310568--11/21/2007--MICROSEMI

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{condition, economic, financial}

{operation, international, foreign}

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{financial, litigation, operation}

{property, intellectual, protect}

{competitive, industry, competition}

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Downturns in the highly cyclical semiconductor industry have in the past adversely affected the operating results and the value of our business, and may continue to do so in the future. The semiconductor business is subject to downward price pressure. The semiconductor industry is highly competitive. We may not be able to develop new technologies and products to satisfy changes in customer demand, and our competitors could develop products that decrease the demand for our products. Compound semiconductor products may not successfully compete with silicon-based products. Production delays related to new compound semiconductors could adversely affect our future results. We may be unable to retain our customers due in part to our inability to fulfil our customer demand and other factors Seasonality in certain retail markets that our OEM customers address, such as LCD television, may cause fluctuations in our rate of revenue growth or financial results. Fluctuations in sales of high-reliability products for use in implantable defibrillators may adversely affect our financial results. We must commit resources to research and development, design, and production prior to receipt of purchase commitments and could lose some or all of the associated investment. Variability of our manufacturing yields may affect our gross margins and profits. International operations and sales expose us to material risks and may increase the volatility of our operating results. The concentration of the factories that service the semiconductor industry makes us more susceptible to events or disasters affecting the areas in which they are most concentrated. Some of our facilities are located near major earthquake fault lines. Delays in beginning production, implementing production techniques, resolving problems associated with technical equipment malfunctions, or issues related to government or customer qualification of facilities could adversely affect our manufacturing efficiencies and our ability to realize cost savings. Interruptions, delays or cost increases affecting our materials, parts, equipment or subcontractors may impair our competitive position. Fixed costs may reduce operating results if our sales fall below expectations. Reliance on government contracts for a portion of our sales could have a material adverse effect on results of operations. There may be unanticipated costs associated with adding to or supplementing our manufacturing capacity. Failure to manage consolidation of operations effectively could adversely affect our margins and earnings. We may be unable to successfully integrate acquired companies and personnel with existing operations. We have closed, combined, sold or disposed of certain subsidiaries or divisions, which in the past has reduced our sales volume and resulted in restructuring costs. Any failure by us to protect our proprietary technologies or maintain the right to use certain technologies may negatively affect our ability to compete. Our products may be found to be defective or hazardous and we may not have sufficient liability insurance. Environmental liabilities could adversely impact our financial position. Litigation could adversely impact our financial position. Our future success depends, in part, upon our ability to continue to attract and retain the services of our executive officers or other key management or technical personnel. We may have increasing difficulty attracting and retaining qualified outside Board members. Delaware law and our charter documents contain provisions that could discourage or prevent a potential takeover of Microsemi that might otherwise result in our stockholders receiving a premium over the market price for their shares. The volatility of our stock price could affect the value of an investment in our stock and our future financial position. We may not make the sales that are suggested by our order rates, backlog or book-to-bill ratio, and our book-to-bill ratio may be affected by product mix. Our inventory levels have risen, which adversely affects cash flow. There may be some potential effects of system outages. Our accounting policies and estimates have a material effect on the financial results we report. If, in the future, we conclude that our internal control over financial reporting is not effective, or if our auditors conclude that our evaluation of internal control over financial reporting is not effective, investors could lose confidence in the reliability of our financial statements, which could result in a decrease in the value of our common stock.

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310568--11/21/2007--MICROSEMI_CORP