1096325--2/27/2007--INTERSIL

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{regulation, change, law}

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{operation, international, foreign}

{product, market, service}

{control, financial, internal}

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{operation, natural, condition}

{gas, price, oil}

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{cost, regulation, environmental}

{competitive, industry, competition}

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RISK FACTORS RELATING TO GENERAL BUSINESS CONDITIONS Our quarterly revenues and operating results are unpredictable and are likely to fluctuate. Downturns in the business cycle could reduce our revenues and profitability. Business interruptions could harm our business. Our business has been and is expected to continue to be characterized by average selling prices ( ASPs ) that decline over relatively short time periods, which can negatively affect our results of operations unless we are able to sell more units, reduce our costs, introduce new products with higher ASPs or some combination thereof. RISK FACTORS RELATING TO PRODUCTION OPERATIONS Production time and the cost of our products could increase if we were to lose one of our limited number of suppliers or if one of those suppliers increased the prices of raw materials. Because we depend on third party foundries and other manufacturing subcontractors to manufacture, assemble and test some of our products, we may experience delays beyond our control in delivering those products to our customers. We rely on manufacturing capacity located in geologically unstable areas, which could affect the availability of supplies and services. Delays in production at new facilities, in implementing new production techniques or in curing problems associated with technical equipment malfunctions may lower yields and reduce our revenues and profitability. We rely on a limited number of packaging subcontractors that may not have adequate capacity to meet our product delivery requirements. If our products contain defects or fail to achieve industry reliability standards, our reputation may be harmed, and we may incur significant unexpected expenses and lose sales opportunities. Our insurance coverage for such events may be insufficient. RISK FACTORS RELATING TO R D, ENGINEERING, INTELLECTUAL PROPERTY AND NEW TECHNOLOGIES We may be unsuccessful in developing and selling new products required to maintain or expand our business. We use a significant amount of intellectual property in our business. If we are unable to protect this intellectual property, we could lose our right to prevent others from using our key technologies, resulting in decreased revenues. Products that we manufacture and sell, or products formerly produced and sold by us and now manufactured and sold by purchasers of business that we have divested, may infringe other parties intellectual property rights. We may have to pay others for infringement and misappropriation of their intellectual property rights, suspend the manufacture use or sale of some affected products, or incur the cost of defending in a litigation, resulting in significant expense to us. We are subject to litigation risks. RISK FACTORS RELATING TO INTERNATIONAL OPERATIONS Our future success depends on international sales and the management of global operations. Fluctuations in the exchange rate of the U.S. dollar and foreign currencies could increase operating expenses and negatively affect our financial performance and results of operations. The outbreak of severe acute respiratory syndrome ( SARS ), avian flu or other health related issues, could impact our customer or supply base, especially in Asia. RISK FACTORS RELATING TO SALES, MARKETING AND COMPETITION Our business is very competitive, and increased competition could reduce gross margins and the value of an investment in our company. We depend upon the continued demand for our products in the high-end consumer, communications, industrial and computing markets for a significant portion of our net revenues. Difficulties in estimating the amount and timing of sales to our customers could harm our operating results. We compete against larger, more established entities and our market share may be reduced if we are unable to respond to our competitors effectively. Most of our distributors and resellers, who represent approximately 40% of net sales, can terminate their contract with us with little or no notice. The termination of a distributor could negatively impact our business, including net sales and accounts receivable. RISK FACTORS RELATING TO ENVIRONMENTAL REGULATIONS, GOVERNMENTAL REGULATIONS, INCLUDING TAXES, AND FINANCIAL REPORTING RULES AND REGULATIONS Environmental liabilities and other governmental regulatory matters could force us to expend significant capital and incur substantial costs. Our financial results may be adversely impacted by higher than expected tax rates, exposure to additional income tax liabilities and the adoption of new accounting pronouncements regarding income tax accounting. Accounting pronouncements are moving toward fair value methodology accounting, which may lead to more volatility in reported earnings which might cause a decline in our stock price. Changes in accounting standards for stock-based compensation may adversely affect our operating results, our stock price, and our competitiveness in the employee marketplace. We are subject to the internal control evaluation and attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002. Our independent registered public accounting firm must confirm its independence in order for us to meet our regulatory reporting obligations on a timely basis. RISK FACTORS RELATING TO OUR BUSINESS STRATEGIES, PERSONNEL AND OTHER OPERATIONS If we fail to attract and retain qualified personnel, our business may be harmed. If we choose to acquire or dispose of product lines and technologies, we may encounter unforeseen costs and difficulties that could impair our financial performance. We rely upon certain critical information systems for the operation of our business.

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1096325--2/27/2007--INTERSIL_CORP/DE