		—		59.0
Bank time deposits		4.8		—		4.8		—
Other non-current assets:
Deferred compensation investments		11.1		1.7		9.4		—
Interest rate swap		0.1		—		0.1		—
Total assets measured at fair value	$	102.5	$	1.7	$	41.8	$	59.0

	Fair value as of December 31, 2010 using:
	Total		Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Assets
Prepaid expenses and other current assets:
Foreign exchange options	$	0.5	$	—	$	0.5	$	—
Long-term investments:
Auction rate securities		69.3		—		—		69.3
Other non-current assets:
Deferred compensation investments		11.5		1.1		10.4		—
Total assets measured at fair value	$	81.3	$	1.1	$	10.9	$	69.3
Liabilities
Other accrued expenses:
Interest rate swap	$	1.6	$	—	$	1.6	$	—

There were no transfers into or out of Level 1 and Level 2 financial assets and liabilities during fiscal years 2010 or 2011.

For actively traded securities, bank time deposits, foreign exchange contracts and interest rate swaps, we generally rely upon the valuations as provided by the third party custodian of these assets or liabilities. For other AFS securities, such as illiquid ARS, we use the present value of future expected cash flows to determine fair value. Significant judgments are required in the estimation of fair value, including assumptions about the expected holding period, yield and appropriate discount rates.

If we use more than one level of input that significantly affects fair value, we include the fair value under the lowest input level used.

9

The following is a reconciliation of changes in the fair market values determined using Level 3 significant unobservable inputs (in millions):

	AFS debt securities
	Insurance related             auction rate             securities		Corporate credit auction rate securities		Student loan auction rate securities		Total
Balance as of December 31, 2010	$	39.8	$	13.9	$	15.6	$	69.3
Transfers into or out of Level 3		—		—		—		—
Total gains or losses:
Unrealized gains		0.8		—		—		0.8
Unrealized losses		—		(0.7)		(0.3)		(1.0)
Purchases, issuances, sales and settlements:
Sales		(10.1)		—		—		(10.1)
Balance as of September 30, 2011	$	30.5	$	13.2	$	15.3	$	59.0

Note 4—Derivative Instruments and Hedging Activities

We enter into derivative instruments for risk management purposes only, including derivatives designated as hedging instruments as required by the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 815, Derivatives and Hedging, and those utilized as economic hedges. We use interest rate-related derivative instruments to manage our exposure to fluctuations of interest rates, as well as foreign currency derivatives to manage exposure to foreign currency fluctuations. By entering into these instruments, we are exposed from time to time to market risk and credit risk.

Market risk is the adverse effect on the value of a financial instrument that results from a change in interest rates or fluctuations in foreign currency rates. We minimize this market risk by establishing and monitoring parameters that limit the types and degree of market risk that may be undertaken. Credit risk is the failure of the counterparty to perform under the terms of the derivative contract. The counterparties to the agreements relating to our derivative instruments consist of three major international financial institutions with high credit ratings. We do not believe that there is significant risk of nonperformance by these counterparties because we continually monitor the credit ratings of such counterparties. Furthermore, none of our derivative transactions are subject to collateral or other security arrangements and none contain provisions that are dependent on our credit ratings from any credit rating agency. While the contract or notional amounts of derivative financial instruments provide one measure of the volume of these transactions, they do not represent the amount of our exposure to credit risk. The amounts potentially subject to credit risk (arising from the possible inability of counterparties to meet the terms of their contracts) are generally limited to the amounts, if any, by which the counterparties’ obligations under the contracts exceed our obligations to the counterparties. As a result of the above considerations, we do not consider the risk of counterparty default to be significant.

Foreign Exchange Exposure Management—We purchase U.S. dollar call options to offset the impact of changes in foreign currency exchange rates on our operations, assets and liabilities that are denominated in currencies other than the U.S. dollar, primarily the Euro. We enter into these foreign currency exchange contracts to support transactions made in the normal course of business and accordingly, the contracts are not speculative in nature. We use foreign exchange contracts to economically hedge anticipated foreign cash flow commitments up to six months. We recognize changes in the fair value of these undesignated hedges in earnings immediately, which generally offset the changes in the value of the foreign currency denominated assets or liabilities being economically hedged. Realized and unrealized gains and losses from economic hedges are classified in the statements of operations consistent with the accounting classification of the items being hedged. We believe our cash flow hedges have been economically effective.

Interest Rate Exposure Management—In connection with the extinguishment of our previous debt facility (see note 8), we terminated our prior interest rate hedge transaction and settled the prior interest rate swap agreement for $3.2 million. On September 21, 2011, we entered into certain interest rate swap transactions with a notional value of $150.0 million to hedge a portion of the risk of changes in the benchmark interest rate of the 1-month London Interbank Offered Rate (“LIBOR”) related to our new outstanding revolving credit facility. Under the terms of the interest rate swaps, we will effectively convert $150.0 million of our variable-rate revolving credit facility to fixed interest rates through August 8, 2016. We designated these interest rate swaps as cash flow hedges to hedge the risk of changes in the benchmark interest. The fair values of the swaps at inception were zero and subsequent changes in the fair values of the swaps are recorded in OCI, net of tax benefit, to the extent they are effective in offsetting the variability of the hedged cash flows.

10

We record the fair value of our derivative financial instruments in the consolidated financial statements in other current assets, other non-current assets or other accrued expenses, regardless of the purpose or intent for holding the derivative contract. Changes in the fair value of the derivative financial instruments are either recognized periodically in earnings or in shareholders’ equity as a component of OCI. Changes in the fair value of derivative instruments designated as a cash flow hedge are recorded in OCI, to the extent the derivative instrument is effective. Changes in the fair values of derivatives not designated for hedge accounting and any ineffectiveness measured in designated hedge transactions are reported in earnings as they occur.

The fair value of these instruments in the unaudited condensed consolidated balance sheet was as follows (in millions):

		Fair value as of
	Balance sheet location	September 30,         2011		December 31,         2010
Derivatives Not Designated as Hedging Instruments
Asset Derivatives
Foreign exchange options	Prepaid expenses and other current assets	$	1.0	$	0.5
Derivatives Designated as Hedging Instruments
Asset Derivatives
Interest rate swap agreements	Other non-current assets	$	0.1	$	—
Liability Derivatives
Interest rate swap agreements	Other accrued expenses	$	—	$	1.6

There was $0.2 million of ineffectiveness recorded in interest expense and fees for the quarter and three quarters ended September 30, 2011. There was no ineffectiveness recorded in income for the quarter or three quarters ended October 1, 2010. As of September 30, 2011, we expect $0.8 million of losses associated with our cash flow hedges to be reclassified from accumulated other comprehensive income into earnings within the next twelve months.

Note 5—Inventories

Inventories are summarized below (in millions):

	September 30, 2011		December 31, 2010
Finished products	$	40.6	$	38.8
Work in process		58.1		57.9
Raw materials		4.8		5.3
Total inventories	$	103.5	$	102.0

Note 6—Goodwill and Purchased Intangibles

Goodwill—Goodwill is an indefinite-lived intangible asset that is not amortized, but instead is tested for impairment annually or more frequently if indicators of impairment exist. The following table summarizes changes in the net goodwill balance for our one reportable segment (in millions):

Gross goodwill balance as of December 31, 2010	$	1,719.8
Accumulated impairment charge (recorded in fiscal year 2008)		(1,154.7)
Adjustment to deferred tax asset related to the Techwell acquisition		1.4
Goodwill balance as of September 30, 2011	$	566.5

11

We perform a goodwill impairment analysis using the two-step method on an annual basis and whenever events or changes in circumstances indicate that the carrying value may not be recoverable. The recoverability of goodwill is measured at the reporting unit level by comparing the reporting unit’s carrying amount, including goodwill, to the fair market value of the reporting unit. As of our last annual goodwill analysis, conducted in the fourth quarter of 2010, we had two reporting units – analog & mixed-signal and power management.

The first step of the goodwill impairment test is to identify potential impairment. If the fair value of a reporting unit exceeds its carrying amount, no impairment of the goodwill of the reporting unit is indicated and the second step of the impairment test is unnecessary. However, if the carrying amount of a reporting unit exceeds its fair value, the second step of the goodwill impairment test is performed to measure the amount of impairment loss, if any. The adjusted carrying amount of goodwill becomes the new accounting basis.

On July 2, 2011, we reorganized our reporting units, increasing from two reporting units to three reporting units – analog & mixed-signal, power management, and consumer. We performed a fair value analysis to allocate our goodwill at the time of the reorganization. Based on our analysis, no impairment was indicated. We will perform our annual test of impairment in the fourth quarter of 2011.

If we experience significant declines in our stock price, market capitalization or future expected cash flows, significant adverse changes in the business climate or slower growth rates, we may need to perform additional impairment analysis of our goodwill in future periods prior to our annual test in the fourth quarter. We can provide no assurance that the significant assumptions used in our analysis will not change substantially and any additional analysis could result in impairment charges.

Purchased intangibles—Purchased intangibles are definite-lived intangible assets which are amortized on a straight-line basis over their estimated useful lives. Substantially all of our purchased intangibles consist of multiple elements of developed technology which has estimated useful lives of 3 to 11 years. Other purchased intangibles consist of other identifiable assets, primarily customer relationships with an estimated useful life of six years.

	September 30, 2011				December 31, 2010
	Gross carrying   amount		Accumulated         amortization		Gross carrying         amount		Accumulated         amortization
	(in millions)
Definite-lived: developed technologies	$	126.0	$	46.6	$	149.0	$	54.9
Definite-lived: other		53.5		14.0		58.3		13.4
Total	$	179.5	$	60.6	$	207.3	$	68.3

We recorded amortization expense as follows (in millions):

	Quarter ended				Three quarters ended
By statement of operations line item	September 30,         2011		October 1, 2010		September 30, 2011		October 1,     2010
Amortization of purchased intangibles	$	6.5	$	9.3	$	20.1	$	20.3

Expected amortization expense remaining by year to the end of the current amortization schedule is the following (in millions):

To be recognized in:
Fiscal year 2011	$	7.2
Fiscal year 2012		28.2
Fiscal year 2013		25.5
Fiscal year 2014		23.7
Fiscal year 2015		16.7
Thereafter		17.6
Total expected amortization expense	$	118.9

12

We review long-lived assets, including intangible assets subject to amortization which are our developed technologies, backlog, customer relationships and intellectual property, for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. We measure recoverability of long-lived assets by comparing the carrying amount of the asset group to the future undiscounted net cash flows expected to be generated by those assets. If such assets are considered to be impaired, we recognize an impairment charge for the amount by which the carrying amounts of the assets exceeds the fair value of the assets. There were no triggering events in the periods presented herein.

Note 7—Income Taxes

The table below summarizes activity in the provision for unrecognized tax benefits (“UTBs”) resulting from uncertain tax positions (“UTPs”) (in millions):

Beginning balance (includes $14.0 million of interest and penalties as of December 31, 2010)	$	166.8
Net increases related to prior year tax positions		0.3
Ending balance (includes $17.7 million of interest and penalties as of September 30, 2011)	$	167.1

The UTB relates primarily to a provision established at the completion of field work on an Internal Revenue Service (“IRS”) tax audit for tax years 2005 through 2007. While the audit covered a number of different issues, the provision is largely due to the intercompany pricing of goods and services between different tax jurisdictions. We are currently contesting this matter through the IRS appeals office. As the final resolution of the appeals process remains uncertain, we continue to provide for the UTPs based on the more likely than not thresholds.

We are currently unable to estimate the amount of accruals that will significantly change in the next twelve months. The major tax jurisdictions in which we operate include the United States, various individual states and several foreign jurisdictions.

Note 8—Long-Term Debt

On September 1, 2011, we established a new five-year, $325.0 million revolving credit facility (the “Facility”). This Facility replaced our previous $300.0 million term-loan facility and $75.0 million revolving credit facility. The Facility matures on September 1, 2016 and is payable in full upon maturity. We may request to increase the Facility by up to $75.0 million. Under the Facility, $25.0 million is available for the issuance of standby letters of credit, $10.0 million is available as swing line loans and $50.0 million is available for multicurrency borrowings. Amounts repaid under the Facility may be reborrowed.

The Facility is secured by a first priority lien and security interest in (a) all of the equity interests and intercompany debt of our direct and indirect subsidiaries, except, in the case of foreign subsidiaries, to the extent that such pledge would be prohibited by applicable law or would result in adverse tax consequences, (b) all of our present and future tangible and intangible assets and our direct and indirect subsidiaries (other than immaterial subsidiaries and foreign subsidiaries) and (c) all proceeds and products of the property and assets described in clauses (a) and (b) above. Our obligations under the Facility are guaranteed by our direct and indirect wholly-owned subsidiaries (other than immaterial subsidiaries and foreign subsidiaries).

At our option, loans under the Facility will bear stated interest based on the Base Rate or Eurocurrency Rate, in each case plus the Applicable Rate (respectively, as defined in the Credit Agreement). The Base Rate will be, for any day, a fluctuating rate per annum equal to the highest of (a) 1/2 of 1.00% per annum above the Federal Funds Rate (as defined in the Credit Agreement), (b) Bank of America’s prime rate and (c) the Eurodollar Rate for a term of one month plus 1.00%. Eurodollar borrowings may be for one, two, three or six months (or such period that is 12 months or less, requested by Intersil and consented to by all the Lenders) and will be at an annual rate equal to the period-applicable Eurodollar Rate plus the Applicable Rate. The Applicable Rate for all revolving loans is based on a pricing grid ranging from 0.75% to 1.75% per annum for Base Rate loans and 1.75% to 2.75% for Eurocurrency Rate loans based on Intersil’s Consolidated Leverage Ratio (as defined in the Credit Agreement).

13

	September 30, 2011			December 31, 2010
	(in millions)
Outstanding balance
Term-loan facility	$	—		$	298.5
Revolving credit facility	$	278.2		$	—
Actual interest rate in effect		1.97	%		4.75%

	Quarter ended						Three quarters ended
	September 30,     2011			October 1, 2010			September 30, 2011		October 1,   2010
	($ in millions)
Cash paid for interest	$	4.6		$	3.7		$	11.6	$	4.2
Weighted-average interest rate (pre-tax)		4.72	%		4.75	%		4.74%		4.83%

During the quarter ended September 30, 2011, we settled our previous term-loan facility for $278.2 million and recorded a loss on extinguishment of debt for unamortized loan fees of $ 8.4 million.

The aggregate annual principle payments of long-term debt remaining as of September 30, 2011 are presented in the following table (in millions):

Fiscal years 2011-2015	$	—
Fiscal year 2016		278.2
Total debt outstanding	$	278.2

The fair value of our debt approximates the carrying value as of September 30, 2011 and December 31, 2010.

Letters of Credit—We issue letters of credit during the ordinary course of business through major financial institutions as required by certain vendor contracts. We had outstanding letters of credit totaling $2.6 million as of September 30, 2011 and December 31, 2010. The standby letters of credit are primarily secured by $2.8 million of long-term bank deposits.

Note 9—Shareholders’ Equity

Dividends—In July 2011, our Board of Directors declared a quarterly dividend of $0.12 per share of common stock. We paid dividends of $15.1 million on August 26, 2011 to shareholders of record as of the close of business on August 16, 2011. In October 2011, our Board of Directors declared a quarterly dividend of $0.12 per share of common stock. The dividend will be paid on November 25, 2011 to shareholders of record as of the close of business on November 15, 2011.

Class A Common Stock—Share activity for Class A common stock since December 31, 2010 (in thousands):

Balance as of December 31, 2010	124,552
Shares issued under stock plans, net of shares withheld for taxes	1,820
Balance as of September 30, 2011	126,372

14

Note 10—Comprehensive Income

	Quarter ended				Three quarters ended
	September 30,         2011		October 1, 2010		September 30, 2011		October 1,     2010
	(in thousands)
Net income	$	7,212	$	32,068	$	43,105	$	339
Unrealized (loss) gain on AFS investments		(3,302)		332		(159)		9,009
Tax effect		776		(78)		37		(1,945)
Unrealized loss on interest rate swap		(412)		(2,471)		(1,229)		(2,471)
Tax effect		154		927		461		927
Currency translation adjustments		(361)		1,052		468		466
Comprehensive income	$	4,067	$	31,830	$	42,683	$	6,325

Currency translation adjustments (“CTA”) result when we translate our foreign currency-based financial statements into US dollars. A weakening US dollar will produce comprehensive income. Conversely, a strengthening US dollar will produce comprehensive loss.

Note 11—Earnings Per Share

The following table sets forth the computation of basic and diluted earnings per share (in thousands, except per share amounts):

	Quarter ended				Three quarters ended
	September 30,         2011		October 1,         2010		September 30, 2011		October 1,     2010
Numerator:
Net income to common shareholders	$	7,212	$	32,068	$	43,105	$	339
Denominator:
Denominator for basic earnings per share—weighted average common shares		125,916		123,870		125,695		123,542
Effect of stock options and awards		128		104		354		991
Denominator for diluted earnings per share adjusted—weighted average common shares		126,044		123,974		126,049		124,533
Earnings per share
Basic	$	0.06	$	0.26	$	0.34	$	—
Diluted	$	0.06	$	0.26	$	0.34	$	—
Anti-dilutive shares not included in the above calculations
Awards		816		4,368		714		1,144
Options		14,202		13,070		14,506		13,476

Note 12—Equity-Based Compensation

We use equity-based compensation plans to enhance our ability to attract, retain and reward talented employees. Shares issued under these plans are made from newly-issued stock. The plans allow several forms of equity compensation including stock options (“Options”), restricted and deferred stock awards (“Awards”) and employee stock purchase plans.

15

Valuations, Assumptions and Terms

We use a binomial lattice model to estimate the fair value of Options and a Monte-Carlo simulation to estimate the fair value of Options and Awards with market conditions. The fair value is amortized as compensation cost over the lesser of the grantee’s requisite service period or the vesting term of the grant. The lattice model uses historical exercise patterns to predict the life of Options and estimates the future volatility of the underlying stock price, considering historical and implied volatility in its calculations. The Monte-Carlo simulation simulates a range of possible future stock prices for Intersil and the components of our peer group.

We used the following assumptions in our models for Options awarded in the periods indicated.

	Three quarters ended
	September 30, 2011	October 1, 2010
Range of expected volatilities	34.4 – 42.9%	40.9 – 46.0%
Weighted average volatility	37.1%	43.0%
Range of dividend yields	3.1 – 4.3%	3.1 – 4.7%
Weighted average dividend yield	3.8%	3.3%
Range of risk-free interest rates	1.2 – 2.3%	1.0 - 3.4%
Weighted average risk-free interest rate	2.2%	2.5%
Range of expected lives, in years	5.0 – 5.6	1.3 – 5.7
Weighted average expected life, in years	5.3	5.4

Generally, our Options vest 25% in the first year and quarterly thereafter over three or four years and have seven year contract lives.

Market value at the date of grant is used as the fair value of Awards without market conditions. We amortize Awards as compensation cost over the lesser of the requisite service period or the vesting term, which is generally three or four years.

The compensation cost for shares issued under the employee stock purchase plan is 15% of the share price, which is the amount of the discount the employee obtains at the date of the purchase transaction.

16

Equity-Based Compensation Summary

	Options						Awards		Aggregate Information
	Shares		Weighted Average Exercise Price		Weighted Average Remaining Contract Lives		Shares		Aggregate Intrinsic Value		Aggregate Unrecognized Compensation Cost
	(in thousands)		(per share)		(in years)		(in thousands)		(in millions)		(in millions)
Outstanding as of December 31, 2010		13,216	$	17.75		4.0		4,208
Granted(1)		3,319		12.56		6.5		1,363
Exercised(2)		(233)		8.72		3.4		(1,188)
Canceled		(1,796)		19.75		1.4		(514)
Outstanding as of September 30, 2011		14,506	$	16.46		4.1		3,869	$	40.5	$	45.3
As of September 30, 2011
Exercisable/vested(2)		7,970	$	19.13		2.7		93	$	1.6
Unexercisable/unvested		6,536	$	13.21		5.8		3,776	$	38.9	$	45.3
Number vested and expected to ultimately vest		14,191	$	16.55		4.0		2,222	$	23.6
			Stock Options				Stock Awards		Aggregate
Weighted average fair value per share of awards granted in the three quarters ended September 30, 2011			$	2.85			$	10.92	$	5.20
Weighted average fair value per share of awards granted in the three quarters ended October 1, 2010			$	4.33			$	14.99	$	10.25

(1) Options granted include 857,385 shares and Awards granted include 285,794 shares issued in 2011 that have performance and market conditions that have not yet been earned.

(2) Awards exercised are those that have reached full vested status and been delivered to the recipients as a taxable event due to elective deferral available in the case of deferred stock units. Deferred stock units for which the deferral is elected timely are vested but still outstanding as Awards. Total un-issued shares related to deferred stock units as of September 30, 2011 were 93,000 shares as shown in the Awards column as Exercisable/vested.

Additional Disclosures	Three quarters ended
	September 30, 2011		October 1, 2010
	($ in millions, share data in thousands)
Shares issued under the employee stock purchase plan		749		564
Aggregate intrinsic value of stock options exercised	$	1.3	$	1.2

17

Financial Statement Effects and Presentation—The following table shows total equity-based compensation expense for the periods indicated that are included in the unaudited condensed consolidated statement of operations (in millions):

	Quarter ended				Three quarters ended
	September 30,         2011		October 1, 2010		September 30, 2011		October 1,     2010
By statement of operations line item
Cost of revenue	$	0.4	$	0.6	$	1.5	$	1.6
Research and development		3.7		4.2		13.0		11.2
Selling, general and administrative		3.0		3.8		8.9		10.5
By stock type
Stock options	$	2.7	$	2.7	$	8.6	$	8.2
Restricted and deferred stock awards		4.1		5.6		13.8		14.2
Employee stock purchase plan		0.3		0.3		1.0		0.9

	September 30, 2011		December 31, 2010
Equity-based compensation capitalized in inventory	$	0.7	$	0.8

Performance-based Grants

As of September 30, 2011, we had Options and Awards outstanding that include the usual service conditions as well as market conditions related to total shareholder return and performance conditions relating to revenue and operating income relative to internal goals and performance by other companies in our industry. Under the terms of the agreements, participants may receive from 0 -150% of the original grant. We periodically evaluate future performance expectations to estimate the number of shares that will ultimately vest.

	September 30, 2011
	Options		Awards
	(in thousands)
Performance-based units outstanding		857		882
Maximum shares that could be issued assuming the highest level of performance		1,286		1,191
Shares expected to vest		706		449

Note 13—Segment Information

We report our results in one reportable segment. We design, develop, manufacture and market high-performance analog and mixed-signal integrated circuits. Our chief executive officer is our chief operating decision maker.

Note 14—Legal Matters and Indemnifications

Legal Matters—We are currently party to various claims and legal proceedings. In our opinion, no material loss is anticipated from such claims and proceedings.

Indemnifications—We incur indemnification obligations for intellectual property infringement claims related to our products. We accrue for known indemnification issues and estimate unidentified issues based on historical activity.

18

Note 15—Recent Accounting Pronouncements

FASB Accounting Standards Update (“ASU”) 2010-06, “Fair Value Measurements and Disclosures (Topic 820) – Improving Disclosures about Fair Value Measurements”—In January 2010, the FASB issued guidance to improve the disclosures for Level 1, Level 2 and Level 3 fair value measurements. ASU 2010-06 requires new disclosures for significant transfers in and out of Level 1 and Level 2 fair value measurements, and requires entities to separately report information about purchases, sales, issuances and settlements of Level 3 fair value measurements. ASU 2010-06 also updates ASC 820-10, Fair Value Measurements and Disclosures, to require an entity to provide fair value measurement disclosures for each class of assets and liabilities. Entities should also provide disclosures about the valuation techniques and inputs used to measure fair value for both recurring and nonrecurring fair value measurements for Level 1 and Level 2 fair value measurements. ASU 2010-06 is currently effective. This statement resulted in additional disclosures on fair value measurements.

FASB ASU 2010-28, “Intangibles – Goodwill and Other (Topic 350)”—In December 2010, the FASB issued ASU No. 2010-28,Intangibles- Goodwill and Other (ASC Topic 350). ASU 2010-28 modifies Step 1 of the goodwill impairment test for reporting units with zero or negative carrying amounts. For those reporting units, an entity is required to perform Step 2 of the goodwill impairment test if it is more likely than not that a goodwill impairment exists. In determining whether it is more likely than not that an impairment of goodwill exists, an entity should consider whether there are any adverse qualitative factors indicating that an impairment may exist. This statement is currently effective and did not impact our unaudited condensed consolidated financial statements.

FASB ASU 2011-04, “Fair Value Measurement (Topic 820) – Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs”—In April 2011, the FASB issued ASU 2011-04. ASU No. 2011-04 provides a uniform framework for fair value measurements and related disclosures between GAAP and International Financial Reporting Standards (“IFRS”). Additional disclosure requirements in the update include: (1) for Level 3 fair value measurements, quantitative information about unobservable inputs used, a description of the valuation processes used by the entity, and a qualitative discussion about the sensitivity of the measurements to changes in the unobservable inputs; (2) for an entity’s use of a nonfinancial asset that is different from the asset’s highest and best use, the reason for the difference; (3) for financial instruments not measured at fair value but for which disclosure of fair value is required, the fair value hierarchy level in which the fair value measurements were determined; and (4) the disclosure of all transfers between Level 1 and Level 2 of the fair value hierarchy. ASU 2011-04 will be effective for interim and annual periods beginning on or after December 15, 2011. We anticipate ASU 2011-04 will result in additional disclosures within our financial statements.

FASB ASU 2011-05, “Comprehensive Income (Topic 220) – Presentation of Comprehensive Income”—In June 2011, the FASB issued ASU 2011-05. ASU No. 2011-05 amends existing guidance by allowing only two options for presenting the components of net income and OCI: (1) in a single continuous financial statement, statement of comprehensive income or (2) in two separate but consecutive financial statements, consisting of an income statement followed by a separate statement of OCI. Also, items that are reclassified from OCI to net income must be presented on the face of the financial statements. ASU No. 2011-05 requires retrospective application, and it is effective for fiscal years, and interim periods within those years, beginning after December 15, 2011, with early adoption permitted. We do not expect ASU 2011-05 to have a material impact on our financial statements.

FASB ASU 2011-08, “Intangibles – Goodwill and Other (Topic 350) – Testing Goodwill for Impairment”—In September 2011, the FASB issued ASU 2011-08. ASU No. 2011-08 amends existing guidance by permitting an entity to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test described in Topic 350. Under the amendments in this ASU, an entity is not required to calculate the fair value of a reporting unit unless the entity determines that it is more likely than not that its fair value is less than its carrying amount. ASU 2011-08 will be effective for interim and annual periods beginning on or after December 15, 2011 with early adoption permitted. We do not anticipate ASU 2011-08 will have a material impact on our financial statements.

—End of Unaudited Condensed Consolidated Financial Statements—

19

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

You should read the following discussion in conjunction with our unaudited condensed consolidated financial statements, including the notes thereto. Except for historical information, the discussions in this section contain forward-looking statements that involve risks and uncertainties. Actual results could differ materially from those discussed below.

Forward Looking Statements

This Quarterly Report on Form 10-Q contains statements relating to expected future results and business trends of Intersil Corporation that are based upon our current estimates, expectations, assumptions and projections about our industry, as well as upon certain views and beliefs held by management, that are “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995. Words such as “anticipates,” “expects,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “may,” “will,” and variations of these words or similar expressions are intended to identify “forward-looking statements.” In addition, any statements that refer to expectations, projections, or other characterizations of future events or circumstances, including any underlying assumptions, are “forward-looking statements.” Such statements are not guarantees of future performance and are subject to certain risks, uncertainties, and assumptions that are difficult to predict. Therefore, undue reliance should not be placed on such statements because our actual results may differ materially and adversely from those expressed in any “forward-looking statement” as a result of various factors. These factors include, but are not limited to:

• industry and global economic and market conditions, such as the cyclical nature of the semiconductor industry and the markets addressed by our and our customers’ products;

• global economic weakness, including insufficient credit available for our customers to purchase our products;

• successful development of new products;

• the timing of new product introductions and new product performance and quality;

• manufacturing difficulties, such as the availability and extent of utilization of manufacturing capacity and raw materials;

• the failure of our suppliers or outsource providers to perform their obligations in a manner consistent with our expectations;

• pricing pressures and other competitive factors, such as competitors’ new products;

• changes in product mix;

• product obsolescence;

• legal challenges to our products and technology, such as intellectual property infringement and misappropriation claims;

• customer service;

• the need for additional capital;

• legislative, tax, accounting, or regulatory changes or changes in their interpretation;

• the ability to develop and implement new technologies and to obtain protection of the related intellectual property;

• the successful integration of acquisitions;

• demand for, and market acceptance of, new and existing products;

• the extent and timing that customers order and use our products and services in their production or business;

• competitors with significantly greater financial, technical, manufacturing and marketing resources;

• fluctuations in manufacturing yields;

• procurement shortage;

• transportation, communication, demand, information technology or supply disruptions based on factors outside of our control such as natural disasters, wars and terrorist activities;

• changes in import export regulations; and

• exchange rate fluctuations.

These “forward-looking statements” are made only as of the date hereof, and we undertake no obligation to update or revise the “forward-looking statements,” whether as a result of new information, future events or otherwise.

Overview

We design, develop, manufacture and market high-performance analog and mixed-signal integrated circuits (“ICs”). We believe our product portfolio addresses some of the fastest growing applications within the industrial, computing, communications and consumer markets.

20

Critical Accounting Policies

You should refer to the disclosures regarding critical accounting policies in Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2010.

Results of Operations

Statement of operations data and percentage of revenue for the periods (% of revenue):

	Quarter ended					Three quarters ended
	September 30, 2011			October 1, 2010		September 30, 2011			October 1, 2010
Revenue		100.0	%		100.0%		100.0	%		100.0%
Cost of revenue		43.0	%		41.1%		42.3	%		42.0%
Gross profit		57.0	%		58.9%		57.7	%		58.0%
Operating costs and expenses:
Research and development		24.4	%		21.7%		24.1	%		21.7%
Selling, general and administrative		18.3	%		15.2%		17.7	%		16.0%
Amortization of purchased intangibles		3.5	%		4.3%		3.4	%		3.2%
Restructuring		—	%		—%		0.4	%		—%
Acquisition-related costs		—	%		0.2%		—	%		1.3%
Operating income		10.8	%		17.5%		12.1	%		15.8%
Interest income		0.4	%		0.3%		0.4	%		0.4%
Interest expense and fees		(2.0	)%		(1.9)%		(2.1	)%		(1.2)%
Loss on extinguishment of debt		(4.5	)%		—%		(1.4	)%		—%
(Loss) gain on deferred compensation investments, net		(0.6	)%		0.1%		(0.2	)%		—%
Other-than-temporary impairment losses		—	%		—%		—	%		(0.2)%
Income before income taxes		4.0	%		16.1%		8.8	%		14.8%
Income tax expense		0.2	%		1.4%		1.5	%		14.7%
Net income		3.9	%		14.6%		7.2	%		0.1%

Note: Totals and percentages may not add or calculate precisely due to rounding. We have modified certain amounts in the quarter(s) ended October 1, 2010 to conform to the presentation in the quarter(s) ended September 30, 2011.

Revenue and Gross Profit

Revenue for the quarter ended September 30, 2011 decreased $32.4 million or 14.8% to $186.8 million from $219.1 million during the quarter ended October 1, 2010. The decrease in sales was broadbased in the industrial, communications, and consumer end markets, partially offset by an increase in the computing end market. Sales into the industrial, communications, and consumer end markets decreased by 33.4%, 6.0%, and 16.3%, respectively, from the quarter ended October 1, 2010. Sales into the computing end market increased 8.7% from the same quarter last year.

Revenues by end market were as follows ($ in millions):

	Quarter ended
	September 30, 2011				October 1, 2010
	Revenue		% of Revenue		Revenue		% of Revenue
Industrial	$	50.3		26.9%	$	75.4		34.4%
Computing		50.5		27.0%		46.4		21.2%
Communications		42.7		22.9%		45.5		20.8%
Consumer		43.3		23.2%		51.8		23.6%
Total	$	186.8		100.0%	$	219.1		100.0%

21

In aggregate, a 2.7% decrease in unit shipments decreased net revenue from third quarter of 2010 levels by $6.0 million and average selling prices (“ASPs”) decreased 12.4%, decreasing revenues by $26.3 million. Declining sales prices at the product level have occurred within the semiconductor industry for much of its existence. While individual products generally experience ASP declines over time, we endeavor to continually introduce new products which typically enter the market at prices higher than existing products. Fluctuations in ASPs are expected to continue into the future.

Revenue for the three quarters ended September 30, 2011 decreased $33.7 million or 5.4% to $594.7 million from $628.4 million during the three quarters ended October 1, 2010. The decrease in sales was broadbased across all end markets. Sales into the industrial, computing, communications, and consumer end markets decreased by 10.1%, 1.0%, 6.2%, and 3.1%, respectively, compared to the three quarters ended October 1, 2010.

Revenues by end market were as follows ($ in millions):

	Three quarters ended
	September 30, 2011				October 1, 2010
	Revenue		% of Revenue		Revenue		% of Revenue
Industrial	$	171.2		28.8%	$	190.4		30.3%
Computing		161.8		27.2%		163.4		26.0%
Communications		130.4		21.9%		139.1		22.1%
Consumer		131.3		22.1%		135.5		21.6%
Total	$	594.7		100.0%	$	628.4		100.0%

In aggregate, a 1.6% increase in unit shipments increased net revenue from year-to-date 2010 levels by $9.8 million and ASPs decreased 6.8%, decreasing revenues by $43.5 million.

Geographically, year-to-date revenues were derived from the Asia/Pacific, North America and Europe regions as follows ($ in millions):

	Three quarters ended
	September 30, 2011					October 1, 2010
	Revenue		% of Revenue			Revenue		% of Revenue
Asia/Pacific	$	460.1		77.4	%	$	463.4		73.7	%
North America		86.6		14.6	%		111.8		17.8	%
Europe and other		48.0		8.0	%		53.2		8.5	%
Total	$	594.7		100.0	%	$	628.4		100.0	%

We anticipate that our revenue from Asia/Pacific region customers will continue to grow as that region leads in the manufacture of the finished goods (consumer electronics, computers and communications equipment) in which our products are used. End market demand for those products is global, and therefore, dependent on aggregate global economic metrics and conditions such as personal incomes and business activity and not necessarily on Asian and Pacific Rim regional economic factors.

We sell our products to customers in many countries including, in descending order by revenue dollars for our top ten countries, China (including Hong Kong), the United States, South Korea, Taiwan, Japan, Germany, Singapore, Mexico, Thailand, and Malaysia. Sales to customers in China (including Hong Kong) comprised approximately 54.4% of revenue, followed by the United States (13.5%) and South Korea (7.1%) during the three quarters ended September 30, 2011. Two distributors that support a wide range of customers around the world accounted for 11.9% and 11.2% of our revenues in the three quarters ended September 30, 2011. Two original design manufacturers accounted for 9.3% and 8.8% of our revenues for the three quarters ended September 30, 2011.

22

Cost of Revenue and Gross Profit

Cost of revenue consists primarily of purchased materials and services, labor, overhead and depreciation associated with manufacturing pertaining to products sold. During the quarter ended September 30, 2011, gross profit decreased $22.5 million or 17.4% to $106.5 million from $129.1 million during the quarter ended October 1, 2010. As a percentage of sales, gross margin was 57.0% during the quarter ended September 30, 2011 compared to 58.9% during the quarter ended October 1, 2010. The decrease in gross margin was primarily due to fluctuations caused by product sales mix changes at the product family level. Generally, our computing and consumer products have lower gross margins than our industrial and communications products.

During the three quarters ended September 30, 2011, gross profit decreased $20.9 million or 5.7% to $343.4 million from $364.2 million during the three quarters ended October 1, 2010. As a percentage of sales, gross margin was 57.7% during the three quarters ended September 30, 2011 compared to 58.0% during the three quarters ended October 1, 2010. The slight decrease in gross margin was primarily due to fluctuations caused by product sales mix changes at the product family level. We strive to improve gross margins from their present levels by emphasizing new high-margin products and cost saving opportunities in our manufacturing chain.

Operating Costs and Expenses

Research and Development (“R&D”)

R&D expenses consist primarily of salaries and expenses of employees engaged in product/process research, design and development activities, as well as related subcontracting activities, prototype development, cost of design tools and technology license agreement expenses.

R&D expenses decreased $1.8 million or 3.9% to $45.7 million during the quarter ended September 30, 2011 from $47.5 million during the quarter ended October 1, 2010. We reduced our R&D spending primarily through reduced incentive accruals and cost reduction initiatives to optimize and integrate acquired organizations.

R&D expenses increased $6.8 million or 5.0% to $143.1 million during the three quarters ended September 30, 2011 from $136.4 million during the three quarters ended October 1, 2010. R&D spending grew year over year primarily through additional employees gained in acquisitions in order to invest in future products and technology essential for long-term growth.

Selling, General and Administrative (“SG&A”)

SG&A expenses consist primarily of salaries and expenses of employees engaged in selling and marketing our products as well as the salaries and expenses required to perform our human resources, finance, information systems, legal, executive and other administrative functions.

SG&A costs increased by $0.8 million or 2.5% to $34.2 million during the quarter ended September 30, 2011 from $33.4 million during the quarter ended October 1, 2010. The increase was driven by increased legal and professional fees primarily offset by reduced sales commissions, compensation expense and incentives as we implemented cost saving initiatives and reduced incentive accruals.

SG&A costs increased by $4.9 million or 4.9% to $105.5 million during the three quarters ended September 30, 2011 from $100.6 million during the three quarters ended October 1, 2010. The increase was driven by increased sales commissions, compensation expense and increased incentives from additional employees gained in acquisition.

Amortization of Purchased Intangible Assets

Amortization of purchased intangible assets decreased $2.8 million or 30.2% to $6.5 million in the quarter ended September 30, 2011 from $9.3 million in the quarter ended October 1, 2010. The decrease resulted primarily from intangibles that became fully amortized during 2011.

23

Amortization of purchased intangible assets decreased $0.2 million or 0.9% to $20.1 million in the three quarters ended September 30, 2011 from $20.3 million in the three quarters ended October 1, 2010. The changes resulted primarily from purchased intangibles due to the acquisition of Techwell, offset by intangibles that became fully amortized during 2011.

Restructuring

Restructuring costs were minimal in the quarter ended September 30, 2011 and $2.4 million in the three quarters ended September 30, 2011. The restructuring was part of our ongoing efforts to optimize operations and conclude the integrations of acquired organizations. It included a workforce reduction of approximately 3% and an anticipated reduction in annual operating expenses of approximately $8 million. There were minimal restructuring expenses in the quarter and three quarters ended October 1, 2010.

Acquisition-related Costs

Acquisition-related costs were minimal for the quarter ended September 30, 2011 and $0.4 million for the quarter ended October 1, 2010. Acquisition-related costs were $0.3 million for the three quarters ended September 30, 2011 and $7.9 million during the three quarters ended October 1, 2010. For all periods, the costs were primarily related to the acquisition of Techwell in the second fiscal quarter of 2010.

Other Income and Expenses

Interest Income

Interest income decreased slightly to $0.7 million during the quarter ended September 30, 2011 from $0.8 million during the quarter ended October 1, 2010. Interest income was $2.2 million during the three quarters ended September 30, 2011 and $2.3 million during the three quarters ending October 1, 2010.

Interest Expense and Fees

Interest expense and fees decreased to $3.8 million during the quarter ended September 30, 2011 from $4.2 million during the quarter ended October 1, 2010. The decrease is due to the replacement of our previous long-term debt agreement with a new revolving loan facility with a lower interest rate.

Interest expense and fees increased to $12.5 million during the three quarters ended September 30, 2011 from $7.6 million during the three quarters ended October 1, 2010. The change was due to interest and fees on the long-term debt agreement entered into during the second quarter of 2010 to fund the acquisition of Techwell.

Loss on Extinguishment of Debt

During the quarter ended September 30, 2011, we extinguished our previous term-loan agreement and wrote-off $8.4 million in unamortized loan fees.

(Loss) Gain on Deferred Compensation Investments, Net

We have a liability for a non-qualified deferred compensation plan. We maintain a portfolio of approximately $11.1 million in mutual fund investments and corporate owned life insurance under the plan. Changes in the fair value of the asset are recorded as a (loss) gain on deferred compensation investments and changes in the fair value of the liability are recorded as a component of compensation expense. In general, the compensation expense (benefit) is substantially offset by the gains and losses on the investment. During the quarter ended September 30, 2011, we recorded a loss of $1.1 million on deferred compensation investments and a decrease in compensation expense of $1.0 million. During the three quarters ended September 30, 2011, we recorded a loss on deferred compensation investments of $0.9 million and a $0.6 million decrease in compensation expense.

24

Other-than-temporary Impairment Losses

During the three quarters ended October 1, 2010, we recorded an impairment charge of $1.1 million, before taxes, on certain preferred equity securities whose decline in fair value was determined to be other-than-temporary and a $0.1 million loss on the sale of certain investments, before taxes. We continue to monitor our securities and intend to hold all of these investments until the anticipated recovery in market value occurs.

Income Tax

Income tax expense for the quarter ended September 30, 2011 was $0.3 million or 4.1% of income before taxes compared with an expense of $3.2 million or 8.9% of income before taxes for the quarter ended October 1, 2010. The quarter ended October 1, 2010 included a discrete benefit of $5.9 million which offset non-discrete tax expense of $9.1 million. The discrete benefit was due primarily to a decrease in the provision for uncertain tax positions. Excluding discrete items, the effective tax rate for the quarter ended September 30, 2011 was lower than the same quarter last year due to a greater portion of income in lower tax jurisdictions. Our fourth quarter tax rate, inclusive of discrete items, is expected to be approximately 18-20%.

Income tax expense for the three quarters ended September 30, 2011 was $9.1 million or 17.5% of income before taxes compared with $92.6 million or 99.6% of income before taxes for the three quarters ended October 1, 2010. The three quarters ended October 1, 2010 included a discrete charge of $69.9 million which was due primarily to a provision established upon the completion of field work of a multi-year IRS examination. The effective tax rate for the three quarters ended September 30, 2011, excluding discrete items, was slightly lower than the prior year due to a greater portion of income in lower tax jurisdictions.

In determining net income, we estimate and exercise judgment in the calculation of tax expense and tax liabilities and in assessing the recoverability of deferred tax assets that arise from temporary differences between the tax and financial statement recognition of assets and liabilities.

In the ordinary course of business, the ultimate tax outcome of many transactions and calculations is uncertain, as the calculation of tax liabilities involves the application of complex tax laws in the United States and other jurisdictions. We recognize liabilities for additional taxes that may be due on tax audit issues based on an estimate of the ultimate resolution of those issues. Although we believe the estimates are reasonable, the final outcome may be different than amounts we estimate. Such determinations could have a material impact on the income tax provision, effective tax rate and operating results in the period they occur. In addition, the effective tax rate reflected in our forward-looking statements is based on current enacted tax law. Significant changes in enacted tax law could materially affect our estimates.

Backlog

Our sales are made pursuant to purchase orders that are generally booked up to six months in advance of delivery. Our standard terms and conditions of sale provide that these orders may not be cancelled or rescheduled thirty days prior to the most current customer request date for standard products and ninety days prior to the customer request date for semi-custom and custom products. Backlog is influenced by several factors, including end market demand, pricing and customer order patterns in reaction to product lead times. Additionally, we believe backlog can fall faster than consumption rates in periods of weak end market demand since production lead times can be shorter. Conversely, we believe backlog can grow faster than consumption in periods of strong end market demand as production and delivery times increase and some customers may increase orders in excess of their current consumption to reduce their own risk of production disruptions.

Our six-month backlog was $141.3 million as of September 30, 2011 compared to $166.3 million as of December 31, 2010 and $167.2 million as of October 1, 2010. Although not always the case, we believe backlog can be an indicator of performance in the near future.

Business Outlook

In our third quarter 2011 earnings release, filed as an exhibit to our Form 8-K on October 26, 2011, we announced that we anticipate revenues for the fourth quarter 2011 to be in the range of $162 million to $170 million. Based on this outlook, we stated that we expect fourth quarter 2011 earnings per diluted share to be between $0.04 and $0.07.

25

Contractual Obligations and Off-Balance Sheet Arrangements

Our contractual obligations and off-balance sheet arrangements have not changed significantly from December 31, 2010. As of September 30, 2011, we had $21.5 million of open purchase orders for inventory from suppliers.

Liquidity and Capital Resources

Our capital requirements depend on a variety of factors, including but not limited to, the rate of increase or decrease in our existing business base; the success, timing and amount of investment required to bring new products to market; revenue growth or decline; and potential acquisitions. We believe that we have the financial resources necessary to meet business requirements for the next 12 months, including our dividend program, the requisite capital expenditures for the maintenance of worldwide manufacturing capacity, working capital requirements and potential future acquisitions or strategic investments. As of September 30, 2011, our total shareholders’ equity was $1,068.2 million and we had $420.8 million in cash, cash equivalents and short-term securities. In addition, we had $278.2 million in long-term debt outstanding as further described in Note 8 of the accompanying unaudited condensed consolidated financial statements.

We had $63.8 million in long-term investments, consisting of $59.0 million in auction rate securities (“ARS”) and $4.8 million in bank time deposits as of September 30, 2011. The ARS are composed of approximately $30.5 million of insurance-related securities, $13.2 million of corporate credit securities and $15.3 million of securities collateralized by student loans. We continue to accrue and receive interest on the securities based on a contractual rate. The weighted rate is currently approximately 193 basis points above one month LIBOR.

Our primary sources and uses of cash during the three quarters ended September 30, 2011 and October 1, 2010 were as follows (in millions):

	Three quarters ended
	September 30, 2011			October 1, 2010
Sources of Cash
Existing business performance and activities
Operating activities, including working capital changes	$	108.4		$	108.6
Exercise of stock options and purchases under the employee stock purchase plan, including tax benefits		4.3			6.5
		112.7			115.1
Issuance of long-term debt
Issuance of long-term debt, net of fees		275.0			288.1
		275.0			288.1
Uses of Cash
Business improvement investments
Business acquisitions, net		—			(404.9	)
Capital expenditures, net of sale proceeds		(8.7	)		(13.2	)
		(8.7	)		(418.1	)
Repayments of debt
Repayments of debt		(298.5	)		(0.8	)
		(298.5	)		(0.8	)
Returns to shareholders
Dividends paid		(46.2	)		(45.0	)
		(46.2	)		(45.0	)
Cash/Investment Management Activities
(Increase) decrease in investments and foreign exchange effects		(23.0	)		83.5
Net increase (decrease) in cash and cash equivalents	$	11.3		$	22.8

26

For the three quarters ended September 30, 2011, our operational cash flows were $112.7 million compared to $115.1 million in the three quarters ended October 1, 2010. This decrease of $2.4 million was primarily due to the settlement of the interest rate swap and lower operating income, offset by changes in working capital. We repaid our long-term debt for $298.5 million year-to-date and drew on our revolver line for $275.0 million, net of fees. We used approximately $8.7 million for capital expenditures and $46.2 million to pay shareholder dividends. Investment balances were increased by $23.0 million in the three quarters ended September 30, 2011 primarily with the purchase of $33.8 million of short and long-term investments offset by calls of certain ARS for $10.1 million. The resulting increase in cash was $11.3 million overall.

We strive to continually improve the cash flows from our existing business activities and return a substantial portion of that cash flow to shareholders. We continue to maintain and improve our existing business performance with necessary capital expenditures and acquisitions that may further improve our business and return on investment. Cash, stock, debt or a combination may be issued to fund additional acquisitions to grow our business.

Our cash, cash equivalents and investments give us the flexibility to return free cash flow to our shareholders while also pursuing business improvement opportunities for our future.

Non-cash Working Capital

Trade accounts receivable, less valuation allowances, decreased by $20.2 million or 22.8% to $68.5 million as of September 30, 2011 from $88.7 million as of December 31, 2010. This decrease primarily reflects the decrease in sales and increased reserves related to changes in distributor agreements.

Our net inventories increased by $1.5 million or 1.5% to $103.5 million as of September 30, 2011 from $102.0 million as of December 31, 2010. Inventories increased from year end as a result of decreased sales activity. We maintain stock of certain high volume products to ensure our lead times remain within customer expectations.

Capital Expenditures

Capital expenditures, net of sales proceeds, were $8.7 million for the three quarters ended September 30, 2011 and $13.2 million for the three quarters ended October 1, 2010. Capital expenditures have been focused primarily on facilities improvements at our Milpitas location, electronic equipment mostly for R&D, and on the expansion of available capacity for test partners to support continuing unit volume growth. We anticipate capital expenditures will remain at current levels in the near term.

Proceeds from Exercises of Stock Options and our Stock Purchase Plan

Cash flow from stock plans (exercises of stock options and related tax benefits and sales under our Employee Stock Purchase Plan, or ESPP) was $4.3 million in the three quarters ended September 30, 2011, compared to $6.5 million received in the three quarters ended October 1, 2010. Exercises are decisions of grantees and are influenced by the level of our stock price and by other considerations of grantees. Recent declines in stock price have resulted in many of our options being “underwater” with exercise prices in excess of the current stock price. While the level of cash inflow from exercises is difficult to forecast or control, we believe it will remain a secondary source of cash.

Dividends on Common Stock

In July 2011, our Board of Directors declared a quarterly dividend of $0.12 per share of common stock. The dividend was paid on August 26, 2011 to shareholders of record as of the close of business on August 16, 2011. In October 2011, our Board of Directors also declared a dividend of $0.12 per share, to be paid on November 25, 2011 to shareholders of record as of the close of business on November 15, 2011.

27

Item 3. Quantitative and Qualitative Disclosures about Market Risk.

Global economic conditions pose a risk to the overall economy as consumers and businesses may defer purchases in response to the uncertainty around tighter credit and negative financial news. These conditions could reduce product demand and affect other related matters. Demand could be different from our expectations due to many factors including changes in business and economic conditions, conditions in the credit market that could affect consumer confidence, customer acceptance of our products, changes in customer order patterns including order cancellations and changes in the level of inventory held by vendors.

Credit markets have tightened as a result of the recent financial crises, resulting in lower liquidity in many financial markets and excess volatility in fixed income, credit and equity markets. We have experienced a number of resulting effects, including product delays due to effects experienced by key suppliers; reduced orders and payments as customers are affected by tighter credit markets and/or insolvency; decreased investing and financing options in a tighter market; increased expenses; increased impairments resulting from lower orders and sales as customers experience difficulties obtaining financing; and volatility and extreme changes in the earnings and fair value of our investments.

Moreover, in the normal course of doing business, we are exposed to the risks associated with foreign currency exchange rates and changes in interest rates. We employ established policies and procedures governing the use of financial instruments, entered into for purposes other than trading purposes, to manage our exposure to these risks.

Our cash equivalents and investments are subject to three market risks: interest rate risk, credit risk and liquidity risk. Our investments are primarily held in money market funds, bank time deposits and Auction Rate Securities (“ARS”). Some of these investments are insured for credit risk.

ARS are subject to substantial risk that the market will fail to provide the opportunity to liquidate on scheduled reset dates. This risk, which we have encountered with regard to our ARS, manifests itself in sponsoring broker-dealers withdrawing from the auction process that provides the rate reset and liquidity.

For further discussion of the risk related to foreign currency exchange rates and market risk, see our 2010 Annual Report on Form 10-K filed with the SEC on February 28, 2011.

Item 4. Controls and Procedures.

(a)Evaluation of Disclosure Controls and Procedures.Our management, with the participation of our Chief Executive Officer, or CEO, and Chief Financial Officer, or CFO, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act) as of September 30, 2011. In designing and evaluating our disclosure controls and procedures, our management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and our management necessarily applied its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on this evaluation, our officers concluded that, as of September 30, 2011, our disclosure controls and procedures were (1) designed to ensure that material information relating to us, including our consolidated subsidiaries, is made known to our CEO and CFO by others within those entities, particularly during the period in which this report was being prepared and (2) effective to ensure that all material information required to be disclosed by Intersil in the reports that it files or furnishes under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC, and that all such material information is accumulated and communicated to our management, including our CEO and CFO, to allow timely decisions regarding required disclosures.

(b)Changes in Internal Controls.No change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act) occurred during the fiscal quarter ended September 30, 2011 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

28

PART II-OTHER INFORMATION

Item 1. Legal Proceedings.

There were no material legal proceedings filed against Intersil during the quarter ended September 30, 2011, nor were there any material developments in existing legal proceedings to which Intersil is a party. Please reference our 2010 Annual Report on Form 10-K filed with the SEC on February 28, 2011 for a discussion of the material legal proceedings to which we are a party.

Item 1A. Risk Factors.

In addition to the cautionary information included in this report, you should carefully consider the factors discussed in “Item 1A. Risk Factors” in our 2010 Annual Report on Form 10-K, filed with the SEC on February 28, 2011, which could materially adversely affect our business, financial condition and/or results of operations.

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

None.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. (Removed and Reserved).

Item 5. Other Information.

None.

29

Item 6. Exhibits.

Exhibit No.	Description
3.1	Amended and Restated Certificate of Incorporation of Intersil Corporation (incorporated by reference to Exhibit 3.01 to the Quarterly Report on Form 10-Q, filed August 9, 2005).
3.2	Restated Bylaws of Intersil (incorporated by reference to Exhibit 3.02 to the Quarterly Report on Form 10-Q, filed August 7, 2009).
4	Specimen Certificate of Intersil Corporation’s Class A Common Stock (incorporated by reference to Exhibit 4.01 to the Annual Report on Form 10-K, filed on February 27, 2007).
10	Credit Agreement dated September 1, 2011, by and among Intersil, the Lenders (as defined therein), Bank of America, N.A. as administrative agent, swing line lender and letter of credit issuer (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K, filed September 8, 2011).
31.1	Certification of Chief Executive Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*
31.2	Certification of Chief Financial Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*
32	Certifications of the Chief Executive Officer and Chief Financial Officer pursuant to Rule 13a-14(b) of the Exchange Act and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*
101.INS	XBRL Instance document*
101.SCH	XBRL Taxonomy Extension Schema*
101.CAL	XBRL Taxonomy Extension Calculation Linkbase*
101.DEF	XBRL Taxonomy Extension Definition Linkbase*
101.LAB	XBRL Taxonomy Extension Label Linkbase*
101.PRE	XBRL Taxonomy Extension Presentation Linkbase*

* Filed or furnished herewith.

Attached as Exhibit 101 to this report are the following, formatted in XBRL (Extensible Business Reporting Language) and furnished electronically herewith: (i) Condensed Consolidated Statements of Earnings, (ii) Condensed Consolidated Balance Sheets, (iii) Condensed Consolidated Statements of Cash Flows, (iv) Consolidated Statements of Comprehensive Income, and (v) Notes to Condensed Consolidated Financial Statements.

In accordance with Rule 406T of Regulation S-T, the XBRL-related information in Exhibit 101 to this Quarterly Report on Form 10-Q is deemed not filed or part of a registration statement or prospectus for purposes of sections 11 or 12 of the Securities Act, is deemed not filed for purposes of Section 18 of the Exchange Act, and otherwise is not subject to liability under these sections.

30

SIGNATURES

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

INTERSIL CORPORATION

(Registrant)

/s/ Jonathan A. Kennedy

Jonathan A. Kennedy

Chief Financial Officer

Date: November 4, 2011

31