Summary of SKYWORKS SOLUTIONS INC

Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
This report and other documents we have filed with the Securities and Exchange Commission ("SEC") contain forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities and Exchange Act of 1934, as amended, and are subject to the "safe harbor" created by those sections. Words such as "believes," "expects," "may," "will," "would," "should," "could," "seek," "intends," "plans," "potential," "continue," "estimates," "anticipates," "predicts," and similar expressions or variations or negatives of such words are intended to identify forward-looking statements, but are not the exclusive means of identifying forward-looking statements in this report. Additionally, statements concerning future matters such as the development of new products, enhancements or technologies, sales levels, expense levels and other statements regarding matters that are not historical are forward-looking statements. Although forward-looking statements in this report reflect the good faith judgment of our management, such statements can only be based on facts and factors currently known by us. Consequently, forward-looking statements involve inherent risks and uncertainties and actual results and outcomes may differ materially and adversely from the results and outcomes discussed in or anticipated by the forward-looking statements. A number of important factors could cause actual results to differ materially and adversely from those in the forward-looking statements. We urge you to consider the risks and uncertainties discussed in our Annual Report on Form 10-K for the fiscal year ended October 3, 2008, under the heading "Certain Business Risks" and in the other documents filed with the SEC in evaluating our forward-looking statements. We have no plans, and undertake no obligation, to revise or update our forward-looking statements to reflect any event or circumstance that may arise after the date of this report. We caution readers not to place undue reliance upon any such forward-looking statements, which speak only as of the date made.
In this document, the words "we," "our," "ours" and "us" refer only to Skyworks Solutions, Inc. and not any other person or entity.
RESULTS OF OPERATIONS
THREE AND SIX-MONTHS ENDED APRIL 3, 2009 AND MARCH 28, 2008
The following table sets forth the results of our operations expressed as a percentage of net revenues for the three and six-month periods ended April 3, 2009 and March 28, 2008:

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                                                        Three-months Ended                    Six-months Ended
                                                  April 3,            March 28,         April 3,          March 28,
                                                    2009                2008              2009              2008
Net revenues                                          100.0 %              100.0 %          100.0 %            100.0 %
Cost of goods sold                                     62.5                 60.2             61.2               60.5

Gross profit                                           37.5                 39.8             38.8               39.5
Operating expenses:
Research and development                               16.5                 18.1             16.5               17.2
Selling, general and administrative                    13.2                 11.6             13.0               11.8
Amortization of intangible assets                       0.7                  0.9              0.6                0.9
Restructuring and other charges                         9.2                    -              4.2                  -

Total operating expenses                               39.6                 30.6             34.3               29.9

Operating (loss) income                                (2.1 )                9.2              4.5                9.6
Interest expense                                       (0.5 )               (0.8 )           (0.5 )             (1.0 )
Gain on early retirement of convertible debt              -                    -              0.5                  -
Other income, net                                         -                  0.9              0.4                1.0

(Loss) income before income taxes                      (2.6 )                9.3              4.9                9.6
Provision for income taxes                                -                  1.0              0.3                0.9

Net (loss) income                                      (2.6 )%               8.3 %            4.6 %              8.7 %

GENERAL
During the six-month period ended April 3, 2009, our financial performance resulted in the following:
§ We generated $96.8 million in cash from operations in the six-month period ended April 3, 2009, an increase of $0.9 million from the comparable six-month period ended March 28, 2008. At April 3, 2009, we had $267.9 million in cash, cash equivalents and restricted cash compared to $228.5 million at March 28, 2008.

§ In the six-month period ended April 3, 2009, we retired $40.5 million of our 2007 Convertible Notes (due in 2012) at an average price of 92.6 percent of par value. These retirements reduced the remaining principal balance on our 2007 Convertible Notes to $97.1 million and reduced related potential dilution of stockholder ownership by approximately 4.2 million shares.

§ On January 22, 2009, we implemented a restructuring plan to realign our cost structure given the currently challenging industry and overall economic conditions. We reduced global headcount by approximately 4%, or 150 employees. We recorded total charges of $19.4 million comprised of inventory write-downs, asset impairments and severance and benefit costs. The non-cash component of this charge was $10.1 million. The restructuring plan was substantially completed as of April 3, 2009. We expect to achieve annual operating expense reductions of approximately $25.0 million due to this restructuring plan.

NET REVENUES

                                   Three-months Ended                       Six-months Ended
                          April 3,                   March 28,     April 3,                  March 28,
(dollars in thousands)      2009         Change        2008          2009        Change        2008

Net revenues $ 172,990 (14.2 )% $ 201,708 $ 383,218 (7.0 )% $ 412,241

We market and sell our mobile platforms and linear products to top tier Original Equipment Manufacturers ("OEMs") of communication electronic products, third-party Original Design Manufacturers ("ODMs") and contract manufacturers, and indirectly through electronic components distributors. We periodically enter into strategic arrangements that leverage our broad intellectual property portfolio by licensing or selling our patents or other intellectual property. We anticipate continuing this intellectual property strategy in future periods.

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Net revenues decreased 14.2% for the three-month period ended April 3, 2009 as compared to the corresponding period in the prior year. Net revenues decreased 7.0% for the six-month period ended April 3, 2009 as compared to the same period in the prior year. The revenue decline for both the three and six-month periods was due to a decline in mobile transceiver product revenues as we exited this product area on January 22, 2009 and an overall slowing of demand for certain of our products due to weak global economic conditions, partially offset by market share gains in our handset business. Net revenues from our top three customers decreased to 40.3% in the second quarter of fiscal 2009 from 41.0% in the second quarter of fiscal 2008, reflecting continued expansion of our customer base and the successful execution of our diversification strategy. Our top three customers in the second quarter of fiscal 2009 were OEMs.

GROSS PROFIT

                                   Three-months Ended                       Six-months Ended
                           April 3,                  March 28,     April 3,                  March 28,
 (dollars in thousands)      2009        Change        2008          2009        Change        2008

 Gross profit             $ 64,875       (19.3 )%    $ 80,367     $ 148,742       (8.6 )%   $ 162,705

% of net revenues 37.5 % 39.8 % 38.8 % 39.5 %

Gross profit represents net revenues less cost of goods sold. Cost of goods sold consists primarily of purchased materials, labor and overhead (including depreciation and equity based compensation expense) associated with product manufacturing.
The decrease in gross profit as a percentage of revenue for the three and six-month periods ended April 3, 2009, as compared to the corresponding periods in the previous fiscal year, was substantially the result of the $3.5 million charge we incurred on inventory write-downs due to our exit of the mobile transceiver product area. The decline in gross profit in aggregate dollars for both periods was principally the result of the lower revenue base. Our ability to maintain relatively consistent gross margin levels (not withstanding the one-time $3.5 million inventory write-down) is principally the result of sustained cost control measures including capacity management enhanced by the flexibility of our hybrid manufacturing model.

RESEARCH AND DEVELOPMENT

                                            Three-months Ended                                    Six-months Ended
                                April 3,                          March 28,          April 3,                          March 28,
(dollars in thousands)            2009            Change             2008              2009            Change             2008

Research and development       $ 28,596            (21.8 )%       $ 36,581          $ 63,240            (10.5 )%       $ 70,675
% of net revenues                  16.5 %                             18.1 %            16.5 %                             17.2 %

Research and development expenses consist principally of direct personnel costs, costs for pre-production evaluation and testing of new devices, masks and engineering prototypes, equity based compensation expense and design and test tool costs.
The decrease in research and development expenses in aggregate dollars and as a percentage of net revenues for the three and six-month periods ended April 3, 2009 as compared to the corresponding periods in the previous fiscal year was principally attributable to due to the restructuring plan implemented on January 22, 2009.

SELLING, GENERAL AND ADMINISTRATIVE

                                          Three-months Ended                                  Six-months Ended
                              April 3,                         March 28,          April 3,                        March 28,
(dollars in thousands)          2009            Change            2008              2009           Change            2008

Selling, general and
administrative               $ 22,794            (2.4 )%       $ 23,346          $ 49,895            2.6 %        $ 48,633
% of net revenues                13.2 %                            11.6 %            13.0 %                           11.8 %

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Selling, general and administrative expenses include legal, accounting, treasury, human resources, information systems, customer service, bad debt expense, sales representative commissions, advertising, marketing and other costs.
Selling, general and administrative expenses decreased in the aggregate for the three-month period ended April 3, 2009, as compared to the corresponding period in fiscal year 2008, primarily due to lower compensation and benefit costs including incentives. Selling, general and administrative expenses increased as a percentage of revenues for the three-month period ended April 3, 2009, as compared to the corresponding period in fiscal year 2008 due to the lower revenue base. Selling, general and administrative expenses increased both in the aggregate and as a percentage of revenue for the six-month period ended April 3, 2009 compared to the corresponding period in the prior year primarily due to higher non-cash equity based compensation expense.

AMORTIZATION OF INTANGIBLE ASSETS

                                   Three-months Ended                        Six-months Ended
                          April 3,                  March 28,      April 3,                  March 28,
(dollars in thousands)      2009        Change         2008          2009        Change         2008

Amortization              $ 1,246       (42.8 )%    $   2,180      $ 2,395       (41.8 )%    $   4,112
% of net revenues             0.7 %                       1.1 %        0.6 %                       1.0 %

The decrease in amortization expense during the three and six-month periods ended April 3, 2009, as compared to the corresponding periods of fiscal 2008, was due to a reduction in amortization of intangible assets associated with an acquisition completed in October 2007. See Note 2 of Notes to Unaudited Interim Consolidated Financial Statements for additional information.

RESTRUCTURING AND OTHER CHARGES

                                          Three-months Ended                                    Six-months Ended
                              April 3,                          March 28,          April 3,                          March 28,
(dollars in thousands)          2009            Change             2008              2009            Change             2008

Restructuring and
other charges                $ 15,982            100.0 %        $      -          $ 15,982            100.0 %        $      -
% of net revenues                 9.2 %                              0.0 %             4.2 %                              0.0 %

Restructuring and other charges consist of charges for asset impairments and restructuring activities, as follows:
2009 RESTRUCTURING AND OTHER CHARGES
On January 22, 2009, we implemented a restructuring plan to realign our costs given current business conditions. We exited our mobile transceiver product area and reduced global headcount by approximately 4%, or 150 employees. We recorded various charges associated with this action. In total, we recorded $15.9 million of restructuring and other charges and $3.5 million in inventory write-downs that were charged to cost of goods sold.
The $15.9 million charge includes the following: $4.5 million related to severance and benefits, $5.6 million related to the impairment of certain long-lived assets, $2.0 million related to the exit of certain operating leases, $2.3 million related to the impairment of technology licenses and design software, and $1.5 million related to other charges. These charges total $15.9 million and are recorded in restructuring and other charges. For additional information regarding restructuring charges and liability balances, see Note 11 of Notes to Unaudited Interim Consolidated Financial Statements.

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INTEREST EXPENSE

                                   Three-months Ended                        Six-months Ended
                          April 3,                  March 28,      April 3,                  March 28,
(dollars in thousands)      2009        Change         2008          2009        Change         2008

Interest expense          $   808       (54.3 )%    $   1,769      $ 1,947       (51.0 )%    $   3,977
% of net revenues             0.5 %                       0.8 %        0.5 %                       1.0 %

Interest expense is comprised principally of payments in connection with the $50.0 million credit facility between Skyworks USA, Inc., our wholly owned subsidiary, and Wachovia Bank, N.A. ("Facility Agreement"), the Company's 4.75% convertible subordinated notes (the "Junior Notes"), and the Company's 1.25% and 1.50% convertible subordinated notes (the "2007 Convertible Notes"). The decrease in interest expense, both in aggregate dollars and as a percentage of net revenues for the three and six-month periods ended April 3, 2009, when compared to the corresponding periods in fiscal 2008, was due to the retirement of our higher interest rate Junior Notes, and the early retirement of $62.4 million and $40.5 million of the 2007 Convertible Notes in the fourth quarter of fiscal 2008 and the first quarter of fiscal 2009, respectively. See Note 8 of Notes to Unaudited Interim Consolidated Financial Statements for information related to our borrowing arrangements.

GAIN ON EARLY RETIREMENT OF CONVERTIBLE DEBT

                                                       Three-months Ended                      Six-months Ended
                                                April 3,                March 28,     April 3,                 March 28,
(dollars in thousands)                            2009       Change       2008          2009       Change        2008

Gain on early retirement of convertible debt     $  0.0        0.0 %    $    0.0      $ 2,035       100.0 %    $    0.0
% of net revenues                                   0.0 %                    0.0 %        0.5 %                     0.0 %

In the six-month period ended April 3, 2009, we retired $40.5 million of our 2007 Convertible Notes due in 2012. We recorded income of $2.0 million in the first quarter of fiscal 2009 related to the early retirement of these notes, reflecting a $2.9 million discount received on the early retirement of the debt offset by a $0.9 million write-off of deferred financing costs.

OTHER (EXPENSE) INCOME, NET

                                                Three-months Ended                                    Six-months Ended
                                  April 3,                            March 28,         April 3,                           March 28,
(dollars in thousands)              2009             Change             2008              2009            Change             2008

Other (expense) income, net       $   (13 )          (100.7 )%       $   1,883          $ 1,389            (64.7 )%       $   3,933
% of net revenues                     0.0 %                                0.9 %            0.4 %                               1.0 %

Other (expense) income, net is comprised primarily of interest income on invested cash balances, other non-operating income and expense items and foreign exchange gains/losses.
The decreases in other (expense) income in both aggregate dollars and as a percentage of net revenues for the three and six-month periods ended April 3, 2009, as compared to the corresponding periods in fiscal 2008, is due to an overall decline in interest income on invested cash balances due to lower interest rates in fiscal 2009.

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PROVISION FOR INCOME TAXES

                                             Three-months Ended                                   Six-months Ended
                                April 3,                          March 28,          April 3,                          March 28,
(dollars in thousands)            2009           Change             2008               2009           Change             2008
Provision for income taxes      $      25          (98.8 )%      $     2,010        $    1,272          (66.5 )%      $     3,799
% of net revenues                     0.0 %                              1.0 %             0.3 %                              0.9 %

The provision for income taxes for the three and six-month periods ended April 3, 2009 consists of approximately $(0.3) million and $0.6 million, respectively, of United States federal and state income taxes. A charge to the United States federal income tax provision was not required to reduce the carrying value of goodwill for the three and six-month periods ended April 3, 2009, respectively. The provision for income taxes for the three and six-month period ended March 28, 2008 consists of approximately $1.7 million and $3.6 million, respectively, of United States federal and state income taxes. Of the total U.S. income tax provision, $1.2 million and $2.7 million were recorded as a charge reducing the carrying value of goodwill for the three and six-month periods ended March 28, 2008, respectively.
The provision for the three and six-month periods ended April 3, 2009 consists of approximately $0.3 million and $0.6 million, respectively, of foreign income taxes incurred by foreign operations. The provision for the three and six-month periods ended March 28, 2008, consists of approximately $0.3 million and $0.2 million, respectively, of foreign income taxes incurred by foreign operations.
In accordance with SFAS 109, Accounting for Income Taxes ("SFAS 109"), management has determined that it is more likely than not that a portion of our historic and current year income tax benefits will not be realized. Accordingly, as of April 3, 2009, we have established a valuation allowance of $76.3 million related to our United States federal deferred tax assets. Deferred tax assets have been recognized for foreign operations when management believes that it is more likely than not that they will be recovered during the carryforward period. There is a valuation allowance of $1.3 million related to our foreign deferred tax assets.
Realization of benefits from our deferred tax asset (principally research and experimentation credits) is dependent upon generating United States source taxable income in the future, which may result in the existing valuation reserve being reversed in the near term to the extent that the related deferred tax assets no longer require a valuation allowance under the provisions of SFAS 109. We will continue to evaluate its valuation allowance in future periods and depending upon the outcome of that assessment, additional amounts could be reversed or recorded and recognized as a reduction to goodwill or an adjustment to income tax benefit or expense. Such adjustments could cause our effective income tax rate to vary in future periods. We will need to generate $309.4 million of future United States federal taxable income to utilize all of our net operating loss carryforwards, research and experimentation tax credit carryforwards, and deferred income tax temporary differences as of April 3, 2009.
As noted in our Annual Report on Form 10-K, no benefit has been recognized for certain acquisition related deferred tax assets. The benefit from the recognition of these deferred items reduces the carrying value of goodwill instead of reducing income tax expense. We will evaluate the realization of the acquisition related deferred tax assets on a quarterly basis and adjust the provision for income taxes accordingly. As a result, the effective tax rate may vary in subsequent quarters.
We adopted FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes-an interpretation of FASB Statement No. 109 ("FIN 48"), as of the beginning of fiscal year 2008. During the quarter ended April 3, 2009, there were no significant changes in our gross unrecognized tax benefits. Of the total unrecognized tax benefits at April 3, 2009, $0.6 million would impact the effective tax rate, if recognized. There are no positions which we anticipate could change within the next twelve months. Total year to date accrued interest related to our unrecognized tax benefits is $0.0 million. Our policy is to recognize accrued interest and penalties, if incurred, on any unrecognized tax benefits as a component of income tax expense.

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Our major tax jurisdictions as of the adoption of FIN 48 are the United States federal and the states of California and Iowa. For United States federal income tax, the statute of limitations is closed on years before fiscal 2005, but because of carryforwards, certain items are open back to fiscal 1998. For California, the statue of limitations is closed on years before fiscal 2004, but because of carryforwards, certain items are open back to fiscal 2002. For Iowa, the statue of limitations is closed on years before fiscal 2005, but because of carryforwards, certain items are open back to fiscal year 2002.

LIQUIDITY AND CAPITAL RESOURCES
Cash Provided and Used

                                                            Six-months Ended
                                                        April 3,      March 28,
     (dollars in thousands)                               2009           2008
     Cash and cash equivalents at beginning of period   $ 225,104     $  241,577
     Net cash provided by operating activities             96,796         95,873
     Net cash used in investing activities                (19,914 )      (67,543 )
     Net cash used in financing activities                (40,035 )      (47,750 )

     Cash and cash equivalents at end of period         $ 261,951     $  222,157

Based on our results of operations for fiscal 2008 and the first six months of fiscal 2009, along with current trends, we expect our existing sources of liquidity, together with cash expected to be generated from operations, will be sufficient to fund our research and development, capital expenditures, debt obligations, working capital and other cash requirements for at least the next 12 months. However, we cannot be certain that the capital required to fund these expenses will be available in the future. In addition, any strategic investments and acquisitions that we may make to help us grow our business may require additional capital resources. If we are unable to obtain sufficient capital to meet our capital needs on a timely basis and on favorable terms (if at all), our business and operations could be materially and adversely affected. Cash and cash equivalent balances increased $36.8 million to $261.9 million at April 3, 2009 from $225.1 million at October 3, 2008. We generated $96.8 million in cash from operations during the six-month period ended April 3, 2009, which was offset by the retirement of $40.5 million of the 2007 Convertible Notes and capital expenditures of $18.7 million. The number of days sales outstanding for the three-month period ended April 3, 2009 decreased to 59 from 74 for the corresponding period in fiscal 2008.
During the six-month period ended April 3, 2009, we generated net income of $17.4 million. We experienced a decrease in receivables, and inventories of $34.0 million and $8.4 million, respectively. We also incurred multiple non-cash charges (e.g., depreciation, amortization, contribution of common shares to savings and retirement plans, share-based compensation expense, non-cash . . .