907687--3/19/2008--ACTEL

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{customer, product, revenue}

{product, market, service}

{condition, economic, financial}

{operation, international, foreign}

{stock, price, operating}

{financial, litigation, operation}

{competitive, industry, competition}

{product, liability, claim}

{property, intellectual, protect}

{regulation, change, law}

{personnel, key, retain}

{product, candidate, development}

{loss, insurance, financial}

{provision, law, control}

{operation, natural, condition}

{system, service, information}

{acquisition, growth, future}

Our historical stock option granting practices and the restatement of our financial statements have exposed us to civil litigation claims and regulatory proceedings, and may expose us to future civil litigation claims, regulatory proceedings, government inquiries, and enforcement actions, that could burden Actel and have a materially adverse effect on our financial condition, business, results of operations, and/or cash flows. A number of our current and former executive officers and Directors have been named as parties to a derivative action lawsuit related to our historical stock option grant practices, and there is a possibility of additional civil litigation claims, regulatory proceedings, government inquiries, and enforcement actions, any of which could result in significant legal expenses. Risks Related to Our Failure to Meet Expectations We derive a large percentage of our quarterly revenues from bookings received during the quarter, making quarterly revenues difficult to predict. We derive a significant percentage of our quarterly revenues from shipments made in the final weeks of the quarter, making quarterly revenues difficult to predict. Our military and aerospace shipments tend to be large and are subject to complex scheduling uncertainties, making quarterly revenues difficult to predict. We derive a majority of our quarterly revenues from products resold by our distributors, making quarterly revenues difficult to predict. An unanticipated shortage of products available for sale may cause our quarterly revenues and/or operating results to fall short of expectations. Unanticipated increases, or the failure to achieve anticipated reductions, in the cost of our products may cause our quarterly operating results to fall short of expectations. Unanticipated reductions in the average selling prices of our products may cause our quarterly revenues and operating results to fall short of expectations. In preparing our financial statements, we make good faith estimates and judgments that may change or turn out to be erroneous. Our gross margin may decline as we increasingly compete with ASICs and serve the value-based market. We may not win sufficient designs, or the designs we win may not generate sufficient revenues, for us to maintain or expand our business. Risks Related to Defective Product Any error or defect in our products could have a material adverse effect on our business, financial condition, and operating results. Any product liability claim could pose a significant risk to our business, financial condition, and operating results. Risks Related to New Products Our introduction of the Actel Fusion PSC presents numerous significant challenges. Numerous factors can cause the development or introduction of new products to fail or be delayed. New products are subject to greater design and operational risks. New products are subject to greater technology risks. New products generally have lower gross margins. Risks Related to Competitive Disadvantages Many of our current and potential competitors are larger and have more resources. Our antifuse technology is not reprogrammable, which is a competitive disadvantage in most cases. Our Flash and antifuse technologies are not manufactured on standard processes, which is a competitive disadvantage. Risks Related to Events Beyond Our Control Our operations and those of our partners are located in areas subject to volatile natural, economic, social, and political conditions. We have only limited insurance coverage. Risks Related to Dependence on Third Parties Our independent wafer manufacturers may be unable or unwilling to satisfy our needs in a timely manner, which could harm our business. Our limited volume and customized process requirements generally make us less attractive to independent wafer manufacturers. Identifying and qualifying new independent wafer manufacturers is difficult and might be unsuccessful. Our independent assembly subcontractors may be unable or unwilling to meet our requirements, which could delay product shipments and result in the loss of customers or revenues. Our independent software and hardware developers and suppliers may be unable or unwilling to satisfy our needs in a timely manner, which could impair the introduction of new products or the support of existing products. Our future performance will depend in part on the effectiveness of our independent distributors in marketing, selling, and supporting our products. Distributor contracts generally can be terminated on short notice. Fluctuations in inventory levels at our distributors can affect our operating results. Risk Related to the Conduct of International Business We depend on international operations for almost all of our products. We depend on international sales for a substantial portion of our revenues. Risk Related to Economic and Market Fluctuations Our revenues and operating results may be adversely affected by future downturns in the semiconductor industry. Our revenues and operating results may be adversely affected by future downturns in the military and aerospace market. Our revenues and operating results may be adversely affected by changes in the military and aerospace market. Our revenues and/or operating results may be adversely affected by future downturns at any of our major customers. Any acquisition we make may harm our business, financial condition, and/or operating results. Risks Related to Changing Rules and Practices Changes in accounting for equity compensation adversely affected our operating results and may adversely affect our ability to attract and retain employees. Compliance with the Sarbanes-Oxley Act of 2002 and related corporate governance and public disclosure requirements have resulted in significant additional expense. We may face significant business and financial risk from claims of intellectual property infringement asserted against us, and we may be unable to adequately enforce our intellectual property rights. We may be unable to attract or retain the personnel necessary to successfully develop our technologies, design our products, or operate, manage, or grow our business. We have some arrangements that may not be neutral toward a potential change of control and our Board of Directors could adopt others. Our stock price may decline significantly, possibly for reasons unrelated to our operating performance.

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907687--3/19/2008--ACTEL_CORP