- Annual Report (10-K)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

/x/ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 2011.

Or

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

Commission File No. 0-25662

ANADIGICS, Inc.
(Exact name of registrant as specified in its charter)

Delaware	22-2582106
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

141 Mt. Bethel Road, Warren, New Jersey	07059
(Address of principal executive offices)	(Zip Code)

(908) 668-5000
(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Common Stock, $0.01 par value

The above securities are registered on the NASDAQ Global Market

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes / / No /X/

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes / / No /X/

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes /X/ No / /

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes /X / No / /

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the registrant's knowledge, in definitive proxy or information statements incorporated in Part III of this Form 10-K or any amendment to this Form 10-K. /X /

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act (check one): Large accelerated filer / / Accelerated filer / X / Non-accelerated filer (Do not check if a smaller reporting company) / / Smaller reporting company / /

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes / / No /X/

The aggregate market value of the voting common equity held by non-affiliates of the registrant as of July 2, 2011 was approximately $215 million, based upon the closing sales price of the registrant’s common equity as quoted on the NASDAQ Global Market on such date.

The number of shares outstanding of the registrant's common stock as of March 2, 2012 was 69,877,065 (excluding 114,574 shares held in treasury).

Documents incorporated by reference: Definitive proxy statement for the registrant’s 2012 annual meeting of shareholders (Part III).

TABLE OF CONTENTS


PART I
Item 1:	Business
Item 1A:	Risk Factors
Item 1B:	Unresolved Staff Comments
Item 2:	Properties
Item 3:	Legal Proceedings
Item 4:	Removed and Reserved

PART II
Item 5:	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
Item 6:	Selected Financial Data
Item 7:	Management’s Discussion and Analysis of Financial Condition and Results of Operations
Item 7A:	Quantitative and Qualitative Disclosures About Market Risk
Item 8:	Financial Statements and Supplementary Data
Item 9:	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
Item 9A:	Controls and Procedures
Item 9B:	Other Information

PART III
Item 10:	Directors, Executive Officers and Corporate Governance
Item 11:	Executive Compensation
Item 12:	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
Item 13:	Certain Relationships and Related Transactions and Director Independence
Item 14:	Principal Accounting Fees and Services

PART IV
Item 15:	Exhibits, Financial Statement Schedules

FORWARD-LOOKING INFORMATION

CERTAIN STATEMENTS IN THIS REPORT OR DOCUMENTS INCORPORATED HEREIN BY REFERENCE ARE FORWARD-LOOKING STATEMENTS (AS THAT TERM IS DEFINED IN THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED) THAT INVOLVE RISKS AND UNCERTAINTIES. THESE FORWARD-LOOKING STATEMENTS CAN GENERALLY BE IDENTIFIED AS SUCH BECAUSE THE CONTEXT OF THE STATEMENT WILL INCLUDE WORDS SUCH AS WE "BELIEVE", "ANTICIPATE", "EXPECT" OR WORDS OF SIMILAR IMPORT. SIMILARLY, STATEMENTS THAT DESCRIBE OUR FUTURE PLANS, OBJECTIVES, ESTIMATES OR GOALS ARE FORWARD-LOOKING STATEMENTS. THE CAUTIONARY STATEMENTS MADE IN THIS REPORT SHOULD BE READ AS BEING APPLICABLE TO ALL RELATED FORWARD-LOOKING STATEMENTS WHEREVER THEY APPEAR IN THIS REPORT. YOU ARE CAUTIONED THAT ANY SUCH FORWARD-LOOKING STATEMENTS ARE NOT GUARANTEES OF FUTURE PERFORMANCE AND INVOLVE RISK AND UNCERTAINTIES, AS WELL AS ASSUMPTIONS THAT IF THEY MATERIALIZE OR PROVE INCORRECT, COULD CAUSE RESULTS TO DIFFER MATERIALLY FROM THOSE EXPRESSED OR IMPLIED BY SUCH FORWARD-LOOKING STATEMENTS. FURTHER, ALL STATEMENTS, OTHER THAN STATEMENTS OF HISTORICAL FACT, ARE STATEMENTS THAT COULD BE DEEMED FORWARD-LOOKING STATEMENTS. WE ASSUME NO OBLIGATION AND DO NOT INTEND TO UPDATE THESE FORWARD-LOOKING STATEMENTS, EXCEPT AS MAY BE REQUIRED BY LAW. IMPORTANT FACTORS THAT COULD CAUSE ACTUAL RESULTS AND DEVELOPMENTS TO BE MATERIALLY DIFFERENT FROM THOSE EXPRESSED OR IMPLIED BY THE FORWARD-LOOKING STATEMENTS PRESENTED HEREIN INCLUDE THE RISK FACTORS DISCUSSED IN THIS ANNUAL REPORT ON FORM 10-K, AS WELL AS THOSE DISCUSSED ELSEWHERE HEREIN.

PART I

ITEM 1. BUSINESS.

Overview

ANADIGICS, Inc. (“we” or the “Company”) is a leading provider of semiconductor solutions in the growing broadband wireless and wireline communications markets. Our products include radio frequency (RF) power amplifiers (PAs), tuner integrated circuits, active splitters, line amplifiers and other components, which can be sold individually or packaged as integrated front end modules (FEMs). We believe that we are well-positioned to capitalize on the high growth and convergence occurring in the voice, data and video segments of the broadband wireless and wireline communications markets. Our RF power amplifier products enable mobile handsets, datacards and other devices to access third and fourth generation (3G and 4G) wireless networks utilizing international standards including LTE (Long Term Evolution), WCDMA (Wideband Code Division Multiple Access), HSPA (High Speed Packet Access), CDMA (Code Division Multiple Access), EVDO (Evolution Data Optimized) and WiMAX (Worldwide Interoperability for Microwave Access). Our WiFi products enable connectivity for wireless mobile devices and other computing devices. Our CATV (Cable Television) products enable fixed-point, wireline broadband communications over CATV infrastructure as well as cable modem and set-top box products. Our Wireless infrastructure products support operator commitments worldwide to optimize the increasing demands for subscriber data through deployment of new small-cell base stations as part of a heterogeneous network.

Our business strategy focuses on enabling anytime, anywhere connectivity which enhances the consumer’s broadband and wireless experience. We develop RF front end solutions for communications equipment manufacturers and we partner with industry-leading wireless and wireline chipset providers who incorporate our solutions into their reference designs. Our solutions cost-effectively enhance communications devices by improving RF performance, efficiency, reliability, time-to-market and integration while reducing the size, weight and cost of these products.

We were incorporated in Delaware in 1984. Our corporate headquarters are located at 141 Mt. Bethel Road, Warren, New Jersey 07059, and our telephone number at that address is 908-668-5000.

We expect our business will benefit in the long-term from three key factors: (1) accelerated use and growth in the established markets for 3G, 4G and CATV and Wireless infrastructure products, (2) increasing penetration of newer-generation wireless and wireline broadband communications technology into developing markets worldwide, and (3) an increased demand for our solutions within the latest-generation products in these end markets. We believe that in the long run the combination of these factors will enable us to outpace the overall end product unit growth in these broadband wireless and wireline communications markets. For example, multiple higher-performance PAs are required in new 3G and 4G wireless handsets and smartphones in order to access higher-speed wireless broadband data services being deployed in markets around the world. In addition, changes in network architectures necessary to accommodate a more data-centric usage model demand new types of small-cell wireless base station products that require RF amplifiers better optimized for power efficiency. The greater complexity and more demanding performance required of the infrastructure and subscriber equipment needed for evolving networks, coupled with our product compatibility on several leading reference designs allows us to capitalize on the growth in the 3G and 4G markets. We believe our new MMIC and hybrid line amplifier products will expand our addressable share of the CATV infrastructure market and we further believe that our infrastructure business will continue to benefit from the adoption of 1 GHz CATV systems worldwide as well as green initiatives focused on reducing power consumption.

We leverage our technological knowledge and advantages to be a leading technology-enabler via innovative semiconductor solutions for broadband wireless and wireline communications. We believe our patented InGaP- plus technology, which combines bipolar amplifying structures and pHEMT RF switches on the same die, coupled with our three level metal interconnect process provides us with a competitive advantage in the marketplace. Additionally, we believe proprietary designs of our HELP™ (High Efficiency at Low Power) power amplifiers when combined with higher efficiency at high output power provide our customers a competitive advantage by delivering performance required for 3G and 4G devices with lower battery power consumption and longer use time than comparable products in these markets.

Industry Background

Wireless 3G and 4G Market

The number of wireless handsets designed for 3G and 4G standards like CDMA/EVDO, WCDMA/HSPA and LTE is expected to grow significantly faster than the overall market as these standards become dominant over the next several years. According to the February 2012 report from Strategy Analytics, annual shipments of all types of 3G and 4G cellular terminals are forecast to grow from 1,057 million units in 2011 to 2,137 million units by 2016, a compound annual growth rate of 15.1%. As a qualified PA supplier to top-tier handset manufacturers such as Samsung Electronics Co. Ltd (Samsung), Huawei, ZTE Corporation, Research in Motion (RIM), and LG Electronics, we believe we are well positioned to benefit from the continuing transition to 3G and 4G wireless technologies.

Traditionally, the chipset in a wireless handset required one or two power amplifiers. As wireless operators acquire additional frequency licenses to deploy 3G and 4G networks, requirements for mobile devices that can operate in multiple bands has increased demand for power amplifiers in handsets, datacards and wireless modems. These wireless devices also require PAs with higher power and better linearity to meet more demanding performance specifications.

The key drivers of growth in the wireless handset market are:

·	Deployment of 4G networks and services.

·	Expansion of 3G footprint and subscriber base in emerging markets.

·	New features and applications to drive replacements in established markets.

·	Increased demand for smartphones and converged wireless devices such as tablet computers.

·	Convergence of voice, data and video services.

Wireless handsets and mobile data devices utilize a semiconductor chipset to enable communication with the network. Key components of a wireless semiconductor chipset include a baseband, transceiver and one or more power amplifiers. Each PA boosts the transmitter RF output to deliver enough signal power to enable connection with the radio access network for voice and data throughput. As additional features and functionality are incorporated into wireless handsets to leverage the higher network data rates that enable applications such as high speed data and streaming video services, increasing demands are placed on the handset battery, thereby reducing battery life. The high-performance PA is a critical component in the handset because it directly affects battery life in both talk and data modes. We believe our manufacturing processes and design technologies such as HELP™ combined with high efficiency at high output power provide a competitive advantage by enabling us to provide PAs that consume less battery power and extend use time.

In addition to wireless handsets and datacards, 3G and 4G capabilities are increasingly being embedded in tablets and in equipment designed for machine-to-machine (M2M) communication including automotive applications. We are a leading enabler in this market through the use of our power amplifiers in industry standard reference designs and in embedded wireless modules manufactured by leading original equipment manufacturers (OEM) providers to this growing market.

The 4G LTE wireless standard continues to gain momentum worldwide, as commercial mobile broadband wireless networks that use OFDM modulation technology continue deployment. We supply LTE PAs to many equipment makers, and believe that our relationships with leading LTE equipment and chipset vendors, in conjunction with our strong product portfolio position us to enable high-speed data and internet connectivity in these 4G networks.

LTE is the 4G standard most widely adopted by the GSM (Global System for Mobile Communications) operators’ community. A survey by the GSA (GSM Suppliers Association) in January 2012 identified 285 operators in 93 countries who are investing in the technology, with 49 LTE networks already launched and another 59 operators engaged in test, study or trial. According to the GSA, LTE has become the fastest developing mobile system technology ever. The rapid increase in wireless broadband data traffic is driving the interest in deploying LTE as quickly as possible. ANADIGICS long-standing business relationships with key players in the LTE ecosystem position us well to benefit from the developing demand for LTE-capable power amplifiers as more networks are deployed.

A defining benefit of 3G and 4G networks is their ability to provide higher data rate connectivity, in support of data-intensive applications such as large file transfer, streaming video, and other multimedia services. It is anticipated that with today's network architectures, a growing consumer demand for these types of applications will quickly limit user capacity. More prolific use of small-cell base stations in wireless networks will increase coverage and user capacity, and maintain a satisfying user experience. Our manufacturing processes and design technologies enable us to provide PAs optimized for new small-cell wireless infrastructure equipment that will support this transition in wireless networks. Further, WiFi data and video access is taken for granted in today’s wireless world and we offer products that enable connectivity to a great range of wireless mobile devices. The desire for increased functionality and use of multi-band applications continues and our products meet these more sophisticated demands. Our expertise and relationships with key industry participants position us to provide enabling WiFi PAs addressing these advanced demands including the emerging 802.11ac standard.

Cable Set-Top Box and Cable Modem Markets

The markets for CATV set-top boxes and cable modems are being shaped by several key trends. Set-top boxes are incorporating advanced functionality, to leverage the convergence of voice, data and video services over the broadband network, such as DVR, HDTV, wireless internet access, interactive services, home networking and gaming. These new features are driving demand for both new and replacement set-top boxes, including a transition to home gateways with support of Internet Protocol Television (IPTV). Unlike a traditional set-top box, IPTV does not require a tuner in order to access video content. Cisco Systems Inc. (Cisco) and Motorola, Inc., both long-time customers of ANADIGICS for set-top box components, are prominent suppliers of home gateway products that will eliminate the need over time for our tuner and splitter products.

As the cable modem market transitions to the DOCSIS 3.0 standard, we believe it will provide additional opportunity for our upstream amplifier products. The DOCSIS 3.0 standard uses multiple channels simultaneously and higher RF power levels to provide wider bandwidth and higher data throughput than previous technologies, and we believe that we are well positioned to support this market opportunity.

CATV Infrastructure

We are a leading supplier of 12V and 24V line amplifier radio frequency integrated circuit (RFIC) amplifiers to the CATV infrastructure market. This market shows continuing demand for equipment upgrades as a result of increasing CATV infrastructure bandwidth requirements, the need of cable service providers to offer converged voice, data and video services over their broadband networks, and the continued deployment of CATV fiber nodes. We are participating in these upgrades in established markets and benefitting from the rollout of digital cable in China and parts of Europe. We anticipate that new line amplifier products in industry-standard packages will expand our addressable market for CATV infrastructure. These include our traditional GaAs-based and new GaN (Gallium Nitride)-based products. Historically, we have enjoyed long product life cycles in these markets.

Our Strategy

Our objective is creating value through innovative RF solutions that enable instantaneous connectivity anytime, anywhere. The key elements of our strategy include:

Expand our serviceable available market (SAM) by developing new product families within both the wireless user equipment and wireless infrastructure market segments. These products include multi-mode multi-band power amplifiers (MMPA), dual band power amplifier duplexers (PAD) and small-cell wireless infrastructure power amplifiers. The MMPA also integrates a quad-band power amplifier for GSM/EDGE (2/2.5G), adding additional content to our SAM.

Expand share in the highest-growth end markets of broadband wireless communications and the CATV Infrastructure market. We target the fastest-growing segments of the wireless communications markets that demand the highest performance. These segments are wireless handsets and small-cell infrastructure. In addition, we expect to increase share in the CATV Infrastructure market by expanding the line amplifier product offering in RFIC and industry standard packages. We believe these markets offer the largest growth opportunity to create and extract value.

Bring patented innovative RF technology to industry-leading products. Our longstanding commitment to innovation in process technology and design has resulted in best-in-class RF products. ANADIGICS new PA architecture creates a competitive advantage by combining the lowest average talk-time current in the industry with high efficiency in high power mode for data only applications in 4G LTE. Power amplifier products leveraging this new architecture provide a performance advantage that helps our customers deliver differentiated products to market at a competitive price.

Work closely with industry-leading customers and partners. We endeavor to develop close relationships with industry leaders in the wireless and broadband markets to create value. These relationships support our technology road-maps and give insight into the most important specifications for next-generation products.

Build upon our operational excellence and further realize economies of scale. Delivering leading technology products in volume requires expert execution and results in long-term value add for our entire value chain, most importantly our customers. We will focus on reducing our product cost structure by leveraging our three level metal inter layer dielectric process, conversion to lower cost metallization and implementation of flip-chip technology. Business growth, driven by increased unit volume with high quality is critical to semiconductor companies and consistent with our long-term business strategy.

Incorporate additional and flexible capacity through co-operation and partnerships. Leveraging third-party capabilities to supplement our existing manufacturing capabilities supports our ability to grow scale while limiting costly further capital investment in manufacturing. These capabilities encompass GaAs, GaN and CMOS wafer fabrication, assembly, packaging and test technologies.

Improvements to our financial model via increased growth. Over the long term, we seek to increase our gross margins and profitability by focusing on products for markets in which we can achieve a strong competitive position. This is achieved by demonstrating technological innovation and leadership, by growing share and volumes and by controlling the growth in our expenses. Consequently, we intend to focus on supplying products in the following markets: (1) user equipment for networks based on 3G and 4G standards including LTE, CDMA/EVDO, WCDMA/HSPA, UMTS and WiMAX and (2) CATV and Wireless infrastructure amplifiers. Additionally, over the long term, we expect to grow research, development and sales expenses at rates slower than our revenue and gross margins growth rates to enable a leveraged increase in profitability dollars and return on revenue percentage .

Products

We classify our revenues based upon the end application of the product in which our integrated circuits are used. For the years ended December 31, 2011, 2010 and 2009, wireless accounted for approximately 78%, 74% and 66%, respectively, of our total net sales, while broadband accounted for approximately 22%, 26% and 34%, respectively, of our total net sales.

Wireless

Our Wireless product line includes power amplifier modules for CDMA/EVDO, GSM/EDGE, WCDMA/HSPA, LTE and other wireless technologies for mobile handsets and data devices. The following table describes our principal products for these applications:

Product	Application
Power Amplifier (PA)	Used in RF transmit chain of wireless handset, smartphone, datacard, or embedded module to amplify uplink signal to base station.
HELP™ PA Module (multiple versions)	ANADIGICS proprietary High Efficiency at Low Power PA design reduces PA average power consumption in LTE, WCDMA/HSPA and CDMA/EVDO devices.
Dual-band PA Modules	Two HELP™ PAs in a single package that enables operation in two different frequency bands at lower cost and with less board area versus single-band PAs.
Dual-band PA Duplexer Modules	Two HELP™ PAs and two duplexer filters in a single package that requires significantly less board area versus discrete PA and filter implementations.
Penta-band PA Modules	Five HELP™ PAs in a single package that enables operation in five different frequency bands at lower cost and significantly less board area versus discrete PA implementations.
Quad-band PA Modules	GSM-EDGE PAs that enable operation in GSM frequencies worldwide.
MMPA Modules	GSM-EDGE and CDMA/WCDMA/LTE PAs in a single package that enables operation in different frequency bands at lower cost and with less board area versus single-band PAs.

Broadband

Our Broadband product line encompasses video, voice and data telecommunications systems, consisting of CATV, Wireless Infrastructure and WiMAX/WiFi applications.

The following table outlines our principal Broadband products and their applications:

Product	Application

CATV Infrastructure Products
GaAs and GaN Line Amplifiers	Used to distribute RF signals from headends to subscribers.
75 Ohm Gain Block Amplifiers	Used to amplify RF signals at intermediate points in the CATV network and at individual subscriber locations.
Optical Network RF Amplifiers	Used to amplify RF signals for Fiber-To-The-Premises and FiOS.

Wireless Infrastructure Products
Power Amplifiers	Used in RF transmit chain of small-cell base stations to amplify the downlink signal to the user equipment (i.e. picocells, femtocells).

CATV Set-Top Box and Cable Modem Products

Tuner Upconverters and Downconverters	Used to perform signal amplification and frequency conversion in double-conversion video and data tuners.
Active Splitters	Used to split an incoming signal to feed multiple tuners.
Integrated Tuners	Used to integrate tuner upconverters, downconverters and synthesizers in a single package.
Upstream Amplifiers	Used to amplify and control the level of signals in the return path.

WiMAX, LTE and WiFi Products
Mobile WiMAX and LTE PAs	Used in RF transmit chain of handsets, smartphones, datacards, or embedded modules to amplify uplink signal to base station.
Fixed Point WiMAX PAs	Used in RF transmit chain of Consumer Premises Equipment (CPEs) and femtocells.
Wi-Fi PAs and Front End ICs (FEIC)	Used in RF transmit and receive chains in embedded notebooks, access points and wireless mobile devices.

Marketing, Sales, Distribution and Customer Support

We sell our products primarily to our direct customers worldwide and have developed close working relationships with leading companies in the broadband wireless and wireline communications markets. Additionally, we selectively use independent manufacturers’ representatives and distributors to complement our direct sales and customer support efforts. Our relationships with our distributors enable them to maintain local practices regarding inventories and payment terms while supporting our growth in Asian wireless and global broadband markets. Working with distributors like World Peace Group and Richardson Electronics, who have extensive sales networks, provides us access to tier-one customers in these markets. We believe this is critical to our objective of expanding our customer base, especially as we expand our product portfolio.

We believe that the technical nature of our products and markets demands an unwavering commitment to building and maintaining close relationships with our customers. Our sales and marketing staff, which are assisted by our technical staff and senior management, visit prospective and existing customers worldwide on a regular basis. Our design and applications engineering staff actively communicate with customers during all phases of design and production. We have highly specialized field application engineering teams in North America, Korea, Taiwan and China, located near key handset OEM’s and chipset providers. We believe that these contacts are vital to the development of close, long-term working relationships with our customers, and in obtaining regular forecasts, market updates and information regarding technical and market trends.

We believe that reference-design manufacturers in the broadband wireless and wireline communications markets will continue to play an important role in the future of these markets. Therefore, we believe it is essential that we maintain strong relationships in partnering with these companies to define products that are compatible with and provide value to their OEM manufacturers.

Process Technology, Manufacturing, Assembly and Testing

We design, develop and manufacture RFICs primarily using GaAs compound semiconductor substrates with various process technologies, Metal Semiconductor Field Effect Transistors (MESFET), Pseudomorphic High Electron Mobility Transistors (pHEMT), and Heterojunction Bipolar Transistors (HBT). Our patented technology, which utilizes InGaP- plus , combines InGaP HBT and pHEMT processes on a single substrate, enabling us to integrate the PA function and the RF active switch function on the same die.

Manufacturing

We fabricate substantially all of our ICs in our six-inch diameter GaAs wafer fab in Warren, New Jersey. Our 150mm (six-inch diameter) GaAs (Gallium Arsenide) wafer fabrication facility (fab) has been operational since 1999. Our Warren fab was first certified as ISO 9001 compliant in December 1993. Since that time, we have updated our compliance to the ISO 9001:2000 upgrade of this standard. In 2004, we also received ISO 14001 certification and remain certified.

We have a strategic foundry agreement with WIN Semiconductors (Taiwan) to supplement our existing wafer fabrication capability and allow for additional and flexible capacity without the requisite capital investment. We have begun shipping certain new products that use this additional production and process capability.

Assembly

Fabricated GaAs wafers are shipped to contractors in Asia for packaging. Certain processes cannot be easily or economically integrated onto a single die, and consequently multi-chip modules that combine multiple die within a single package are now required, enabling the selection of the optimal process technology for each IC within the package. This provides enhanced integration at the sub-system level and these solutions generate significant size reductions in wireless handset component circuitry.

Modules allow our customers to get their product to market more rapidly at a lower overall end product cost due largely to reductions in parts count and required engineering effort. We believe we are well positioned to address the shift toward more complex multi-chip modules because we possess both extensive process breadth (a key advantage, as modules typically incorporate numerous process technologies) and a large portfolio of RF expertise ( e.g. , PAs, switches, transceivers, and discretes).

Final Test

After assembly, packaged ICs are tested prior to shipment to our customers. We outsource the majority of our production RF testing operations, which are performed near our module assembly contractors in Asia. This adds considerable efficiencies to the device manufacturing process in reducing product cycle times and supports our initiative to reduce manufacturing costs.

Raw Materials

GaAs wafers, HBT/pHEMT epitaxial wafers, passive components, other raw materials, and equipment used in the production of our ICs are available from a limited number of sources. See “Risk Factors—Sources for certain components, materials and equipment are limited, which could result in delays or reductions in product shipments.”

Research and Development

We have made significant investments in our proprietary processes, including product design, packaging and wafer fabrication, which we believe gives us a competitive advantage. Research and development expenses were $45.0 million, $50.1 million and $46.0 million in 2011, 2010 and 2009, respectively. We continue to focus our research and development primarily on advanced PAs and front end modules for 3G and 4G wireless markets, Wireless infrastructure PAs, and CATV infrastructure line amplifiers in the broadband market.

Further, we develop other components, for example silicon CMOS and GaN (Gallium Nitride) components, to support our PA module and other products. We do not intend to manufacture this technology in-house, as we believe there will be adequate external foundry capacity available. See “Risk Factors—Sources for certain components, materials and equipment are limited, which could result in delays or reductions in product shipments.”

Customers

Sales to RIM, Samsung and ZTE Corporation accounted for 22%, 19% and 13%, respectively, of total net sales during 2011. No other customer accounted for 10% or more of total net sales during 2011. See “Risk Factors—We depend on a small number of customers; a loss of a customer or a decrease in purchases and/or changes in purchasing or payment patterns by one of these customers could materially and adversely affect our revenues and our ability to forecast revenues.”

Employees

As of December 31, 2011, we had 540 employees.

Competition

We compete with U.S. and international semiconductor and integrated circuit manufacturers of all sizes. Our key competitors are Avago Technologies Limited, RF Micro Devices, Inc., Skyworks Solutions, Inc. and TriQuint Semiconductor, Inc.

Our competitors have significantly greater financial, technical, manufacturing and marketing resources than we do. Increased competition could adversely affect our revenue and profitability through price reductions or reduced demand for our products. See “Risk Factors—We face intense competition, which could result in a decrease in our products’ prices and sales.”

Patents, Licenses and Proprietary Rights

It is our practice to seek U.S. patent and copyright protection on our products and developments where appropriate and to protect our valuable technology under U.S. laws affording protection for trade secrets and for semiconductor chip designs. We own 74 U.S. patents and have 8 pending U.S. patent applications. The U.S. patents were issued between 1995 and 2011 and will expire between 2013 and 2029.

We rely primarily upon trade secrets, technical know-how and other unpatented proprietary information relating to our product development and manufacturing activities. To protect our trade secrets, technical know-how and other proprietary information, our employees are required to enter into agreements providing for maintenance of confidentiality and the assignment of rights to inventions made by them while in our employ. We have also entered into non-disclosure agreements to protect our confidential information delivered to third parties in conjunction with possible corporate collaborations and for other purposes. See “Risk Factors—We may not be successful in protecting our intellectual property rights or in avoiding claims that we infringe on the intellectual property rights of others.”

Environmental Matters

Our operations are subject to federal, state and local environmental laws, regulations and ordinances that govern activities or operations that may have adverse effects on human health or the environment. These laws, regulations or ordinances may impose liability for the cost of remediating, and for certain damages resulting from, sites of past releases of hazardous materials. We believe that we currently conduct, and have conducted, our activities and operations in substantial compliance with applicable environmental laws and regulations, and that costs arising from existing environmental laws and regulations will not have a material adverse effect on our results of operations. We cannot assure you, however, that such environmental laws and regulations will not become more stringent in the future or that we will not incur significant costs in the future in order to comply with these laws and regulations. See “Risk Factors—We are subject to stringent environmental laws and regulations both domestically and abroad.”

Available Information

Copies of our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 are available free of charge through our website ( www.anadigics.com ) as soon as reasonably practicable after we electronically file the material with, or furnish it to, the Securities and Exchange Commission. All SEC filings are also available at the SEC’s Web site at www.sec.gov

************************************************************************

ITEM 1A. RISK FACTORS

Risks Related to ANADIGICS

We have experienced losses in the past, and may experience losses in the future.

We have incurred substantial operating and net losses in the past, including 2011, and we expect to continue to incur losses in 2012. If economic conditions worsen or there is an abrupt change in our customers’ businesses or markets, our business, financial condition and results of operations will likely be materially and adversely affected.

Our results of operations can vary significantly due to the cyclical nature of the semiconductor industry and our end markets.

The semiconductor industry and our end markets have been cyclical, seasonal and subject to significant downturns. Further, the industry can have limited visibility into customers’ forecasts and inventory levels. In past years, the industry has experienced periods marked by market weaknesses that created lower order demand, production overcapacity, high inventory levels, and accelerated declines in average selling prices for our products. These factors negatively affected our financial condition and results of operations during these periods and may negatively affect our financial condition and results of operations in the future.

Our results of operations also may be subject to significant quarterly and annual fluctuations. These fluctuations are due to a number of factors, many of which are beyond our control, including, among others: (i) changes in end-user demand for the products manufactured with our products and sold by our customers; (ii) the effects of competitive pricing pressures, including decreases in average selling prices of our products; (iii) industry production capacity levels and fluctuations in industry manufacturing yields; (iv) levels of inventory in our end markets; (v) availability and cost of products from our suppliers; (vi) the gain or loss of significant customers; (vii) our ability to develop, introduce and market new products and technologies on a timely basis; (viii) new product and technology introductions by competitors; (ix) changes in the mix of products produced and sold; (x) market acceptance of our products and our customers; and (xi) intellectual property disputes.

As a result, we may experience substantial period-to-period fluctuations in future operating results. Investors should not rely on our results of operations for any previous period as an indicator of what results may be for any future period. Failure of our operating results to meet the expectations of analysts or investors could materially and adversely affect the price of our common stock.

We depend on a small number of customers; a loss of a customer or a decrease in purchases and/or changes in purchasing or payment patterns by one of these customers could materially and adversely affect our revenues and our ability to forecast revenues.

We receive a significant portion of our revenues from a few significant customers and their subcontractors. Our financial condition and results of operations have been materially and adversely affected in the past by the failure of anticipated orders to be realized and by deferrals or cancellations of orders as a result of changes in customer requirements. If we were to lose any of our major customers, or if sales to these customers were to decrease materially, our financial condition and results of operations could be materially and adversely affected. Further, if a customer encounters financial difficulties of its own as a result of a change in demand or for any other reason, the customer’s ability to make timely payments to us for non-returnable products could be impaired.

If we fail to sell a high volume of products, our operating results may be harmed.

We have both increased capacity in and underutilized our manufacturing facility in recent years. In years in which we had excess capacity, this excess capacity meant we incurred higher fixed costs for our products relative to the revenues we generate. Because large portions of our manufacturing costs are relatively fixed, our manufacturing volumes are critical to our operating results. If we fail to achieve and maintain acceptable manufacturing volumes or experience product shipment delays, our results of operations could be harmed. During periods of decreased demand, our high fixed manufacturing costs negatively affect our results of operations. We base our expense levels in part on our expectations of future orders and these expense levels are predominantly fixed. If we receive fewer customer orders than expected or if our customers delay or cancel orders, we may not be able to reduce our manufacturing costs, which would have an adverse effect on our results of operations. If we are unable to improve utilization levels and correctly manage capacity, the increased expense levels relative to revenue will have an adverse effect on our business, financial condition and results of operations.

We face intense competition, which could result in a decrease in our products’ prices and sales.

The markets for our products are intensely competitive and are characterized by rapid technological change. We compete with U.S. and international semiconductor and integrated circuit (IC) manufacturers of all sizes, some of whom have significantly greater financial, technical, manufacturing and marketing resources than we do. We currently face significant competition in our markets and expect that intense price and product competition will continue. This competition has resulted in, and is expected to continue to result in, declining average selling prices for our products and increased challenges in maintaining or increasing market share. We believe that the principal competitive factors for suppliers in our markets include, among others: (i) time-to-market; (ii) timely new product innovation; (iii) product quality, reliability and performance; (iv) product price; (v) features available in products; (vi) compliance with industry standards; (vii) strategic relationships with leading reference design providers and customers; and (viii) access to and protection of intellectual property.

Certain of our competitors may be able to adapt more quickly than we can to new or emerging technologies and changes in customer requirements or may be able to devote greater resources to the development, promotion and sale of their products than we can.

Current and potential competitors have established, or may in the future establish, financial or strategic relationships among themselves or with customers, distributors, reference design providers or other third parties with whom we have or may in the future have relationships. If our competitors are able to strengthen existing, or establish new, relationships with these third parties they may rapidly acquire market share at our expense, which has occurred to some extent in the past when we were unable to fully meet customer demand due to capacity constraints. We cannot assure you that we will be able to compete successfully against current and potential competitors. Increased competition could result in pricing pressures, decreased gross margins and loss of market share and may materially and adversely affect our financial condition and results of operations.

We need to keep pace with rapid product and process development and technological changes as well as product cost reductions to be competitive.

The markets for our products are characterized by rapid changes in both product and process technologies based on the continuous demand for product enhancements, higher levels of integration, decreased size and reduced power consumption. Because the continuous evolution of these technologies and frequent introduction of new products and enhancements have generally resulted in short product life cycles for our wireless products, we believe that our future success will depend, in part, upon our ability to continue to improve the efficiency of our products and process technologies and rapidly develop new products and process technologies. The successful development of our products is highly complex and depends on numerous factors, including our ability to anticipate customer and market requirements and changes in technology and industry standards, our ability to differentiate our products from offerings of our competitors, and our ability to protect, develop or otherwise obtain adequate intellectual property for our new products. If a competing technology emerges that is, or is perceived to be, superior to our existing technology and we are unable to develop and/or implement the new technology successfully or to develop and implement a competitive and economically acceptable alternative technology, our financial condition and results of operations could be materially and adversely affected. This implementation may require us to modify the manufacturing process for our products, design new products to more stringent standards, and redesign some existing products, which may prove difficult for us and result in sub-optimal manufacturing yields, delays in product deliveries and increased expenses. We will need to make substantial investments to develop these enhancements and technologies, and we cannot assure investors that we will have funds available for these investments or that these enhancements and technologies will be successful.

If Original Equipment Manufacturers (OEMs) and Original Design Manufacturers (ODMs) of communications electronics products do not design our products into their equipment, we will have difficulty selling those products. Moreover, a “design win” from a customer does not guarantee future sales to that customer.

Our products are not sold directly to the end-user, but are components or subsystems of other products. As a result, we rely on OEMs and ODMs of wireless communications electronics products to select our products from among alternative offerings to be designed into their equipment. Without these “design wins,” we would have difficulty selling our products. If a manufacturer designs another supplier’s product into one of its product platforms, it is more difficult for us to achieve future design wins with that platform because changing suppliers involves significant cost, time, effort and risk on the part of that manufacturer. Also, achieving a design win with a customer does not ensure that we will receive significant revenues from that customer. Even after a design win, the customer is not obligated to purchase our products and can choose at any time to reduce or cease use of our products, including for example, if its own products are not commercially successful. We may not continue to achieve design wins or to convert design wins into actual sales, and failure to do so could materially and adversely affect our operating results.

Lengthy product development and sales cycles associated with many of our products may result in significant expenditures before generating any revenues related to those products.

After our product has been developed, tested and manufactured, our customers may need three to six months or longer to integrate, test and evaluate our product and an additional three to six months or more to begin volume production of equipment that incorporates the product. This lengthy cycle time increases the possibility that a customer may decide to cancel or change product plans, which could reduce or eliminate our sales to that customer. As a result of this lengthy sales cycle, we may incur significant research and development expenses, and selling and administrative expenses, before we generate the related revenues for these products. Furthermore, we may never generate the anticipated revenues from a product after incurring such expenses if our customer cancels or changes its product plans.

Uncertainties involving the ordering and shipment of our products could adversely affect our business.

Our sales are typically made pursuant to individual purchase orders and not under long-term supply arrangements with our customers. Our customers may cancel orders before shipment. Additionally, we sell a portion of our products through distributors, some of whom have certain rights to return unsold products. We may purchase and manufacture inventory based on estimates of customer demand for our products, which is difficult to predict. This difficulty may be compounded when we sell to OEMs or ODMs indirectly through distributors or contract manufacturers, or both, as our forecasts of demand will then be based on estimates provided by multiple parties. In addition, our customers may change their inventory practices on short notice for any reason. The cancellation or deferral of product orders, the return of previously sold products, or overproduction due to a change in anticipated order volumes could result in us holding excess or obsolete inventory, which could result in inventory write-downs and, in turn, could have a material adverse effect on our financial condition. In addition, shortened customer order lead times and opportunistic orders may not be filled timely due to a lack of, or inadequate level of uncommitted inventory resulting in lower revenues than possible. In addition, shortened customer order lead times may make it difficult to forecast revenues.

We face risks from failures in our manufacturing processes and the processes of our vendors.

The fabrication of integrated circuits, particularly those made of GaAs, is a highly complex and precise process. Our integrated circuits are primarily manufactured on wafers made of GaAs requiring multiple process steps. It requires production in a highly controlled, clean environment. Minor impurities, contamination of the clean room environment, errors in any step of the fabrication process, defects in the masks used to print circuits on a wafer, defects in equipment or materials, downtime on equipment, human error, interruptions in electrical supply or a number of other factors can cause a substantial interruption in our manufacturing processes. Moreover, our manufacturing process is subject to fluctuations in our demand and fab utilization. In an environment of increasing manufacturing output and personnel to satisfy increasing demand, we may incur manufacturing disruptions limiting supply to customers.

Additionally, our operations may be affected by lengthy or recurring disruptions of operations at our production facility or those of our subcontractors. These disruptions may include electrical power outages, fire, earthquakes, flooding, international conflicts, war, acts of terrorism, or other natural or man-made disasters. Specifically, in the fourth quarter of 2011, one of our subcontractors was impacted by the floods in Thailand, resulting in a temporary interruption of supply. Disruptions of our manufacturing operations could cause significant delays in our shipments unless and until we are able to shift the manufacturing of such products from an affected facility to another facility or the disruption is remedied. Furthermore, many of our customers require that they qualify a new manufacturing source before they will accept products from such source. This qualification process may be expensive and time consuming. In the event of such delays, we cannot assure you that the required alternative capacity would be available on a timely basis or at all. Even if alternative manufacturing capacity or assembly and test capacity is available, we may not be able to obtain it on favorable terms, which could result in higher costs and/or a loss of customers. We may be unable to obtain sufficient manufacturing capacity to meet demand, either at our own facilities or through external manufacturing. In the event we are unable to supply our customers with products previously assembled by our subcontractors on a timely basis, such customers may seek alternative suppliers.

Due to the highly specialized nature of the gallium arsenide integrated circuit manufacturing process, in the event of a disruption at the Warren, New Jersey semiconductor wafer fab, alternative gallium arsenide production capacity for certain processes would not be readily available from third-party sources. Any disruptions could have a material adverse effect on our business, financial condition and results of operations.

We also depend on certain vendors for components, equipment and services. We maintain stringent policies regarding qualification of these vendors. However, if these vendors’ processes vary in reliability or quality, they could negatively affect our products, and thereby, our results of operations.

Our dependence on foreign semiconductor component suppliers, assembly and test operations contractors could lead to delays in or reductions of product shipments.

We do not assemble or test all of our integrated circuits or multi-chip modules. Instead, we provide the integrated circuit die and, in some cases, packaging and other components to assembly and test vendors located primarily in Asia. Our products contain numerous component parts, substrates and silicon-based products, obtained from external suppliers. The use of external suppliers involves a number of risks, including the possibility of material disruptions in the supply of key components and the lack of control over delivery schedules, capacity constraints, manufacturing yields, quality, fabrication costs, warranty issues and protection of intellectual property. Further, we are dependent upon a few foreign semiconductor assembly and test subcontractors. If these vendors’ processes vary in reliability or quality, they could negatively affect our products and, therefore, our results of operations. If we are unable to obtain sufficient high quality and timely component parts, assembly or test service, if we experience delays in transferring or requalifying our production between suppliers, assembly or test locations or if means of transportation to or from these locations are interrupted, we would experience increased costs, delays or reductions in product shipment, and/or reduced product yields, which could materially and adversely affect our financial condition and results of operations.

The short life cycles and nature of semiconductor production, including the potential for order cancellation and need to build product to forecast for some of our products may leave us with obsolete or excess inventories.

The life cycles of some of our products depend heavily upon the life cycles of the end products into which our products are designed. For example, we estimate that current life cycles for wireless handsets, and in turn our wireless products, are approximately 9 to 12 months. Products with short life cycles require us to manage production and inventory levels closely. We cannot be certain that obsolete or excess inventories, which may result from unanticipated changes in the estimated total demand for our products and/or the estimated life cycles of the end products into which our products are designed, will not result in significant charges that will negatively affect our operating profit and net income.

Our products may experience significant declines in unit prices.

In each of the markets where we compete, prices of established products tend to decline significantly over time and in some cases rapidly. Accordingly, in order to remain competitive, we believe that we must continue to develop product enhancements and new technologies that will either slow the price declines of our products or reduce the cost of producing and delivering our products. If we fail to do so, our financial condition and results of operations could be materially and adversely affected.

Sources for certain components, materials and equipment are limited, which could result in delays or reductions in product shipments.

We do not manufacture any of the starting wafers, packaging or passive components used in the production of our gallium arsenide integrated circuits. Epitaxial wafers, packaging and passive components are available from a limited number of sources. To the extent that we are unable to obtain these materials, packaging or passive components in the required quantities, as has occurred from time to time in the past, we could experience delays or reductions in product shipments, which could materially and adversely affect our financial condition and results of operations.

We depend on a limited number of vendors to supply the equipment used in our manufacturing processes. When demand for semiconductor manufacturing equipment is high, lead times for delivery of such equipment can be substantial. We cannot assure you that we would not lose potential sales if required manufacturing equipment is unavailable and, as a result, we are unable to maintain or increase our production levels. A delay for any reason in increasing capacity would limit our ability to increase sales volumes, which could harm our relationships with customers.

We may pursue selective investments, acquisitions and alliances; the management and integration of additional operations could be expensive and divert management time and acquisitions may dilute the ownership of our stockholders.

Although we have invested in the past, and intend to continue to invest, significant resources in internal research and development activities, the complexity and rapidity of technological changes and the significant expense of internal research and development make it impractical for us to pursue development of all technological solutions on our own. On an ongoing basis, we review investment, alliance and acquisition prospects that would complement our product offerings, augment our market coverage or enhance our technological capabilities. Our ability to complete acquisitions or alliances is dependent upon, and may be limited to, the availability of suitable candidates and capital. In addition, acquisitions and alliances involve risks that could materially adversely affect our financial condition and results of operations, including the management time that may be diverted from operations in order to pursue and complete such transactions and difficulties in integrating and managing the additional operations and personnel of acquired companies. We cannot assure you that we will be able to obtain the capital necessary to consummate acquisitions or alliances on satisfactory terms, if at all. Further, any businesses that we acquire will likely have their own capital needs, which may be significant, and which we could be called upon to satisfy independent of the acquisition price. Future acquisitions or alliances could result in the incurrence of debt, costs and contingent liabilities, all of which could materially adversely affect our financial condition and results of operations. Any debt could subject us to substantial and burdensome covenants. The growth that may result from future acquisitions or alliances may place significant strains on our resources, systems and management. If we are unable to effectively manage such growth by implementing systems, expanding our infrastructure and hiring, training and managing employees, our financial condition and results of operations could be materially adversely affected. In addition, if we issue additional shares of our common stock in order to acquire another business, our stockholders’ interest in us, or the combined company, could be materially diluted. Further, in periods following an acquisition, we will be required to evaluate goodwill and acquisition-related intangible assets for impairment. When such assets are found to be impaired, they will be written down to estimated fair value, with a charge against earnings.

If our products fail to perform or meet customer requirements, we could incur significant additional costs.

The fabrication of integrated circuits from substrate materials and the modules containing these components is a highly complex and precise process. Our customers specify quality, performance and reliability standards that we must meet. If our products do not meet these standards, we may be required to rework or replace the products. Our products may contain undetected defects or failures that only become evident after we commence volume shipments, which we may experience from time to time. Other defects or failures may also occur in the future. If such failures or defects occur, we could: (i) lose revenues; (ii) incur increased costs such as warranty expense and costs associated with customer support; (iii) experience delays, cancellations or rescheduling of orders for our products; and (iv) experience increased product returns or discounts.

We have implemented restructuring programs in the past and may need to again in the future.

We implemented cost restructuring programs in the past, including in 2011. Such restructuring programs are costly to implement and may inadequately address the operating environment. No assurance can be given that the implementation of cost reduction programs will generate the anticipated cost savings and other benefits or that future or additional measures may be required. We could incorrectly anticipate the extent and term of the market decline and weakness for our products and services and we may be forced to restructure further or may incur future operating charges due to poor business conditions.

The variability of our manufacturing yields may affect our gross margins.

Our manufacturing yields vary significantly among products, depending on the complexity of a particular integrated circuit’s design and our experience in manufacturing that type of integrated circuit. We have experienced difficulties in achieving planned yields in the past, particularly in pre-production and upon initial commencement of full production volumes, which have adversely affected our gross margins.

Regardless of the process technology used, the fabrication of integrated circuits is a highly complex and precise process. Problems in the fabrication process can cause a substantial percentage of wafers to be rejected or numerous integrated circuits on each wafer to be nonfunctional, thereby reducing yields. These difficulties can include: (i) defects in masks, which are used to transfer circuit patterns onto our wafers; (ii) impurities in the materials used; (iii) operator errors; (iv) contamination of the manufacturing environment; (v) equipment failure; and (vi) interruptions in electrical supply.

Many of our manufacturing costs are fixed and average selling prices for our products tend to decline over time. Therefore, it is critical for us to increase the number of shippable integrated circuits per wafer and increase the production volume of wafers in order to maintain or improve our results of operations. Yield decreases can result in substantially higher unit costs, which could materially and adversely affect our financial condition and results of operations and have done so in the past. We cannot assure you that we will not suffer periodic yield problems, particularly during the early production of new products or introduction of new process technologies. If any new yield problems were to arise or any existing yield problems were to continue, our financial condition and results of operations could be materially and adversely affected.

Unfavorable general economic conditions in individual or world markets could negatively impact our financial performance.

Unfavorable general economic conditions, such as a recession or economic slowdown in the United States or in one or more of our other major markets, could negatively affect the demand for some of our products. Our customer base includes OEMs and ODMs that are reliant on consumer demand. Consumers may seek to reduce discretionary spending, which can soften demand for our customers’ products and can negatively affect our financial performance.

Our gallium arsenide semiconductors may cease to be competitive with silicon alternatives.

Among our product portfolio, we manufacture and sell gallium arsenide semiconductor devices and components, principally PAs and switches, which tend to be more expensive than their silicon counterparts. The cost differential is due to higher costs of raw materials for gallium arsenide and higher unit costs associated with smaller sized wafers and lower production volumes. We expect the cost of producing gallium arsenide devices will continue for the foreseeable future to exceed the costs of producing their silicon counterparts. In addition, silicon semiconductor technologies are widely-used process technologies for certain integrated circuits and these technologies continue to improve in performance. Therefore, to remain competitive, we must offer gallium arsenide products that provide superior performance over their silicon-based counterparts. If we do not continue to offer products that provide sufficiently superior performance to justify their higher cost, our financial condition and results of operations could be materially and adversely affected. We cannot assure you that there will continue to be products and markets that require the performance attributes of gallium arsenide solutions.

We face a risk that capital needed for our business will not be available when we need it.

In the future, we may need to access sources of financing to fund our growth. Taking into consideration our combined cash and marketable securities balance of $93.6 million as of December 31, 2011, we believe that our existing sources of liquidity will be sufficient to fund our research and development, capital expenditures, working capital requirements, interest and other financing requirements for at least the next twelve months.

However, there is no assurance that the capital required to fund these expenditures will be available in the future. Conditions existing in the U.S. capital markets, as well as the then current condition of our company, will affect our ability to raise capital, as well as the terms of any financing. We may not be able to raise enough capital to meet our capital needs on a timely basis or at all. Failure to obtain capital when required could have a material adverse effect on us.

In addition, any strategic investments and acquisitions that we may make to help us grow our business may require additional capital. We cannot assure you that the capital required to fund these investments and acquisitions will be available in the future.

The liquidity and valuation of our investments in marketable securities could be affected by disruption in financial markets.

We maintain investments in financial instruments including corporate debt obligations, auction rate securities, and government-related obligations, which included $6.0 million carrying value of auction rate securities at December 31, 2011. These investments must be supported by actively trading financial markets in order to be liquid investments. Financial markets can temporarily or permanently have an imbalance of buyers and sellers that can impact valuations and liquidity. Auction rate markets have experienced imbalances since late 2007 and may continue to be imbalanced. Such imbalances could negatively impact the fair value of our investments, requiring a charge against income as has occurred in the past, our access to cash and the liquidity of our marketable securities. We cannot assure you that our marketable securities could be sold for their carrying value or in our required time frame to support our intermediate term cashflow and liquidity needs.

Our success depends on our ability to attract and retain qualified personnel.

A small number of key executive officers manage our business. Their departure could have a material adverse effect on our operations. We believe that our future success will also depend in large part on our continued ability to attract and retain highly qualified manufacturing personnel, technical sales and marketing personnel, design and application engineers, as well as senior management. We believe that there is, and will continue to be, intense competition for qualified personnel in the semiconductor industry as the emerging broadband wireless and wireline communications markets develop, and we cannot assure you that we will be successful in retaining our key personnel or in attracting and retaining highly qualified manufacturing personnel, technical sales and marketing personnel, design and application engineers, as well as senior management. The loss of the services of one or more of our key employees or our inability to attract, retain and motivate qualified personnel could have a material effect on our ability to operate our business. We do not presently maintain key-man life insurance for any of our key executive officers.

We are subject to risks due to our international customer base and our subcontracting operations.

Sales to customers located outside the United States (based on shipping addresses and not on the locations of ultimate end users) accounted for approximately 95% of our net sales for each of the last three years. We expect that international sales will continue to represent a significant portion of our net sales. In addition, independent third parties located in Asia supply a substantial portion of the package substrates and components that we use in the production of gallium arsenide integrated circuits, and assemble and test nearly all of our products.

Due to our reliance on international sales and on foreign suppliers, assemblers and test houses, we are subject to risks of conducting business outside of the United States, including primarily those arising from local economic and political conditions, fluctuations in exchange rates, international health epidemics, natural disasters, restrictive governmental actions ( e.g. , exchange controls, duties, etc.), limitation of protecting intellectual property rights in foreign jurisdictions and potential acts of terrorism.

We are subject to stringent environmental laws and regulations both domestically and abroad.

We are subject to a variety of federal, state, local and foreign laws and regulations governing the protection of the environment. These environmental laws and regulations include those related to the use, storage, handling, discharge and disposal of toxic or otherwise hazardous materials used in or resulting from our manufacturing processes. Failure to comply with environmental laws and regulations could subject us to substantial liability or force us to significantly change our manufacturing operations. In addition, under some of these laws and regulations, we could be held financially responsible for remedial measures if our properties are contaminated, even if we did not cause the contamination. Although we are aware of contamination resulting from historical third-party operations at one of our facilities, a prior owner of such facility has been performing, and paying for the costs associated with, remediation of this property pursuant to an agreement with the state environmental regulatory authority. However, we cannot assure you that such prior owner will continue to do so or that we will not incur any material costs or liabilities associated with compliance with environmental laws in the future.

We may not be successful in protecting our intellectual property rights or in avoiding claims that we infringe on the intellectual property rights of others.

Our success depends in part on our ability to obtain patents and copyrights. Despite our efforts to protect our intellectual property, unauthorized third parties may violate our patents or copyrights. In addition to intellectual property that we have patented and copyrighted, we also rely on trade secrets, technical know-how and other non-patented proprietary information relating to our product development and manufacturing activities, which we seek to protect, in part, by entering into confidentiality agreements with our collaborators and employees. We cannot assure you that these agreements will not be breached, that we would have adequate remedies for any breach or that our trade secrets and proprietary know-how will not otherwise become known or independently discovered by others.

We seek to operate without infringing on the intellectual property rights of third parties. As is typical in the semiconductor industry, we have been notified, and may be notified in the future, that we may be infringing on certain patents and/or other intellectual property rights of other parties. We cannot assure you that we will not be subject to litigation to defend our products or processes against claims of patent infringement or other intellectual property claims. Any such litigation could result in substantial costs and diversion of our resources. If we infringe on the intellectual property rights of others, we cannot assure investors that we would be able to obtain any required licenses on commercially reasonable terms and we may be required to pay substantial damages, including treble damages, and cease production of our work product or use of one or more manufacturing processes. Even if we are ultimately successful, patent litigation can be time consuming, disruptive to management and expensive. If any of the foregoing were to occur, our financial condition and results of operations could be materially adversely affected.

We have had significant volatility in our stock price and it may fluctuate in the future. Therefore, you may be unable to sell shares of our common stock at or above the price you paid for such shares.

The trading price of our common stock has and may continue to fluctuate significantly. Such fluctuations may be influenced by many factors, including: (i) our operating results and prospects; (ii) the operating results and prospects of our major customers; (iii) announcements by our competitors; (iv) the depth and liquidity of the market for our common stock; (v) investor perception of us and the industry in which we operate; (vi) changes in our earnings estimates or buy/sell recommendations by analysts covering our stock; (vii) general financial and other market conditions; and (viii) domestic and international economic conditions.

Public stock markets have experienced extreme price and trading volume volatility, particularly in the technology sectors of the market. This volatility significantly affected and may in the future affect the market prices of securities of many technology companies for reasons frequently unrelated to or disproportionately impacted by the operating performance of these companies. These broad market fluctuations may materially and adversely affect the market price of our common stock.

In addition, fluctuations in our stock price and our price-to-earnings multiple may have made our stock attractive to momentum, hedge or day-trading investors who often shift funds into and out of stocks rapidly, exacerbating price fluctuations in either direction, particularly when viewed on a quarterly basis.

Certain provisions in our amended and restated certificate of incorporation, our amended and restated bylaws and our stockholders’ rights agreement and of Delaware law could deter, delay or prevent a third party from acquiring us and that could deprive you of an opportunity to obtain a takeover premium for our common stock.

Our amended and restated certificate of incorporation, our amended and restated bylaws and Delaware law contain provisions that could have the effect of making it more difficult for a third party to acquire us, or of discouraging a third party from attempting to acquire control of us. In addition, we have a stockholders’ rights agreement that under certain circumstances would significantly impair the ability of third parties to acquire control of us without prior approval of our board of directors.

Together, our amended and restated certificate of incorporation, our amended and restated by-laws, certain provisions of Delaware law and our stockholders’ rights agreement may discourage transactions that otherwise could provide for the payment of a premium over prevailing market prices for our common stock and could also limit the price that investors may be willing to pay in the future for our common stock.

We and certain of our directors are defendants in litigation and the outcome of these lawsuits may, to the extent not covered by insurance, negatively affect our financial condition, results of operations and cash flows.

Since late 2008, the Company, a former officer and a former officer-director have been parties to a now consolidated putative securities class action lawsuit pending in the United States District Court for the District of New Jersey. This lawsuit alleges federal securities fraud claims and seeks unspecified damages arising out of the alleged non-disclosure of information concerning, among other things, manufacturing inefficiencies and customer demand. Following plaintiffs’ submission of the Second Amended Complaint, filed on October 4, 2010, the alleged class period runs from February 12, 2008 through August 7, 2008. By an Opinion and an Order dated September 30, 2011, the District Court dismissed with prejudice plaintiffs' Second Amended Complaint. Plaintiff filed a notice of appeal to the United States Court of Appeals for the Third Circuit. The appeal is pending. In early 2009, two shareholders’ derivative lawsuits were filed in New Jersey Superior Court against the Company, as a nominal defendant, and certain of its current and former directors, alleging state law claims and seeking unspecified damages arising out of the same events at issue in the putative class action lawsuits. Neither the putative class action lawsuits nor the shareholders’ derivative lawsuits have yet advanced beyond the preliminary procedural stages. (See “Item 3. Legal Proceedings” for additional details on these cases and related matters.)

At this time, we cannot predict the probable outcome of these lawsuits. The pendency of these lawsuits, and any others that might subsequently be filed against us, could divert the attention of management from our business, harm our reputation and otherwise have a negative effect on our financial condition, results of operations and cash flows. Any adverse outcome in any one of these lawsuits may, to the extent not reimbursed by insurance, have a negative effect on our financial condition, results of operations and cash flows.

ITEM 1B. UNRESOLVED STAFF COMMENTS

Not applicable.

ITEM 2. PROPERTIES.

Our executive offices and primary fabrication facility are located at 141 Mt. Bethel Road, Warren, New Jersey 07059. We currently lease space in several buildings in Warren, New Jersey, located within the industrial complex. Approximately 150,000 square feet of manufacturing and office space is occupied in a building located at 141 Mt. Bethel Road in Warren, New Jersey under a twenty-year lease expiring on December 31, 2016. We occupy another 25,000 square feet of office space in a nearby building under a two-year lease expiring on October 31, 2012.

We also lease approximately 41,500 square feet in aggregate of office space in the following locations: Atlanta, Georgia; Tyngsboro, Massachusetts; Richardson, Texas; San Diego, California; Taipei, Taiwan; Aalborg, Denmark; China; South Korea; and Japan under lease agreements with remaining terms ranging from one month to seven years that can be extended, at our option.

ITEM 3. LEGAL PROCEEDINGS.

On or about November 11, 2008, plaintiff Charlie Attias filed a putative securities class action lawsuit in the United States District Court for the District of New Jersey, captioned Charlie Attias v. Anadigics, Inc ., et al. , No. 3:08-cv-05572, and, on or about November 21, 2008, plaintiff Paul Kuznetz filed a related class action lawsuit in the same court, captioned Paul J. Kuznetz v. Anadigics, Inc., et al. , No. 3:08-cv-05750 (jointly, the "Class Actions"). The Complaints in the Class Actions, which were consolidated under the caption In re Anadigics, Inc. Securities Litigation , No. 3:08-cv-05572, by an Order of the District Court dated November 24, 2008, seek unspecified damages for alleged violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as well as Rule 10b-5 promulgated thereunder, in connection with alleged misrepresentations and omissions in connection with, among other things, Anadigics's manufacturing capabilities and the demand for its products. On October 23, 2009, plaintiffs filed a Consolidated Amended Class Action Complaint, (the “First Amended Complaint”), which names the Company, a former officer and a former officer-director, and alleges a proposed class period that runs from July 24, 2007 through August 7, 2008. On December 23, 2009, defendants filed a motion to dismiss the First Amended Complaint; that motion was fully briefed as of March 30, 2010. After holding extensive oral argument on defendants' motion on August 3, 2010, the District Court found plaintiffs' First Amended Complaint to be deficient, but afforded them another opportunity to amend their pleading. The District Court therefore denied defendants' motion to dismiss without prejudice to defendants' renewing the motion in response to plaintiffs' Second Amended Complaint, which plaintiffs filed on October 4, 2010. The Second Amended Complaint, which contains the same substantive claims that were alleged in the First Amended Complaint, alleges a proposed class period that runs from February 12, 2008 through August 7, 2008. Defendants filed a motion to dismiss the Second Amended Complaint on December 3, 2010. By an Opinion and an Order dated September 30, 2011, the District Court dismissed with prejudice plaintiffs' Second Amended Complaint. On October 27, 2011, plaintiffs filed with the District Court a notice of appeal to the United States Court of Appeals for the Third Circuit from the District Court's September 30, 2011 Opinion and Order. The appeal is pending.

On or about January 14, 2009, a shareholder's derivative lawsuit, captioned Sicari v. Anadigics, Inc., et al. , No. SOM-L-88-09, was filed in the Superior Court of New Jersey, and, on or about February 2, 2009, a related shareholder's derivative lawsuit, captioned Moradzadeh v. Anadigics, Inc., et al. , No. SOM-L-198-09, was filed in the same court (jointly, the "Derivative Lawsuits"). The Derivative Lawsuits seek unspecified damages for alleged state law claims against certain of the Company's current and former directors arising out of the matters at issue in the Class Actions. By Order dated March 6, 2009, the New Jersey Superior Court consolidated the Derivative Lawsuits under the caption In re Anadigics, Inc. Derivative Litigation , No. SOM-L-88-09. By Order dated March 27, 2009, the Superior Court stayed the Derivative Lawsuits pending disposition of the defendants' motion to dismiss the First Amended Complaint in the Class Actions. By Order dated September 13, 2010, the Superior Court extended the stay of the Derivative Lawsuits until the disposition of defendants' motion to dismiss the Second Amended Complaint in the Class Actions.

Because the Class Actions and the Derivative Lawsuits, which are in a preliminary stage, do not specify alleged monetary damages, we are unable to reasonably estimate a possible range of loss, if any, to the Company in connection therewith.

We are also a party to ordinary course litigation arising out of the operation of our business. We believe that the ultimate resolution of such ordinary course litigation should not have a material adverse effect on its consolidated financial condition or results of operations.

ITEM 4. REMOVED AND RESERVED.

PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.

Our $0.01 par value Common Stock, (“Common Stock”) has been quoted on the NASDAQ Global Market under the symbol "ANAD" since the commencement of trading on April 21, 1995 following our initial public offering of our Common Stock. The following table sets forth for the periods indicated the high and low sale prices for our Common Stock.

	High		Low
Calendar 2011
Fourth Quarter	$	2.90	$	1.92
Third Quarter		3.44		2.12
Second Quarter		4.51		2.82
First Quarter		8.20		3.96

Calendar 2010
Fourth Quarter	$	7.90	$	5.20
Third Quarter		6.25		3.55
Second Quarter		5.44		3.40
First Quarter		5.02		3.41

As of December 31, 2011, there were 69,279,551 shares of Common Stock outstanding (excluding shares held in Treasury) and 244 holders of record of the Common Stock.

We have never paid cash dividends on our capital stock. We currently anticipate that we will retain available funds for use in the operation and expansion of our business, and do not anticipate paying any cash dividends in the foreseeable future.

See also “Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters” under Part III, Item 12 of this report.

ITEM 6. SELECTED FINANCIAL DATA.

The selected financial data set forth below should be read in conjunction with Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations", and our financial statements, related notes and other financial information included herein. The selected consolidated financial data set forth below as of December 31, 2011 and 2010 and for the years ended December 31, 2011, 2010 and 2009 have been derived from our audited financial statements included herein. The selected consolidated financial data set forth below as of December 31, 2009, 2008 and 2007 and for the years ended December 31, 2008 and 2007 have been derived from our audited financial statements, as adjusted for discontinued operations, that are not included herein or incorporated by reference herein. The Company sold the majority of the operating assets of Telcom Devices Inc, (Telcom, a wholly-owned subsidiary of the Company) on April 2, 2007 and effectively ceased Telcom’s operations. Accordingly, the financial results and position of Telcom have been classified as discontinued operations in the 2007 financial statements. Our historical results are not necessarily indicative of the results that may be expected for any future period.

(amounts in thousands, except for per share amounts)	2011			2010			2009			2008			2007
RESULTS OF OPERATIONS
Net sales	$	152,827		$	216,714		$	140,484		$	258,170		$	230,556
Gross profit		31,103			75,845			20,158			78,587			78,788
Operating (loss) income from continuing operations		(50,119	)		(535	)		(55,323	)		(38,267	)		2,078
(Loss) income before income taxes		(49,323	)		963			(57,404	)		(41,872	)		6,916
Benefit from income taxes		-			(297	)		(321	)		-			-
Net (loss) income from continuing operations		(49,323	)		1,260			(57,083	)		(41,872	)		6,916

(Loss) earnings per share from continuing operations:
Basic	$	(0.73	)	$	0.02		$	(0.92	)	$	(0.70	)	$	0.13
Diluted	$	(0.73	)	$	0.02		$	(0.92	)	$	(0.70	)	$	0.12

BALANCE SHEET DATA:
Total cash and marketable securities	$	93,578		$	106,093		$	92,526		$	145,724		$	176,812
Total assets		188,801			233,812			214,452			303,777			333,461
Total capital lease obligations		-			-			-			-			-
Current portion of long-term debt		-			-			-			38,000			-
Long-term debt		-			-			-			-			38,000
Total stockholders’ equity		166,525			202,964			189,058			230,008			250,106

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

OVERVIEW

We are a leading provider of semiconductor solutions in the growing broadband wireless and wireline communications markets. Our products include RF power amplifiers, tuner integrated circuits, active splitters, line amplifiers and other components, which can be sold individually or packaged as FEM’s. We believe that we are well-positioned to capitalize on the high growth and convergence occurring in the voice, data and video segments of the broadband wireless and wireline communications markets. Our RF power amplifier products enable mobile handsets, datacards and other devices to access 3G and 4G wireless networks utilizing international standards including LTE, WCDMA, HSPA, CDMA, EVDO and WiMAX. Our WiFi products enable connectivity for wireless mobile devices and other computing devices. Our CATV products enable fixed-point, wireline broadband communications over CATV infrastructure as well as cable modem and set-top box products. Our Wireless infrastructure products support operator commitments worldwide to optimize the increasing demands for subscriber data through deployment of new small-cell base stations as part of a heterogeneous network.

We leverage our technological knowledge and advantages to be a leading technology-enabler via innovative semiconductor solutions for broadband wireless and wireline communications. We believe our patented InGaP- plus technology, which combines bipolar amplifying structures pHEMT RF switches on the same die, coupled with our three level metal interconnect process provides us with a competitive advantage in the marketplace. Additionally, we believe proprietary designs of our HELP™ power amplifiers when combined with higher efficiency at high output power provide our customers a competitive advantage by delivering performance required for 3G and 4G devices with lower battery power consumption and longer use time than comparable products in these markets.

Our six-inch diameter GaAs fab located at our corporate headquarters in Warren, New Jersey, has been operational since 1999. In addition, we have a strategic foundry agreement with WIN Semiconductors of Taiwan to supplement our existing wafer fabrication capability and allow for additional and flexible capacity without the requisite capital investment.

Our annual revenues decreased in 2011 after increasing in 2010 from 2009, as the Company experienced a decline in Wireless revenues resulting from a decline in revenue from one of our largest customers resulting from certain of their programs reaching end of life and their change in chipset suppliers that did not utilize our power amplifiers. We anticipate a decline in total revenues in the first quarter of 2012.

We believe our markets are, and will continue to remain, competitive which could result in continued quarterly volatility in our net sales. This competition has resulted in, and is expected over the long-term to continue to result in competitive or declining average selling prices for our products and increased challenges in maintaining or increasing market share.

We have only one reportable segment. For financial information related to such segment and certain geographic areas, see Note 3 to the accompanying consolidated financial statements.

CRITICAL ACCOUNTING POLICIES & SIGNIFICANT ESTIMATES

We believe the following accounting policies are critical to our business operations and the understanding of our results of operations. Such accounting policies may require management to exercise a higher degree of judgment and make estimates used in the preparation of our consolidated financial statements.


		Effect if Actual Results Differ
Description	Judgments and Uncertainties	From Assumptions

Revenue Recognition Revenue from product sales is recognized when title to the products is transferred to the customer, which occurs upon shipment or delivery, depending upon the terms of the sales order. We maintain revenue allowances for price protection and stock rotation for certain distributor sales. These allowances are recorded upon shipment and calculated based on distributors’ indicated intent, historical data, current economic conditions and contractual terms.	Our revenue recognition accounting methodology contains uncertainties because it requires management to make assumptions and to apply judgment to estimate the value of future credits to customers for price protection and stock rotation. Our estimates of the amount and timing of the reserves is based primarily on distributors’ indicated intent, historical data, current economic conditions and contractual terms.	We have not made any material changes in our accounting methodology used to record revenue allowances for the years ended December 31, 2011, 2010 and 2009. We do not believe there is a reasonable likelihood that there will be a material change in the future estimates or assumptions that would have a material impact to our consolidated financial statements.

Allowance for Doubtful Accounts We maintain an allowance for doubtful accounts for estimated losses resulting from our customers’ failure to make payments. The reserve is based on historical experience and an analysis of credit risk.	Our allowance for doubtful accounts methodology contains uncertainties because it requires management to apply judgment to evaluate credit risk and collectability of aged accounts receivables based on historical experience and forward looking assumptions.	We have not made any material changes in our accounting methodology used to create and maintain the allowance for doubtful accounts for the years ended December 31, 2011, 2010 and 2009. We do not believe there is a reasonable likelihood that there will be a material change in the future estimates or assumptions that would have a material impact to our consolidated financial statements.
Inventory Valuation We value our inventory at lower of cost or market (LCM), using the first-in, first-out method. We establish reserves for excess and obsolete inventory based upon a review of forecasted short-term demand in relation to on-hand inventory, salability, general market conditions, and product life cycles.	Our inventory reserves contain uncertainties because the calculation requires management to make assumptions and to apply judgment regarding historical experience, forecasted demand and technological obsolescence.	We have not made any material changes to our inventory reserve methodology for the years ended December 31, 2011, 2010 and 2009. We do not believe that significant changes will be made in future estimates or assumptions we use to calculate these reserves. However, if our estimates are inaccurate or technological changes affect consumer demand we may be exposed to unforeseen gains or losses. A 10% difference in our inventory reserves at December 31, 2011 would affect our consolidated financial statements for year then ended by approximately $0.6 million.

Warranty Costs We provide for potential warranty claims by recording a current charge to income. We estimate potential claims by examining current and historical returns, current economic conditions and contractual terms to provide for an amount which we believe will cover future warranty obligations for products sold.	Our warranty reserve methodology contains uncertainties because it requires management to make assumptions and to apply judgment to estimate the value of future product returns by customers. Our estimates of the amount and timing of the reserves is based primarily on historical experience and specific contractual arrangements.	We have not made any material changes to our warranty reserve methodology for the years ended December 31, 2011, 2010 and 2009. We do not believe there is a reasonable likelihood that there will be a material change in the future estimates or assumptions that would have a material impact to our consolidated financial statements.

Marketable Securities Available-for-sale securities are stated at fair value, as determined by quoted market prices or independent valuation models, which uses a combination of two calculations: (1) a discounted cash flow model and (2) a market comparables method. We review our investments on an ongoing basis for indications of possible impairment, and if an impairment is identified and considered other-than-temporary, it is recorded as a charge to income. The primary factors we consider in classifying the timing of an impairment are the extent to which and period of time that the fair value of each investment has declined below its cost basis. Unrealized improvement gains in value subsequent to recording an impairment charge to income are reflected in other comprehensive income, whereas realized gains and losses are recorded through Other income (expense). The amortized cost of debt securities is adjusted for accretion of market discounts over the effective life of the debt securities and recorded through interest income.	The valuations include numerous assumptions such as assessments of the underlying structure of each security, expected cash flows, discount rates, credit ratings, workout periods and overall capital market liquidity. Further, the determination of whether the impairment is temporary or other-than-temporary requires significant judgment regarding the extent and timing of declines in value versus its cost basis.	While we have not made any material changes to our valuation methodology for the years ended December 31, 2011, 2010 and 2009, capital market expectations, liquidity and rates have fluctuated in the periods. We do not believe there is a reasonable likelihood that there will be a material change in the future estimates or assumptions that would have a material impact to our consolidated financial statements.

Stock-Based Compensation We have a stock-based compensation plan which includes non-qualified stock options, share awards, and an employee stock purchase plan. See Note 10 of Item 8 for a discussion of our stock-based compensation programs. We determine the fair value of stock-based compensation for our non-qualified stock options and employee stock purchase plans at the date of grant using the Black Scholes options-pricing model. Our determination of fair value of share-based payment awards on the date of grant contains assumptions regarding a number of highly complex and subjective variables. These variables include, but are not limited to, our expected stock price volatility over the term of the award, risk-free rate, the expected life and potential forfeitures of awards. Management periodically evaluates these assumptions and updates stock-based compensation expense accordingly.	Option-pricing models and generally accepted valuation techniques require management to make assumptions and to apply judgment to determine the fair value of our awards. These assumptions and judgments include estimating the future rates of volatility of our stock price, employee turnover and employee stock option exercise behaviors. Changes in these assumptions can materially affect the fair value estimate and stock based compensation recognized by the Company.	We have not made any material changes in the accounting methodology we used to calculate stock-based compensation for the years ended December 31, 2011, 2010 and 2009. We do not believe that there is a reasonable likelihood there will be a material change in future estimates or assumptions used to determine stock-based compensation expense.

Valuation of Long-Lived Assets Long-lived assets is primarily comprised of fixed assets. We regularly review these assets for indicators of impairment and assess the carrying value of the assets against market values. When an impairment exists, we record an expense to the extent that the carrying value exceeds fair market value. We assess the impairment of long-lived assets whenever events or changes in circumstances indicate that their carrying value may not be recoverable.	Our impairment loss calculations contain uncertainties because they require management to make assumptions and to apply judgment to estimate asset fair values, including estimating future cash flows, useful lives and selecting an appropriate discount rate that reflects the risk inherent in future cash flows.	We have not made any material changes in the accounting methodology we use to assess impairment loss for the years ended December 31, 2011, 2010 and 2009. As of December 31, 2011, we evaluated fixed assets for impairment and performed a recoverability analysis. The results of the analysis indicate that the assets are fully-recoverable. We do not believe there is a reasonable likelihood that there will be a material change in the estimates or assumptions we use to calculate long-lived asset impairment losses. However, if actual results are not consistent with our estimates and assumptions used in estimating future cash flows and asset fair values, we may record material losses.

Income Taxes We account for income taxes using the asset and liability method, under which deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between tax and financial reporting. Deferred tax assets and liabilities are measured using the currently enacted tax rates that apply to taxable income in effect for the years in which those tax assets are expected to be realized or settled. We record a valuation allowance to reduce deferred tax assets to the amount that is believed more likely than not to be realized.	Management judgment is required in developing our provision for income taxes, including the determination of deferred tax assets and liabilities and any valuation allowances that might be required against the deferred tax assets. We maintain a full valuation allowance on our deferred tax assets. Accordingly, we have not recorded a benefit or provision for income taxes other than for the refund of certain research and experimental tax credits during 2010.	We have not made any material changes in the accounting methodology we used to measure our deferred tax asset valuation allowance for the years ended December 31, 2011, 2010 and 2009. We do not believe there is a reasonable likelihood that there will be a material change in the estimates or assumptions we use to record our valuation allowances for deferred tax assets. However, if actual results are not consistent with our estimates and assumptions used in estimating future taxable income, we may record material income tax benefits.

RESULTS OF OPERATIONS

The following table sets forth statements of operations data as a percentage of net sales for the periods indicated:

	2011			2010			2009

Net sales		100.0	%		100.0	%		100.0	%
Cost of sales		79.6			65.0			85.7

Gross profit		20.4	%		35.0	%		14.3	%
Research and development expense		29.5			23.1			32.7
Selling and administrative expenses		23.0			12.9			19.2
Restructuring and impairment (recovery) charges		0.7			(0.8	)		1.8

Operating loss		(32.8	%)		(0.2	%)		(39.4	%)
Interest income		0.4			0.4			0.8
Interest expense		-			(0.1	)		(1.3	)
Other income (expense), net		0.1			0.4			(0.9	)

Income (loss) before income taxes		(32.3	%)		0.5	%		(40.8	%)
Benefit from income taxes		-			(0.1	)		(0.2	)

Net income (loss)		(32.3	%)		0.6	%		(40.6	%)

2011 COMPARED TO 2010

NET SALES. Net sales for the year ended December 31, 2011 decreased 29.5% to $152.8 million, compared to net sales for the year ended December 31, 2010 of $216.7 million. The net sales decrease primarily resulted from a decrease in market demand for WCDMA cellular device markets and in Broadband from lower cable set-top box and WiMax applications’ demand.

Net sales for the year ended December 31, 2011 of the Company’s wireless products decreased 25.3% to $119.5 million compared to net sales for the year ended December 31, 2010 of $159.9 million. The decrease in sales was primarily the result of decreased demand in our WCDMA cellular device markets due to 1) declines at one of our largest customers due to certain products reaching end of life and their change in chipset providers that do not utilize our power amplifiers and 2) a decline in the market penetration of datacard products for embedded wireless connectivity.

Net sales for the year ended December 31, 2011 of the Company’s broadband products decreased 41.3% to $33.3 million compared to net sales for the year ended December 31, 2010 of $56.8 million. The decrease in sales was primarily due to decreased demand from cable set-top box and WiMax applications.

GROSS MARGIN. Gross margin for 2011 decreased to 20.4% of net sales, compared with 35.0% of net sales in the prior year. The decrease in gross margin was primarily due to lower production and sales volume and a concentration of fixed costs as a percent of smaller revenues. Fixed production costs include, but are not limited to depreciation, maintenance and operations’ support functions.

RESEARCH & DEVELOPMENT. Company-sponsored Research and development (R&D) expenses decreased 10.1% during 2011 to $45.0 million from $50.1 million during 2010. The decrease resulted from improved controls over our key projects, lower labor costs and recruitment expense.

SELLING AND ADMINISTRATIVE. Selling and administrative expenses increased 25.6% during 2011 to $35.1 million from $28.0 million in 2010. The increase was primarily due to management separation charges recorded in the first and fourth quarters of 2011 totaling $6.4 million.

RESTRUCTURING AND IMPAIRMENT (RECOVERY) CHARGES. During the second quarter of 2011, we implemented workforce reductions, which eliminated approximately 40 positions, resulting in a restructuring charge of $1.0 million for severance and related benefits. During the second quarter of 2010, we sold the wafer fabrication building in Kunshan, China which had been fully written-off in 2008. The sale resulted in a net recovery of $1.7 million.

BENEFIT FROM INCOME TAXES. The Housing and Economic Recovery Act of 2008 included the partial refund of certain carried-forward Research and Experimental (R&E) tax credits. During the third quarter of 2010, the Company finalized and filed its R&E claim as part of its 2009 Federal tax return and subsequently received cash of $0.3 million. Such refund was recorded as a benefit from income taxes.

2010 COMPARED TO 2009

NET SALES. Net sales for the year ended December 31, 2010 increased 54.3% to $216.7 million, compared to net sales for the year ended December 31, 2009 of $140.5 million. The net sales increase resulted from an increase in market demand, particularly for wireless products.

Net sales for the year ended December 31, 2010 of the Company’s wireless products increased 71.7% to $159.9 million compared to net sales for the year ended December 31, 2009 of $93.2 million. The increase in sales was primarily due to increased demand in WCDMA and to a lesser degree CDMA cellular device markets.

Net sales for the year ended December 31, 2010 of the Company’s broadband products increased 19.9% to $56.8 million compared to net sales for the year ended December 31, 2009 of $47.3 million. The increase in sales was primarily due to increased demand for WiMax and CATV subscriber and infrastructure products, partly offset by declines in WiFi PAs shipped into the PC Notebook market.

GROSS MARGIN. Gross margin for 2010 increased to 35.0% of net sales, compared with 14.3% of net sales in the prior year. Gross margin for 2009 included charges of $5.3 million, representing 3.8% of revenue, arising from a settlement of a commercial dispute with a customer and certain inventory reserve charges. After considering the charge outlined above, the remaining increase in gross margin was primarily due to increased product shipments and wafer production, and fixed production costs decreasing as a percent of higher revenues and was further supported by variable cost improvements gained over the prior year. Fixed production costs include, but are not limited to depreciation, maintenance and operations’ support functions.

RESEARCH & DEVELOPMENT. Company-sponsored Research and development (R&D) expenses increased 9.0% during 2010 to $50.1 million from $46.0 million during 2009. The increase was primarily due to greater material spending, personnel and support costs for our accelerated R&D product and process development efforts.

SELLING AND ADMINISTRATIVE. Selling and administrative expenses increased 3.9% during 2010 to $28.0 million from $26.9 million in 2009. The increase was driven by increased investment in our sales effort, which was partly offset by reductions in general and administrative costs.

RESTRUCTURING AND IMPAIRMENT (RECOVERY) CHARGES. During the second quarter of 2010, we sold the wafer fabrication building in Kunshan, China which had been fully written-off in 2008. The sale resulted in a net recovery of $1.7 million. During the first quarter of 2009 we implemented workforce reductions, which eliminated approximately 110 positions, resulting in a restructuring charge of $2.6 million principally for severance and related benefits.

INTEREST INCOME. Interest income decreased 30.9% to $0.8 million during 2010 from $1.1 million in 2009. The decrease was primarily due to lower average funds invested.

INTEREST EXPENSE. Interest expense decreased 91.9% to $0.2 million in 2010 compared to $1.9 million in 2009. The decrease principally related to the repayment of our 5% Convertible Senior Notes due in October 2009.

OTHER INCOME (EXPENSE), NET. Other income (expense) primarily results from valuation activity in marketable securities we hold. Other income of $0.9 million in 2010 compares to $1.3 million of other expense in 2009. In 2010, other income principally relates to recoveries on redemptions of certain action rate securities. In 2009, other expense was comprised of a $1.5 million other-than-temporary decline in value on certain auction rate securities and a corporate debt security held by the Company, offset by $0.2 million of income recorded on par value redemption recoveries.

BENEFIT FROM INCOME TAXES. The Housing and Economic Recovery Act of 2008 included the partial refund of certain carried-forward Research and Experimental (R&E) tax credits. During the third quarter of 2010 and 2009, the Company finalized and filed its R&E claim as part of its 2009 and 2008 Federal tax return and subsequently received cash of $0.3 million in each of these periods. Such refund was recorded as a benefit from income taxes.

LIQUIDITY AND SOURCES OF CAPITAL

At December 31, 2011 we had $32.7 million of cash and cash equivalents and $60.9 million in marketable securities.

Operations used $8.2 million in cash during 2011, primarily as a result of our operating results adjusted for non-cash expenses, as reduced by $11.2 million of cash generated by reducing working capital. Investing activities used $57.9 million of cash during 2011, consisting of net purchases of marketable securities of $52.4 million and net purchases of equipment of $5.8 million, as reduced by $0.3 million of proceeds on sale. Financing activities provided $1.7 million of cash during 2011, consisting of proceeds received from the employee stock purchase plan and stock option exercises.

At December 31, 2011, the Company had unconditional purchase obligations of approximately $3.0 million.

We believe that our existing sources of capital, including our existing cash and marketable securities, will be adequate to satisfy operational needs and anticipated capital needs for at least the next twelve months. Our anticipated capital needs may include acquisitions of complementary businesses or technologies, investments in other companies or repurchases of our equity. Subject to liquidity considerations of our auction rate securities as discussed more fully in Item 7A, we may elect to finance all or part of our future capital requirements through additional equity or debt financing. There can be no assurance that such additional financing would be available on satisfactory terms.

The table below summarizes required cash payments as of December 31, 2011:

CONTRACTUAL OBLIGATIONS	PAYMENTS DUE BY PERIOD (in thousands)
	Total		Less than 1 year		1 – 3 years		4 – 5 years		After 5 years
Operating leases		12,363		2,886		4,472		4,676		329
Unconditional purchase obligations		3,041		3,041		-		-		-
Total contractual cash obligations	$	15,404	$	5,927	$	4,472	$	4,676	$	329

IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS

Changes to accounting principles generally accepted in the United States of America are established by the Financial Accounting Standards Board (FASB) in the form of Accounting Standards Updates to the FASB’s Accounting Standards Codification.

In May 2011, the FASB issued guidance on fair value measurements and disclosure requirements. The guidance provides a consistent definition of fair value to ensure fair value measurement and disclosure requirements are similar between U.S. Generally Accepted Accounting Principles and International Financial Reporting Standards. This guidance is effective for interim and annual periods beginning on or after December 15, 2011. We do not expect the adoption of this guidance to have a material impact on our consolidated financial statements.

In June and December 2011, the FASB issued guidance on the presentation of other comprehensive income (OCI). This guidance eliminates the option to present the components of OCI as part of the statement of changes in stockholders’ equity and also requires presentation of reclassification adjustments from OCI to net income on the face of the financial statements. This guidance is effective for fiscal years and interim periods beginning after December 15, 2011, with the exception of the requirement to present reclassification adjustments from OCI to net income on the face of the financial statements, which has been deferred pending further deliberation by the FASB. We do not expect the adoption of this guidance to have a material impact on our consolidated financial statements.

OFF-BALANCE SHEET ARRANGEMENTS

None.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Our cash and available-for-sale securities are exposed to changes in short-term interest rates. Our available-for-sale securities consist of fixed income securities, U.S. government agency debt securities, a corporate bond security and certain auction rate securities, the latter of which are discussed more specifically below. We continually monitor our exposure to changes in interest rates and the credit ratings of issuers with respect to our available-for-sale securities. Accordingly, we believe that the effects of changes in interest rates and the credit ratings of these issuers are limited and would not have a material impact on our financial condition or results of operations. However, it is possible that we would be at risk if interest rates or the credit ratings of these issuers were to change in an unfavorable direction. The magnitude of any gain or loss would be a function of the difference between the fixed rate of the financial instrument and the market rate and our financial condition and results of operations could be materially affected.

At December 31, 2011, we held marketable securities with an estimated fair value of $60.9 million. Our primary interest rate exposure results from changes in short-term interest rates. We do not purchase financial instruments for trading or speculative purposes. All of our marketable securities are classified as available-for-sale securities. The following table provides information about our marketable securities at December 31, 2011:

Estimated Principal Amount and Weighted Average Stated Interest Rate by Expected Maturity Value													Fair Value
($’s 000)	2012			2013			> 10 years			Total			($’s 000)

Principal	$	24,040		$	27,765		$	14,525		$	66,330		$	60,883

Weighted Average Stated Interest Rates		2.82	%		1.29	%		1.61	%		1.92	%		-

The stated rates of interest expressed in the above table may not approximate the actual yield of the securities which we currently hold since we have valued some of our marketable securities at other than face value. Additionally, some of the securities represented in the above table may be called or redeemed, at the option of the issuer, prior to their expected due dates. If such early redemptions occur, we may reinvest the proceeds realized on such calls or redemptions in marketable securities with stated rates of interest or yields that are lower than those of our current holdings, which would affect both future cash interest streams and future earnings.

We invest the majority of our cash in money market funds, fixed income securities and U.S. government agency debt securities in order to protect principal, maintain liquidity as well as fund operations. Fluctuations in interest rates will affect the yield on monies invested by the Company. Such fluctuations can have an impact on our future cash interest streams and future earnings, but the impact of such fluctuations are not expected to be material.

All of our marketable securities are classified as available-for-sale and therefore reported on our balance sheet at market value. Within our $60.9 million in marketable securities at December 31, 2011, we held a total of $32.5 million of fixed income securities, $19.6 million of U.S. government agency debt securities, $6.0 million of auction rate securities (ARS), and $2.8 million as a former-auction corporate debt security originally purchased as an ARS prior to its exchange for the underlying 30 year notes due 2037. ARS were a short-term cash management instrument used by the market and the Company prior to 2008. The instrument used a monthly Dutch auction process to provide liquidity on long-term financial instruments by resetting the applicable interest rate and through the reset, allowed existing investors to rollover or liquidate their holdings at par value. During the second half of 2007 and the first quarter of 2008, ARS failed to auction due to sell orders exceeding buy orders and trading continues to be constrained. The funds associated with the failed auctions will not be accessible until a successful auction occurs, a suitable buyer is found outside of the auction process or an issuer redeems its security. To date, we have not realized any losses on ARS held by the Company or the notes received in exchange for an ARS, but have recognized other-than-temporary impairments of $8.2 million. The fair market values of certain of our ARS, when combined with the fair market values of our corporate debt security have subsequently increased by $2.5 million which was recorded to other comprehensive income.

We anticipate selling the existing and former-auction corporate debt securities prior to a recovery in valuation. We will continue to monitor and evaluate these investments for impairment and for short term classification purposes. We may not be able to access cash by selling the aforementioned debt or preferred securities without the loss of principal until a buyer is located, a future auction for these investments is successful, they are redeemed by their issuers or they mature. If we are unable to sell these securities in the market or they are not redeemed, then we may be required to hold them to maturity or in perpetuity for the preferred ARS. Based on our ability to access our cash, our expected operating cash flows, and our other sources of cash, we do not anticipate that the potential illiquidity of these investments will affect our ability to execute our current business plan.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

Report of Independent Registered Public Accounting Firm

The Board of Directors and Stockholders

ANADIGICS, Inc.

We have audited the accompanying consolidated balance sheets of ANADIGICS, Inc. as of December 31, 2011 and 2010, and the related consolidated statements of operations, comprehensive (loss) income, stockholders' equity, and cash flows for each of the three years in the period ended December 31, 2011. Our audit also included the financial statement schedule listed in the Index at Item 15(a). These financial statements and schedule are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements and schedule based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of ANADIGICS, Inc. at December 31, 2011 and 2010, and the consolidated results of its operations and its cash flows for each of the three years in the period ended December 31, 2011, in conformity with U.S. generally accepted accounting principles. Also, in our opinion, the related financial statement schedule, when considered in relation to the basic financial statements taken as a whole, presents fairly in all material respects the information set forth therein.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), ANADIGICS, Inc.’s internal control over financial reporting as of December 31, 2011, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated March 15, 2012 expressed an unqualified opinion thereon.

/s/ Ernst & Young LLP

MetroPark, New Jersey

March 15, 2012

ANADIGICS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

	YEAR ENDED DECEMBER 31,
	2011			2010			2009

Net sales	$	152,827		$	216,714		$	140,484
Cost of sales		121,724			140,869			120,326

Gross profit		31,103			75,845			20,158
Research and development expenses		45,037			50,120			45,969
Selling and administrative expenses		35,138			27,977			26,914
Restructuring and impairment (recovery) charges		1,047			(1,717	)		2,598
		81,222			76,380			75,481

Operating loss		(50,119	)		(535	)		(55,323	)

Interest income		576			784			1,134
Interest expense		(25	)		(154	)		(1,897	)
Other income (expense), net		245			868			(1,318	)

(Loss) income before income taxes	$	(49,323	)	$	963		$	(57,404	)
Benefit from income taxes		-			(297	)		(321	)

Net (loss) income	$	(49,323	)	$	1,260		$	(57,083	)

(Loss) earnings per share:
Basic	$	(0.73	)	$	0.02		$	(0.92	)
Diluted	$	(0.73	)	$	0.02		$	(0.92	)

Weighted average common shares outstanding used in computing (loss) earnings per share:
Basic		67,771			65,084			62,372
Diluted		67,771			67,554			62,372

CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME

(AMOUNTS IN THOUSANDS)

	Year Ended December 31,
	2011			2010			2009
Net (loss) income	$	(49,323	)	$	1,260		$	(57,083	)
Other comprehensive (loss) income:
Unrealized (loss) gain on marketable securities		(143	)		665			2,701
Foreign currency translation adjustment		-			(42	)		(85	)

Reclassification adjustment:
Net recognized gain on marketable securities previously included in other comprehensive (loss) income		(193	)		(588	)		-
Comprehensive (loss) income	$	(49,659	)	$	1,295		$	(54,467	)

See accompanying notes.

ANADIGICS, INC.

CONSOLIDATED BALANCE SHEETS

(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

	December 31,
	2011			2010
ASSETS
Current assets:
Cash and cash equivalents	$	32,695		$	97,129
Short-term marketable securities		24,127			-
Accounts receivable, net of allowance for doubtful accounts of $172 and $739 at December 31, 2011 and December 31, 2010, respectively		17,329			35,299
Inventories		19,733			20,734
Prepaid expenses and other current assets		3,198			3,319

Total current assets		97,082			156,481

Marketable securities		36,756			8,964
Plant and equipment
Equipment and furniture		199,908			205,493
Leasehold improvements		46,667			46,482
Projects in process		2,049			3,693
		248,624			255,668
Less accumulated depreciation and amortization		193,900			187,549
		54,724			68,119
Other assets		239			248
	$	188,801		$	233,812
LIABILITIES AND STOCKHOLDERS EQUITY

Current liabilities:
Accounts payable	$	11,905		$	17,968
Accrued liabilities		7,946			10,191
Total current liabilities		19,851			28,159

Other long-term liabilities		2,425			2,689

Commitments and contingencies

Stockholders’ equity
Preferred stock, $0.01 par value, 5,000 shares authorized, none issued or outstanding
Common stock, convertible, non-voting, $0.01 par value, 1,000 shares authorized, none issued or outstanding
Common stock, $0.01 par value, 144,000 shares authorized at December 31, 2011 and 2010, and 69,394 and 66,916 issued at December 31, 2011 and 2010, respectively		694			669
Additional paid-in capital		602,757			589,562
Accumulated deficit		(439,113	)		(389,790	)
Accumulated other comprehensive income		2,446			2,782
Treasury stock at cost: 115 shares at December 31, 2011 and 2010		(259	)		(259	)
Total stockholders’ equity		166,525			202,964
	$	188,801		$	233,812

See accompanying notes.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(AMOUNTS IN THOUSANDS)

	Common Stock Shares		Common Stock Amount		Treasury Stock Shares			Treasury Stock Amount			Additional Paid-In Capital			Accumulated Deficit			Accumulated Other Comprehensive Income (loss )			Total Stockholders’ Equity

Balance, December 31, 2008		63,424	$	634		(114	)	$	(258	)	$	563,468		$	(333,967	)	$	131		$	230,008

Stock options exercised		49		1								101									102
Shares issued under employee stock purchase plan		729		7								1,006									1,013
Treasury share purchase						(1	)		(1	)											(1	)
Restricted stock activity, net of forfeitures		315		3								(3	)								-
Amortization of stock-based compensation												12,403									12,403
Other comprehensive income																		2,616			2,616
Net loss															(57,083	)					(57,083	)

Balance, December 31, 2009		64,517	$	645		(115	)	$	(259	)	$	576,975		$	(391,050	)	$	2,747		$	189,058

Stock options exercised		758		7								1,504									1,511
Shares issued under employee stock purchase plan		488		5								1,860									1,865
Restricted stock activity, net of forfeitures		1,153		12								(12	)								-
Amortization of stock-based compensation												9,235									9,235
Other comprehensive income																		35			35
Net income															1,260						1,260

Balance, December 31, 2010		66,916	$	669		(115	)	$	(259	)	$	589,562		$	(389,790	)	$	2,782		$	202,964

Stock options exercised		441		4								931									935
Shares issued under employee stock purchase plan		384		4								767									771
Restricted stock activity, net of forfeitures		1,653		17								(17	)								-
Amortization of stock-based compensation												11,514									11,514
Other comprehensive income																		(336	)		(336	)
Net loss															(49,323	)					(49,323	)

Balance, December 31, 2011		69,394	$	694		(115	)	$	(259	)	$	602,757		$	(439,113	)	$	2,446		$	166,525

See accompanying notes.

ANADIGICS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(AMOUNTS IN THOUSANDS)

	YEAR ENDED DECEMBER 31,
	2011			2010			2009

CASH FLOWS FROM OPERATING ACTIVITIES
Net (loss) income	$	(49,323	)	$	1,260		$	(57,083	)
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities:
Depreciation		18,239			19,115			18,463
Amortization		-			-			341
Stock based compensation		11,514			9,235			12,403
Amortization of premium on marketable securities		405			-			-
Marketable securities recovery, accretion, impairment and other		(208	)		(808	)		1,504
Recovery on sale of China building		-			(1,717	)		-
Gain on disposal of equipment		(41	)		(116	)		(167	)
Changes in operating assets and liabilities:
Accounts receivable		17,970			(15,286	)		5,371
Inventories		1,001			(2,484	)		15,328
Prepaid expenses and other assets		190			(784	)		300
Accounts payable		(5,462	)		5,790			(1,489	)
Accrued and other liabilities		(2,509	)		(1,251	)		(3,480	)
Net cash (used in) provided by operating activities		(8,224	)		12,954			(8,509	)

CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of plant and equipment		(5,812	)		(5,566	)		(10,346	)
Proceeds from sale of building and equipment		348			1,918			1,346
Purchases of marketable securities		(65,152	)		-			(15,201	)
Proceeds from sales and redemptions of marketable securities		12,700			1,275			29,216
Net cash (used in) provided by investing activities		(57,916	)		(2,373	)		5,015

CASH FLOWS FROM FINANCING ACTIVITIES
Repayment of Convertible notes		-			-			(38,000	)
Issuances of common stock, net of related costs		1,706			3,376			1,115
Repurchase of common stock into treasury		-			-			(1	)
Net cash provided by (used in) financing activities		1,706			3,376			(36,886	)

Net (decrease) increase in cash and cash equivalents		(64,434	)		13,957			(40,380	)
Cash and cash equivalents at beginning of period		97,129			83,172			123,552

Cash and cash equivalents at end of period	$	32,695		$	97,129		$	83,172

Supplemental disclosures of cash flow information:
Interest paid	$	-		$	-		$	1,900
Net taxes paid (refunded)		136			(243	)		(311	)

See accompanying notes.

ANADIGICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NATURE OF OPERATIONS AND BASIS OF PRESENTATION

ANADIGICS, Inc (the Company) is a leading provider of semiconductor solutions in the growing broadband wireless and wireline communications markets. The Company’s products include radio frequency (RF) power amplifiers (PAs), tuner integrated circuits, active splitters, line amplifiers and other components, which can be sold individually or packaged as integrated front end modules (FEMs). The Company’s RF power amplifier products enable mobile handsets, datacards and other devices to access third and fourth generation (3G and 4G) wireless networks utilizing international standards including Long Term Evolution (LTE), Wideband Code Division Multiple Access (WCDMA), High Speed Packet Access (HSPA), Code Division Multiple Access (CDMA), Evolution Data Optimized (EVDO) and Worldwide Interoperability for Microwave Access (WiMAX). The Company’s WiFi products enable connectivity for wireless mobile devices and other computing devices. The Company’s Cable Television (CATV) products enable fixed-point, wireline broadband communications over CATV infrastructure as well as cable modem and set-top box products. The Company’s Wireless infrastructure products support operator commitments worldwide to optimize the increasing demands for subscriber data through deployment of new small-cell base stations as part of a heterogeneous network.

The Company designs, develops and manufactures RF integrated circuits (RFICs) primarily using Gallium Arsenide (GaAs) compound semiconductor substrates with various process technologies, Metal Semiconductor Field Effect Transistors (MESFET), Pseudomorphic High Electron Mobility Transistors (pHEMT), and Heterojunction Bipolar Transistors (HBT). The Company’s proprietary technology, which utilizes InGaP-plus TM , combines InGaP HBT and pHEMT processes on a single substrate, enabling it to integrate the PA function and the RF active switch function on the same die. The Company fabricates substantially all of its ICs in its six-inch diameter GaAs wafer fabrication facility.

The consolidated financial statements include the accounts of ANADIGICS, Inc. and its wholly owned subsidiaries. All significant inter-company accounts and transactions have been eliminated in consolidation.

The Company has evaluated subsequent events and determined that there were no subsequent events to recognize or disclose in these consolidated financial statements other than the redemption at a gain of an auction rate security discussed in Note 4.

USE OF ESTIMATES

The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts in the consolidated financial statements and the accompanying notes. Actual results could differ from those estimates. Significant estimates that affect the financial statements include, but are not limited to: allowance for doubtful accounts, recoverability and valuation of inventories, warranty reserve, valuation of stock-based compensation, reserves for distributor arrangements and returns, valuation of certain marketable securities, useful lives and amortization periods and recoverability of long-lived assets.

CONCENTRATION OF CREDIT RISK

The Company grants trade credit to its customers, who are primarily foreign manufacturers of wireless communication devices, cable and broadcast television receivers and fiber optic communication devices. The Company performs periodic credit evaluations of its customers and generally does not require collateral. Sales and accounts receivable from customers are denominated in U.S. dollars. The Company has not experienced significant losses related to receivables from these individual customers.

Net sales to individual customers and their affiliates who accounted for 10% or more of the Company’s total net sales and corresponding end application information are as follows:

	YEAR ENDED DECEMBER 31
	2011					2010					2009
Customer (primary application)	$			%		$			%		$			%
Research In Motion Limited (Wireless)		33,704		22	%		56,284		26	%		19,824		14	%
Samsung Electronics (Wireless)		29,326		19	%		24,052		11	%	<10 %		<10 %
ZTE Corporation (Wireless)		20,416		13	%		21,772		10	%	<10 %		<10 %
LG Electronics, Inc. (Wireless)	<10 %		<10 %			<10 %		<10 %				20,359		15	%

Accounts receivable at December 31, 2011 and 2010 from the greater than 10% customers accounted for 62% and 54% of total accounts receivable, respectively.

REVENUE RECOGNITION

Revenue from product sales is recognized when title to the products is transferred to the customer, which occurs upon shipment or delivery, depending upon the terms of the sales order. The Company sells to certain distributors who are granted limited contractual rights of return and exchange and certain pre-negotiated individual product-customer price protection. Revenue from sales of products to distributors is recognized, net of allowances, upon shipment of the products to the distributors. At the time of shipment, title transfers to the distributors and payment from the distributors is due on our standard commercial terms; payment terms are not contingent upon resale of the products. Revenue is appropriately reduced for the portion of shipments subject to return, exchange or price protection. Allowances for the distributors are recorded upon shipment and calculated based on the distributors’ indicated intent, historical data, current economic conditions and contractual terms. The Company believes it can reasonably and reliably estimate allowances for credits to distributors in a timely manner. The Company charges customers for the costs of certain contractually-committed inventories that remain at the end of a product's life. Such amounts are recognized as cancellation revenue when cash is received. The value of the inventory related to cancellation revenue may, in some instances, have been reserved during prior periods in accordance with the Company’s inventory obsolescence policy. The Company maintains an allowance for doubtful accounts for estimated losses resulting from customers' failure to make payments.

ALLOWANCE FOR DOUBTFUL ACCOUNTS

The Company establishes an allowance for doubtful accounts for estimated losses resulting from customers' failure to make payments, based upon historical experience.

WARRANTY COSTS

The Company provides, by a current charge to income, an amount it estimates, by examining historical returns and other information it deems critical, will be needed to cover future warranty obligations for products sold during the year. The liability for warranty costs is included in Accrued liabilities in the consolidated balance sheets.

PLANT AND EQUIPMENT

Plant and equipment are stated at cost. Depreciation of plant, furniture and equipment has been provided on the straight-line method over 3-7 years. Leasehold improvements are amortized and included in depreciation over the useful life of the leasehold or the life of the lease, whichever is shorter.

IMPAIRMENT OF LONG-LIVED ASSETS

Long-lived assets used in operations are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets might not be recoverable. For long-lived assets to be held and used, the Company recognizes an impairment loss if its carrying amount is not recoverable through its undiscounted cash flows and measures the impairment loss based on the difference between the carrying amount and fair value. Long-lived assets held for sale are reported at the lower of cost or fair value less costs to sell.

INCOME TAXES

Deferred income taxes reflect the net effects of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the income tax basis of such assets and liabilities. The Company maintains a full valuation allowance on its deferred tax assets. Accordingly, the Company has not recorded a benefit or provision for income taxes other than for the refund of certain research and experimental tax credits during 2010 and 2009. The Company recognizes interest and penalties related to the underpayment of income taxes in income tax expense. No unrecognized tax benefits, interest or penalties were accrued at December 31, 2011 and 2010. The Company’s U.S. federal net operating losses have occurred since 1998 and as such, tax years subject to potential tax examination could apply from that date because carrying-back net operating loss opens the relevant year to audit.

RESEARCH AND DEVELOPMENT COSTS

The Company charges all research and development costs associated with the development of new products to expense when incurred.

CASH EQUIVALENTS

The Company considers all highly liquid marketable securities with a maturity of three months or less when purchased to be cash equivalents.

MARKETABLE SECURITIES

Available for sale securities are stated at fair value, as determined by quoted market prices or as needed, independent valuation models, with unrealized gains and losses reported in other accumulated comprehensive income or loss. Unrealized losses are reviewed and those considered other than temporary are recorded as a charge to other income (expense). Subsequent gains or losses upon redemption or sale of these securities in excess of, or below, their adjusted cost basis are also recorded as other income (expense). The Company considers it more likely than not that it will sell certain auction rate securities prior to a full recovery in valuation. The cost of securities sold is based upon the specific identification method. The amortized cost of securities is adjusted for amortization of premium and accretion of market discounts over the securities’ effective life or maturity and recorded in interest income. See Note 4 for a summary of marketable securities.

INVENTORY

Inventories are valued at the lower of cost or market ("LCM"), using the first-in, first-out method. The Company capitalizes production overhead costs to inventory on the basis of normal capacity of its production facility and in periods of abnormally low utilization charges the related expenses as a period cost in the statement of operations. In addition to LCM limitations, the Company reserves against inventory items for estimated obsolescence or unmarketable inventory. The reserve for excess and obsolete inventory is primarily based upon forecasted short-term demand for the product. Once established, these write-downs are considered permanent adjustments to the cost basis of the excess inventory. If actual demand and market conditions are less favorable than those projected by management, additional inventory write-downs may be required. In the event the Company sells inventory that had been covered by a specific inventory reserve, the sale is recorded at the actual selling price and the related cost of goods sold at the full inventory cost, net of the reserve.

DEFERRED RENT

Aggregate rental expense is recognized on a straight-line basis over the lease terms of operating leases that contain predetermined increases in rentals payable during the lease term.

FOREIGN CURRENCY TRANSLATION

The financial statements of subsidiaries outside of the United States are measured using the local currency as the functional currency. Assets and liabilities of these subsidiaries are translated at the rates of exchange at the balance sheet dates. The resultant translation adjustments are included in other accumulated comprehensive income or loss. Income and expense items are translated at the average monthly rates of exchange. Gains and losses from foreign currency transactions of these subsidiaries are included in the determination of net income or loss.

EARNINGS PER SHARE

Basic earnings per share is computed by dividing net (loss) income by the weighted average number of common shares outstanding during the period. Diluted earnings per share reflects the potential dilution that could occur if stock options and other commitments to issue common stock were exercised resulting in the issuance of common stock of the Company. Any dilution arising from the Company's outstanding stock awards will not be included where their effect is anti-dilutive.

FAIR VALUE OF FINANCIAL INSTRUMENTS

The fair value of a financial instrument is the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. The fair value of each of the following instruments approximates their carrying value because of the short maturity of these instruments: cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities. See Note 4 for additional fair value disclosures.

STOCK-BASED COMPENSATION

The Company has various stock-based compensation plans for employees and directors, which are described more fully in Note 11. The Company records stock compensation expense for all stock-based payment awards made to its employees and directors. Stock-based compensation cost is measured at the grant date based on the fair value of the award and is recognized as expense over the requisite service period which in most cases is the vesting period.

RECLASSIFICATIONS

Certain prior period amounts have been reclassified to conform to the current presentation.

IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS

In May 2011, the FASB issued guidance on fair value measurements and disclosure requirements. The guidance provides a consistent definition of fair value to ensure fair value measurement and disclosure requirements are similar between U.S. Generally Accepted Accounting Principles and International Financial Reporting Standards. This guidance, effective for interim and annual periods beginning on or after December 15, 2011. The Company does not expect the adoption of this guidance to have a material impact its consolidated financial statements.

In June and December 2011, the FASB issued guidance on the presentation of other comprehensive income (OCI). This guidance eliminates the option to present the components of OCI as part of the statement of changes in stockholders’ equity and also requires presentation of reclassification adjustments from OCI to net income on the face of the financial statements. This guidance is effective for fiscal years and interim periods beginning after December 15, 2011, with the exception of the requirement to present reclassification adjustments from OCI to net income on the face of the financial statements, which has been deferred pending further deliberation by the FASB. The Company does not expect the adoption of this guidance to have a material impact on its consolidated financial statements.

2. RESTRUCTURING, MANAGEMENT SEPARATION CHARGES, IMPAIRMENT (RECOVERY) AND OTHER CHARGES

RESTRUCTURING

During the second quarter of 2011, the Company implemented a workforce reduction that eliminated approximately 40 positions, resulting in a Restructuring charge of $1,047 for severance and related benefits.

During the fourth quarter of 2008 and first quarter of 2009, the Company implemented certain workforce reduction programs, which eliminated approximately 210 positions throughout the Company, resulting in charges aggregating $4,738 for severance and related benefits.

Activity and liability balances related to the restructuring were as follows:

	Workforce-related			Other			Total
December 31, 2008 balance	$	1,065		$	100		$	1,165
Restructuring expense		2,598			-			2,598
Payments		(3,608	)		(100	)		(3,708	)
December 31, 2009 balance	$	55		$	-		$	55
Payments		(55	)		-			(55	)
December 31, 2010 balance	$	-		$	-		$	-
Restructuring expense		1,047			-			1,047
Payments		(1,047	)		-			(1,047	)
December 31, 2011 balance	$	-		$	-		$	-

MANAGEMENT SEPARATION CHARGES

During the fourth quarter of 2011, the Company recorded a $4,234 management separation charge, inclusive of accelerated stock-based compensation of $1,775, within Selling and administrative expenses. The management separation charge arose from the resignation of our former Chief Financial Officer, and included contractual separation pay, accelerated vesting of certain equity awards, and certain other costs.

During the first quarter of 2011, the Company recorded certain management separation charges of $838 and $2,111, inclusive of accelerated stock-based compensation of $568 and $116, within Research and development and Selling and administrative expenses, respectively. The management separation charges arose from the resignations of our former Chief Executive Officer and another Executive Officer, and included contractual separation pay, accelerated vesting of certain equity awards, and certain other costs.

In the fourth quarter of 2009, the Company recorded management separation charges of $2,125. Of this amount, $1,755 was included in Research and development and $370 was included in Selling and administrative expenses.

IMPAIRMENT (RECOVERY)

During the second quarter of 2010, the Company sold its wafer fabrication building in Kunshan, China for net proceeds of $1,717, resulting in the partial recovery of a related impairment charge. During 2008, the Company had written-off the value of this unfinished wafer fabrication building following an evaluation of alternatives in light of the then current circumstances, including: surplus industry production capacity, reduced demand experienced by the Company as well as the broader macroeconomic environment. As a result of its analysis of projected discounted cashflows, the Company recorded a $12,957 impairment charge in 2008 related to the China wafer fabrication facility.

OTHER CHARGES

In the third quarter of 2009, the Company recorded a charge within Cost of sales in the amount of $3,879 in settlement of a commercial dispute with a customer. The settlement required an initial payment of $1,110 which was paid in the fourth quarter of 2009, and six quarterly payments of $500 which commenced in March 2010.

3. SEGMENTS

The Company has one reportable segment. Its integrated circuits are primarily manufactured using common manufacturing facilities located in the same domestic geographic area. The method for determining what information to report is based on management’s use of financial information for the purposes of assessing performance and making operating decisions. All operating expenses and assets of the Company are combined and reviewed by the chief operating decision maker on an enterprise-wide basis, resulting in no additional discrete financial information or operating segment information. The Company’s business units share similar long term business models, research and development expenses and selling and administrative expenses. The Company has concluded at December 31, 2011 that it has only one reportable segment. The Company will re-assess its conclusions at least annually.

The Company classifies its revenues based upon the end application of the product in which its integrated circuits are used. Net sales by end application are regularly reviewed by the chief operating decision maker and are as follows:

	Year Ended December 31,
	2011		2010		2009
Wireless	$	119,472	$	159,937	$	93,147
Broadband		33,355		56,777		47,337
Total	$	152,827	$	216,714	$	140,484

The Company sells to five geographic regions: Asia, Europe, Latin America, USA and Other. The geographic region is determined by the destination of the shipped product. Net sales to each of the five geographic regions are as follows:

	Year Ended December 31,
	2011		2010		2009
Asia	$	102,437	$	131,298	$	101,064
Europe		14,146		24,941		9,518
Latin America		29,027		46,007		20,647
USA		6,934		11,341		7,498
Other		283		3,127		1,757
Total	$	152,827	$	216,714	$	140,484

4. FAIR VALUE AND MARKETABLE SECURITIES

FAIR VALUE OF FINANCIAL INSTRUMENTS

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). Inputs used to measure fair value are classified in the following hierarchy:

Level 1	Unadjusted quoted prices in active markets for identical assets or liabilities

Level 2	Unadjusted quoted prices in active markets for similar assets or liabilities, or unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active, or inputs other than quoted prices that are observable for the asset or liability

Level 3	Unobservable inputs for the asset or liability

The Company endeavors to utilize the best available information in measuring fair value. Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The following table presents a summary of fair value information for available-for-sale securities:

					Fair Value Measurements at Reporting Date Using
Security Type	Amortized Cost Basis (1)		Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Former-auction corporate debt security (2)	$	1,624	$	2,960	$	2,960	$	-	$	-
Auction Rate Securities
Corporate Debt (2)		726		1,199		-		-		1,199
Preferred Equity		2,404		3,110		-		-		3,110
State and Municipal Debt (2)		1,419		1,695		-		-		1,695
Total at December 31, 2010	$	6,173	$	8,964	$	2,960	$	-	$	6,004

Fixed Income Securities (3)	$	32,574	$	32,532	$	32,532	$	-	$	-
U.S. Government Agency debt securities (3)		19,573		19,556		19,556		-		-
Former-auction corporate debt security (2)		1,681		2,834		2,834		-		-
Auction Rate Securities
Corporate Debt (2)		762		1,215		-		-		1,215
Preferred Equity		2,404		3,031		-		2,403		628
State and Municipal Debt (2)		1,434		1,715		-	$	1,715		-
Total at December 31, 2011	$	58,428	$	60,883	$	54,922	$	4,118	$	1,843

(1) Difference between amortized cost basis and fair value represents gross unrealized gain or loss.

(2) Available for sale debt securities with contractual maturities in excess of 10 years.

(3) Available for sale debt securities with contractual maturities of 2 years or less.

AUCTION RATE SECURITIES AND FORMER-AUCTION CORPORATE DEBT SECURITY

Auction rate securities (ARS) were a short-term cash management instrument used by the market and the Company prior to 2008. The instruments used a monthly Dutch auction process to provide liquidity on long-term financial instruments by resetting the applicable interest rate and through the reset, allowed existing investors to rollover or liquidate their holdings at par value. During the second half of 2007 and the first quarter of 2008, ARS failed to auction due to sell orders exceeding buy orders and trading continues to be constrained. The funds associated with the failed auctions will not be accessible until a successful auction occurs, a suitable buyer is found outside of the auction process or an issuer redeems its security.

Certain ARS market information was insufficient to determine the fair value of the Company’s investments in ARS. Given the complexity of ARS investments, the Company obtained the assistance of an independent valuation firm to assist management in assessing the fair value of its ARS portfolio. The third party valuations developed to estimate the ARS fair value were determined using a combination of two calculations (1) a discounted cash flow model, where the expected cash flows of the ARS are discounted to the present using a yield that incorporates compensation for illiquidity, and (2) a market comparables method, where the ARS are valued based on indications, from the secondary market, of what discounts buyers demand when purchasing similar ARS. The valuations include numerous assumptions such as assessments of the underlying structure of each security, expected cash flows, discount rates, credit ratings, workout periods, and overall capital market liquidity.

Interest income of $179 and $392 was recognized to accrete the amortized cost basis of the Company’s existing and former-auction debt securities during the years ended December 31, 2011 and 2010, respectively.

The table below provides a reconciliation of the beginning and ending balances for each type of security valued using a Level 3 valuation.

($ in 000’s)	Fair Value Measurements Using Significant Unobservable Inputs (Level 3) Years ended December 31, 2010 and 2011
	State & Municipal Debt Security (a)			Corporate Debt Security (b)			Preferred Equity Securities						Total
	State & Municipal Debt Security (a)			Corporate Debt Security (b)			Closed-end Funds (c )			Monoline insurers (d)			Total
Beginning balance December 31, 2009	$	1,805		$	1,106		$	3,181		$	522		$	6,614
Transfers into Level 3		-			-			-			-			-
Total gains or losses realized/unrealized
Included in net income		322			125			266			-			713
Included in other comprehensive income		(32	)		(32	)		(249	)		265			(48	)
Redemptions		(400	)		-			(875	)		-			(1,275	)
Balance at December 31, 2010		1,695			1,199			2,323			787			6,004
Transfers out of Level 3 (e)		(1,702	)		-			(2,565	)		-			(4,267	)
Total gains or losses realized/unrealized
Included in net loss		75			36			-			-			111
Included in other comprehensive income		32			(20	)		242			(159	)		95
Redemptions		(100	)		-			-			-			(100	)
Ending Balance December 31, 2011	$	-		$	1,215		$	-		$	628			1,843
Amount of total gains or losses for the period included in earnings(loss) attributable to the change in unrealized gains or losses relating to Level 3 assets still held at the reporting date	$	-		$	36		$	-		$	-		$	36
Level 3 securities held at December 31, 2011:
Face value	$	-		$	2,500		$	-		$	3,125		$	5,625
Financial ratings					A					A2 & NR
Weighted average interest rate (*)		-			2.1	%		-			1.9	%		2.0	%
Maturity date		-			2036			-			N/A

* Interest rates are reset every one to three months based on a premium to AA Commercial Paper, LIBOR or Treasury Bill rates.

(a) Security represents an interest in pooled student loans that are guaranteed by the Federal Family Education Loan Program.

(b) Security issued by a publicly-held insurance company trust, which holds investments in U.S. Government obligations, highly rated commercial paper and money market funds and other investments approved by two credit rating agencies. The trust is funded by life insurance residuals. If the residuals are insufficient, the security becomes an obligation of the publicly-held insurance company. Subsequent to December 31, 2011 year end, the issuer repurchased the security for $2,013, resulting in a gain of $1,251 over the amortized cost basis.

(c) Preferred securities issued by diversified closed-end management investment companies, which are governed by the Investment Company Act of 1940 with regard to operating standards, antifraud rules, diversification requirements and an asset coverage requirement for asset backing of 200% of the par value of the preferred stock issued. Initially there were three separate issuers of these securities, however two issuers redeemed their securities in 2010.

(d) Preferred securities issued by subsidiaries of two publicly-held debt default insurers . One of the debt default insurers ceased paying interest in 2009 and the security was written to zero.

(e) In the second quarter of 2011, the Company transferred its state and municipal debt security and closed-end preferred security from Level 3 to Level 2 after having assessed external valuations and observing sustained trading in similar securities.

5. INVENTORIES

Inventories consist of the following:

	December 31,
	2011		2010
Raw materials	$	4,579	$	3,615
Work in progress		8,113		10,792
Finished goods		7,041		6,327
Total	$	19,733	$	20,734

6. ACCRUED LIABILITIES

Accrued liabilities consist of the following:

	December 31,
	2011		2010
Accrued compensation	$	2,976	$	3,933
Warranty reserve		430		571
Accrued management separation liability		2,294		-
Liability for customer dispute		-		1,475
Accrued health insurance		-		535
Accrued relocation		48		674
Other		2,198		3,003
	$	7,946	$	10,191

Changes in the Company’s product warranty reserve are as follows:

	Year ended December 31
	2011			2010			2009
Beginning balance	$	571		$	994		$	645
Additions charged to costs and expenses		871			540			2,077
Claims processed		(1,012	)		(963	)		(1,728	)
Ending balance	$	430		$	571		$	994

7. CONVERTIBLE NOTES

On September 24, 2004, the Company issued $38,000 aggregate principal amount of 5% Convertible Senior Notes (2009 Notes) due October 15, 2009. The 2009 Notes were convertible into shares of the Company’s common stock at any time prior to their maturity, at an initial conversion rate of 200 shares for each $1,000 principal amount, which was equivalent to a conversion price of $5.00 per share (7,600 shares contingently issuable). Interest on the 2009 Notes was payable semi-annually in arrears on April 15 and October 15 of each year. The 2009 Notes were repaid on the October 15, 2009 maturity date.

8. COMMITMENTS AND CONTINGENCIES

The Company leases manufacturing, warehousing and office space under noncancelable operating leases that expire through 2016. Rent expense was $2,617, $2,623, $2,561 in 2011, 2010 and 2009, respectively. At December 31, 2011 and 2010, there were no capital lease obligations outstanding. The future minimum lease payments under the noncancelable operating leases, excluding deferred rent adjustments. are as follows:

YEAR	Operating Leases
2012	$	2,886
2013		2,218
2014		2,254
2015		2,336
2016		2,340
Thereafter		329

Total minimum lease payments	$	12,363

In addition to the above, at December 31, 2011, the Company had unconditional purchase obligations of approximately $3,041.

9. INCOME TAXES

For the years ended December 31, 2011 and 2010, the current Federal component of income taxes were $0 and $297 benefit, respectively, resulting from a refund of research and experimental credits received under the Housing and Economic Recovery Act of 2008.

Deferred tax assets require a valuation allowance when, in the opinion of management, it is more likely than not that some portion of the deferred tax assets may not be realized. Whereas realization of the deferred tax assets is dependent upon the timing and magnitude of future taxable income prior to the expiration of the deferred tax attributes, management began recording a full valuation allowance in 2001. The amount of the deferred tax assets considered realizable, however, could change if estimates of future taxable income during the carry-forward period are changed.

Significant components of the Company’s net deferred taxes as of December 31, 2011 and 2010 are as follows:

	December 31,
	2011			2010
Deferred tax balances
Accruals/reserves	$	12,127		$	15,070
Net operating loss carryforwards		154,860			135,758
Research and experimentation credits		14,053			13,985
Deferred rent expense		928			1,029
Difference in basis of plant and equipment		9,477			9,422
Valuation allowance		(191,445	)		(175,264	)
Net deferred tax assets		-			-

As of December 31, 2011, the Company had net operating loss carryforwards of approximately $440,088 for both federal and state tax reporting purposes. The federal carryforward will begin to expire in 2019, and the state carryforwards have begun to expire. A portion of net operating loss carryforwards and tax credit carryforwards may be subject to an annual limitation regarding their utilization against taxable income in future periods due to the “change of ownership” provisions of the Internal Revenue Code and similar state provisions. A portion of these carryforwards may expire before becoming available to reduce future income tax liabilities.

At December 31, 2011, $25,149 of the deferred tax asset related to net operating loss carryforwards and an equivalent amount of deferred tax asset valuation allowance represented tax benefits associated with the exercise of non-qualified stock options and vesting of restricted stock deduction over book. Such benefit, when realized, will be credited to additional paid-in capital. Included within the Company’s net operating loss tax carryforwards at December 31, 2011, the Company has excess tax benefits, related to stock-based compensation of $23,776 which are not recorded as a deferred tax asset as the amounts would not have resulted in a reduction in current taxes payable until all other tax attributes currently available to the Company were utilized. The benefit of these deductions will be recorded to additional paid-in capital at the time the tax deduction results in a reduction of current taxes payable.

The earnings associated with the Company’s investment in its foreign subsidiaries are considered to be permanently invested and no provision for U.S. federal and state income taxes on those earnings or translation adjustments has been provided.

The reconciliation of income tax expense computed at the U.S. federal statutory rate to the benefit from income taxes is as follows:

	Year Ended December 31,
	2011					2010					2009
Tax at U.S. statutory rate	$	(17,263	)	(35.0	)%	$	337		35.0	%	$	(20,091	)	(35.0	)%
Effect of permanent items		(2	)	-			(604	)	(62.7	)		(1,636	)	(2.8	)
State and foreign tax (benefit), net of federal tax effect		(1,603	)	(3.3	)		(25	)	(2.6	)		(2,018	)	(3.5	)
Research and experimentation tax credits, net		(68	)	(0.1	)		(153	)	(15.9	)		113		0.2
Valuation allowance, net		16,181		32.8			123		12.8			23,573		41.1
Other		2,755		5.6			25		2.5			(262	)	(0.5	)
(Benefit from) provision for income taxes	$	-		-	%	$	(297	)	(30.9	)%	$	(321	)	(0.5	)%

10. STOCKHOLDERS' EQUITY

On December 17, 1998, the Company adopted a Shareholders’ Rights Agreement (the Agreement). Pursuant to the Agreement, as amended on November 30, 2000 and October 2, 2008, rights were distributed as a dividend at the rate of one right for each share of ANADIGICS, Inc. common stock, par value $0.01 per share, held by stockholders of record as of the close of business on December 31, 1998. The rights will expire on December 17, 2018, unless earlier redeemed or exchanged. Under the Agreement, each right will entitle the registered holder to buy one one-thousandth of a share of Series A Junior Participating Preferred Stock at a price of $75.00 per one one-thousandth of a share, subject to adjustment in accordance with the Agreement. The rights will become exercisable only if a person or group of affiliated or associated persons acquires, or obtains the right to acquire, beneficial ownership of ANADIGICS, Inc. common stock or other voting securities that have 18% or more of the voting power of the outstanding shares of voting stock, or upon the commencement or announcement of an intention to make a tender offer or exchange offer, the consummation of which would result in such person or group acquiring, or obtaining the right to acquire, beneficial ownership of 18% or more of the voting power of ANADIGICS, Inc. common stock or other voting securities.

11. EMPLOYEE BENEFIT PLANS

The Company records stock-based compensation expense for all stock-based payment awards made to our employees and directors. Stock-based compensation cost is measured at the grant date based on the fair value of the award and is recognized as expense over the requisite service period which in most cases is the vesting period.

Equity Compensation Plans

The Company had 4 equity compensation plans under which equity securities are authorized for issuance to employees and/or directors:

The 1995 Long-Term Incentive and Share Award Plan for Officers and Directors (terminated February 28, 2005) (1995 Plan);

The 1997 Long Term Incentive and Share Award Plan (1997 Plan);

The 2005 Long Term Incentive and Share Award Plan (2005 Plan, collectively with the 1995 Plan and the 1997 Plan, the Plans); and

The Employee Stock Purchase Plan (ESP Plan).

Employees and outside directors have been granted restricted stock shares or units (collectively, restricted stock) and options to purchase shares of common stock under stock option plans adopted in 1995, 1997 and 2005. An aggregate of 4,913, 5,100 and 16,050 shares of common stock were reserved for issuance under the 1995 Plan, the 1997 Plan and the 2005 Plan, respectively. The Plans provide for the granting of stock options, stock appreciation rights, restricted stock and other share based awards to eligible employees and directors, as defined in the Plans. Option grants have terms of ten years and become exercisable in varying amounts over periods of up to three years. To date, no stock appreciation rights have been granted under the Plans. On February 1, 2009, a CEO inducement award of 700 stock options was granted outside of the Plans and the unvested portion of that award contractually vested upon separation on March 28, 2011.

In 1995, the Company adopted the ESP Plan under Section 423 of the Internal Revenue Code. All full-time employees of ANADIGICS, Inc. and part-time employees, as defined in the ESP Plan, are eligible to participate in the ESP Plan. An aggregate of 6,694 shares of common stock were reserved for offering under the ESP Plan. Offerings are made at the commencement of each calendar year and must be purchased by the end of that calendar year. Pursuant to the terms of the ESP Plan, shares purchased and the applicable per share price were 384 ($2.00), 488 ($3.83) and 729 ($1.39) for the years ended December 31, 2011, 2010 and 2009, respectively.

Stock-based compensation expense arises from the amortization of restricted stock grants, unamortized stock option grants and from the ESP Plan. The Company uses the straight-line basis in calculating stock-based compensation expense.

The table below summarizes stock-based compensation by source and by financial statement line item:

	For years ended December 31,
	2011			2010		2009
Amortization of restricted stock awards	$	9,308		$	7,188	$	8,242
Amortization of ESP Plan		307			699		461
Amortization of stock option awards		1,899			1,348		3,700
Total stock-based compensation	$	11,514		$	9,235	$	12,403

By Financial Statement line item
Cost of sales	$	1,798		$	2,173	$	2,441
Research and development expenses		2,981			3,228		5,088
Selling and administrative expenses		6,815			3,834		5,065
Restructuring and impairment (recovery) charges		(80	)		-		(191	)

No tax benefits have been recorded due to the Company’s full valuation allowance position.

Restricted Stock Awards

Under the Plans, the Company grants restricted stock shares and units to its employees. The value of restricted stock grants are fixed upon the date of grant and amortized over the related vesting period of six months to three years. Restricted stock is subject to forfeiture if employment terminates prior to vesting. The Company estimates that approximately 2.5% of its restricted stock and option awards are forfeited annually (exclusive of LTI’s, as described below). The restricted stock shares carry voting and certain forfeitable dividend rights commencing upon grant, whereas restricted stock units do not. Neither restricted stock shares nor restricted stock units may be traded or transferred prior to vesting. Grant, vest and forfeit activity and related weighted average (WA) price per share for restricted stock and for stock options during the period from January 1, 2009 to December 31, 2011 is presented in tabular form below:

	Restricted Stock Shares					Restricted Stock Units					Stock Options
	Shares			WA price per share		Units			WA price per unit		Issuable upon exercise			WA exercise price

Shares outstanding at December 31, 2008		1,974		$	9.27		611		$	4.94		2,819		$	10.00
Granted		-			-		873			3.22		3,245			2.04
Shares vested/options exercised		(1,195	)		8.66		(587	)		4.71		(49	)		2.06
Forfeited/expired (1)		(141	)		11.52		(69	)		4.01		(708	)		9.18
Balance at December 31, 2009		638		$	9.90		828		$	3.36		5,307		$	5.32
Granted		-			-		2,009			4.33		121			5.08
Shares vested/options exercised		(279	)		9.74		(1,338	)		3.56		(758	)		1.99
Forfeited/expired (2)		(179	)		11.66		(39	)		4.16		(527	)		12.90
Balance at December 31, 2010		180		$	8.39		1,460		$	4.49		4,143		$	4.96
Granted (3)		-			-		2,573			5.91		1,065			3.29
Shares vested/options exercised		(179	)		8.38		(1,654	)		5.08		(442	)		2.12
Forfeited/expired (4)		(1	)		9.72		(409	)		6.03		(491	)		9.37
Balance at December 31, 2011		-			-		1,970		$	5.52		4,275		$	4.32

(1)	Year 2009 restricted stock shares forfeited include 78 performance award shares

(2)	Year 2010 restricted stock shares forfeited include 156 performance award shares

(3)	Year 2011 stock options granted include 417 performance stock option shares

(4)	Year 2011 stock options forfeited include 167 performance stock option shares

Exercisable options and their related average exercise prices were 3,485 ($4.55), 2,929 ($6.03) and 2,389 ($9.21) as of December 31, 2011, 2010 and 2009, respectively.

In June 2011, the Company’s Chief Executive Officer and Chief Financial Officer were awarded a base grant of 417 long-term incentive stock options (LTI stock options) contingent upon the Company’s shareholder return performance against the performance of the Philadelphia Semiconductor Index component companies. The award and performance will be evaluated annually in one-third increments measuring Company shareholder returns during the one, two and three year periods following the award. Depending upon performance, the number of shares issuable pursuant to the LTI stock options can range from 50% to 150% of the base option shares. Company performance below the 25th-percentile in a measurement period would result in no vesting for that period. The LTI stock options have an exercise price of $3.24, a ten year term to expiration, and an average fair value of $2.62. The fair value estimate was calculated with the assistance of a valuation consultant using a Monte Carlo Simulation model. In November 2011, 167 shares of the 417 LTI stock options were forfeited upon the separation of our former Chief Financial Officer.

In 2008, the Company granted 357 restricted stock shares pursuant to long-term incentive awards (LTI award) issued to management contingent upon the Company’s performance using multi-year adjusted earnings per share and revenue targets measured over a three-year period ending December 31, 2010. In 2008, 27 shares of the 357 LTI award shares were released upon the separation of our former chief executive officer. Based on the performance of the Company over the LTI award term, no further stock-based compensation for the LTI award was expensed and the balance of unvested shares forfeited by December 31, 2010.

The total fair value of restricted stock vested during the years ended December 31, 2011, 2010 and 2009 were $6,942, $6,827 and $4,964, respectively. The intrinsic value of exercised options during the years ended December 31, 2011, 2010 and 2009 were $787, $3,075 and $130, respectively.

	Weighted average information as of December 31, 2011

Options currently exercisable
Shares issuable upon exercise		3,485
Weighted average exercise price	$	4.55
Weighted average remaining contractual term	3.0 years
Weighted average remaining contractual term for outstanding options	4.1 years

Intrinsic value of exercisable options	$	347
Intrinsic value of outstanding options	$	367
Unrecognized stock-based compensation cost
Option plans	$	1,260
Restricted stock	$	7,145
Weighted average remaining vest period for option plans	2.0 years
Weighted average remaining vest period for restricted stock	2.0 years

Stock options outstanding at December 31, 2011 are summarized as follows:

Range of exercise prices		Outstanding Options at December 31, 2011		Weighted average remaining contractual life		Weighted average exercise price		Exercisable at December 31, 2011		Weighted average exercise price

$	1.39 - $2.03		1,750		3.3	$	1.98		1,673	$	1.98
$	2.08 - $3.30		1,100		5.9	$	3.13		469	$	2.99
$	3.65 - $8.79		722		3.6	$	6.37		640	$	6.51
$	8.84 - $18.98		703		4.0	$	9.93		703	$	9.93

Valuation for ESP Plan and Stock Option Awards

The fair value of these equity awards was estimated at the date of grant using a Black-Scholes option pricing model. The weighted average assumptions and fair values for stock-based compensation grants used for the years ended December 31, 2011, 2010 and 2009 are summarized below (excludes the aforementioned LTI option grants).

	Year ended December 31,
	2011			2010			2009
Stock option awards:
Risk-free interest rate		2.2	%		2.6	%		1.6	%
Expected volatility		65	%		85	%		99	%
Average expected term (in years)		5			5			5
Expected dividend yield		0	%		0	%		0	%
Weighted average fair value of options granted	$	1.85		$	3.42		$	1.52

ESP Plan:
Risk-free interest rate		0.1	%		0.3	%		0.5	%
Expected volatility		66	%		60	%		80	%
Average expected term		1			1			1
Expected dividend yield		0	%		0	%		0	%
Weighted average fair value of purchase option	$	0.80		$	1.43		$	0.63

The Company regularly assesses the assumptions used in its option valuation. For equity awards with expected terms of less than one year, the assumption for expected volatility is based on the Company’s historical volatility. For equity awards with expected terms of greater than one year, the Company used a combination of historical and implied volatility for options granted in the years ended December 31, 2011 and 2010. The expected term of the stock options is based on historical observations of employee exercise patterns combined with expectations of employee exercise behavior in the future giving consideration to the contractual terms of the stock-based awards. The risk free interest rate assumption has consistently been based on the yield at the time of grant of a U.S. Treasury security with an equivalent remaining term. The Company has never paid cash dividends and does not currently intend to pay cash dividends and has consistently assumed a 0% dividend yield.

The Company also sponsors an Employee Savings and Protection Plan under Section 401(k) of the Internal Revenue Code which is available to all full-time employees. Employees can make voluntary contributions up to limitations prescribed by the Internal Revenue Code. The Company previously matched 50% of employee contributions up to 6% of their gross pay; however as a cost reduction during the first quarter of 2009, the Company discontinued matching 401(k) contributions. Effective January 1, 2011, the Company commenced matching 30% of employee contributions up to 10% of their gross pay. The Company recorded expense relating to plan contributions of $928, $0 and $254 for the years ended December 31, 2011, 2010 and 2009, respectively.

12. (LOSS) EARNINGS PER SHARE

The reconciliation of shares used to calculate basic and diluted (loss) earnings per share consists of the following:

	Year ended December 31,
	2011		2010		2009
Weighted average common shares for basic (loss) earnings per share		67,771		65,084		62,372
Effect of dilutive securities:
Stock options (*)		-		1,819		-
Unvested restricted stock (*)		-		651		-
Adjusted weighted average shares for diluted (loss) earnings per share		67,771		67,554		62,372

*	Incremental shares from restricted stock and stock options are computed using the treasury stock method.

Dilution arising from the Company's outstanding stock options or unvested restricted stock was not included in the years ended December 31, 2011 and 2009 as their effect was anti-dilutive. Potential dilution arising from any of the remainder of the Company's outstanding stock options or unvested restricted stock is detailed below. Such potential dilution was excluded as their effect was anti-dilutive.

	Year ended December 31,
	2011		2010		2009
Stock options		4,275		1,539		5,307
Unvested restricted stock		1,970		6		1,466

13. OTHER ACCUMULATED COMPREHENSIVE INCOME

The components of other accumulated comprehensive income are as follows:

	As of December 31,
	2011			2010
Unrealized income on marketable securities	$	2,455		$	2,791
Foreign currency translation adjustment		(9	)		(9	)
Total	$	2,446		$	2,782

14. LEGAL PROCEEDINGS

Because the Class Actions and the Derivative Lawsuits, which are in a preliminary stage, do not specify alleged monetary damages, the Company is unable to reasonably estimate a possible range of loss, if any, to the Company in connection therewith.

The Company is also a party to ordinary course litigation arising out of the operation of our business. The Company believes that the ultimate resolution of such ordinary course litigation should not have a material adverse effect on its consolidated financial condition or results of operations.

15. QUARTERLY FINANCIAL DATA (UNAUDITED)

2011 and 2010 Quarterly Financial Data

The following table sets forth certain unaudited results of operations for each quarter during 2011 and 2010. The unaudited information has been prepared on the same basis as the audited consolidated financial statements and includes all adjustments which management considers necessary for a fair presentation of the financial data shown. The operating results for any quarter are not necessarily indicative of the results to be attained for any future period. Basic and diluted (loss) income per share are computed independently for each of the periods presented. Accordingly, the sum of the quarterly (loss) income per share may not agree to the total for the year (in thousands, except for per share data).

	Quarter Ended
	2011												2010
	Dec. 31			Oct. 1			July 2			April 2			Dec. 31			Oct. 2			July 3			April 3

Net sales	$	36,517		$	37,264		$	35,583		$	43,463		$	60,229		$	61,288		$	51,666		$	43,531
Cost of sales		31,148			30,229			29,044			31,303			37,920			39,049			33,853			30,047
Gross profit		5,369			7,035			6,539			12,160			22,309			22,239			17,813			13,484
Research and development expenses		10,186			9,938			11,340			13,573			12,799			13,326			12,214			11,781
Selling and administrative expense		11,013			7,360			7,329			9,436			6,992			7,101			6,892			6,992
Restructuring and impairment (recovery) charges		-			-			1,047			-			-			-			(1,717	)		-
Operating (loss) income		(15,830	)		(10,263	)		(13,177	)		(10,849	)		2,518			1,812			424			(5,289	)
Interest income (1)		159			145			131			141			492			106			93			93
Interest expense		-			-			(8	)		(17	)		(25	)		(34	)		(43	)		(52	)
Other income, net		90			104			-			51			380			111			317			60
Benefit from income taxes		-			-			-			-			-			(297	)		-			-
Net (loss) income	$	(15,581	)	$	(10,014	)	$	(13,054	)	$	(10,674	)	$	3,365		$	2,292		$	791		$	(5,188	)

Net (loss) income per share:
Basic	$	(0.23	)	$	(0.15	)	$	(0.19	)	$	(0.16	)	$	0.05		$	0.04		$	0.01		$	(0.08	)
Diluted	$	(0.23	)	$	(0.15	)	$	(0.19	)	$	(0.16	)	$	0.05		$	0.03		$	0.01		$	(0.08	)

(1) Includes $392 recorded in the fourth quarter of 2010 representing accretion of market discount on long-term marketable debt securities.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.

None.

ITEM 9A. CONTROLS AND PROCEDURES.

Conclusion Regarding the Effectiveness of Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports filed with the Securities and Exchange Commission, or SEC, is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer, or CEO, and Chief Financial Officer, or CFO, as appropriate, to allow timely decisions regarding required disclosure. As of December 31, 2011, an evaluation was performed under the supervision and with the participation of our Management, including our CEO and CFO, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) under the U.S. Securities Exchange Act of 1934). Based on that evaluation, our management, including our CEO and CFO, concluded that our disclosure controls and procedures were effective as of December 31, 2011.

Management’s Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f). Under the supervision and with the participation of our management, including our CEO and CFO, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework of Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on that evaluation, our management concluded that our internal control over financial reporting was effective as of December 31, 2011.

The effectiveness of our internal control over financial reporting as of December 31, 2011 has been audited by Ernst & Young LLP, an independent registered public accounting firm, as stated in their report which is included below.

There was no change in the Company’s internal control over financial reporting during the Company’s last fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

Inherent Limitations of Controls

Because of their inherent limitations, disclosure controls and procedures and internal control over financial reporting may not pre vent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders

ANADIGICS, Inc.

We have audited ANADIGICS, Inc.’s internal control over financial reporting as of December 31, 2011, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (the COSO criteria). ANADIGICS, Inc.’s management is responsible for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the company’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, ANADIGICS, Inc. maintained, in all material respects, effective internal control over financial reporting as of December 31, 2011, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of ANADIGICS, Inc. as of December 31, 2011 and 2010, and the related consolidated statements of operations, comprehensive (loss) income, stockholders' equity, and cash flows for each of the three years in the period ended December 31, 2011 of ANADIGICS Inc. and our report dated March 15, 2012 expressed an unqualified opinion thereon.

/s/ Ernst & Young LLP

MetroPark, New Jersey

March 15, 2012

ITEM 9B. OTHER INFORMATION

None.

PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.

The Company has adopted a Code of Conduct and Business Ethics that applies to directors, officers and employees, including the President and Chief Executive Officer, and Chief Financial Officer and has posted such code on its website at (www.anadigics.com). Changes to and waivers granted with respect to the Company’s Code of Conduct and Business Ethics for officers and directors that are required to be disclosed pursuant to the applicable rules and regulations will be filed on a current report on Form 8-K and posted on the Company website.

The registrant incorporates by reference herein information to be set forth in its definitive proxy statement for its 2012 annual meeting of shareholders that is responsive to the information required with respect to this Item.

ITEM 11. EXECUTIVE COMPENSATION.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE.

ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES.

PART IV

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES.

(a) 1. Financial Statements

Financial Statements are included in Item 8, "Financial Statements and Supplementary Data" as follows:

-	Report of Independent Registered Public Accounting Firm
-	Consolidated Balance Sheets - December 31, 2011 and 2010

-	Consolidated Statements of Operations - Year ended December 31, 2011, 2010 and 2009
-	Consolidated Statements of Comprehensive (Loss) Income - Year ended December 31, 2011, 2010 and 2009

-	Consolidated Statements of Stockholders’ Equity - Year ended December 31, 2011, 2010 and 2009
-	Consolidated Statements of Cash Flows - Year ended December 31, 2011, 2010 and 2009

-	Notes to Consolidated Financial Statements

2. Financial Statement Schedules

Schedule II - Valuation and Qualifying Accounts

All other schedules for which provision is made in the applicable accounting regulation of the Securities and Exchange Commission are not required under the related instructions or are inapplicable and therefore have been omitted.

(b) Exhibit List

3.1	Amended and Restated Certificate of Incorporation of the Company, together with all amendments thereto. Filed as an exhibit to the Company's Registration Statement on Form S-3 (Registration No. 333-75040), and incorporated herein by reference.
3.2	Amended and Restated By-laws of the Company. Filed as an exhibit to the Company's current report on Form 8-K dated January 22, 2008, and incorporated herein by reference.
4.1	Form of Common Stock Certificate. Filed as an exhibit to the Company's Registration Statement on Form S-1 (Registration No. 33-89928), and incorporated herein by reference.
4.2	Form of Registration Rights Agreement. Filed as an exhibit to the Company's Registration Statement on Form S-1 (Registration No. 33-89928), and incorporated herein by reference.
4.3	Schedule to Form of Registration Rights Agreement. Filed as an exhibit to the Company's Registration Statement on Form S-1 (Registration No. 333-20783), and incorporated herein by reference.
4.4	Rights Agreement dated as of December 17, 1998 between the Company and Chase Mellon Shareholder Services L.L.C., as Rights Agent. Filed as an exhibit to the Company’s Current Report on Form 8-K dated December 17, 1998, and incorporated herein by reference.
4.5	Amendment No. 1 dated as of November 30, 2000 to the Rights Agreement dated as of December 17, 1998 between the Company and Chase Mellon Shareholder Services L.L.C., as Rights Agent. Filed as an exhibit to the Company’s Current Report on Form 8-K dated December 4, 2000, and incorporated herein by reference.
4.6	Amendment No. 2 dated as of October 2, 2008, to the Rights Agreement, dated as of December 17, 1998, as amended as of November 30, 2000, between the Company and Mellon Investor Services LLC (f/k/a ChaseMellon Shareholder Services, L.L.C.). Filed as an exhibit to the Company’s Form 8-A filed on October 2, 2008 and incorporated herein by reference.
10.1	1994 Long-Term Incentive and Share Award Plan. Filed as an exhibit to the Company's Registration Statement on Form S-1 (Registration No. 33-89928), and incorporated herein by reference.
10.2	1995 Long-Term Incentive and Share Award Plan, as amended May 29, 1997 and May 24, 2000. Filed as an exhibit to the Company’s Current Report on Form S-8 (Registration No. 333-49632), and incorporated herein by reference.
10.3	Employee Savings and Protection Plan. Filed as an exhibit to the Company's Registration Statement on Form S-1 (Registration No. 33-89928), and as incorporated herein by reference.
10.4	First Amendment to Employee Savings and Protection Plan, effective as of May 1, 2005
10.5	Amended and Restated Employee Stock Purchase Plan. Filed as an exhibit to the Company's Quarterly Report on Form 10-Q filed on May 16, 2008, and incorporated herein by reference; as amended and filed as an exhibit to the Company’s Current Report on Form 8-K dated May 14, 2010; each as incorporated herein by reference.
10.6	Lease Agreement between United States Land Resources, L.P. (and its successor in interest, Warren Hi-Tech Center, L.P.), and the Company dated as of April 26, 1996. Filed as an exhibit to the Company's Registration Statement on Form S-1 (Registration No. 333-20783); as amended in the Company’s Annual Report filed on Form 10-K405 dated March 29, 2002; each as incorporated herein by reference.
10.7	Employment Agreement between the Company and Thomas C. Shields, dated March 28, 2011. Filed as an exhibit to the Company’s current report on Form 8-KA dated April 19, 2011; and as incorporated herein by reference.
10.8	Form of 1997 Long-Term Incentive and Share Award Plan. Filed as an exhibit to the Company’s Annual Report on Form 10-K405 dated February 18, 1997, and incorporated herein by reference.
10.9	Amended and Restated 2005 Long Term Incentive and Share Award Plan. Filed as an exhibit to the Company’s current report on Form 8-K filed on May 16, 2008; and incorporated herein by reference; as amended and filed as an exhibit to the Company’s Current Report on Form 8-K dated May 14, 2010; each as incorporated herein by reference.
10.10	Employment Agreement between the Company and Ron Michels, dated as of March 28, 2011. Filed as an exhibit to the Company’s current report on Form 8-KA filed on April 19, 2011; and as incorporated herein by reference.
10.11	Employment Agreement between the Company and John Van Saders, dated as of March 28, 2011. Filed as an exhibit to the Company’s current report on Form 8-KA dated April 19, 2011; and as incorporated herein by reference.
10.12	Employment Agreement between the Company and Terrence G. Gallagher, dated as of November 14, 2011. Filed as an exhibit to the Company’s current report on Form 8-KA filed on December 19, 2011; and as incorporated herein by reference.
*21	Subsidiary Listing
*23.1	Consent of Ernst & Young LLP.
24.1	Power of Attorney (included on the signature page of this Annual Report on Form 10-K).
*31.1	Rule 13a-14(a)/15d-14(a) Certification of Ronald Michels, President and Chief Executive Officer of ANADIGICS, Inc.
*31.2	Rule 13a-14(a)/15d-14(a) Certification of Terrence G. Gallagher, Vice President and Chief Financial Officer of ANADIGICS, Inc.
*32.1	Section 1350 Certification of Ronald Michels, President and Chief Executive Officer of ANADIGICS, Inc.
*32.2	Section 1350 Certification of Terrence G. Gallagher, Vice President and Chief Financial Officer of ANADIGICS, Inc.
* Filed herewith

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized on the 15th day of March, 2012.

ANADIGICS, INC.

BY: /s/ Ronald Michels

-----------------------------------------

Ronald Michels

CHIEF EXECUTIVE OFFICER AND PRESIDENT

KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints each of Ronald Michels and Terrence G. Gallagher as his attorney-in-fact and agent, with full power of substitution and resubstitution, for him and in his name, place, and stead, in any and all capacities, to sign and file any and all amendments to this Annual Report on Form 10-K, with all exhibits thereto and hereto, and other documents with the Securities and Exchange Commission, granting unto said attorney-in-fact and agent, and each of them, full power and authority to do and perform each and every act and thing requisite or necessary to be done in and about the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their or his substitutes, may lawfully do or cause to be done by virtue hereof.

PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934, THIS REPORT HAS BEEN SIGNED BY THE FOLLOWING PERSONS ON BEHALF OF ANADIGICS, INC. IN THE CAPACITIES AND ON THE DATES INDICATED:

Name	Title	Date

/s/ Ronald Michels	President, Chief Executive Officer (Principal Executive Officer) and Director	March 15, 2012
Ronald Michels

/s/ Terrence G. Gallagher	Vice President and Chief Financial Officer (Principal Financial Accounting Officer)	March 15, 2012
Terrence G. Gallagher

/s/ Lewis Solomon	Chairman of the Board of Directors	March 15, 2012
Lewis Solomon

/s/ Paul S. Bachow	Director	March 15, 2012
Paul S. Bachow

/s/ David Fellows	Director	March 15, 2012
David Fellows

/s/ Harry T. Rein	Director	March 15, 2012
Harry T. Rein

/s/ Ronald Rosenzweig	Director	March 15, 2012
Ronald Rosenzweig

/s/ Dennis Strigl	Director	March 15, 2012
Dennis Strigl

SCHEDULE II--VALUATION AND QUALIFYING ACCOUNTS

Description (Dollars in Thousands)	Balance at beginning of period		Additions charged to costs and expenses		Deductions					Balance at end of period
Year ended December 31, 2011:
Deducted from asset account:
Allowance for doubtful accounts	$	739	$	-	$	(567	)	(1	)	$	172
Reserve for excess and obsolete inventory		8,948		137		(3,526	)	(2	)		5,559

Year ended December 31, 2010:
Deducted from asset account:
Allowance for doubtful accounts	$	739	$	-	$	-		(1	)	$	739
Reserve for excess and obsolete inventory		9,879		1,496		(2,427	)	(2	)		8,948

Year ended December 31, 2009:
Deducted from asset account:
Allowance for doubtful accounts	$	739	$	-	$	-		(1	)	$	739
Reserve for excess and obsolete inventory		9,028		2,940		(2,089	)	(2	)		9,879