10-K

Use these links to rapidly review the document
Table of Contents
Part IV

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

(Mark One)
ý	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 28, 2013
or
o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from            to

Commission file number: 000-29823

SILICON LABORATORIES INC.
(Exact name of registrant as specified in its charter)

Delaware (State or other jurisdiction of incorporation or organization)	74-2793174 (I.R.S. Employer Identification No.)
400 West Cesar Chavez, Austin, Texas (Address of principal executive offices)	78701 (Zip Code)

(512) 416-8500
(Registrant's telephone number, including area code)

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

Title of each class	Name of exchange on which registered
Common Stock, $0.0001 par value	The NASDAQ Stock Market LLC

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. ý Yes    o No

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

         Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Sections 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. ý Yes    o 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). ý Yes    o No

         Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of the registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. o

         Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer ý Accelerated filer o Non-accelerated filer o Smaller reporting company o

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

         The aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold as of the last business day of the registrant's most recently completed second fiscal quarter (June 28, 2013) was $1,639,157,249 (assuming, for this purpose, that only directors and officers are deemed affiliates).

         There were 42,826,583 shares of the registrant's common stock issued and outstanding as of January 21, 2014.

DOCUMENTS INCORPORATED BY REFERENCE

         Portions of the Proxy Statement for the registrant's 2013 Annual Meeting of Stockholders are incorporated by reference into Part III of this Form 10-K.

Table of Contents

			Page Number
Part I
	Item 1.	Business		2
	Item 1A.	Risk Factors		12
	Item 1B.	Unresolved Staff Comments		27
	Item 2.	Properties		27
	Item 3.	Legal Proceedings		27
	Item 4.	Mine Safety Disclosures		27
Part II
	Item 5.	Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities		28
	Item 6.	Selected Financial Data		30
	Item 7.	Management's Discussion and Analysis of Financial Condition and Results of Operations		31
	Item 7A.	Quantitative and Qualitative Disclosures about Market Risk		44
	Item 8.	Financial Statements and Supplementary Data		45
	Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure		45
	Item 9A.	Controls and Procedures		45
	Item 9B.	Other Information		45
Part III
	Item 10.	Directors, Executive Officers and Corporate Governance		46
	Item 11.	Executive Compensation		49
	Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters		49
	Item 13.	Certain Relationships and Related Transactions, and Director Independence		49
	Item 14.	Principal Accounting Fees and Services		49
Part IV
	Item 15.	Exhibits and Financial Statement Schedules		50

Cautionary Statement

Except for the historical financial information contained herein, the matters discussed in this report on Form 10-K (as well as documents incorporated herein by reference) may be considered "forward-looking" statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements include declarations regarding the intent, belief or current expectations of Silicon Laboratories Inc. and its management and may be signified by the words "believe," "estimate," "expect," "intend," "anticipate," "plan," "project," "will" or similar language. You are cautioned that any such forward-looking statements are not guarantees of future performance and involve a number of risks and uncertainties. Actual results could differ materially from those indicated by such forward-looking statements. Factors that could cause or contribute to such differences include those discussed under "Risk Factors" and elsewhere in this report. Silicon Laboratories disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

1

Part I

Item 1.    Business

General

        Silicon Laboratories Inc. designs and develops proprietary, analog-intensive, mixed-signal integrated circuits (ICs) for a broad range of applications. Mixed-signal ICs are electronic components that convert real-world analog signals, such as sound and radio waves, into digital signals that electronic products can process. Therefore, mixed-signal ICs are critical components in products addressing a variety of markets, including communications, consumer, industrial and automotive.

        Our world-class, mixed-signal ICs leverage standard complementary metal oxide semiconductor (CMOS), a low cost, widely available process technology. This enables smaller, more cost effective and energy efficient solutions. Our expertise in analog-intensive, mixed-signal IC design in CMOS allows us to develop new and innovative products that are highly integrated, simplifying our customers' designs and improving their time-to-market.

Industry Background

        The pervasiveness of connectivity and the explosion in mobile computing is driving semiconductor consumption. Intelligence is being added to electronic systems to enable remote monitoring, power efficiency and an improved user experience. This in turn is increasing the demand for bandwidth, requiring more infrastructure to support higher performance networks. The nearly ubiquitous availability of Internet access and the increasing intelligence of electronic devices and mobility are enabling what is called the Internet of Things (IoT), a term that describes the exponential increase in IP-enabled devices connected to the Internet.

        These trends are requiring more and more interaction between the analog world we live in and the digital world of computing, and therefore require analog-intensive, mixed-signal circuits. Traditional mixed-signal designs relied upon solutions built with numerous, complex discrete analog and digital components. While these traditional designs provide the required functionality, they are often inefficient and inadequate for use in markets where size, cost, power consumption and performance are increasingly important product differentiators. In order to improve their competitive position, electronics manufacturers need to reduce the cost and complexity of their systems and enable new features or functionality to differentiate themselves from their competitors.

        Simultaneously, these manufacturers face accelerating time-to-market demands and must be able to rapidly adapt to evolving industry standards and new technologies. Because analog-intensive, mixed-signal IC design expertise is difficult to find, these manufacturers increasingly are turning to third parties, like us, to provide advanced mixed-signal solutions. Mixed-signal design requires specific expertise and relies on creative, experienced engineers to deliver solutions that optimize speed, power and performance, despite the noisy digital environment, and within the constraints of standard manufacturing processes. The development of this design expertise typically requires years of practical analog design experience under the guidance of a senior engineer, and engineers with the required level of skill and expertise are in short supply.

        Many IC providers lack sufficient analog expertise to develop compelling mixed-signal ICs. As a result, manufacturers of electronic devices value IC providers that can supply them with mixed-signal solutions with greater functionality, smaller size and lower power requirements at a reduced cost and shorter time-to-market.

2

Products

        We provide analog-intensive, mixed-signal solutions for use in a variety of electronic products in a broad range of applications including portable devices, AM/FM radios and other consumer electronics, networking equipment, test and measurement equipment, industrial monitoring and control, home automation and customer premises equipment. Our products integrate complex mixed-signal functions that are frequently performed by numerous discrete components in competing products into a single chip or chipset. By doing so, we are able to create products that, when compared to many competing products:

•

Require less printed circuit board (PCB) space;

•

Reduce the use of external components lowering the system cost and simplifying design;

•

Offer superior performance improving our customers' end products;

•

Provide increased reliability and manufacturability, improving customer yields; and/or

•

Reduce system power requirements enabling smaller form factors and/or longer battery life.

        We group our products into the following categories:

•

Broad-based products, which include our microcontrollers (MCUs), timing products (clocks and oscillators), power and isolation devices, and sensors;

•

Broadcast products, which include our broadcast audio and video products; and

•

Access products, which include our Voice over IP (VoIP) products, embedded modems and our Power over Ethernet (PoE) devices.

        The following table summarizes the diverse product areas and applications for the various ICs that we have introduced to customers:

Product Areas and Description	Applications
Broad-based Products
Microcontrollers
We offer a family of products ideal for embedded systems that include, 8-bit mixed-signal microcontrollers, 32-bit wireless MCUs and ultra low-power 32-bit MCUs based on scalable, ARM® Cortex-M0/M3/M4 cores, as well as peripheral devices such as our EZRadio® family of fully integrated, low power transceivers. These products generally integrate intelligent data capture, high performance processing, and communication interfaces in a single system on a chip. This family of products addresses a variety of end-markets, including the IoT, automotive, communications, consumer, industrial, medical and power management markets.	• Connected devices for the IoT • Home automation • Security systems • Smart energy • Automotive sensors and controls • Medical instrumentation • Electronic test and measurement equipment • Industrial automation and control • Consumer electronics • Wearables • Computer peripherals • White goods • Smart metering • Remote controls

3

Product Areas and Description	Applications
Timing Devices
Our Timing devices leverage our DSPLL® and MultiSynth technologies to offer frequency agile, extremely low jitter clock and oscillator products. Our patented CMEMS® technology integrates microelectromechanical system (MEMS) resonators with CMOS timing circuits to eliminate the need for discrete quartz resonators that have traditionally been required in solutions like crystal based oscillator devices. Our CMEMS based oscillators are in the early stages of adoption and compete against bulky, expensive and less reliable quartz solutions. We also offer a full line of low jitter clock buffers that are often used with our clock and oscillator offerings to a build a timing subsystem.	• Networking equipment • Telecommunications • Wireless base stations and backhaul • Test and measurement equipment • Broadcast video systems • HDTV cameras • High-speed data acquisition • Optical networking • Servers and storage systems
Power and Isolation Products
Our isolation techniques enable customers to meet safety standards for isolation and solve noise issues. Products include multi-channel isolators and isolated drivers that simplify design, minimize noise emissions, and reduce system cost.	• Motor control • Industrial networking • Switch mode power supplies • Isolated analog data acquisition • Isolated DC-DC supplies • Electronic ballasts for lighting • Solar power inverters
Sensors
Our sensor products include optical, proximity sensors, ambient light sensors and relative humidity (RH) / temperature sensors. These devices leverage our mixed-signal capability to provide high accuracy, quicker response time and lower power consumption than competing parts.	• Smart home applications • Industrial controls • Toys and consumer electronics • Consumer health & fitness • Monitors and lavatory controls
Broadcast Products
Broadcast Radio Receivers and Transmitters
Our AM and FM receivers deliver the entire tuner from antenna input to audio output in a single chip. The broadcast audio products are based on an innovative digital architecture that enables significant improvements in performance, which translates to a better consumer experience, while reducing system cost and board space for our customers.	• Automotive infotainment systems • Stand-alone AM/FM radios • Portable audio devices • MP3/digital media players • Navigation/GPS devices • Satellite radios • Home stereos

4

Product Areas and Description	Applications
Video Tuners and Demodulators
Our complete, globally-compliant hybrid TV tuners with analog TV demodulator in a single CMOS IC leverage our proven digital low-IF architecture and exceed the performance of traditional discrete TV tuners, enabling TV makers to deliver improved picture quality and better reception for both analog and digital broadcasts. Our small, low power and high performance digital video demodulators support DVB-T/T2, DVB-S/S2, and/or DVB-C/C2 in a single chip and are ideal for equipment receiving digital terrestrial, satellite and/or cable services.	• Integrated digital televisions (iDTV) • Free-to-Air (FtA) or pay-TV set-top box receivers • PC-TV applications • DVD/HDD personal video recorders
Access Products
ProSLIC® Subscriber Line Interface Circuits for VoIP
Our ProSLIC provides the analog subscriber line interface on the source end of the telephone which generates dial tone, busy tone, caller ID and ring signal. Our offerings include short-haul applications suitable for the customer premises as well as long-haul applications suitable for the traditional telephone company central office.	• Voice over broadband modems and terminal adapters • VoIP residential gateways • Wireless local loop remote access systems • PBXs • Wired long loop and central office systems
ISOmodem® Embedded Modems
The ISOmodem embedded modems leverage innovative silicon direct access arrangement (DAA) technology and a digital signal processor to deliver a globally compliant, very small analog modem for embedded applications.	• Fax machines and multi-function printers • Industrial monitoring • Postage meters • Security systems • Remote medical monitoring • Point of sale (POS) terminals • Set-top and digital cable boxes
Power over Ethernet
Our Power over Ethernet power source equipment and powered device ICs offer highly differentiated solutions with a reduced total bill of materials (BOM) and improved performance and reliability. Our solutions also offer a higher level of integration not available with competing solutions.	• Networking routers and switches • Wireless access points (WAP) • VoIP phones • Radio frequency identification (RFID) tag readers • POS terminals • Security cameras

5

        During fiscal 2013, 2012 and 2011, sales of our mixed-signal products accounted for substantially all of our revenue. The following summarizes our revenue by product category (in thousands):

	Fiscal Year
	2013		2012		2011
Broad-based	$	281,777	$	270,098	$	208,697
Broadcast		199,837		186,067		169,548
Access		98,473		107,129		113,380
Revenues	$	580,087	$	563,294	$	491,625

Customers, Sales and Marketing

        We market our products through our direct sales force and through a network of independent sales representatives and distributors. Direct and distributor customers buy on an individual purchase order basis, rather than pursuant to long-term agreements.

        We consider our customer to be the end customer purchasing either directly from a distributor, a contract manufacturer or us. An end customer purchasing through a contract manufacturer typically instructs such contract manufacturer to obtain our products and incorporate such products with other components for sale by such contract manufacturer to the end customer. Although we actually sell the products to, and are paid by, the distributors and contract manufacturers, we refer to such end customer as our customer.

        Two of our distributors, Edom Technology and Avnet, represented 21% and 11% of our revenues during fiscal 2013, respectively. No other distributor accounted for 10% or more of revenues for fiscal 2013.

        During fiscal 2013, our ten largest end customers accounted for 41% of our revenues. We had one customer, Samsung, whose purchases across a variety of product areas represented 15% of our revenues during this period. Our major customers include Alcatel, Cisco, Harman Becker, Huawei, LG Electronics, Pace, Samsung, Technicolor, Varian Medical Systems and ZTE.

        We maintain numerous sales offices in North America, Europe and Asia. Revenue is attributed to a geographic area based on the shipped-to location. The percentage of our revenues derived from outside of the United States was 88% in fiscal 2013. For further information regarding our revenues and long-lived assets by geographic area, see Note 18, Segment Information, to the Consolidated Financial Statements.

        Our direct sales force is comprised of a number of sales professionals who possess varied levels of responsibility and experience, including directors, country managers, regional sales managers, district sales managers, strategic account managers, field sales engineers and sales representatives. We also utilize independent sales representatives and distributors to generate sales of our products. We have relationships with many independent sales representatives and distributors worldwide whom we have selected based on their understanding of the mixed-signal IC marketplace and their ability to provide effective field sales applications support for our products.

        Our marketing efforts are targeted at both identified industry leaders and emerging market participants. Direct marketing activities are supplemented by a focused marketing communications effort that seeks to raise awareness of our company and products. Our public relations efforts are focused on leading trade and business publications. Our external website is used to deliver corporate and product information. We also pursue targeted advertising in key trade publications and we have a cooperative marketing program that allows our distributors and representatives to promote our products to their local markets in conjunction with their own advertising activities. Finally, we maintain

6

a presence at strategic trade shows and industry events. These activities, in combination with direct sales activities, help drive demand for our products.

        Due to the complex and innovative nature of our ICs, we employ experienced applications engineers who work closely with customers to support the design-win process, and can significantly accelerate the customer's time to market. A design-win occurs when a customer has designed our ICs into its product architecture and ordered product from us. A considerable amount of effort to assist the customer in incorporating our ICs into its products is typically required prior to any sale. In many cases, our innovative ICs require significantly different implementations than existing approaches and, therefore, successful implementations may require extensive communication with potential customers. The amount of time required to achieve a design-win can vary substantially depending on a customer's development cycle, which can be relatively short (such as three months) or very long (such as two years) based on a wide variety of customer factors. Not all design wins ultimately result in revenue. However, once a completed design architecture has been implemented and produced in high volumes, our customers are reluctant to significantly alter their designs due to this extensive design-win process. We believe this process, coupled with our intellectual property protection, promotes relatively longer product life cycles for our ICs and high barriers to entry for competitive products, even if such competing products are offered at lower prices. Our close collaboration with our customers provides us with knowledge of derivative product ideas or completely new product line offerings that may not otherwise arise in other new product discussions.

Research and Development

        Through our research and development efforts, we leverage experienced analog and mixed-signal engineering talent and expertise to create new ICs that integrate functions typically performed inefficiently by multiple discrete components. This integration generally results in lower costs, smaller die sizes, lower power demands and enhanced price/performance characteristics. We attempt to reuse successful techniques for integration in new applications where similar benefits can be realized. We believe that we have attracted many of the best engineers in our industry. We believe that reliable and precise analog and mixed-signal ICs can only be developed by teams of engineers who have significant analog experience and are familiar with the intricacies of designing these ICs for commercial volume production. The development of test methodologies is just one example of a critical activity requiring experience and know-how to enable the rapid release of a new product for commercial success. We have accumulated a vast set of trade secrets that allow us to pursue innovative approaches to mixed-signal problems that are difficult for competitors to duplicate. We highly value our engineering talent and strive to maintain a very high bar when bringing new recruits to the company.

        Research and development expenses were $157.8 million, $138.0 million and $136.0 million in fiscal 2013, 2012 and 2011, respectively.

Technology

        Our product development process facilitates the design of highly-innovative, analog-intensive, mixed-signal ICs. Our engineers' deep knowledge of existing and emerging standards and performance requirements helps us to assess the technical feasibility of a particular IC. We target areas where we can provide compelling product improvements. Once we have solved the primary challenges, our field application engineers continue to work closely with our customers' design teams to maintain and develop an understanding of our customers' needs, allowing us to formulate derivative products and refined features.

        In providing mixed-signal ICs for our customers, we believe our key competitive advantages are:

•

Analog and RF design expertise in CMOS;

7

•

Digital signal processing, firmware and system design expertise;

•

Microcontroller and system on a chip design expertise;

•

Software expertise; and

•

Our broad understanding of systems technology and trends.

        To fully capitalize on these advantages, we have assembled a world-class development team with exceptional analog and mixed-signal design expertise led by accomplished senior engineers.

Analog and RF Design Expertise in CMOS

        We believe that our most significant core competency is world-class analog and RF design capability. Additionally, we strive to design substantially all of our ICs in standard CMOS processes. While it is significantly more difficult to design analog ICs in CMOS, CMOS provides multiple benefits versus existing alternatives, including significantly reduced cost, reduced technology risk and greater worldwide foundry capacity. CMOS is the most commonly used process technology for manufacturing digital ICs and as a result is most likely to be used for the manufacturing of ICs with finer line geometries. These finer line geometries can enable smaller and faster ICs. By designing our ICs in CMOS, we enable our products to benefit from this trend towards finer line geometries, which allows us to integrate more digital functionality into our mixed-signal ICs.

        Designing analog and mixed-signal ICs is significantly more complicated than designing stand alone digital ICs. While advanced software tools exist to help automate digital IC design, there are far fewer tools for advanced analog and mixed-signal IC design. In many cases, our analog circuit design efforts begin at the fundamental transistor level. We believe that we have a demonstrated ability to design the most difficult analog and RF circuits using standard CMOS technologies.

Digital Signal Processing, Firmware and System Design Expertise

        We consider the partitioning of a circuit to be a proprietary and creative design technique. Deep systems knowledge allows us to use our digital signal processing (DSP) design expertise to maximize the price/performance characteristics of both the analog and digital functions and allow our ICs to work in an optimized manner to accomplish particular tasks. Generally, we attempt to move analog functions into the digital domain as quickly as possible, creating system efficiencies without compromising performance. These patented approaches require our advanced DSP and systems expertise. We then leverage our firmware know-how to change the 'personality' of our devices, optimizing features and functions needed by various markets we serve. For example, our broadcast audio products use a proven digital low-IF receiver and transmitter architecture to deliver superior RF performance and interference rejection compared to traditional, analog-only approaches. Digital signal processing is utilized to optimize sound quality under varying signal conditions, enabling a better consumer experience. Firmware has enabled us to rapidly expand the portfolio to address multiple markets without substantial silicon changes, including shortwave, longwave, analog tuned, digital tuned and even high performance HD-capable automotive radios.

Microcontroller and System on a Chip Design Expertise

        We have the talent and circuit integration methodologies required to combine precision analog, high-speed digital, flash memory and in-system programmability into a single, monolithic CMOS integrated circuit. Our microcontroller products are designed to capture an external analog signal, convert it to a digital signal, compute digital functions on the stream of data and then communicate the results through a standard digital interface. The ability to develop standard products with the broadest possible customer application base while being cost efficient with the silicon area of the monolithic CMOS integrated circuit requires a keen sense of customer value and engineering capabilities.

8

Additionally, to manage the wide variety of signals on a monolithic piece of silicon including electrical noise, harmonics and other electronic distortions requires a fundamental knowledge of device physics and accumulated design expertise.

Software Expertise

        Our software expertise allows us to develop products for markets where intelligent data capture, high-performance processing and communication are increasingly important product differentiators. The software we have developed to address these markets enable machine-to-machine communications, providing intelligence to electronic systems. Our products integrate high-performance, low-power wireless and microcontroller ICs with reliable and scalable software into a flexible and robust networking platform.

        The demand for low-power, small-footprint wireless technology is accelerating as more and more IP-enabled end points are being connected to the Internet of Things (IoT). Our software enables a broad range of power-sensitive applications for the IoT, including smart energy, home automation, security and other connected products. We believe that the combination of our software and IC design expertise differentiates us from many of our competitors.

Understanding of Systems Technology and Trends

        Our focused expertise in mixed-signal ICs is the result of the breadth of engineering talent we have assembled with experience working in analog-intensive CMOS design for a wide variety of applications. This expertise, which we consider a competitive advantage, is the foundation of our in-depth understanding of the technology and trends that impact electronic systems and markets. Our expertise includes:

•

Isolation, which is critical for existing and emerging industrial applications and telecom networks;

•

Frequency synthesis, which is core technology for wireless and clocking applications;

•

Integration, which enables the elimination of discrete components in a system; and

•

Signal processing and precision analog, which forms the heart of consumer, industrial, medical and automotive electronics applications.

        Our understanding of the role of analog/digital interfaces within electronic systems, standards evolution, and end market drivers enables us to identify product development opportunities and capitalize on market trends.

Manufacturing

        As a fabless semiconductor company, we conduct IC design and development in our facilities and electronically transfer our proprietary IC designs to third-party semiconductor fabricators who process silicon wafers to produce the ICs that we design. Our IC designs typically use industry-standard CMOS manufacturing process technology to achieve a level of performance normally associated with more expensive special-purpose IC fabrication technology. We believe the use of CMOS technology facilitates the rapid production of our ICs within a lower cost framework. Our IC production employs submicron process geometries which are readily available from leading foundry suppliers worldwide, thus increasing the likelihood that manufacturing capacity will be available throughout our products' life cycles. We currently partner with Taiwan Semiconductor Manufacturing Co. (TSMC) or its affiliates to manufacture the majority of our semiconductor wafers. We believe that our fabless manufacturing model significantly reduces our capital requirements and allows us to focus our resources on design, development and marketing of our ICs.

9

        Once the silicon wafers have been produced, they are shipped directly to our third-party assembly subcontractors. The assembled ICs are then moved to the final testing stage. This operation can be performed by the same contractor that assembled the IC, other third-party test subcontractors or within our internal facilities prior to shipping to our customers. During fiscal 2013, most of our units shipped were tested by offshore third-party test subcontractors. We expect that our utilization of offshore third-party test subcontractors will remain substantial during fiscal 2014.

Backlog

        As of December 28, 2013, our backlog was approximately $109.9 million, compared to approximately $105.8 million as of December 29, 2012. We include in backlog accepted product purchase orders from customers and worldwide distributor stocking orders. We only include orders with an expected shipping date from us within six months. Product orders in our backlog are subject to changes in delivery schedules or cancellation at the option of the purchaser typically without penalty. Our backlog may fluctuate significantly depending upon customer order patterns which may, in turn, vary considerably based on rapidly changing business circumstances. Shipments to distributors are not recognized as revenue until the products are sold by the distributors. Additionally, our arrangements with distributors typically provide for price protection and stock rotation activities. Accordingly, we do not believe that our backlog at any time is necessarily representative of actual sales for any succeeding period.

Competition

        The markets for semiconductors generally, and for analog and mixed-signal ICs in particular, are intensely competitive. We anticipate that the market for our products will continually evolve and will be subject to rapid technological change. We believe the principal competitive factors in our industry are:

• Product size;	• Power requirement;
• Level of integration;	• Customer support;
• Product capabilities;	• Reputation;
• Reliability;	• Ability to rapidly introduce new products to market; and
• Price;	• Intellectual property.
• Performance;

        We believe that we are competitive with respect to these factors, particularly because our ICs typically are smaller in size, are highly integrated, achieve high performance specifications at lower price points than competitive products and are manufactured in standard CMOS which generally enables us to supply them on a relatively rapid basis to customers to meet their product introduction schedules. However, disadvantages we face include our relatively short operating history in certain of our markets and the need for customers to redesign their products and modify their software to implement our ICs in their products.

        Due to our diversified product portfolio and the numerous markets and applications we serve, we target a relatively large number of competitors. We compete with Analog Devices, Atmel, Conexant, Cypress, Epson, Freescale, IDT, Lantiq, Maxim Integrated Products, MaxLinear, Microchip, Microsemi, NXP Semiconductors, Renesas, Sony Semiconductor, STMicroelectronics, Texas Instruments, Vectron International and others. We expect to face competition in the future from our current competitors, other manufacturers and designers of semiconductors and start-up semiconductor design companies. Our competitors may also offer bundled solutions offering a more complete product, which may negatively impact our competitive position despite the technical merits or advantages of our products. In addition, our customers could develop products or technologies internally that would replace their need for our products and would become a source of competition. We could also face competition from

10

module makers or other systems suppliers that may include mixed-signal components in their products that could eliminate the need for our ICs.

        Many of our competitors and potential competitors have longer operating histories, greater name recognition, access to larger customer bases, complementary product offerings, and significantly greater financial, sales and marketing, manufacturing, distribution, technical and other resources than us. Current and potential competitors have established or may establish financial and strategic relationships between themselves or with our existing or potential customers, resellers or other third parties. Accordingly, it is possible that new competitors or alliances among competitors could emerge and rapidly acquire significant market share.

Intellectual Property

        Our future success depends in part upon our proprietary technology. We seek to protect our technology through a combination of patents, copyrights, trade secrets, trademarks and confidentiality procedures. As of December 28, 2013, we had approximately 1,105 issued or pending United States patents in the IC field. We also frequently file for patent protection in a variety of international jurisdictions with respect to the proprietary technology covered by our U.S. patents and patent applications. There can be no assurance that patents will ever be issued with respect to these applications. Furthermore, it is possible that any patents held by us may be invalidated, circumvented, challenged or licensed to others. In addition, there can be no assurance that such patents will provide us with competitive advantages or adequately safeguard our proprietary rights. While we continue to file new patent applications with respect to our recent developments, existing patents are granted for prescribed time periods and will expire at various times in the future.

        We claim copyright protection for proprietary documentation for our products. We have filed for registration, or are in the process of filing for registration, the visual images of certain ICs with the U.S. Copyright Office. We have registered the "Silicon Labs" logo and a variety of other product and product family names as trademarks in the United States and selected foreign jurisdictions. All other trademarks, service marks or trade names appearing in this report are the property of their respective owners. We also attempt to protect our trade secrets and other proprietary information through agreements with our customers, suppliers, employees and consultants, and through other customary security measures. We intend to protect our rights vigorously, but there can be no assurance that our efforts will be successful. In addition, the laws of other countries in which our products are sold may not protect our products and intellectual property rights to the same extent as the laws of the United States.

        While our ability to effectively compete depends in large part on our ability to protect our intellectual property, we believe that our technical expertise and ability to introduce new products in a timely manner will be an important factor in maintaining our competitive position.

        Many participants in the semiconductor and electronics industries have a significant number of patents and have frequently demonstrated a readiness to commence litigation based on allegations of patent and other intellectual property infringement. From time to time, third parties may assert infringement claims against us. We may not prevail in any such litigation or may not be able to license any valid and infringed patents from third parties on commercially reasonable terms, if at all. Litigation, regardless of the outcome, is likely to result in substantial cost and diversion of our resources, including our management's time. Any such litigation could materially adversely affect us.

        Our licenses include industry standard licenses with our vendors, such as wafer fabrication tool libraries, third-party core libraries, computer-aided design applications and business software applications.

11

Employees

        As of December 28, 2013, we employed 1,060 people. Our success depends on the continued service of our key technical and senior management personnel and on our ability to continue to attract, retain and motivate highly skilled analog and mixed-signal engineers. The competition for such personnel is intense. We have never had a work stoppage and none of our U.S. employees are represented by a labor organization. We consider our employee relations to be good.

Environmental Regulation

        Federal, state and local regulations impose various environmental controls on the storage, use, discharge and disposal of certain chemicals and gases used in the semiconductor industry. Our compliance with these laws and regulations has not had a material impact on our financial position or results of operations.

Available Information

        Our website address is www.silabs.com. 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 through the investor relations page of our website free of charge as soon as reasonably practicable after we electronically file such material with, or furnish it to, the Securities and Exchange Commission (SEC). Our website and the information contained therein or connected thereto are not intended to be incorporated into this Annual Report on Form 10-K.

Item 1A.    Risk Factors

Risks Related to our Business

We may not be able to maintain our historical growth and may experience significant period-to-period fluctuations in our revenues and operating results, which may result in volatility in our stock price

        Although we have generally experienced revenue growth in our history, we may not be able to sustain this growth. We may also experience significant period-to-period fluctuations in our revenues and operating results in the future due to a number of factors, and any such variations may cause our stock price to fluctuate. In some future period our revenues or operating results may be below the expectations of public market analysts or investors. If this occurs, our stock price may drop, perhaps significantly.

        A number of factors, in addition to those cited in other risk factors applicable to our business, may contribute to fluctuations in our revenues and operating results, including:

•

The timing and volume of orders received from our customers;

•

The timeliness of our new product introductions and the rate at which our new products may cannibalize our older products;

•

The rate of acceptance of our products by our customers, including the acceptance of new products we may develop for integration in the products manufactured by such customers, which we refer to as "design wins";

•

The time lag and realization rate between "design wins" and production orders;

•

The demand for, and life cycles of, the products incorporating our ICs;

•

The rate of adoption of mixed-signal ICs in the markets we target;

12

•

Deferrals or reductions of customer orders in anticipation of new products or product enhancements from us or our competitors or other providers of ICs;

•

Changes in product mix;

•

The average selling prices for our products could drop suddenly due to competitive offerings or competitive predatory pricing;

•

The average selling prices for our products generally decline over time;

•

Changes in market standards;

•

Impairment charges related to inventory, equipment or other long-lived assets;

•

The software used in our products, including software provided by third parties, may not meet the needs of our customers;

•

Significant legal costs to defend our intellectual property rights or respond to claims against us; and

•

The rate at which new markets emerge for products we are currently developing or for which our design expertise can be utilized to develop products for these new markets.

        The markets for consumer electronics, for example, are characterized by rapid fluctuations in demand and seasonality that result in corresponding fluctuations in the demand for our products that are incorporated in such devices. Additionally, the rate of technology acceptance by our customers results in fluctuating demand for our products as customers are reluctant to incorporate a new IC into their products until the new IC has achieved market acceptance. Once a new IC achieves market acceptance, demand for the new IC can quickly accelerate to a point and then level off such that rapid historical growth in sales of a product should not be viewed as indicative of continued future growth. In addition, demand can quickly decline for a product when a new IC product is introduced and receives market acceptance. Due to the various factors mentioned above, the results of any prior quarterly or annual periods should not be relied upon as an indication of our future operating performance.

If we are unable to develop or acquire new and enhanced products that achieve market acceptance in a timely manner, our operating results and competitive position could be harmed

        Our future success will depend on our ability to develop or acquire new ICs and product enhancements that achieve market acceptance in a timely and cost-effective manner. The development of mixed-signal ICs is highly complex, and we have at times experienced delays in completing the development and introduction of new products and product enhancements. Successful product development and market acceptance of our products depend on a number of factors, including:

•

Requirements of customers;

•

Accurate prediction of market and technical requirements;

•

Timely completion and introduction of new designs;

•

Timely qualification and certification of our ICs for use in our customers' products;

•

Commercial acceptance and volume production of the products into which our ICs will be incorporated;

•

Availability of foundry, assembly and test capacity;

•

Achievement of high manufacturing yields;

•

Quality, price, performance, power use and size of our products;

13

•

Availability, quality, price and performance of competing products and technologies;

•

Our customer service, application support capabilities and responsiveness;

•

Successful development of our relationships with existing and potential customers;

•

Technology, industry standards or end-user preferences; and

•

Cooperation of third-party software providers and our semiconductor vendors to support our chips within a system.

        We cannot provide any assurance that products which we recently have developed or may develop in the future will achieve market acceptance. We have introduced to market or are in development of many ICs. If our ICs fail to achieve market acceptance, or if we fail to develop new products on a timely basis that achieve market acceptance, our growth prospects, operating results and competitive position could be adversely affected.

Our research and development efforts are focused on a limited number of new technologies and products, and any delay in the development, or abandonment, of these technologies or products by industry participants, or their failure to achieve market acceptance, could compromise our competitive position

        Our ICs are used as components in electronic devices in various markets. As a result, we have devoted and expect to continue to devote a large amount of resources to develop products based on new and emerging technologies and standards that will be commercially introduced in the future. Research and development expense during fiscal 2013 was $157.8 million, or 27.2% of revenues. A number of large companies are actively involved in the development of these new technologies and standards. Should any of these companies delay or abandon their efforts to develop commercially available products based on new technologies and standards, our research and development efforts with respect to these technologies and standards likely would have no appreciable value. In addition, if we do not correctly anticipate new technologies and standards, or if the products that we develop based on these new technologies and standards fail to achieve market acceptance, our competitors may be better able to address market demand than we would. Furthermore, if markets for these new technologies and standards develop later than we anticipate, or do not develop at all, demand for our products that are currently in development would suffer, resulting in lower sales of these products than we currently anticipate.

We depend on a limited number of customers for a substantial portion of our revenues, and the loss of, or a significant reduction in orders from, any key customer could significantly reduce our revenues

        The loss of any of our key customers, or a significant reduction in sales to any one of them, would significantly reduce our revenues and adversely affect our business. During fiscal 2013, our ten largest customers accounted for 41% of our revenues. Some of the markets for our products are dominated by a small number of potential customers. Therefore, our operating results in the foreseeable future will continue to depend on our ability to sell to these dominant customers, as well as the ability of these customers to sell products that incorporate our IC products. In the future, these customers may decide not to purchase our ICs at all, purchase fewer ICs than they did in the past or alter their purchasing patterns, particularly because:

•

We do not have material long-term purchase contracts with our customers;

•

Substantially all of our sales to date have been made on a purchase order basis, which permits our customers to cancel, change or delay product purchase commitments with little or no notice to us and without penalty;

•

Some of our customers may have efforts underway to actively diversify their vendor base which could reduce purchases of our ICs; and

14

•

Some of our customers have developed or acquired products that compete directly with products these customers purchase from us, which could affect our customers' purchasing decisions in the future.

        While we have been a significant supplier of ICs used in many of our customers' products, our customers regularly evaluate alternative sources of supply in order to diversify their supplier base, which increases their negotiating leverage with us and protects their ability to secure these components. We believe that any expansion of our customers' supplier bases could have an adverse effect on the prices we are able to charge and volume of product that we are able to sell to our customers, which would negatively affect our revenues and operating results.

Significant litigation over intellectual property in our industry may cause us to become involved in costly and lengthy litigation which could seriously harm our business

        In recent years, there has been significant litigation in the United States involving patents and other intellectual property rights. From time to time, we receive letters from various industry participants alleging infringement of patents, trademarks or misappropriation of trade secrets or from customers or suppliers requesting indemnification for claims brought against them by third parties. The exploratory nature of these inquiries has become relatively common in the semiconductor industry. We respond when we deem appropriate and as advised by legal counsel. We have been involved in litigation to protect our intellectual property rights in the past and may become involved in such litigation again in the future. In the future, we may become involved in additional litigation to defend allegations of infringement asserted by others, both directly and indirectly as a result of certain industry-standard indemnities we may offer to our customers or suppliers. Legal proceedings could subject us to significant liability for damages or invalidate our proprietary rights. Legal proceedings initiated by us to protect our intellectual property rights could also result in counterclaims or countersuits against us. Any litigation, regardless of its outcome, would likely be time-consuming and expensive to resolve and would divert our management's time and attention. Most intellectual property litigation also could force us to take specific actions, including:

•

Cease selling or manufacturing products that use the challenged intellectual property;

•

Obtain from the owner of the infringed intellectual property a right to a license to sell or use the relevant technology, which license may not be available on reasonable terms, or at all;

•

Redesign those products that use infringing intellectual property; or

•

Pursue legal remedies with third parties to enforce our indemnification rights, which may not adequately protect our interests.

Any acquisitions we make could disrupt our business and harm our financial condition

        As part of our growth and product diversification strategy, we continue to evaluate opportunities to acquire other businesses, intellectual property or technologies that would complement our current offerings, expand the breadth of our markets or enhance our technical capabilities. The acquisitions that we have made and may make in the future entail a number of risks that could materially and adversely affect our business and operating results, including:

•

Problems integrating the acquired operations, technologies or products with our existing business and products;

•

Diversion of management's time and attention from our core business;

•

Need for financial resources above our planned investment levels;

15

•

Difficulties in retaining business relationships with suppliers and customers of the acquired company;

•

Risks associated with entering markets in which we lack prior experience;

•

Risks associated with the transfer of licenses of intellectual property;

•

Increased operating costs due to acquired overhead;

•

Tax issues associated with acquisitions;

•

Acquisition-related disputes, including disputes over earn-outs and escrows;

•

Potential loss of key employees of the acquired company; and

•

Potential impairment of related goodwill and intangible assets.

        Future acquisitions also could cause us to incur debt or contingent liabilities or cause us to issue equity securities that could negatively impact the ownership percentages of existing shareholders.

We may be unable to protect our intellectual property, which would negatively affect our ability to compete

        Our products rely on our proprietary technology, and we expect that future technological advances made by us will be critical to sustain market acceptance of our products. Therefore, we believe that the protection of our intellectual property rights is and will continue to be important to the success of our business. We rely on a combination of patent, copyright, trademark and trade secret laws and restrictions on disclosure to protect our intellectual property rights. We also enter into confidentiality or license agreements with our employees, consultants, intellectual property providers and business partners, and control access to and distribution of our documentation and other proprietary information. Despite these efforts, unauthorized parties may attempt to copy or otherwise obtain and use our proprietary technology. Monitoring unauthorized use of our technology is difficult, and we cannot be certain that the steps we have taken will prevent unauthorized use of our technology, particularly in foreign countries where the laws may not protect our proprietary rights as fully as in the United States. We cannot be certain that patents will be issued as a result of our pending applications nor can we be certain that any issued patents would protect or benefit us or give us adequate protection from competing products. For example, issued patents may be circumvented or challenged and declared invalid or unenforceable. We also cannot be certain that others will not develop effective competing technologies on their own.

Failure to manage our distribution channel relationships could impede our future growth

        The future growth of our business will depend in large part on our ability to manage our relationships with current and future distributors and sales representatives, develop additional channels for the distribution and sale of our products and manage these relationships. As we execute our indirect sales strategy, we must manage the potential conflicts that may arise with our direct sales efforts. For example, conflicts with a distributor may arise when a customer begins purchasing directly from us rather than through the distributor. The inability to successfully execute or manage a multi-channel sales strategy could impede our future growth. In addition, relationships with our distributors often involve the use of price protection and inventory return rights. This often requires a significant amount of sales management's time and system resources to manage properly.

We are subject to increased inventory risks and costs because we build our products based on forecasts provided by customers before receiving purchase orders for the products

        In order to ensure availability of our products for some of our largest customers, we start the manufacturing of our products in advance of receiving purchase orders based on forecasts provided by

16

these customers. However, these forecasts do not represent binding purchase commitments and we do not recognize sales for these products until they are shipped to the customer. As a result, we incur inventory and manufacturing costs in advance of anticipated sales. Because demand for our products may not materialize, manufacturing based on forecasts subjects us to increased risks of high inventory carrying costs, increased obsolescence and increased operating costs. These inventory risks are exacerbated when our customers purchase indirectly through contract manufacturers or hold component inventory levels greater than their consumption rate because this causes us to have less visibility regarding the accumulated levels of inventory for such customers. A resulting write-off of unusable or excess inventories would adversely affect our operating results.

Our products are complex and may contain errors which could lead to product liability, an increase in our costs and/or a reduction in our revenues

        Our products are complex and may contain errors, particularly when first introduced or as new versions are released. Our new products are increasingly being designed in more complex processes which further increases the risk of errors. We rely primarily on our in-house testing personnel to design test operations and procedures to detect any errors prior to delivery of our products to our customers. Because our products are manufactured by third parties, should problems occur in the operation or performance of our ICs, we may experience delays in meeting key introduction dates or scheduled delivery dates to our customers. These errors also could cause us to incur significant re-engineering costs, divert the attention of our engineering personnel from our product development efforts and cause significant customer relations and business reputation problems. Any defects could require product replacement or recall or we could be obligated to accept product returns. Any of the foregoing could impose substantial costs and harm our business.

        Product liability claims may be asserted with respect to our products. Our products are typically sold at prices that are significantly lower than the cost of the end-products into which they are incorporated. A defect or failure in our product could cause failure in our customer's end-product, so we could face claims for damages that are disproportionately higher than the revenues and profits we receive from the products involved. Furthermore, product liability risks are particularly significant with respect to medical and automotive applications because of the risk of serious harm to users of these products. There can be no assurance that any insurance we maintain will sufficiently protect us from any such claims.

We rely on third parties to manufacture, assemble and test our products and the failure to successfully manage our relationships with our manufacturers and subcontractors would negatively impact our ability to sell our products

        We do not have our own wafer fab manufacturing facilities. Therefore, we rely on third-party vendors to manufacture the ICs we design. We also currently rely on Asian third-party assembly subcontractors to assemble and package the silicon chips provided by the wafers for use in final products. Additionally, we rely on these offshore subcontractors for a substantial portion of the testing requirements of our products prior to shipping. We expect utilization of third-party subcontractors to continue in the future.

        The cyclical nature of the semiconductor industry drives wide fluctuations in available capacity at third-party vendors. On occasion, we have been unable to adequately respond to unexpected increases in customer demand due to capacity constraints and, therefore, were unable to benefit from this incremental demand. We may be unable to obtain adequate foundry, assembly or test capacity from our third-party subcontractors to meet our customers' delivery requirements even if we adequately forecast customer demand.

17

        There are significant risks associated with relying on these third-party foundries and subcontractors, including:

•

Failure by us, our customers or their end customers to qualify a selected supplier;

•

Potential insolvency of the third-party subcontractors;

•

Reduced control over delivery schedules and quality;

•

Limited warranties on wafers or products supplied to us;

•

Potential increases in prices or payments in advance for capacity;

•

Increased need for international-based supply, logistics and financial management;

•

Their inability to supply or support new or changing packaging technologies; and

•

Low test yields.

        We typically do not have long-term supply contracts with our third-party vendors which obligate the vendor to perform services and supply products to us for a specific period, in specific quantities, and at specific prices. Our third-party foundry, assembly and test subcontractors typically do not guarantee that adequate capacity will be available to us within the time required to meet demand for our products. In the event that these vendors fail to meet our demand for whatever reason, we expect that it would take up to 12 months to transition performance of these services to new providers. Such a transition may also require qualification of the new providers by our customers or their end customers.

        Since our inception, most of the silicon wafers for the products that we have shipped were manufactured either by TSMC or its affiliates. Our customers typically complete their own qualification process. If we fail to properly balance customer demand across the existing semiconductor fabrication facilities that we utilize or are required by our foundry partners to increase, or otherwise change the number of fab lines that we utilize for our production, we might not be able to fulfill demand for our products and may need to divert our engineering resources away from new product development initiatives to support the fab line transition, which would adversely affect our operating results.

        We monitor the financial condition of our third-party foundries and subcontractor partners. In April 2013, we received notice that Telefunken Semiconductors GmbH & Co (TSG), a wafer supplier for our high-voltage products, had filed an insolvency proceeding in Germany. Between April 2013 and December 3, 2013, the operations of TSG were managed by a trustee appointed by the German bankruptcy court. On December 3, 2013, all of the saleable assets of TSG were purchased by Donauplaza GmbH. Donauplaza is now operating the former foundry of TSG and supplying wafers to us.

        We do not have a history of working with Donauplaza. Donauplaza's ability to successfully operate a wafer foundry is unknown. If Donauplaza is unable to successfully continue the operations of TSG, the supply of the wafers provided to us by Donauplaza could be reduced or discontinued. We have accumulated a supply of inventory of the affected products based on the possibility of a reduction or discontinuation of supply. We are qualifying a new vendor as an alternative source for such wafers. If there is a disruption in the supply of wafers and if the time required for qualification of a new vendor by us or by our customers and their end-customers takes longer than expected, we might not be able to fulfill demand for such products. Any reduction in the supply for these products could significantly reduce our revenues, which would adversely affect our operating results.

18

Our customers require our products to undergo a lengthy and expensive qualification process without any assurance of product sales

        Prior to purchasing our products, our customers require that our products undergo an extensive qualification process, which involves testing of the products in the customer's system as well as rigorous reliability testing. This qualification process may continue for six months or longer. However, qualification of a product by a customer does not ensure any sales of the product to that customer. Even after successful qualification and sales of a product to a customer, a subsequent revision to the IC or software, changes in the IC's manufacturing process or the selection of a new supplier by us may require a new qualification process, which may result in delays and in us holding excess or obsolete inventory. After our products are qualified, it can take an additional six months or more before the customer commences volume production of components or devices that incorporate our products. Despite these uncertainties, we devote substantial resources, including design, engineering, sales, marketing and management efforts, toward qualifying our products with customers in anticipation of sales. If we are unsuccessful or delayed in qualifying any of our products with a customer, such failure or delay would preclude or delay sales of such product to the customer, which may impede our growth and cause our business to suffer.

We have substantial international activities, which subjects us to additional business risks including logistical and financial complexity, political instability and currency fluctuations

        We have established international subsidiaries and have opened offices in international markets to support our activities in Europe and Asia. This has included the establishment of a headquarters in Singapore for non-U.S. operations. The percentage of our revenues derived from outside of the United States was 88% during fiscal 2013. We may not be able to maintain or increase international market demand for our products. Our international operations are subject to a number of risks, including:

•

Complexity and costs of managing international operations and related tax obligations, including our headquarters for non-U.S. operations in Singapore;

•

Protectionist laws and business practices that favor local competition in some countries;

•

Difficulties related to the protection of our intellectual property rights in some countries;

•

Multiple, conflicting and changing tax and other laws and regulations that may impact both our international and domestic tax and other liabilities and result in increased complexity and costs;

•

Longer sales cycles;

•

Greater difficulty in accounts receivable collection and longer collection periods;

•

High levels of distributor inventory subject to price protection and rights of return to us;

•

Political and economic instability;

•

Greater difficulty in hiring and retaining qualified technical sales and applications engineers and administrative personnel; and

•

The need to have business and operations systems that can meet the needs of our international business and operating structure.

        To date, all of our sales to international customers and purchases of components from international suppliers have been denominated in U.S. dollars. As a result, an increase in the value of the U.S. dollar relative to foreign currencies could make our products more expensive for our international customers to purchase, thus rendering our products less competitive. Similarly, a decrease in the value of the U.S. dollar could reduce our buying power with respect to international suppliers.

19

Our products incorporate technology licensed from third parties

        We incorporate technology (including software) licensed from third parties in our products. We could be subjected to claims of infringement regardless of our lack of involvement in the development of the licensed technology. Although a third-party licensor is typically obligated to indemnify us if the licensed technology infringes on another party's intellectual property rights, such indemnification is typically limited in amount and may be worthless if the licensor becomes insolvent. See Significant litigation over intellectual property in our industry may cause us to become involved in costly and lengthy litigation which could seriously harm our business. Furthermore, any failure of third-party technology to perform properly would adversely affect sales of our products incorporating such technology.

Our inability to manage growth could materially and adversely affect our business

        Our past growth has placed, and any future growth of our operations will continue to place, a significant strain on our management personnel, systems and resources. We anticipate that we will need to implement a variety of new and upgraded sales, operational and financial enterprise-wide systems, information technology infrastructure, procedures and controls, including the improvement of our accounting and other internal management systems to manage this growth and maintain compliance with regulatory guidelines, including Sarbanes-Oxley Act requirements. To the extent our business grows, our internal management systems and processes will need to improve to ensure that we remain in compliance. We also expect that we will need to continue to expand, train, manage and motivate our workforce. All of these endeavors will require substantial management effort, and we anticipate that we will require additional management personnel and internal processes to manage these efforts and to plan for the succession from time to time of certain persons who have been key management and technical personnel. If we are unable to effectively manage our expanding global operations, including our international headquarters in Singapore, our business could be materially and adversely affected.

We are subject to risks relating to product concentration

        We derive a substantial portion of our revenues from a limited number of products, and we expect these products to continue to account for a large percentage of our revenues in the near term. Continued market acceptance of these products, is therefore, critical to our future success. In addition, substantially all of our products that we have sold include technology related to one or more of our issued U.S. patents. If these patents are found to be invalid or unenforceable, our competitors could introduce competitive products that could reduce both the volume and price per unit of our products. Our business, operating results, financial condition and cash flows could therefore be adversely affected by:

•

A decline in demand for any of our more significant products;

•

Failure of our products to achieve continued market acceptance;

•

Competitive products;

•

New technological standards or changes to existing standards that we are unable to address with our products;

•

A failure to release new products or enhanced versions of our existing products on a timely basis; and

•

The failure of our new products to achieve market acceptance.

We are subject to credit risks related to our accounts receivable

        We do not generally obtain letters of credit or other security for payment from customers, distributors or contract manufacturers. Accordingly, we are not protected against accounts receivable

20

default or bankruptcy by these entities. The current economic situation could increase the likelihood of such defaults and bankruptcies. Our ten largest customers or distributors represent a substantial majority of our accounts receivable. If any such customer or distributor, or a material portion of our smaller customers or distributors, were to become insolvent or otherwise not satisfy their obligations to us, we could be materially harmed.

We depend on our key personnel to manage our business effectively in a rapidly changing market, and if we are unable to retain our current personnel and hire additional personnel, our ability to develop and successfully market our products could be harmed

        We believe our future success will depend in large part upon our ability to attract and retain highly skilled managerial, engineering, sales and marketing personnel. We believe that our future success will be dependent on retaining the services of our key personnel, developing their successors and certain internal processes to reduce our reliance on specific individuals, and on properly managing the transition of key roles when they occur. There is currently a shortage of qualified personnel with significant experience in the design, development, manufacturing, marketing and sales of analog and mixed-signal ICs. In particular, there is a shortage of engineers who are familiar with the intricacies of the design and manufacturability of analog elements, and competition for such personnel is intense. Our key technical personnel represent a significant asset and serve as the primary source for our technological and product innovations. We may not be successful in attracting and retaining sufficient numbers of technical personnel to support our anticipated growth. The loss of any of our key employees or the inability to attract or retain qualified personnel both in the United States and internationally, including engineers, sales, applications and marketing personnel, could delay the development and introduction of, and negatively impact our ability to sell, our products.

Any dispositions could harm our financial condition

        Any disposition of a product line would entail a number of risks that could materially and adversely affect our business and operating results, including:

•

Diversion of management's time and attention from our core business;

•

Difficulties separating the divested business;

•

Risks to relations with customers who previously purchased products from our disposed product line;

•

Reduced leverage with suppliers due to reduced aggregate volume;

•

Risks related to employee relations;

•

Risks associated with the transfer and licensing of intellectual property;

•

Security risks and other liabilities related to the transition services provided in connection with the disposition;

•

Tax issues associated with dispositions; and

•

Disposition-related disputes, including disputes over earn-outs and escrows.

Our stock price may be volatile

        The market price of our common stock has been volatile in the past and may be volatile in the future. The market price of our common stock may be significantly affected by the following factors:

•

Actual or anticipated fluctuations in our operating results;

21

•

Changes in financial estimates by securities analysts or our failure to perform in line with such estimates;

•

Changes in market valuations of other technology companies, particularly semiconductor companies;

•

Announcements by us or our competitors of significant technical innovations, acquisitions, strategic partnerships, joint ventures or capital commitments;

•

Introduction of technologies or product enhancements that reduce the need for our products;

•

The loss of, or decrease in sales to, one or more key customers;

•

A large sale of stock by a significant shareholder;

•

Dilution from the issuance of our stock in connection with acquisitions;

•

The addition or removal of our stock to or from a stock index fund;

•

Departures of key personnel; and

•

The required expensing of stock awards.

        The stock market has experienced extreme volatility that often has been unrelated to the performance of particular companies. These market fluctuations may cause our stock price to fall regardless of our performance.

Most of our current manufacturers, assemblers, test service providers, distributors and customers are concentrated in the same geographic region, which increases the risk that a natural disaster, epidemic, labor strike, war or political unrest could disrupt our operations or sales

        Most of TSMC's foundries and several of our assembly and test subcontractors' sites are located in Taiwan and most of our other foundry, assembly and test subcontractors are located in the Pacific Rim region. In addition, many of our customers are located in the Pacific Rim region. The risk of earthquakes in Taiwan and the Pacific Rim region is significant due to the proximity of major earthquake fault lines in the area. Earthquakes, tsunamis, fire, flooding, lack of water or other natural disasters, an epidemic, political unrest, war, labor strikes or work stoppages in countries where our semiconductor manufacturers, assemblers and test subcontractors are located, likely would result in the disruption of our foundry, assembly or test capacity. There can be no assurance that alternate capacity could be obtained on favorable terms, if at all.

        A natural disaster, epidemic, labor strike, war or political unrest where our customers' facilities are located would likely reduce our sales to such customers. North Korea's geopolitical maneuverings have created unrest. Such unrest could create economic uncertainty or instability, could escalate to war or otherwise adversely affect South Korea and our South Korean customers and reduce our sales to such customers, which would materially and adversely affect our operating results. In addition, a significant portion of the assembly and testing of our products occurs in South Korea. Any disruption resulting from these events could also cause significant delays in shipments of our products until we are able to shift our manufacturing, assembling or testing from the affected subcontractor to another third-party vendor.

The semiconductor manufacturing process is highly complex and, from time to time, manufacturing yields may fall below our expectations, which could result in our inability to satisfy demand for our products in a timely manner and may decrease our gross margins due to higher unit costs

        The manufacturing of our products is a highly complex and technologically demanding process. Although we work closely with our foundries and assemblers to minimize the likelihood of reduced

22

manufacturing yields, we have from time to time experienced lower than anticipated manufacturing yields. Changes in manufacturing processes or the inadvertent use of defective or contaminated materials could result in lower than anticipated manufacturing yields or unacceptable performance deficiencies, which could lower our gross margins. If our foundries fail to deliver fabricated silicon wafers of satisfactory quality in a timely manner, we will be unable to meet our customers' demand for our products in a timely manner, which would adversely affect our operating results and damage our customer relationships. Additionally, we are beginning to utilize microelectromechanical systems (MEMS) in certain of our timing products rather than the pure CMOS manufacturing process that we have traditionally utilized. We have less operating history with MEMS IC design and MEMS IC manufacturing processes. If we are unable to successfully execute the design and product qualification of MEMS-based products we may encounter lower yields and reduced manufacturing capacity.

We depend on our customers to support our products, and some of our customers offer competing products

        We rely on our customers to provide hardware, software, intellectual property indemnification and other technical support for the products supplied by our customers. If our customers do not provide the required functionality or if our customers do not provide satisfactory support for their products, the demand for these devices that incorporate our products may diminish or we may otherwise be materially adversely affected. Any reduction in the demand for these devices would significantly reduce our revenues.

        In certain products, some of our customers offer their own competitive products. These customers may find it advantageous to support their own offerings in the marketplace in lieu of promoting our products.

Our debt could adversely affect our operations and financial condition

        We believe we have the ability to service our debt under our credit facilities, but our ability to make the required payments thereunder when due depends upon our future performance, which will be subject to general economic conditions, industry cycles and other factors affecting our operations, including risk factors described under this Item 1A, many of which are beyond our control. Our credit facilities also contain covenants, including financial covenants. If we breach any of the covenants under our credit facilities and do not obtain appropriate waivers, then, subject to any applicable cure periods, our outstanding indebtedness thereunder could be declared immediately due and payable.

We could seek to raise additional debt or equity capital in the future, but additional capital may not be available on terms acceptable to us, or at all

        We believe that our existing cash, cash equivalents, investments and credit under our credit facilities will be sufficient to meet our working capital needs, capital expenditures, investment requirements and commitments for at least the next 12 months. However, our ability to borrow further under the credit facilities is dependent upon our ability to satisfy various conditions, covenants and representations. It is possible that we may need to raise additional funds to finance our activities or to facilitate acquisitions of other businesses, products, intellectual property or technologies. We believe we could raise these funds, if needed, by selling equity or debt securities to the public or to selected investors. In addition, even though we may not need additional funds, we may still elect to sell additional equity or debt securities or obtain credit facilities for other reasons. However, we may not be able to obtain additional funds on favorable terms, or at all. If we decide to raise additional funds by issuing equity or convertible debt securities, the ownership percentages of existing shareholders would be reduced.

23

We are a relatively small company with limited resources compared to some of our current and potential competitors and we may not be able to compete effectively and increase market share

        Some of our current and potential competitors have longer operating histories, significantly greater resources and name recognition and a larger base of customers than we have. As a result, these competitors may have greater credibility with our existing and potential customers. They also may be able to adopt more aggressive pricing policies and devote greater resources to the development, promotion and sale of their products than we can to ours. In addition, some of our current and potential competitors have already established supplier or joint development relationships with the decision makers at our current or potential customers. These competitors may be able to leverage their existing relationships to discourage their customers from purchasing products from us or persuade them to replace our products with their products. Our competitors may also offer bundled solutions offering a more complete product despite the technical merits or advantages of our products. These competitors may elect not to support our products which could complicate our sales efforts. These and other competitive pressures may prevent us from competing successfully against current or future competitors, and may materially harm our business. Competition could decrease our prices, reduce our sales, lower our gross margins and/or decrease our market share.

Provisions in our charter documents and Delaware law could prevent, delay or impede a change in control of us and may reduce the market price of our common stock

        Provisions of our certificate of incorporation and bylaws could have the effect of discouraging, delaying or preventing a merger or acquisition that a stockholder may consider favorable. For example, our certificate of incorporation and bylaws provide for:

•

The division of our Board of Directors into three classes to be elected on a staggered basis, one class each year;

•

The ability of our Board of Directors to issue shares of our preferred stock in one or more series without further authorization of our stockholders;

•

A prohibition on stockholder action by written consent;

•

Elimination of the right of stockholders to call a special meeting of stockholders;

•

A requirement that stockholders provide advance notice of any stockholder nominations of directors or any proposal of new business to be considered at any meeting of stockholders; and

•

A requirement that a supermajority vote be obtained to amend or repeal certain provisions of our certificate of incorporation.

        We also are subject to the anti-takeover laws of Delaware which may discourage, delay or prevent someone from acquiring or merging with us, which may adversely affect the market price of our common stock.

Risks related to our industry

We are subject to the cyclical nature of the semiconductor industry, which has been subject to significant fluctuations

        The semiconductor industry is highly cyclical and is characterized by constant and rapid technological change, rapid product obsolescence and price erosion, evolving standards, short product life cycles and wide fluctuations in product supply and demand. The industry has experienced significant fluctuations, often connected with, or in anticipation of, maturing product cycles and new product introductions of both semiconductor companies' and their customers' products and fluctuations in general economic conditions. Deteriorating general worldwide economic conditions, including

24

reduced economic activity, concerns about credit and inflation, increased energy costs, decreased consumer confidence, reduced corporate profits, decreased spending and similar adverse business conditions, would make it very difficult for our customers, our vendors, and us to accurately forecast and plan future business activities and could cause U.S. and foreign businesses to slow spending on our products. We cannot predict the timing, strength, or duration of any economic slowdown or economic recovery. If the economy or markets in which we operate deteriorate, our business, financial condition, and results of operations would likely be materially and adversely affected.

        Downturns have been characterized by diminished product demand, production overcapacity, high inventory levels and accelerated erosion of average selling prices. In the recent past, we believe the semiconductor industry suffered a downturn due in large part to adverse conditions in the global credit and financial markets, including diminished liquidity and credit availability, declines in consumer confidence, declines in economic growth, increased unemployment rates and general uncertainty regarding the economy. Such downturns may have a material adverse effect on our business and operating results.

        Upturns have been characterized by increased product demand and production capacity constraints created by increased competition for access to third-party foundry, assembly and test capacity. We are dependent on the availability of such capacity to manufacture, assemble and test our ICs. None of our third-party foundry, assembly or test subcontractors have provided assurances that adequate capacity will be available to us.

The average selling prices of our products could decrease rapidly which may negatively impact our revenues and gross margins

        We may experience substantial period-to-period fluctuations in future operating results due to the erosion of our average selling prices. We have reduced the average unit price of our products in anticipation of or in response to competitive pricing pressures, new product introductions by us or our competitors and other factors. If we are unable to offset any such reductions in our average selling prices by increasing our sales volumes, increasing our sales content per application or reducing production costs, our gross margins and revenues will suffer. To maintain our gross margin percentage, we will need to develop and introduce new products and product enhancements on a timely basis and continually reduce our costs. Our failure to do so could cause our revenues and gross margin percentage to decline.

Competition within the numerous markets we target may reduce sales of our products and reduce our market share

        The markets for semiconductors in general, and for mixed-signal ICs in particular, are intensely competitive. We expect that the market for our products will continually evolve and will be subject to rapid technological change. In addition, as we target and supply products to numerous markets and applications, we face competition from a relatively large number of competitors. We compete with Analog Devices, Atmel, Conexant, Cypress, Epson, Freescale, IDT, Lantiq, Maxim Integrated Products, MaxLinear, Microchip, Microsemi, NXP Semiconductors, Renesas, Sony Semiconductor, STMicroelectronics, Texas Instruments, Vectron International and others. We expect to face competition in the future from our current competitors, other manufacturers and designers of semiconductors, and start-up semiconductor design companies. As the markets for communications products grow, we also may face competition from traditional communications device companies. These companies may enter the mixed-signal semiconductor market by introducing their own ICs or by entering into strategic relationships with or acquiring other existing providers of semiconductor products. In addition, large companies may restructure their operations to create separate companies or may acquire new businesses that are focused on providing the types of products we produce or acquire our customers.

25

Our products must conform to industry standards and technology in order to be accepted by end users in our markets

        Generally, our products comprise only a part of a device. All components of such devices must uniformly comply with industry standards in order to operate efficiently together. We depend on companies that provide other components of the devices to support prevailing industry standards. Many of these companies are significantly larger and more influential in affecting industry standards than we are. Some industry standards may not be widely adopted or implemented uniformly, and competing standards may emerge that may be preferred by our customers or end users. If larger companies do not support the same industry standards that we do, or if competing standards emerge, market acceptance of our products could be adversely affected which would harm our business.

        Products for certain applications are based on industry standards that are continually evolving. Our ability to compete in the future will depend on our ability to identify and ensure compliance with these evolving industry standards. The emergence of new industry standards could render our products incompatible with products developed by other suppliers. As a result, we could be required to invest significant time and effort and to incur significant expense to redesign our products to ensure compliance with relevant standards. If our products are not in compliance with prevailing industry standards for a significant period of time, we could miss opportunities to achieve crucial design wins.

        Our pursuit of necessary technological advances may require substantial time and expense. We may not be successful in developing or using new technologies or in developing new products or product enhancements that achieve market acceptance. If our ICs fail to achieve market acceptance, our growth prospects, operating results and competitive position could be adversely affected.

We may be subject to information technology failures that could damage our reputation, business operations and financial condition

        We rely on information technology for the effective operation of our business. Our systems are subject to damage or interruption from a number of potential sources, including natural disasters, accidents, power disruptions, telecommunications failures, acts of terrorism or war, computer viruses, physical or electronic break-ins, cyber attacks, sabotage, vandalism, or similar events or disruptions. Our security measures may not detect or prevent such security breaches. Any such compromise of our information security could result in the unauthorized publication of our confidential business or proprietary information, result in the unauthorized release of customer, supplier or employee data, result in a violation of privacy or other laws, expose us to a risk of litigation or damage our reputation. In addition, our inability to use or access these information systems at critical points in time could unfavorably impact the timely and efficient operation of our business, which could negatively affect our business and operating results.

        Third parties with which we conduct business, such as foundries, assembly and test contractors, and distributors, have access to certain portions of our sensitive data. In the event that these third parties do not properly safeguard our data that they hold, security breaches could result and negatively impact our business, operations and financial results.

Customer demands and new regulations related to conflict-free minerals may adversely affect us

        The Dodd-Frank Wall Street Reform and Consumer Protection Act imposes new disclosure requirements regarding the use of "conflict" minerals mined from the Democratic Republic of Congo and adjoining countries in products, whether or not these products are manufactured by third parties. These new requirements could affect the pricing, sourcing and availability of minerals used in the manufacture of semiconductor devices (including our products). There will be additional costs associated with complying with the disclosure requirements, such as costs related to determining the source of any conflict minerals used in our products. Our supply chain is complex and we may be unable to verify the origins for all metals used in our products. We may also encounter challenges with our customers and stockholders if we are unable to certify that our products are conflict free.

26

Item 1B.    Unresolved Staff Comments

        None.

Item 2.    Properties

        Our corporate headquarters, housing engineering, sales and marketing, administration and test operations, is located in Austin, Texas. Our headquarters facilities consist of two buildings, which we purchased in 2012, that are located on land which we have leased through 2099. The buildings contain approximately 441,000 square feet of floor space, of which approximately 111,000 square feet were leased to other tenants. In addition to these properties, we lease smaller facilities in various locations in the United States, China, France, Germany, Hungary, India, Ireland, Italy, Japan, Norway, Singapore, South Korea, Taiwan and the United Kingdom for engineering, sales and marketing, administrative and manufacturing support activities. We believe that these facilities are suitable and adequate to meet our current operating needs.

Item 3.    Legal Proceedings

Patent Litigation

        On January 21, 2014, Cresta Technology Corporation ("Cresta Technology"), a Delaware corporation, filed a lawsuit against us, Samsung Electronics Co., Ltd., Samsung Electronics America, Inc., LG Electronics Inc. and LG Electronics U.S.A., Inc. in the United States District Court in the District of Delaware, alleging infringement of United States Patent Nos. 7,075,585, 7,265,792 and 7,251,466. The lawsuit relates to our family of television tuner products. Cresta Technology seeks unspecified compensatory and enhanced damages, attorney fees and a permanent injunction. On January 28, 2014, Cresta Technology also filed a complaint with the United States International Trade Commission alleging infringement of the same patents against us, Samsung and LG Electronics and seeking to prevent the importation and sale of allegedly infringing products in the United States. We intend to vigorously defend against these allegations. At this time, we cannot predict the outcome of these matters or the resulting financial impact to us, if any.

        In 2012, MaxLinear, Inc., a Delaware corporation, and we engaged one another in three patent infringement lawsuits filed in the United States District Court for the Southern District of California, San Diego Division, and in the United States District Court for the Western District of Texas, Austin Division. The Texas Court determined that the dispute concerning MaxLinear's patents would proceed in the California Court. On May 16, 2013, MaxLinear filed an additional patent infringement lawsuit against us in the United States District Court for the Southern District of California. On October 3, 2013, we and MaxLinear executed a Settlement Agreement resolving all of the lawsuits between us. MaxLinear granted us a license to its patent portfolio for our accused products, and we granted MaxLinear a license to our patent portfolio for the accused MaxLinear products. As part of the settlement, MaxLinear made a one-time payment of $1.25 million to us. We and MaxLinear also entered into a 3-year covenant not to sue and agreed to dismiss all of the pending cases.

Other

        We are involved in various other legal proceedings that have arisen in the normal course of business. While the ultimate results of these matters cannot be predicted with certainty, we do not expect them to have a material adverse effect on our consolidated financial statements.

Item 4.    Mine Safety Disclosures

        Not applicable.

27

Part II

Item 5.    Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Market Information and Holders

        Our registration statement (Registration No. 333-94853) under the Securities Act of 1933, as amended, relating to our initial public offering of our common stock became effective on March 23, 2000. Our common stock is quoted on the NASDAQ National Market (NASDAQ) under the symbol "SLAB". The table below shows the high and low per-share sales prices of our common stock for the periods indicated, as reported by NASDAQ. As of January 21, 2014, there were 111 holders of record of our common stock.

	High		Low
Fiscal Year 2012
First Quarter	$	48.50	$	41.07
Second Quarter		43.42		32.00
Third Quarter		40.35		34.55
Fourth Quarter		42.98		35.00
Fiscal Year 2013
First Quarter	$	47.41	$	39.65
Second Quarter		44.00		38.04
Third Quarter		46.21		38.16
Fourth Quarter		44.19		37.57

Dividend Policy

        We have never declared or paid any cash dividends on our common stock and we do not intend to pay cash dividends in the foreseeable future. We currently expect to retain any future earnings to fund the operation and expansion of our business.

28

Stock Performance Graph

        The graph depicted below shows a comparison of cumulative total stockholder returns for an investment in Silicon Laboratories Inc. common stock, the NASDAQ Composite Index, the NASDAQ Electronic Components Index and the PHLX Semiconductor Index.

Company / Index	01/03/09		01/02/10		01/01/11		12/31/11		12/29/12		12/28/13
Silicon Laboratories Inc.	$	100.00	$	189.28	$	180.05	$	169.87	$	162.32	$	165.69
NASDAQ Composite	$	100.00	$	144.45	$	169.81	$	167.85	$	188.54	$	267.16
PHLX Semiconductor Index	$	100.00	$	159.68	$	183.23	$	186.05	$	204.93	$	268.55

(1)

The graph assumes that $100 was invested in our common stock and in each index at the market close on January 3, 2009, and that all dividends were reinvested. No cash dividends have been declared on our common stock.

(2)

Stockholder returns over the indicated period should not be considered indicative of future stockholder returns.

29

Issuer Purchases of Equity Securities

        The following table summarizes repurchases of our common stock during the three months ended December 28, 2013 (in thousands, except per share amounts):

Period	Total Number of Shares Purchased		Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs		Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs
September 29, 2013 - October 26, 2013		42	$	39.51		42	$	40,557
October 27, 2013 - November 23, 2013		286	$	39.32		286	$	29,301
November 24, 2013 - December 28, 2013		136	$	39.14		136	$	23,991
Total		464	$	39.28		464

        In January 2013, our Board of Directors authorized a program to repurchase up to $50 million of our common stock through January 2014. The program allows for repurchases to be made in the open market or in private transactions, including structured or accelerated transactions, subject to applicable legal requirements and market conditions.

Item 6.    Selected Financial Data

        Please read this selected consolidated financial data in conjunction with "Management's Discussion and Analysis of Financial Condition and Results of Operations," our Consolidated Financial Statements and the notes to those statements included in this Form 10-K.

	Fiscal Year
	2013		2012		2011		2010		2009
	(in thousands, except per share data)
Consolidated Statements of Income Data
Revenues	$	580,087	$	563,294	$	491,625	$	493,341	$	441,020
Operating income	$	64,310	$	85,675	$	50,074	$	86,671	$	66,511
Net income	$	49,819	$	63,548	$	35,472	$	73,242	$	73,092	(2)
Earnings per share:
Basic	$	1.17	$	1.51	$	0.82	$	1.63	$	1.62
Diluted	$	1.14	$	1.47	$	0.79	$	1.57	$	1.57
Consolidated Balance Sheet Data
Cash, cash equivalents and investments (1)	$	286,025	$	293,360	$	324,967	$	383,362	$	434,899
Working capital		350,170		361,304		370,211		414,073		435,359
Total assets		991,150		871,966		705,991		727,658		742,838
Long-term obligations		143,441		115,615		24,214		22,372		24,403
Total stockholders' equity		738,562		649,973		598,939		625,430		629,796

(1)

Reflects repurchases of $26 million, $62 million, $110 million, $140 million and $20 million of our common stock in fiscal 2013, 2012, 2011, 2010 and 2009, respectively.

(2)

Includes a benefit related to the resolution of prior year uncertain tax benefits.

30

Item 7.    Management's Discussion and Analysis of Financial Condition and Results of Operations

        The following discussion and analysis of financial condition and results of operations should be read in conjunction with the Consolidated Financial Statements and related notes thereto included elsewhere in this report. This discussion contains forward-looking statements. Please see the "Cautionary Statement" and "Risk Factors" above for discussions of the uncertainties, risks and assumptions associated with these statements. Our fiscal year-end financial reporting periods are a 52-or 53-week year ending on the Saturday closest to December 31st. Fiscal 2013, 2012 and 2011were 52-week years and ended on December 28, 2013, December 29, 2012 and December 31, 2011, respectively. Fiscal 2014 will have 53 weeks with the extra week occurring in the fourth quarter of the year.

Overview

        We design and develop proprietary, analog-intensive, mixed-signal integrated circuits (ICs) for a broad range of applications. Mixed-signal ICs are electronic components that convert real-world analog signals, such as sound and radio waves, into digital signals that electronic products can process. Therefore, mixed-signal ICs are critical components in products addressing a variety of markets, including communications, consumer, industrial and automotive. Our major customers include Alcatel, Cisco, Harman Becker, Huawei, LG Electronics, Pace, Samsung, Technicolor, Varian Medical Systems and ZTE.

        As a fabless semiconductor company, we rely on third-party semiconductor fabricators in Asia, and to a lesser extent the United States and Europe, to manufacture the silicon wafers that reflect our IC designs. Each wafer contains numerous die, which are cut from the wafer to create a chip for an IC. We rely on third parties in Asia to assemble, package, and, in most cases, test these devices and ship these units to our customers. Testing performed by such third parties facilitates faster delivery of products to our customers (particularly those located in Asia), shorter production cycle times, lower inventory requirements, lower costs and increased flexibility of test capacity.

        Our expertise in analog-intensive, high-performance, mixed-signal ICs enables us to develop highly differentiated solutions that address multiple markets. We group our products into the following categories:

•

Broad-based products, which include our microcontrollers, timing products (clocks and oscillators), power and isolation devices, and sensors;

•

Broadcast products, which include our broadcast audio and video products; and

•

Access products, which include our Voice over IP (VoIP) products, embedded modems and our Power over Ethernet (PoE) devices.

        Through acquisitions and internal development efforts, we have continued to diversify our product portfolio and introduce next-generation ICs with added functionality and further integration. On July 1, 2013, we acquired Energy Micro AS. Energy Micro designed and developed energy-efficient 32-bit microcontrollers based on ARM Cortex-M architecture. Energy Micro's energy-friendly solutions are designed to enable a broad range of power-sensitive applications for the Internet of Things (IoT), including smart energy, home automation, security and portable electronics markets. See Note 9, Acquisitions, for additional information.

        In fiscal 2013, we introduced a new family of sub-GHz wireless MCUs optimized for power-sensitive, battery-powered systems with RF connectivity; a high-performance bridge controller for USB connectivity applications; relative humidity (RH) and temperature sensors that simplify RH sensing designs while providing power efficiency and ease of use; the EFM32™ Zero Gecko MCU family designed to achieve low system energy consumption for a wide range of battery-powered applications; a

31

family of universal digital video broadcast (DVB) demodulators that support the latest worldwide DVB standards for cable, terrestrial and satellite reception; a low-jitter, low-power and frequency-flexible timing solution for high-speed networking equipment based on the Synchronous Ethernet (SyncE) standard; a new family of silicon TV tuners offering high performance, integration and low system cost while supporting all worldwide terrestrial and cable TV standards; highly integrated, feature-rich 8-bit MCUs optimized for cost-sensitive motor control applications; highly integrated microelectromechanical system (MEMS) oscillators based on our CMEMS (CMOS+MEMS) technology and designed to replace general-purpose crystal oscillators (XOs) in cost-sensitive, low-power and high-volume industrial, embedded and consumer electronics applications; ultra-small and low-power PCI Express (PCIe) clock generators; XOs that meet ultra-low jitter requirements for cloud computing and networking equipment; digital CMOS-based drop-in replacement solutions for opto-drivers; a single-chip digital radio receiver developed for the global portable and consumer electronics markets; next-generation analog-tuned, analog/digital-display (ATxD) multiband radio ICs; and a high-performance, ultra-low-power sub-GHz wireless transceiver optimized for China's smart metering market. We plan to continue to introduce products that increase the content we provide for existing applications, thereby enabling us to serve markets we do not currently address and expanding our total available market opportunity.

        During fiscal 2013, 2012 and 2011, we had one customer, Samsung, whose purchases across a variety of product areas represented 15%, 19% and 13% of our revenues, respectively. In addition to direct sales to customers, some of our end customers purchase products indirectly from us through distributors and contract manufacturers. An end customer purchasing through a contract manufacturer typically instructs such contract manufacturer to obtain our products and incorporate such products with other components for sale by such contract manufacturer to the end customer. Although we actually sell the products to, and are paid by, the distributors and contract manufacturers, we refer to such end customer as our customer. Two of our distributors, Edom Technology and Avnet, represented 21% and 11% of our revenues during fiscal 2013, respectively. Edom and Avnet, represented 22% and 11% of our revenues during fiscal 2012, respectively. Edom, Avnet and Macnica, represented 24%, 12% and 10% of our revenues during fiscal 2011, respectively. There were no other distributors or contract manufacturers that accounted for more than 10% of our revenues in fiscal 2013, 2012 or 2011.

        The percentage of our revenues derived from outside of the United States was 88% in fiscal 2013, 88% in fiscal 2012 and 86% in fiscal 2011. All of our revenues to date have been denominated in U.S. dollars. We believe that a majority of our revenues will continue to be derived from customers outside of the United States.

        The sales cycle for our ICs can be as long as 12 months or more. An additional three to six months or more are usually required before a customer ships a significant volume of devices that incorporate our ICs. Due to this lengthy sales cycle, we typically experience a significant delay between incurring research and development and selling, general and administrative expenses, and the corresponding sales. Consequently, if sales in any quarter do not occur when expected, expenses and inventory levels could be disproportionately high, and our operating results for that quarter and, potentially, future quarters would be adversely affected. Moreover, the amount of time between initial research and development and commercialization of a product, if ever, can be substantially longer than the sales cycle for the product. Accordingly, if we incur substantial research and development costs without developing a commercially successful product, our operating results, as well as our growth prospects, could be adversely affected.

        Because many of our ICs are designed for use in consumer products such as televisions, set-top boxes, radios and mobile handsets, we expect that the demand for our products will be typically subject to some degree of seasonal demand. However, rapid changes in our markets and across our product areas make it difficult for us to accurately estimate the impact of seasonal factors on our business.

32

Results of Operations

        The following describes the line items set forth in our Consolidated Statements of Income:

        Revenues.    Revenues are generated almost exclusively by sales of our ICs. We recognize revenue on sales when all of the following criteria are met: 1) there is persuasive evidence that an arrangement exists, 2) delivery of goods has occurred, 3) the sales price is fixed or determinable, and 4) collectibility is reasonably assured. Generally, we recognize revenue from product sales to direct customers and contract manufacturers upon shipment. Certain of our sales are made to distributors under agreements allowing certain rights of return and price protection on products unsold by distributors. Accordingly, we defer the revenue and cost of revenue on such sales until the distributors sell the product to the end customer. Our products typically carry a one-year replacement warranty. Replacements have been insignificant to date. Our revenues are subject to variation from period to period due to the volume of shipments made within a period, the mix of products we sell and the prices we charge for our products. The vast majority of our revenues were negotiated at prices that reflect a discount from the list prices for our products. These discounts are made for a variety of reasons, including: 1) to establish a relationship with a new customer, 2) as an incentive for customers to purchase products in larger volumes, 3) to provide profit margin to our distributors who resell our products or 4) in response to competition. In addition, as a product matures, we expect that the average selling price for such product will decline due to the greater availability of competing products. Our ability to increase revenues in the future is dependent on increased demand for our established products and our ability to ship larger volumes of those products in response to such demand, as well as our ability to develop or acquire new products and subsequently achieve customer acceptance of newly introduced products.

        Cost of Revenues.    Cost of revenues includes the cost of purchasing finished silicon wafers processed by independent foundries; costs associated with assembly, test and shipping of those products; costs of personnel and equipment associated with manufacturing support, logistics and quality assurance; costs of software royalties, other intellectual property license costs and certain acquired intangible assets; and an allocated portion of our occupancy costs.

        Research and Development.    Research and development expense consists primarily of personnel-related expenses, including stock-based compensation, as well as new product masks, external consulting and services costs, equipment tooling, equipment depreciation, amortization of intangible assets, and an allocated portion of our occupancy costs. Research and development activities include the design of new products, refinement of existing products and design of test methodologies to ensure compliance with required specifications.

        Selling, General and Administrative.    Selling, general and administrative expense consists primarily of personnel-related expenses, including stock-based compensation, as well as an allocated portion of our occupancy costs, sales commissions to independent sales representatives, applications engineering support, professional fees, legal fees and promotional and marketing expenses.

        Interest Income.    Interest income reflects interest earned on our cash, cash equivalents and investment balances.

        Interest Expense.    Interest expense consists of interest on our short and long-term obligations, including our Credit Facilities.

        Other Income (Expense), Net.    Other income (expense), net consists primarily of foreign currency remeasurement adjustments as well as other non-operating income and expenses.

        Provision for Income Taxes.    Provision for income taxes includes both domestic and foreign income taxes at the applicable statutory rates adjusted for non-deductible expenses, research and development tax credits and other permanent differences.

33

        The following table sets forth our Consolidated Statements of Income data as a percentage of revenues for the periods indicated:

	Fiscal Year
	2013			2012			2011
Revenues		100.0	%		100.0	%		100.0	%
Cost of revenues		39.2			40.0			39.3
Gross margin		60.8			60.0			60.7
Operating expenses:
Research and development		27.2			24.5			27.7
Selling, general and administrative		22.5			20.3			22.8
Operating expenses		49.7			44.8			50.5
Operating income		11.1			15.2			10.2
Other income (expense):
Interest income		0.2			0.2			0.3
Interest expense		(0.6	)		(0.2	)		0.0
Other income (expense), net		0.0			0.1			0.1
Income before income taxes		10.7			15.3			10.6
Provision for income taxes		2.1			4.0			3.4
Net income		8.6	%		11.3	%		7.2	%

Comparison of Fiscal 2013 to Fiscal 2012

Revenues

	Fiscal Year
(in millions)	2013		2012		Change			% Change
Broad-based	$	281.8	$	270.1	$	11.7			4.3	%
Broadcast		199.8		186.1		13.7			7.4	%
Access		98.5		107.1		(8.6	)		(8.1	)%
Revenues	$	580.1	$	563.3	$	16.8			3.0	%

        The change in revenues in fiscal 2013 was due primarily to:

•

Increased revenues of $11.7 million for our Broad-based ICs, due primarily to the addition of revenues from the acquisition of Energy Micro in July 2013 and Ember in July 2012 and market share gains for our timing ICs. Broad-based revenue growth was offset in part by declines in revenue for our touch controller ICs due to our planned exit from this market.

•

Increased revenues of $13.7 million for our Broadcast ICs, due primarily to market share gains for our video ICs. Broadcast revenue growth was offset in part by declines in revenue for our audio ICs, which decreased primarily due to declines in market share.

•

Decreased revenues of $8.6 million for our Access ICs. The decrease in Access revenues resulted primarily due to declines in market share for our VoIP ICs.

        Unit volumes of our products decreased compared to fiscal 2012 by 8.1%. Average selling prices increased compared to the same period by 12.1%. The average selling prices of our products may fluctuate significantly from period to period. In general, as our products become more mature, we expect to experience decreases in average selling prices. We anticipate that newly announced, higher priced, next generation products and product derivatives will offset some of these decreases.

34

Gross Margin

	Fiscal Year
(in millions)	2013			2012			Change
Gross margin	$	352.9		$	338.0		$	14.9
Percent of revenue		60.8	%		60.0	%		0.8	%

        The increased dollar amount of gross margin in fiscal 2013 was due primarily to $14.4 million of increased gross margin from higher market demand for our video and timing ICs and the addition of ICs acquired from Energy Micro and Ember, offset in part by a decline in demand for our touch controller, audio and VoIP ICs.

        We may experience declines in the average selling prices of certain of our products. This creates downward pressure on gross margin as a percentage of revenues and may be offset to the extent we are able to: 1) introduce higher margin new products and gain market share with our ICs; 2) achieve lower production costs from our wafer suppliers and third-party assembly and test subcontractors; 3) achieve lower production costs per unit as a result of improved yields throughout the manufacturing process; or 4) reduce logistics costs.

Research and Development

	Fiscal Year
									% Change
(in millions)	2013			2012			Change
Research and development	$	157.8		$	138.0		$	19.8		14.4	%
Percent of revenue		27.2	%		24.5	%

        The increase in research and development expense in fiscal 2013 was principally due to increases of (a) $11.4 million for personnel-related expenses, including personnel costs associated with (i) increased headcount, and (ii) the acquisition of Energy Micro and Ember, and (b) $4.0 million for the amortization of intangible assets primarily related to our acquisition of Energy Micro. We expect that research and development expense will remain relatively stable in absolute dollars in the first quarter of 2014.

        Recent development projects include a new family of sub-GHz wireless MCUs optimized for power-sensitive, battery-powered systems with RF connectivity; a high-performance bridge controller for USB connectivity applications; RH and temperature sensors that simplify RH sensing designs while providing power efficiency and ease of use; the EFM32 Zero Gecko MCU family designed to achieve low system energy consumption for a wide range of battery-powered applications; a family of universal DVB demodulators that support the latest worldwide DVB standards for cable, terrestrial and satellite reception; a low-jitter, low-power and frequency-flexible timing solution for high-speed networking equipment based on the SyncE standard; a new family of silicon TV tuners offering high performance, integration and low system cost while supporting all worldwide terrestrial and cable TV standards; highly integrated, feature-rich 8-bit MCUs optimized for cost-sensitive motor control applications; highly integrated MEMS oscillators based on our CMEMS technology and designed to replace general-purpose XOs in cost-sensitive, low-power and high-volume industrial, embedded and consumer electronics applications; ultra-small and low-power PCIe clock generators; XOs that meet ultra-low jitter requirements for cloud computing and networking equipment; digital CMOS-based drop-in replacement solutions for opto-drivers; a single-chip digital radio receiver developed for the global portable and consumer electronics markets; next-generation analog-tuned, analog/digital-display (ATxD) multiband radio ICs; and a high-performance, ultra-low-power sub-GHz wireless transceiver optimized for China's smart metering market.

35

Selling, General and Administrative

	Fiscal Year
									% Change
(in millions)	2013			2012			Change
Selling, general and administrative	$	130.8		$	114.4		$	16.4		14.3	%
Percent of revenue		22.5	%		20.3	%

        The increase in selling, general and administrative expense in fiscal 2013 was principally due to a net gain of $8.5 million in fiscal 2012 from the purchase of our headquarters. Furthermore, the increase in selling, general and administrative expense in fiscal 2013 was also due to increases of (a) $2.5 million for sales commissions, (b) $2.1 million for personnel-related expenses, primarily associated with (i) increased headcount, and (ii) the acquisition of Energy Micro and Ember, and (c) $1.5 million for legal fees, primarily related to litigation and acquisition-related costs. We expect that selling, general and administrative expense will increase in absolute dollars in the first quarter of 2014.

Interest Income

        Interest income in fiscal 2013 was $0.9 million compared to $1.3 million in fiscal 2012.

Interest Expense

        Interest expense in fiscal 2013 was $3.3 million compared $1.1 million in fiscal 2012. The increase in fiscal 2013 was principally due to higher average debt balances in the period on our Term Loan Facility under our Credit Agreement.

Other Income (Expense), Net

        Other income (expense), net in fiscal 2013 was $0.2 million compared to $0.5 million in fiscal 2012.

Provision for Income Taxes

	Fiscal Year
(in millions)	2013			2012			Change
Provision for income taxes	$	12.2		$	22.8		$	(10.6	)
Effective tax rate		19.7	%		26.4	%

        The effective tax rate for fiscal 2013 decreased from the prior period, primarily due to the prior period tax charge related to the intercompany license of certain technology associated with the acquisition of Ember during 2012 and the recognition of the fiscal 2012 and fiscal 2013 federal research and development tax credits in fiscal 2013 as a result of the enactment of the American Taxpayer Relief Act of 2012 (the "Act") on January 2, 2013. The decrease in the effective tax rate for fiscal 2013 was partially offset by the release during the prior period of unrecognized tax benefits that were determined to be effectively settled during 2012. We expect our effective tax rate for fiscal 2014 to increase primarily due to the expiration of the federal research and development tax credit on December 31, 2013.

        The effective tax rates for each of the periods presented differ from the federal statutory rate of 35% due to the amount of income earned in foreign jurisdictions where the tax rate may be lower than the federal statutory rate, research and development tax credits and other permanent items including changes to the liability for unrecognized tax benefits.

36

Comparison of Fiscal 2012 to Fiscal 2011

Revenues

	Fiscal Year
								% Change
(in millions)	2012		2011		Change
Broad-based	$	270.1	$	208.7	$	61.4			29.4	%
Broadcast		186.1		169.5		16.6			9.7	%
Access		107.1		113.4		(6.3	)		(5.5	)%
Revenues	$	563.3	$	491.6	$	71.7			14.6	%

        The change in revenues in fiscal 2012 was due primarily to:

•

Increased revenues of $61.4 million for our broad-based ICs due primarily to (a) increased unit volumes of our microcontroller ICs, and (b) the introduction of our touch controller ICs. The increased unit volumes of our microcontroller ICs resulted from higher market demand as customers continued to adopt these ICs over ICs from competitors as well as increased IC revenues resulting from the acquisition of Ember in July 2012.

•

Increased revenues of $16.6 million for our broadcast ICs due primarily to increased unit volumes of our video ICs, which resulted from higher market demand as customers continued to adopt these ICs over ICs from competitors. The increase in broadcast revenues was offset in part by a decline in revenues for our audio ICs, resulting primarily from decreased unit volumes. The decrease in unit volumes was due to a decline in our market share for audio ICs, primarily due to increased competition.

        Unit volumes of our products increased compared to fiscal 2011 by 18.0%. Average selling prices decreased compared to the same period by 3.0%.

Gross Margin

	Fiscal Year
(in millions)	2012			2011			Change
Gross margin	$	338.0		$	298.4		$	39.6
Percent of revenue		60.0	%		60.7	%		(0.7	)%

        The increased dollar amount of gross margin in fiscal 2012 was due primarily to $51.3 million of increased gross margin from higher market demand for our video and microcontroller ICs and the introduction of our touch controller ICs, offset in part by an increase in acquisition-related charges. Gross margin as a percentage of revenue decreased 0.5 percent due primarily to the increased sales of video ICs, which had a lower gross margin percentage than the Company average.

Research and Development

	Fiscal Year
									% Change
(in millions)	2012			2011			Change
Research and development	$	138.0		$	136.0		$	2.0		1.5	%
Percent of revenue		24.5	%		27.7	%

        The increase in research and development expense in fiscal 2012 was principally due to an increase of $2.8 million for personnel-related expenses, including personnel costs associated with the acquisition of Ember. The decrease in research and development expense as a percent of revenues in fiscal 2012 is due to our increased revenues.

37

Selling, General and Administrative

	Fiscal Year
									% Change
(in millions)	2012			2011			Change
Selling, general and administrative	$	114.4		$	112.4		$	2.0		1.8	%
Percent of revenue		20.3	%		22.8	%

        The increase in selling, general and administrative expense in fiscal 2012 was principally due to increases of (a) $6.5 million for personnel-related expenses, including severance related to a separation agreement between us and our former CEO, (b) $1.5 million for legal fees, primarily related to litigation and acquisition-related costs, and (c) $0.8 million for product marketing costs. The increase in fiscal 2012 was offset in part by a net gain of $8.5 million from the purchase of our headquarters in fiscal 2012. The decrease in selling, general and administrative expense as a percent of revenues in fiscal 2012 is due to our increased revenues.

Interest Income

        Interest income in fiscal 2012 was $1.3 million compared to $1.9 million in fiscal 2011.

Interest Expense

        Interest expense in fiscal 2012 was $1.1 million compared to $37 thousand in fiscal 2011. The increase in fiscal 2012 is principally due to interest on our Term Loan Facility under our Credit Agreement.

Other Income (Expense), Net

        Other income (expense), net in fiscal 2012 was $0.5 million compared to $0.4 million in fiscal 2011.

Provision for Income Taxes

	Fiscal Year
(in millions)	2012			2011			Change
Provision for income taxes	$	22.8		$	16.9		$	5.9
Effective tax rate		26.4	%		32.2	%

        The effective tax rate for fiscal 2012 decreased from fiscal 2011, primarily due to the release of prior year unrecognized tax benefits that were determined to be effectively settled during fiscal 2012, along with one-time nondeductible costs associated with the acquisition of Spectra Linear in fiscal 2011. The impact of these items was partially offset by the non-renewal of the federal research and development tax credit in fiscal 2012.

        The American Taxpayer Relief Act of 2012 (the "Act") was enacted on January 2, 2013. The Act retroactively reinstates the federal research and development credit from January 1, 2012, through December 31, 2013. The effect of the change in the tax law related to fiscal 2012 was recognized as a benefit to income tax expense in the first quarter of fiscal 2013, the quarter in which the law was enacted.

        The effective tax rates for each of the periods presented differ from the federal statutory rate of 35% due to the amount of income earned in foreign jurisdictions where the tax rate may be lower than the federal statutory rate, research and development tax credits and other permanent items including changes to the liability for unrecognized tax benefits.

38

Business Outlook

        We expect revenues in the first quarter of fiscal 2014 to be in the range of $142 to $146 million. Furthermore, we expect our diluted earnings per share to be in the range of $0.14 to $0.18.

Liquidity and Capital Resources

        Our principal sources of liquidity as of December 28, 2013 consisted of $275.4 million in cash, cash equivalents and short-term investments, of which approximately $185.7 million was held by our U.S. entities. The remaining balance was held by our foreign subsidiaries. Our cash equivalents and short-term investments consisted of municipal bonds, money market funds, variable-rate demand notes, corporate bonds, certificates of deposit, commercial paper and asset backed securities.

        Our long-term investments consisted of auction-rate securities. In fiscal 2008, auctions for many of our auction-rate securities failed because sell orders exceeded buy orders. As of December 28, 2013, we held $12.4 million par value auction-rate securities, all of which have experienced failed auctions. These securities have contractual maturity dates ranging from 2033 to 2046. We are receiving the underlying cash flows on all of our auction-rate securities. The principal amounts associated with failed auctions are not expected to be accessible until a successful auction occurs, the issuer redeems the security, a buyer is found outside of the auction process or the underlying securities mature. We are unable to predict if these funds will become available before their maturity dates. We do not expect to need access to the capital represented by any of our auction-rate securities prior to their maturities.

        Net cash provided by operating activities was $120.2 million during fiscal 2013, compared to net cash provided of $97.1 million during fiscal 2012. Operating cash flows during fiscal 2013 reflect our net income of $49.8 million, adjustments of $62.7 million for depreciation, amortization, stock-based compensation and deferred income taxes, and a net cash inflow of $7.7 million due to changes in our operating assets and liabilities.

        Accounts receivable decreased to $72.1 million at December 28, 2013 from $78.0 million at December 29, 2012. Our average days sales outstanding (DSO) was 44 days at December 28, 2013 and 46 days at December 29, 2012.

        Inventory decreased to $45.3 million at December 28, 2013 from $49.6 million at December 29, 2012. Our inventory level is primarily impacted by our need to make purchase commitments to support forecasted demand and variations between forecasted and actual demand. Our average days of inventory (DOI) was 71 days at December 28, 2013 and 76 days at December 29, 2012.

        Net cash used in investing activities was $105.9 million during fiscal 2013, compared to net cash used of $139.3 million during fiscal 2012. The decrease in cash outflows was principally due to a decrease of $91.6 million for purchases of property and equipment, offset by an increase of $46.1 million for net purchases of marketable securities. In fiscal 2013, we acquired Energy Micro for approximately $140.6 million. In fiscal 2012, we purchased our corporate headquarters facilities for approximately $94.4 million and acquired Ember for approximately $79.0 million. See Note 9, Acquisitions, for additional information.

        We anticipate capital expenditures of approximately $10 to $14 million for fiscal 2014. Additionally, as part of our growth strategy, we expect to evaluate opportunities to invest in or acquire other businesses, intellectual property or technologies that would complement or expand our current offerings, expand the breadth of our markets or enhance our technical capabilities.

        Net cash used in financing activities was $23.9 million during fiscal 2013, compared to net cash provided of $52.7 million during fiscal 2012. The increase in cash outflows was principally due to net proceeds of $98.3 million from the issuance of long-term debt in fiscal 2012, offset by a decline of $36.0 million for repurchases of our common stock in fiscal 2013. In January 2013, our Board of

39

Directors authorized a program to repurchase up to $50 million of our common stock through January 2014.

Debt

        On July 31, 2012, we entered into a $230 million five-year Credit Agreement (the "Agreement"). The Agreement consists of a $100 million Term Loan Facility and a $130 million Revolving Credit Facility.

        The Term Loan Facility provides for quarterly principal amortization (equal to 5% of the principal in each of the first two years and 10% of the principal in each of the next three years) with the remaining balance payable upon the maturity date. The Revolving Credit Facility includes a $25 million letter of credit sublimit and a $10 million swingline loan sublimit. We have an option to increase the size of the Revolving Credit Facility by up to an aggregate of $50 million in additional commitments, subject to certain conditions. On September 27, 2012, we borrowed $100 million under the Term Loan Facility. To date, we have not borrowed under the Revolving Credit Facility.

        The Term Loan Facility and Revolving Credit Facility, other than swingline loans, will bear interest at LIBOR plus an applicable margin or, at our option, a base rate (defined as the highest of the Bank of America prime rate, the Federal Funds rate plus 0.50% and a daily rate equal to one-month LIBOR plus 1.00%) plus an applicable margin. Swingline loans accrue interest at a per annum rate based on the base rate plus the applicable margin for base rate loans. The applicable margins for the LIBOR rate loans range from 1.50% to 2.50% and for base rate loans range from 0.50% to 1.50%, depending in each case, on the leverage ratio as defined in the Agreement. We also pay a commitment fee on the unused amount of the Revolving Credit Facility.

        In connection with the closing of the Credit Agreement, we entered into a security and pledge agreement. Under the security and pledge agreement, we pledged equity securities of certain of our subsidiaries, subject to exceptions and limitations. The Credit Facilities contain various conditions, covenants and representations with which we must be in compliance in order to borrow funds and to avoid an event of default, including financial covenants that we must maintain a leverage ratio (funded debt/EBITDA) of no more than 2.5 to 1 and a minimum fixed charge coverage ratio (EBITDA/debt payments, income taxes and capital expenditures) of no less than 1.50 to 1. As of December 28, 2013, the Company was in compliance with all covenants of the Credit Facilities. See Note 11, Debt, to the Consolidated Financial Statements for additional information.

        We have entered into an interest rate swap agreement as a hedge against the LIBOR portion of the variable interest payments under the Term Loan Facility and effectively converted the LIBOR portion of the interest on the Term Loan Facility to a fixed interest rate through the maturity date. See Note 5, Derivative Financial Instruments, to the Consolidated Financial Statements for additional information.

        Our future capital requirements will depend on many factors, including the rate of sales growth, market acceptance of our products, the timing and extent of research and development projects, potential acquisitions of companies or technologies and the expansion of our sales and marketing activities. We believe our existing cash, cash equivalents, investments and credit under our Credit Facilities are sufficient to meet our capital requirements through at least the next 12 months, although we could be required, or could elect, to seek additional funding prior to that time. We may enter into acquisitions or strategic arrangements in the future which also could require us to seek additional equity or debt financing.

40

Contractual Obligations

        The following table summarizes our contractual obligations as of December 28, 2013 (in thousands):

	Payments due by period
	Total		2014		2015		2016		2017		2018		Thereafter
Long-term debt obligations (1)	$	95,000	$	7,500	$	10,000	$	10,000	$	67,500	$	—	$	—
Interest on long-term debt obligations (2)		8,934		3,008		2,496		2,241		1,189		—		—
Operating lease obligations (3)		15,475		4,232		3,704		3,058		2,350		1,449		682
Purchase obligations (4)		31,650		31,650		—		—		—		—		—
Other long-term obligations (5)		33,194		—		23,158		4,392		2,273		1,969		1,402

(1)

Long-term debt obligations represent the principal due under our Term Loan Facility and include amounts classified as current portion of long-term debt.

(2)

Interest on our long-term debt obligations is based on LIBOR plus an applicable margin. We have entered into an interest rate swap agreement as a hedge against the LIBOR portion of such variable interest payments and effectively converted the LIBOR portion of the interest on the Term Loan Facility to a fixed interest rate through the maturity date. As of December 28, 2013, the combined interest rate on the Term Loan Facility was 2.514%. The impact of the interest rate swap was factored into the calculation of the future interest payments on our long-term debt obligations.

(3)

Operating lease obligations include amounts for leased facilities.

(4)

Purchase obligations include contractual arrangements in the form of purchase orders with suppliers where there is a fixed non-cancelable payment schedule or minimum payments due with a reduced delivery schedule.

(5)

Other long-term obligations represent estimated payments due in connection with the acquisition of Energy Micro, including escrow withheld and estimated contingent consideration.

We are unable to make a reasonably reliable estimate as to when or if cash settlement with taxing authorities will occur for our unrecognized tax benefits. Therefore, our liability of $5.0 million for unrecognized tax benefits is not included in the table above. See Note 17, Income Taxes, to the Consolidated Financial Statements for additional information.

Off-Balance Sheet Arrangements

        As of December 28, 2013, we had no significant off-balance sheet arrangements.

Critical Accounting Policies and Estimates

        The preparation of financial statements and accompanying notes in conformity with U.S. generally accepted accounting principles requires that we make estimates and assumptions that affect the amounts reported. Changes in facts and circumstances could have a significant impact on the resulting estimated amounts included in the financial statements. We believe the following critical accounting policies affect our more complex judgments and estimates. We also have other policies that we consider to be key accounting policies, such as our policies for revenue recognition, including the deferral of revenues and cost of revenues on sales to distributors; however, these policies do not meet the definition of critical accounting estimates because they do not generally require us to make estimates or judgments that are difficult or subjective.

41

        Inventory valuation—We assess the recoverability of inventories through the application of a set of methods, assumptions and estimates. In determining net realizable value, we write down inventory that may be slow moving or have some form of obsolescence, including inventory that has aged more than 12 months. We also adjust the valuation of inventory when its manufacturing cost exceeds the estimated market value less selling costs. We assess the potential for any unusual customer returns based on known quality or business issues and write-off inventory losses for scrap or non-saleable material. Inventory not otherwise identified to be written down is compared to an assessment of our 12-month forecasted demand. The result of this methodology is compared against the product life cycle and competitive situations in the marketplace to determine the appropriateness of the resulting inventory levels. Demand for our products may fluctuate significantly over time, and actual demand and market conditions may be more or less favorable than those that we project. In the event that actual demand is lower or market conditions are worse than originally projected, additional inventory write-downs may be required.

        Stock-based compensation—We recognize the fair-value of stock-based compensation transactions in the Consolidated Statements of Income. The fair value of our full-value stock awards (with the exception of market-based performance awards) equals the fair market value of our stock on the date of grant. The fair value of our market-based performance award grants is estimated at the date of grant using a Monte-Carlo simulation. The fair value of our stock option and employee stock purchase plan grants is estimated at the date of grant using the Black-Scholes option pricing model. In addition, we are required to estimate the expected forfeiture rate of our stock grants and only recognize the expense for those shares expected to vest. If our actual experience differs significantly from the assumptions used to compute our stock-based compensation cost, or if different assumptions had been used, we may have recorded too much or too little stock-based compensation cost. See Note 13, Stock-Based Compensation, to the Consolidated Financial Statements for additional information.

        Investments in auction-rate securities—We determine the fair value of our investments in auction-rate securities using a discounted cash flow model. The assumptions used in preparing the discounted cash flow model include estimates for interest rates, amount of cash flows, expected holding periods of the securities and a discount to reflect our inability to liquidate the securities. For available-for-sale auction-rate securities, if the calculated value is below the carrying amount of the securities, we then determine if the decline in value is other-than-temporary. We consider various factors in determining whether an impairment is other-than-temporary, including the severity and duration of the impairment, changes in underlying credit ratings, forecasted recovery, our intent to sell or the likelihood that we would be required to sell the investment before its anticipated recovery in market value and the probability that the scheduled cash payments will continue to be made. When we conclude that an other-than-temporary impairment has occurred, we assess whether we intend to sell the security or if it is more likely than not that we will be required to sell the security before recovery. If either of these two conditions is met, we recognize a charge in earnings equal to the entire difference between the security's amortized cost basis and its fair value. If we do not intend to sell a security and it is not more likely than not that we will be required to sell the security before recovery, the unrealized loss is separated into an amount representing the credit loss, which is recognized in earnings, and the amount related to all other factors, which is recorded in accumulated other comprehensive loss.

        Acquired intangible assets—When we acquire a business, a portion of the purchase price is typically allocated to identifiable intangible assets, such as acquired technology and customer relationships. Fair value of these assets is determined primarily using the income approach, which requires us to project future cash flows and apply an appropriate discount rate. We amortize intangible assets with finite lives over their expected useful lives. Our estimates are based upon assumptions believed to be reasonable but which are inherently uncertain and unpredictable. Assumptions may be incomplete or inaccurate,

42

and unanticipated events and circumstances may occur. Incorrect estimates could result in future impairment charges, and those charges could be material to our results of operations.

        Impairment of goodwill and other long-lived assets—We review long-lived assets which are held and used, including fixed assets and purchased intangible assets, for impairment whenever changes in circumstances indicate that the carrying amount of the assets may not be recoverable. Such evaluations compare the carrying amount of an asset to future undiscounted net cash flows expected to be generated by the asset over its expected useful life and are significantly impacted by estimates of future prices and volumes for our products, capital needs, economic trends and other factors which are inherently difficult to forecast. If the asset is considered to be impaired, we record an impairment charge equal to the amount by which the carrying value of the asset exceeds its fair value determined by either a quoted market price, if any, or a value determined by utilizing a discounted cash flow technique.

        We test our goodwill for impairment annually as of the first day of our fourth fiscal quarter and in interim periods if certain events occur indicating that the carrying value of goodwill may be impaired. The goodwill impairment test is a two-step process. The first step of the impairment analysis compares our fair value to our net book value. In determining fair value, the accounting guidance allows for the use of several valuation methodologies, although it states quoted market prices are the best evidence of fair value. If the fair value is less than the net book value, the second step of the analysis compares the implied fair value of our goodwill to its carrying amount. If the carrying amount of goodwill exceeds its implied fair value, we recognize an impairment loss equal to that excess amount.

        Income taxes—We are required to calculate income taxes in each of the jurisdictions in which we operate. This process involves calculating the actual current tax liability together with assessing temporary differences in recognition of income (loss) for tax and accounting purposes. These differences result in deferred tax assets and liabilities, which are included in our Consolidated Balance Sheet. We record a valuation allowance when it is more likely than not that some portion or all of the deferred tax assets will not be realized. In assessing the need for a valuation allowance, we are required to estimate the amount of expected future taxable income. Judgment is inherent in this process and differences between the estimated and actual taxable income could result in a material impact on our Consolidated Financial Statements.

        We recognize liabilities for uncertain tax positions based on a two-step process. The first step requires us to determine if the weight of available evidence indicates that the tax position has met the threshold for recognition; therefore, we must evaluate whether it is more likely than not that the position will be sustained on audit, including resolution of any related appeals or litigation processes. The second step requires us to measure the tax benefit of the tax position taken, or expected to be taken, in an income tax return as the largest amount that is more than 50% likely of being realized upon ultimate settlement. This measurement step is inherently complex and requires subjective estimations of such amounts to determine the probability of various possible outcomes. We re-evaluate the uncertain tax positions each quarter based on factors including, but not limited to, changes in facts or circumstances, changes in tax law, expirations of statutes of limitation, effectively settled issues under audit, and new audit activity. Such a change in recognition or measurement would result in the recognition of a tax benefit or an additional charge to the tax provision in the period.

        Although we believe the measurement of our liabilities for uncertain tax positions is reasonable, no assurance can be given that the final outcome of these matters will not be different than what is reflected in the historical income tax provisions and accruals. If additional taxes are assessed as a result of an audit or litigation, it could have a material effect on our income tax provision and net income in the period or periods for which that determination is made. We operate within multiple taxing jurisdictions and are subject to audit in these jurisdictions. These audits can involve complex issues

43

which may require an extended period of time to resolve and could result in additional assessments of income tax. We believe adequate provisions for income taxes have been made for all periods.

Recent Accounting Pronouncements

        In February 2013, the Financial Accounting Standards Board (FASB) issued FASB Accounting Standards Update (ASU) No. 2013-02, Comprehensive Income (Topic 220)—Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income. ASU 2013-02 requires an entity to provide information about the amounts reclassified out of accumulated other comprehensive income by component. In addition, an entity is required to present, either on the face of the financial statements or in the notes, significant amounts reclassified out of accumulated other comprehensive income by the respective line items of net income, but only if the amount reclassified is required under U.S. GAAP to be reclassified to net income in its entirety in the same reporting period. For amounts that are not required to be reclassified in their entirety to net income, an entity is required to cross-reference to other disclosures that provide additional details about those amounts. ASU 2013-02 is effective prospectively for reporting periods beginning after December 15, 2012. The adoption of this ASU did not have an impact on our financial statements, but did amend the disclosures for accumulated other comprehensive loss.

Item 7A.    Quantitative and Qualitative Disclosures about Market Risk

Interest Income

        Our investment portfolio includes cash, cash equivalents, short-term investments and long-term investments. Our main investment objectives are the preservation of investment capital and the maximization of after-tax returns on our investment portfolio. Our interest income is sensitive to changes in the general level of U.S. interest rates. Our investment portfolio holdings as of December 28, 2013 and December 29, 2012 yielded less than 100 basis points. A decline in yield to zero basis points on our investment portfolio holdings as of December 28, 2013 and December 29, 2012 would decrease our annual interest income by approximately $0.9 million and $1.2 million, respectively. We believe that our investment policy, which defines the duration, concentration, and minimum credit quality of the allowable investments, meets our investment objectives.

Interest Expense

        We are exposed to interest rate fluctuations in the normal course of our business, including through our Credit Facilities. The interest payments on the facility are calculated using a variable-rate of interest. We have entered into an interest rate swap agreement with an original notional value of $100 million (equal to the full amount borrowed under the Term Loan Facility) and, effectively, converted the variable-rate interest payments on the Term Loan Facility to fixed-rate interest payments through July 2017.

Investments in Auction-rate Securities

        In fiscal 2008, auctions for many of our auction-rate securities failed because sell orders exceeded buy orders. As of December 28, 2013, we held $12.4 million par value auction-rate securities, all of which have experienced failed auctions. The principal amounts associated with failed auctions are not expected to be accessible until a successful auction occurs, the issuer redeems the securities, a buyer is found outside of the auction process or the underlying securities mature. We are unable to predict if these funds will become available before their maturity dates. Additionally, if we determine that an other-than-temporary decline in the fair value of any of our available-for-sale auction-rate securities has occurred, we may be required to adjust the carrying value of the investments through an impairment charge.

44

Item 8.    Financial Statements and Supplementary Data

        The Financial Statements and supplementary data required by this item are included in Part IV, Item 15 of this Form 10-K and are presented beginning on page F-1.

Item 9.    Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

        None.

Item 9A.    Controls and Procedures

        We have performed an evaluation under the supervision and with the participation of our management, including our Chief Executive Officer (CEO) and Chief Financial Officer (CFO), of the effectiveness of our disclosure controls and procedures, as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934 (the Exchange Act). Based on that evaluation, our management, including our CEO and CFO, concluded that our disclosure controls and procedures were effective as of December 28, 2013 to provide reasonable assurance that information required to be disclosed by us in the reports filed or submitted by us under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms. Such disclosure controls and procedures include controls and procedures designed to ensure that information required to be disclosed is accumulated and communicated to our management, including our CEO and CFO, to allow timely decisions regarding required disclosures. There was no change in our internal controls during the fiscal quarter ended December 28, 2013 that materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting.

Management's Report on Internal Control over Financial Reporting

        Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Our internal control system was designed to provide reasonable assurance to our management and Board of Directors regarding the preparation and fair presentation of published financial statements.

        Our management assessed the effectiveness of our internal control over financial reporting as of December 28, 2013. In making this assessment, it used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control—Integrated Framework. Based on our assessment we concluded that, as of December 28, 2013, our internal control over financial reporting is effective based on those criteria.

        Our independent registered public accounting firm, Ernst & Young LLP, issued an attestation report on our internal control over financial reporting. This report appears on page F-1.

Item 9B.    Other Information

        None.

45

Part III

        Certain information required by Part III is omitted from this report because we intend to file a definitive Proxy Statement pursuant to Regulation 14A (the "Proxy Statement") no later than 120 days after the end of the fiscal year covered by this report, and certain information to be included therein is incorporated herein by reference.

Item 10.    Directors, Executive Officers and Corporate Governance

        Set forth below is information regarding the executive officers and directors of Silicon Laboratories as of January 21, 2014.

Name	Age	Position
Navdeep S. Sooch	51	Chairman of the Board
G. Tyson Tuttle	46	Chief Executive Officer and Director
William G. Bock	63	President and Director
John C. Hollister	44	Chief Financial Officer and Senior Vice President
Kurt W. Hoff	56	Senior Vice President of Worldwide Sales
Jonathan D. Ivester	58	Senior Vice President of Strategic Operations
David R. Welland	58	Vice President and Director
Alf-Egil Bogen	47	Director
Harvey B. Cash	75	Director
R. Ted Enloe III	75	Director
Jack R. Lazar	48	Director
Laurence G. Walker	65	Director
William P. Wood	58	Director

        Navdeep S. Sooch co-founded Silicon Laboratories in August 1996 and has served as Chairman of the Board since our inception. Mr. Sooch served as our Chief Executive Officer from our inception through the end of fiscal 2003 and served as interim Chief Executive Officer from April 2005 to September 2005. From March 1985 until founding Silicon Laboratories, Mr. Sooch held various positions at Crystal Semiconductor/Cirrus Logic, a designer and manufacturer of integrated circuits, including Vice President of Engineering, as well as Product Planning Manager of Strategic Marketing and Design Engineer. From May 1982 to March 1985, Mr. Sooch was a Design Engineer with AT&T Bell Labs. Since October 2011, Mr. Sooch has served as the CEO of Ketra, Inc., a private company in the field of solid state lighting. Mr. Sooch holds a B.S. in Electrical Engineering from the University of Michigan, Dearborn and an M.S. in Electrical Engineering from Stanford University. Mr. Sooch's prior experience as our Chief Executive Officer as well as a semiconductor designer provides him with extensive insight into our industry and our operations and qualifies him to serve as Chairman of our Board of Directors.

        G. Tyson Tuttle has served as a director and our Chief Executive Officer since April 2012. Mr. Tuttle served as our Chief Executive Officer and President from April 2012 to May 2013. Mr. Tuttle served as our Chief Operating Officer and Senior Vice President from May 2011 to April 2012. From January 2010 to May 2011, Mr. Tuttle served as our Chief Technical Officer. From May 2005 to December 2009, he was our Vice President and General Manager of Broadcast products including the audio and video product families. Mr. Tuttle joined Silicon Laboratories in 1997 as a senior design engineer. From 1999 to 2005, Mr. Tuttle served in a variety of product management, marketing and business leadership positions. Previously, Mr. Tuttle held senior design engineering positions at Crystal Semiconductor/Cirrus Logic and Broadcom Corporation where he focused on high-speed mixed-signal circuit design for hard disk drive read channel and Ethernet applications. Mr. Tuttle holds an M.S. in Electrical Engineering from UCLA and a B.S. in Electrical Engineering from Johns Hopkins University. Mr. Tuttle's intimate knowledge of our company and the industry and his service as our Chief Executive Officer qualify him to serve as a member of our Board of Directors.

46

        William G. Bock has served as our President since June 2013. He served Silicon Laboratories as Interim Chief Financial Officer and Senior Vice President from February 2013 until June 2013. He served as Chief Financial Officer from November 2006 to July 2011 and Senior Vice President of Finance and Administration from July 2011 through December 2011. He joined Silicon Laboratories as a director in March 2000, and served as Chairman of the audit committee until November 2006 when he stepped down from the Board of Directors to assume the CFO role. Mr. Bock rejoined Silicon Laboratories' Board of Directors in July of 2011. From 2001 to 2006, Mr. Bock participated in the venture capital industry, principally as a partner with CenterPoint Ventures. Before his venture career, Mr. Bock held senior executive positions with three venture-backed companies, Dazel Corporation, Tivoli Systems and Convex Computer Corporation. Mr. Bock began his career with Texas Instruments. Mr. Bock has served on the Board of Directors of Convio, Inc., from January 2008 until its sale to Blackbaud Inc. in April 2012. Mr. Bock currently serves on the Board of Directors of Entropic Communications and as a member of the Audit Committee. Mr. Bock holds a B.S. in Computer Science from Iowa State University and an M.S. in Industrial Administration from Carnegie Mellon University. Mr. Bock's extensive financial and executive experience and his in-depth knowledge of Silicon Laboratories qualify him to serve as a member of our Board of Directors.

        John C. Hollister has served Silicon Laboratories as our Chief Financial Officer since June 2013. Prior to this role, Mr. Hollister was our Vice President, Business Development since April 2012, and also served as our Chief Information Officer since November 2012. Mr. Hollister served as our Vice President, Manufacturing and Asia Operations from November 2009 to April 2012. From April 2007 to October 2009, he was Managing Director, Asia Operations. Mr. Hollister joined Silicon Laboratories in 2004 and held finance management positions until April 2007. Prior to joining Silicon Laboratories, Mr. Hollister's experience included Vice President of Finance at Cicada Semiconductor as well as various finance positions at Cirrus Logic, Veritas DGC, 3-D Geophysical and PricewaterhouseCoopers LLP. Mr. Hollister is a Certified Public Accountant and has a master's degree in Accounting and a bachelor's degree in Business Administration from the University of Texas at Austin.

        Kurt W. Hoff has served as our Senior Vice President of Worldwide Sales since April 2012. He previously served as our Vice President of Worldwide Sales from July 2007 to April 2012. From 2005 until July 2007, he managed the company's European sales and operations. Prior to joining Silicon Laboratories in 2005, Mr. Hoff served as president, Chief Executive Officer and director of Cognio. Mr. Hoff also managed the operations and sales of C-Port Corporation, a network processor company acquired by Motorola in May 2000. Additionally, Mr. Hoff spent 10 years in various sales positions at AMD. Mr. Hoff holds a B.S. in Physics from the University of Illinois and an M.B.A. from the University of Chicago.

        Jonathan D. Ivester has served as our Senior Vice President of Strategic Operations since July 2013. He previously served as Senior Vice President of Worldwide Operations from June 2008 to July 2013 and as Vice President of Worldwide Operations from May 2005 to June 2008. He joined Silicon Laboratories in September 1997 as Vice President. Previously, Mr. Ivester was with Applied Materials, a supplier of equipment and services to the semiconductor industry, and served as Director of Manufacturing and Director of U.S. Procurement in addition to various engineering and manufacturing management positions. Mr. Ivester also was a scientist at Bechtel Corporation, an engineering and construction company, and at Abcor, Inc., an ultrafiltration company and subsidiary of Koch Industries. Mr. Ivester holds a B.S. in Chemistry from the Massachusetts Institute of Technology and an M.B.A. from Stanford University.

        David R. Welland co-founded Silicon Laboratories in August 1996, has served as a Vice President and director since our inception and was appointed Fellow in March 2004. From November 1991 until founding Silicon Laboratories, Mr. Welland held various positions at Crystal Semiconductor/Cirrus Logic, a designer and manufacturer of integrated circuits, including Senior Design Engineer. Mr. Welland holds a B.S. in Electrical Engineering from the Massachusetts Institute of Technology.

47

Mr. Welland's years of experience as a semiconductor designer provide him with extensive insight into our operations and qualifies him to serve as a member of our Board of Directors.

        Alf-Egil Bogen has served as a director of Silicon Laboratories since October 2013. Mr. Bogen is a 20-year semiconductor veteran and one of the inventors of the highly successful AVR microcontroller. He is currently the chief executive officer and a member of the Board of Directors of Novelda AS, a privately held semiconductor company based in Norway specializing in nanoscale wireless low-power technology for ultra-high-resolution impulse radar. Prior to Novelda, he was chief marketing officer of Energy Micro AS until it was acquired by Silicon Laboratories in July 2013. Mr. Bogen also held various management positions during his 17 years at Atmel Corporation, including managing director of the AVR business unit as well as vice president of corporate marketing and chief marketing officer. He began his career at Nordic VLSI in Norway. Mr. Bogen holds an M.S. in Electrical Engineering and Computer Science from Norwegian University of Science and Technology and a B.S. in Electrical and Computing Engineering from Trondheim University College. Mr. Bogen's combination of independence and his experience, including past experience in the semiconductor industry, qualifies him to serve as a member of our Board of Directors.

        Harvey B. Cash has served as a director of Silicon Laboratories since June 1997. Mr. Cash has served as general partner of InterWest Partners, a venture capital firm, since 1986. Mr. Cash currently serves on the Board of Directors of the following public companies: Ciena Corporation, a designer and manufacturer of dense wavelength division multiplexing systems for fiber optic networks; Argo Group International Holdings, Ltd., a specialty insurance company; and First Acceptance Corp, a provider of low-cost auto insurance. Mr. Cash holds a B.S. in Electrical Engineering from Texas A&M University and an M.B.A. from Western Michigan University. Mr. Cash's independence and experience as a director of various public companies, as well as his prior operational experience as an executive, qualifies him to serve as a member of our Board of Directors.

        R. Ted Enloe III has served as a director of Silicon Laboratories since April 2003. Mr. Enloe is currently the Managing General Partner of Balquita Partners, Ltd., a family investment firm. Mr. Enloe formerly served as Vice Chairman and member of the office of chief executive of Compaq Computer Corporation. He also served as President of Lomas Financial Corporation and Liberté Investors for more than 15 years. Mr. Enloe co-founded a number of other publicly held firms, including Capstead Mortgage Corp., Tyler Cabot Mortgage Securities Corp., and Seaman's Corp. Mr. Enloe currently serves on the Board of Directors of Leggett & Platt, Inc. and Live Nation, Inc. Mr. Enloe holds a B.S. in Engineering from Louisiana Polytechnic University and a J.D. from Southern Methodist University. Mr. Enloe's combination of independence, qualification as an audit committee financial expert and his experience, including past experience as an executive officer and current and past experience as a director of various public companies, qualifies him to serve as a member of our Board of Directors.

        Jack R. Lazar has served as a director of Silicon Laboratories since April 2013. Mr. Lazar is currently the Chief Financial Officer of GoPro, a leading provider of wearable and mountable camera products. From January 2013 to January 2014, he was an independent business and financial consultant. Mr. Lazar previously served as Senior Vice President, Corporate Development and General Manager of Qualcomm Atheros from May 2011 to January 2013. From September 2003 until the acquisition of Atheros by Qualcomm in May 2011, Mr. Lazar served as Chief Financial Officer and Secretary of Atheros Communications, Inc., a publicly traded provider of communications semiconductor solutions. Mr. Lazar also served Atheros as Vice President of Corporate Development from February 2008 and Senior Vice President of Corporate Development from November 2010 until the acquisition by Qualcomm. From May 2002 to September 2003, Mr. Lazar was an independent business and financial consultant. From August 1999 to May 2002, Mr. Lazar served in a variety of positions at NetRatings, Inc., a publicly traded Internet audience measurement and analysis company, most recently as Executive Vice President of Corporate Development, Chief Financial Officer and Secretary. Previously, Mr. Lazar held a variety of executive and management positions at Apptitude, Electronics

48

for Imaging and Price Waterhouse. Mr. Lazar currently serves on the Board of Directors of TubeMogul, a private brand focused video marketing company. Mr. Lazar is a Certified Public Accountant and holds a B.S. in Commerce with an emphasis in Accounting from Santa Clara University. Mr. Lazar's combination of independence and his experience, including past experience as an executive officer, qualifies him to serve as a member of our Board of Directors.

        Laurence G. Walker has served as a director of Silicon Laboratories since June 2003. Previously, Mr. Walker co-founded and served as Chief Executive Officer of C-Port Corporation, a pioneer in the network processor industry, which was acquired by Motorola in 2000. Following the acquisition, Mr. Walker served as Vice President of Strategy for Motorola's Network and Computing Systems Group and then as Vice President and General Manager of the Network and Computing Systems Group until 2002. From August 1996 to May 1997, Mr. Walker served as Chief Executive Officer of CertCo, a digital certification supplier. Mr. Walker served as Vice President and General Manager, Network Products Business Unit, of Digital Equipment Corporation, a computer hardware company, from January 1994 to July 1996. From 1998 to 2007, he served on the Board of Directors of McData Corporation, a provider of storage networking solutions. From 1981 to 1994, he held a variety of other management positions at Digital Equipment Corporation. Mr. Walker holds a B.S. in Electrical Engineering from Princeton University and an M.S. and Ph.D. in Electrical Engineering from the Massachusetts Institute of Technology. Mr. Walker's combination of independence and his experience, including past experience as an executive officer, qualifies him to serve as a member of our Board of Directors.

        William P. Wood has served as a director of Silicon Laboratories since March 1997 and as Lead Director since December 2005. Since 1996, Mr. Wood has also served as general partner of various funds associated with Silverton Partners, a venture capital firm. From 1984 to 2003, Mr. Wood was a general partner, and for certain funds created since 1996, a special limited partner, of various funds associated with Austin Ventures, a venture capital firm. Mr. Wood holds a B.A. in History from Brown University and an M.B.A. from Harvard University. Mr. Wood's combination of independence and his experience, including past experience as an investor in numerous semiconductor and technology companies, qualifies him to serve as a member of our Board of Directors.

        The remaining information required by this Item is incorporated by reference to the Proxy Statement under the sections captioned "Proposal One: Election of Directors," "Executive Compensation," "Section 16(a) Beneficial Ownership Reporting Compliance" and "Code of Ethics."

Item 11.    Executive Compensation

        The information under the caption "Executive Compensation" and "Proposal One: Election of Directors" appearing in the Proxy Statement, is incorporated herein by reference.

Item 12.    Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

        The information under the caption "Ownership of Securities" and "Equity Compensation Plan Information" appearing in the Proxy Statement is incorporated herein by reference.

Item 13.    Certain Relationships and Related Transactions, and Director Independence

        The information under the caption "Certain Relationships and Related Transactions, and Director Independence" appearing in the Proxy Statement is incorporated herein by reference.

Item 14.    Principal Accounting Fees and Services

        The information under the caption "Proposal Two: Ratification of Appointment of Independent Registered Public Accounting Firm" appearing in the Proxy Statement is incorporated herein by reference.

49

Part IV

Item 15.    Exhibits and Financial Statement Schedules

(a)

1.    Financial Statements

Index

	Page
Report of independent registered public accounting firm	F-1
Report of independent registered public accounting firm	F-2
Consolidated Balance Sheets at December 28, 2013 and December 29, 2012	F-3
Consolidated Statements of Income for the fiscal years ended December 28, 2013, December 29, 2012 and December 31, 2011	F-4
Consolidated Statements of Comprehensive Income for the fiscal years ended December 28, 2013, December 29, 2012 and December 31, 2011	F-5
Consolidated Statements of Changes in Stockholders' Equity for the fiscal years ended December 28, 2013, December 29, 2012 and December 31, 2011	F-6
Consolidated Statements of Cash Flows for the fiscal years ended December 28, 2013, December 29, 2012 and December 31, 2011	F-7
Notes to Consolidated Financial Statements	F-8

2.

Schedules

        Schedule II—Valuation and Qualifying Accounts

        All other schedules have been omitted since the information required by the schedule is not applicable, or is not present in amounts sufficient to require submission of the schedule, or because the information required is included in the Consolidated Financial Statements and notes thereto.

3.

Exhibits

        The exhibits listed on the accompanying index to exhibits immediately following the Consolidated Financial Statements are filed as part of, or hereby incorporated by reference into, this Form 10-K.

50

(b)

Exhibits

Exhibit Number
	2.1	*	Share Purchase Agreement, dated June 6, 2013, by and between Silicon Laboratories International Pte. Ltd. and Energy AS and Silicon Laboratories Inc. (filed as Exhibit 2.1 to the Form 8-K filed on June 7, 2013).
	3.1	*	Form of Fourth Amended and Restated Certificate of Incorporation of Silicon Laboratories Inc. (filed as Exhibit 3.1 to the Registrant's Registration Statement on Form S-1 (Securities and Exchange Commission File No. 333-94853) (the "IPO Registration Statement")).
	3.2	*	Second Amended and Restated Bylaws of Silicon Laboratories Inc. (filed as Exhibit 3.2 to the Registrant's Annual Report on Form 10-K for the fiscal year ended January 3, 2004).
	4.1	*	Specimen certificate for shares of common stock (filed as Exhibit 4.1 to the IPO Registration Statement).
	10.1	*	Form of Indemnification Agreement between Silicon Laboratories Inc. and each of its directors and executive officers (filed as Exhibit 10.1 to the IPO Registration Statement).
	10.2	*+	Silicon Laboratories Inc. 2000 Stock Incentive Plan (filed as Exhibit 99.1 to the Registrant's Registration Statement on Form S-8 (Securities and Exchange Commission File No. 333-60794) filed on May 11, 2001).
	10.3	*+	Form of Stock Option Agreement and Notice of Grant of Stock Option under Registrant's 2000 Stock Incentive Plan (filed as Exhibit 10.3 to the Registrant's Annual Report on Form 10-K for the year ended January 1, 2005).
	10.4	*+	Form of Addendum to Stock Option Agreement under Registrant's 2000 Stock Incentive Plan (filed as Exhibit 10.4 to the Registrant's Annual Report on Form 10-K for the year ended January 1, 2005).
	10.5	*+	Form of Stock Issuance Agreement under Registrant's 2000 Stock Incentive Plan (filed as Exhibit 10.5 to the Registrant's Annual Report on Form 10-K for the year ended January 1, 2005).
	10.6	*+	Form of Addendum to Stock Issuance Agreement under Registrant's 2000 Stock Incentive Plan (filed as Exhibit 10.6 to the Registrant's Annual Report on Form 10-K for the year ended January 1, 2005).
	10.7	*	Sale and Purchase Agreement dated February 8, 2007 by and between NXP B.V., NXP Semiconductors France SAS, Silicon Laboratories Inc. and Silicon Laboratories International Pte. Ltd. (filed as Exhibit 10.1 to the Registrant's Current Report on Form 8-K filed on February 9, 2007).
	10.8	*	Intellectual Property License Agreement dated as of March 23, 2007, by and among Silicon Laboratories Inc., Silicon Laboratories International Pte. Ltd., NXP B.V. and NXP Semiconductors France SAS (filed as Exhibit 10.1 to the Registrant's Current Report on Form 8-K filed on March 29, 2007).
	10.9	*+	Silicon Laboratories Inc. 2009 Stock Incentive Plan (filed as Exhibit 10.1 to the Registrant's Current Report on Form 8-K filed on April 27, 2009).
	10.10	*+	Silicon Laboratories Inc. 2009 Employee Stock Purchase Plan (filed as Exhibit 10.2 to the Registrant's Current Report on Form 8-K filed on April 27, 2009).

51

Exhibit Number
	10.11	*+	Form of Restricted Stock Units Grant Notice and Restricted Stock Units Award Agreement under Registrant's 2009 Stock Incentive Plan (filed as Exhibit 10.3 to the Registrant's Current Report on Form 8-K filed on April 27, 2009).
	10.12	*+	Form of Stock Option Grant Notice and Stock Option Award Agreement under Registrant's 2009 Stock Incentive Plan (filed as Exhibit 10.4 to the Registrant's Current Report on Form 8-K filed on April 27, 2009).
	10.13	*	Credit Agreement, dated July 31, 2012, by and among Silicon Laboratories Inc., the subsidiaries of the borrower identified therein, Bank of America, N.A., Wells Fargo Bank, National Association, and Regions Bank (filed as Exhibit 10.1 to the Form 8-K filed August 1, 2012).
	10.14	*	Security and Pledge Agreement, dated July 31, 2012, by and among Silicon Laboratories Inc., with the other parties identified as "Obligors" (as defined therein) and such other parties that may become Obligors thereunder after the date thereof, and Bank of America, N.A (filed as Exhibit 10.2 to the Form 8-K filed August 1, 2012).
	10.15	*	Silicon Laboratories Inc. 2014 Bonus Plan (filed as Exhibit 10.1 to the Registrant's Current Report on Form 8-K filed on January 24, 2014).
	21		Subsidiaries of the Registrant.
	23.1		Consent of Independent Registered Public Accounting Firm.
	24		Power of Attorney (included on signature page to this Form 10-K).
	31.1		Certification of the Principal Executive Officer, as required by Section 302 of the Sarbanes-Oxley Act of 2002.
	31.2		Certification of the Principal Financial Officer, as required by Section 302 of the Sarbanes-Oxley Act of 2002.
	32.1		Certification as required by Section 906 of the Sarbanes-Oxley Act of 2002.
	101.INS		XBRL Instance Document
	101.SCH		XBRL Taxonomy Extension Schema Document
	101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document
	101.LAB		XBRL Taxonomy Extension Label Linkbase Document
	101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document
	101.DEF		XBRL Taxonomy Extension Definition Linkbase Document

*

Incorporated herein by reference to the indicated filing.

+

Management contract or compensatory plan or arrangement

52

SCHEDULE II

SILICON LABORATORIES INC.
VALUATION AND QUALIFYING ACCOUNTS

			Additions
Valuation Allowance for Deferred Tax Assets	Balance at Beginning of Period		Charged to Expenses		Charged to Goodwill		Deductions (1)			Balance at End of Period
					(in thousands)
Year ended December 28, 2013	$	2,114	$	2,335	$	—	$	(674	)	$	3,775
Year ended December 29, 2012	$	—	$	—	$	2,114	$	—		$	2,114

(1)

Represents adjustments to deferred tax assets

53

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, in Austin, Texas, on January 31, 2014.

SILICON LABORATORIES INC.
By:	/s/ G. TYSON TUTTLE G. Tyson Tuttle Chief Executive Officer

POWER OF ATTORNEY

        KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints G. Tyson Tuttle and John C. Hollister and each of them, acting individually, as his or her attorney-in-fact, each with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments to this annual report on Form 10-K and other documents in connection herewith and therewith, and to file the same, with all exhibits thereto, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection herewith and therewith and about the premises, as fully to all intents and purposes as he or she 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 substitute or 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 below by the following persons on behalf of the registrant and in the capacities and on the dates indicated:

Name	Title	Date
/s/ NAVDEEP S. SOOCH Navdeep S. Sooch	Chairman of the Board	January 31, 2014
/s/ G. TYSON TUTTLE G. Tyson Tuttle	Chief Executive Officer and Director (Principal Executive Officer)	January 31, 2014
/s/ WILLIAM G. BOCK William G. Bock	President and Director	January 31, 2014
/s/ JOHN C. HOLLISTER John C. Hollister	Senior Vice President and Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)	January 31, 2014

54

Name	Title	Date
/s/ DAVID R. WELLAND David R. Welland	Vice President and Director	January 31, 2014
/s/ ALF-EGIL BOGEN Alf-Egil Bogen	Director	January 31, 2014
/s/ HARVEY B. CASH Harvey B. Cash	Director	January 31, 2014
/s/ ROBERT TED ENLOE, III Robert Ted Enloe, III	Director	January 31, 2014
/s/ JACK R. LAZAR Jack R. Lazar	Director	January 31, 2014
/s/ LAURENCE G. WALKER Laurence G. Walker	Director	January 31, 2014
/s/ WILLIAM P. WOOD William P. Wood	Director	January 31, 2014

55

Report of Independent Registered Public Accounting Firm

The Board of Directors and Stockholders of Silicon Laboratories Inc.

        We have audited Silicon Laboratories Inc.'s (the Company) internal control over financial reporting as of December 28, 2013, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (1992 framework) (the COSO criteria). Silicon Laboratories 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, Silicon Laboratories Inc. maintained, in all material respects, effective internal control over financial reporting as of December 28, 2013, 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 Silicon Laboratories Inc. as of December 28, 2013 and December 29, 2012, and the related consolidated statements of income, comprehensive income, changes in stockholders' equity and cash flows for each of the three fiscal years in the period ended December 28, 2013 of Silicon Laboratories Inc. and our report dated January 31, 2014 expressed an unqualified opinion thereon.

/s/ ERNST & YOUNG LLP

Austin, Texas
January 31, 2014

F-1

Report of Independent Registered Public Accounting Firm

The Board of Directors and Stockholders of Silicon Laboratories Inc.

        We have audited the accompanying consolidated balance sheets of Silicon Laboratories Inc. (the Company) as of December 28, 2013 and December 29, 2012, and the related consolidated statements of income, comprehensive income, changes in stockholders' equity and cash flows for each of the three fiscal years in the period ended December 28, 2013. Our audits 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 Silicon Laboratories Inc. at December 28, 2013 and December 29, 2012, and the consolidated results of its operations and its cash flows for each of the three fiscal years in the period ended December 28, 2013, 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), Silicon Laboratories Inc.'s internal control over financial reporting as of December 28, 2013, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (1992 framework) and our report dated January 31, 2014 expressed an unqualified opinion thereon.

/s/ ERNST & YOUNG LLP

Austin, Texas
January 31, 2014

F-2

Silicon Laboratories Inc.
Consolidated Balance Sheets
(In thousands, except per share data)

	December 28, 2013			December 29, 2012
Assets
Current assets:
Cash and cash equivalents	$	95,800		$	105,426
Short-term investments		179,593			176,565
Accounts receivable, net of allowances for doubtful accounts of $797 at December 28, 2013 and $670 at December 29, 2012		72,124			78,023
Inventories		45,271			49,579
Deferred income taxes		18,878			16,652
Prepaid expenses and other current assets		47,651			41,437
Total current assets		459,317			467,682
Long-term investments		10,632			11,369
Property and equipment, net		132,445			135,271
Goodwill		228,781			130,265
Other intangible assets, net		131,593			90,750
Other assets, net		28,382			36,629
Total assets	$	991,150		$	871,966
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$	22,126		$	29,622
Current portion of long-term debt		7,500			5,000
Accrued expenses		45,975			40,410
Deferred income on shipments to distributors		30,853			30,259
Income taxes		2,693			1,087
Total current liabilities		109,147			106,378
Long-term debt		87,500			95,000
Other non-current liabilities		55,941			20,615
Total liabilities		252,588			221,993
Commitments and contingencies
Stockholders' equity:
Preferred stock—$0.0001 par value; 10,000 shares authorized; no shares issued and outstanding		—			—
Common stock—$0.0001 par value; 250,000 shares authorized; 42,779 and 41,879 shares issued and outstanding at December 28, 2013 and December 29, 2012, respectively		4			4
Additional paid-in capital		48,630			10,122
Retained earnings		690,612			640,793
Accumulated other comprehensive loss		(684	)		(946	)
Total stockholders' equity		738,562			649,973
Total liabilities and stockholders' equity	$	991,150		$	871,966

The accompanying notes are an integral part of these Consolidated Financial Statements.

F-3

Silicon Laboratories Inc.
Consolidated Statements of Income
(In thousands, except per share data)

	Year Ended
	December 28, 2013			December 29, 2012			December 31, 2011
Revenues	$	580,087		$	563,294		$	491,625
Cost of revenues		227,183			225,277			193,179
Gross margin		352,904			338,017			298,446
Operating expenses:
Research and development		157,799			137,952			135,953
Selling, general and administrative		130,795			114,390			112,419
Operating expenses		288,594			252,342			248,372
Operating income		64,310			85,675			50,074
Other income (expense):
Interest income		853			1,338			1,859
Interest expense		(3,293	)		(1,149	)		(37	)
Other income (expense), net		157			484			444
Income before income taxes		62,027			86,348			52,340
Provision for income taxes		12,208			22,800			16,868
Net income	$	49,819		$	63,548		$	35,472
Earnings per share:
Basic	$	1.17		$	1.51		$	0.82
Diluted	$	1.14		$	1.47		$	0.79
Weighted-average common shares outstanding:
Basic		42,715			42,136			43,421
Diluted		43,537			43,106			44,832

The accompanying notes are an integral part of these Consolidated Financial Statements.

F-4

Silicon Laboratories Inc.
Consolidated Statements of Comprehensive Income
(In thousands)

	Year Ended
	December 28, 2013			December 29, 2012			December 31, 2011
Net income	$	49,819		$	63,548		$	35,472
Other comprehensive income, before tax:
Net changes to available-for-sale securities:
Unrealized gains (losses) arising during the period		(535	)		1,000			4
Reclassification for gains included in net income		(232	)		—			—
Net changes to cash flow hedges:
Unrealized gains (losses) arising during the period		611			(956	)		(424	)
Reclassification for losses included in net income		560			2,295			2,237
Other comprehensive income, before tax		404			2,339			1,817
Provision for income taxes		142			818			636
Other comprehensive income		262			1,521			1,181
Comprehensive income	$	50,081		$	65,069		$	36,653

The accompanying notes are an integral part of these Consolidated Financial Statements.

F-5

Silicon Laboratories Inc.
Consolidated Statements of Changes in Stockholders' Equity
(In thousands)

	Common Stock
												Accumulated Other Comprehensive Loss
	Number of Shares			Par Value		Additional Paid-In Capital			Retained Earnings						Total Stockholders' Equity
Balance as of January 1, 2011		43,933		$	4	$	49,947		$	579,127		$	(3,648	)	$	625,430
Net income		—			—		—			35,472			—			35,472
Other comprehensive income		—			—		—			—			1,181			1,181
Stock issuances under employee plans, net of shares withheld for taxes		1,290			—		7,660			—			—			7,660
Income tax benefit (detriment) from employee stock-based awards		—			—		2,707			—			—			2,707
Repurchases of common stock		(3,155	)		—		(82,117	)		(27,946	)		—			(110,063	)
Stock-based compensation		—			—		36,552			—			—			36,552
Balance as of December 31, 2011		42,068			4		14,749			586,653			(2,467	)		598,939
Net income		—			—		—			63,548			—			63,548
Other comprehensive income		—			—		—			—			1,521			1,521
Stock issuances under employee plans, net of shares withheld for taxes		1,560			—		15,148			—			—			15,148
Income tax benefit (detriment) from employee stock-based awards		—			—		1,675			—			—			1,675
Repurchases of common stock		(1,749	)		—		(52,611	)		(9,408	)		—			(62,019	)
Stock-based compensation		—			—		31,161			—			—			31,161
Balance as of December 29, 2012		41,879			4		10,122			640,793			(946	)		649,973
Net income		—			—		—			49,819			—			49,819
Other comprehensive income		—			—		—			—			262			262
Stock issuances under employee plans, net of shares withheld for taxes		1,057			—		15,301			—			—			15,301
Income tax benefit (detriment) from employee stock-based awards		—			—		(772	)		—			—			(772	)
Repurchases of common stock		(661	)		—		(26,022	)		—			—			(26,022	)
Stock-based compensation		—			—		30,753			—			—			30,753
Stock issued in business combination		504			—		19,248			—			—			19,248
Balance as of December 28, 2013		42,779		$	4	$	48,630		$	690,612		$	(684	)	$	738,562

The accompanying notes are an integral part of these Consolidated Financial Statements.

F-6

Silicon Laboratories Inc.
Consolidated Statements of Cash Flows
(In thousands)

	Year Ended
	December 28, 2013			December 29, 2012			December 31, 2011
Operating Activities
Net income	$	49,819		$	63,548		$	35,472
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation of property and equipment		13,491			13,621			13,570
Net gain on the purchase of property and equipment		—			(8,457	)		—
Amortization of other intangible assets and other assets		15,911			14,154			11,030
Impairment of long-lived assets		—			708			1,322
Stock-based compensation expense		30,800			31,176			36,115
Income tax benefit (detriment) from employee stock-based awards		(606	)		1,827			2,814
Excess income tax benefit from employee stock-based awards		(290	)		(1,294	)		(2,404	)
Deferred income taxes		3,319			4,725			(445	)
Changes in operating assets and liabilities:
Accounts receivable		8,972			(20,743	)		(8,562	)
Inventories		5,588			(13,056	)		5,334
Prepaid expenses and other assets		(2,514	)		10,629			(5,948	)
Accounts payable		(3,979	)		7,217			(2,176	)
Accrued expenses		(3,169	)		(3,812	)		(1,320	)
Deferred income on shipments to distributors		(2,381	)		4,623			(1,915	)
Income taxes		5,189			(7,816	)		5,855
Net cash provided by operating activities		120,150			97,050			88,742
Investing Activities
Purchases of available-for-sale investments		(213,883	)		(192,450	)		(178,676	)
Proceeds from sales and maturities of available-for-sale investments		210,824			235,517			193,474
Purchases of property and equipment		(10,472	)		(102,043	)		(8,690	)
Purchases of other assets		(5,939	)		(8,508	)		(4,018	)
Acquisitions of businesses, net of cash acquired		(86,441	)		(71,852	)		(27,262	)
Net cash used in investing activities		(105,911	)		(139,336	)		(25,172	)
Financing Activities
Proceeds from issuance of common stock, net of shares withheld for taxes		15,301			15,148			7,660
Excess income tax benefit from employee stock-based awards		290			1,294			2,404
Repurchases of common stock		(26,022	)		(62,019	)		(110,063	)
Proceeds from issuance of long-term debt, net		—			98,325			—
Payments on debt		(13,434	)		—			(7,174	)
Net cash provided by (used in) financing activities		(23,865	)		52,748			(107,173	)
Increase (decrease) in cash and cash equivalents		(9,626	)		10,462			(43,603	)
Cash and cash equivalents at beginning of period		105,426			94,964			138,567
Cash and cash equivalents at end of period	$	95,800		$	105,426		$	94,964
Supplemental Disclosure of Cash Flow Information:
Interest paid	$	2,925		$	677		$	35
Income taxes paid	$	3,838		$	23,564		$	8,241
Supplemental Disclosure of Non-Cash Activity:
Stock issued in business combination	$	19,248		$	—		$	—

The accompanying notes are an integral part of these Consolidated Financial Statements.

F-7

Silicon Laboratories Inc.
Notes to Consolidated Financial Statements
December 28, 2013

1. Description of Business

        Silicon Laboratories Inc. (the "Company"), a Delaware corporation, develops and markets mixed-signal analog intensive integrated circuits (ICs) for a broad range of applications for global markets. Within the semiconductor industry, the Company is known as a "fabless" company meaning that the ICs are manufactured by third-party foundry semiconductor companies.

2. Significant Accounting Policies

Basis of Presentation and Principles of Consolidation

        The Company prepares financial statements on a 52- or 53-week fiscal year that ends on the Saturday closest to December 31. Fiscal 2013, 2012 and 2011 were 52-week years and ended on December 28, 2013, December 29, 2012 and December 31, 2011, respectively. The accompanying Consolidated Financial Statements include the accounts of the Company and its wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation.

Foreign Currency Transactions

        The Company's foreign subsidiaries are considered to be extensions of the U.S. Company. The functional currency of the foreign subsidiaries is the U.S. dollar. Accordingly, gains and losses resulting from remeasuring transactions denominated in currencies other than U.S. dollars are included in other income (expense), net in the Consolidated Statements of Income.

Use of Estimates

        The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Among the significant estimates affecting the financial statements are those related to inventories, stock-based compensation, investments in auction-rate securities, acquired intangible assets, goodwill, long-lived assets and income taxes. Actual results could differ from those estimates, and such differences could be material to the financial statements.

Reclassifications

        Certain reclassifications have been made to prior year financial statements to conform to current year presentation.

Fair Value of Financial Instruments

        The fair values of the Company's financial instruments are recorded using a hierarchal disclosure framework based upon the level of subjectivity of the inputs used in measuring assets and liabilities. The three levels are described below:

Level 1—Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date.

F-8

Silicon Laboratories Inc.
Notes to Consolidated Financial Statements
December 28, 2013 (Continued)

2. Significant Accounting Policies (Continued)

Level 2—Inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.

Level 3—Inputs are unobservable for the asset or liability and are developed based on the best information available in the circumstances, which might include the Company's own data.

Cash and Cash Equivalents

        Cash and cash equivalents consist of cash deposits, money market funds and investments in debt securities with original maturities of ninety days or less when purchased.

Investments

        The Company's investments typically have original maturities greater than ninety days as of the date of purchase and are classified as either available-for-sale or trading securities. Investments in available-for-sale securities are reported at fair value, with unrealized gains and losses, net of tax, recorded as a component of accumulated other comprehensive loss in the Consolidated Balance Sheet. Investments in trading securities are reported at fair value, with both realized and unrealized gains and losses recorded in other income (expense), net in the Consolidated Statement of Income. Investments in which the Company has the ability and intent, if necessary, to liquidate in order to support its current operations (including those with contractual maturities greater than one year from the date of purchase) are classified as short-term.

        The Company reviews its available-for-sale investments as of the end of each reporting period for other-than-temporary declines in fair value based on the specific identification method. The Company considers various factors in determining whether an impairment is other-than-temporary, including the severity and duration of the impairment, changes in underlying credit ratings, forecasted recovery, its intent to sell or the likelihood that it would be required to sell the investment before its anticipated recovery in market value and the probability that the scheduled cash payments will continue to be made. When the Company concludes that an other-than-temporary impairment has occurred, the Company assesses whether it intends to sell the security or if it is more likely than not that it will be required to sell the security before recovery. If either of these two conditions is met, the Company recognizes a charge in earnings equal to the entire difference between the security's amortized cost basis and its fair value. If the Company does not intend to sell a security and it is not more likely than not that it will be required to sell the security before recovery, the unrealized loss is separated into an amount representing the credit loss, which is recognized in earnings, and the amount related to all other factors, which is recorded in accumulated other comprehensive loss.

Derivative Financial Instruments

        The Company uses derivative financial instruments to manage certain exposures to the variability of interest rates. The Company's objective is to offset increases and decreases in expenses resulting from changes in interest rates with gains and losses on the derivative contracts, thereby reducing volatility of earnings. The Company does not use derivative contracts for speculative purposes. The effective portion of the gain or loss on interest rate swaps is recorded in accumulated other comprehensive loss as a separate component of stockholders' equity and is subsequently recognized in

F-9

Silicon Laboratories Inc.
Notes to Consolidated Financial Statements
December 28, 2013 (Continued)

2. Significant Accounting Policies (Continued)

earnings when the hedged exposure affects earnings. Cash flows from derivatives are classified according to the nature of the cash receipt or payment in the Consolidated Statement of Cash Flows.

Inventories

        Inventories are stated at the lower of cost, determined using the first-in, first-out method, or market. The Company writes down the carrying value of inventory to net realizable value for estimated obsolescence or unmarketable inventory based upon assumptions about the age of inventory, future demand and market conditions. Inventory impairment charges establish a new cost basis for inventory and charges are not subsequently reversed to income even if circumstances later suggest that increased carrying amounts are recoverable.

Property and Equipment

        Property and equipment are stated at cost, net of accumulated depreciation. Depreciation is computed using the straight-line method over the useful lives of the assets ranging from three to seven years. Leasehold improvements are depreciated over the contractual lease period or their useful life, whichever is shorter.

        In fiscal 2012, the Company purchased the facilities it had previously leased for its headquarters in Austin, Texas. The buildings are located on land which is leased through 2099 from a third party. The rents for these ground leases were prepaid for the term of the leases by the previous lessee. The buildings and leasehold interest in ground leases are being depreciated on a straight-line basis over their estimated useful lives of 40 years and 86 years, respectively.

Business Combinations

        The Company records business combinations using the acquisition method of accounting and accordingly, allocates the fair value of purchase consideration to the assets acquired and liabilities assumed based on their fair values at the acquisition date. The excess of the fair value of purchase consideration over the fair value of the assets acquired and liabilities assumed is recorded as goodwill. The results of operations of the businesses acquired are included in the Company's consolidated results of operations beginning on the date of the acquisition.

Long-Lived Assets

        Purchased intangible assets are stated at cost, net of accumulated amortization, and are amortized using the straight-line method over their estimated useful lives, ranging from six to twelve years. Fair values are determined primarily using the income approach, in which the Company projects future expected cash flows and applies an appropriate discount rate.

        Long-lived assets "held and used" by the Company are reviewed for impairment whenever events or changes in circumstances indicate that their net book value may not be recoverable. When such factors and circumstances exist, the Company compares the projected undiscounted future cash flows associated with the related asset or group of assets over their estimated useful lives, against their respective carrying amounts. Impairment, if any, is based on the excess of the carrying amount over the fair value of those assets and is recorded in the period in which the determination was made.

F-10

Silicon Laboratories Inc.
Notes to Consolidated Financial Statements
December 28, 2013 (Continued)

2. Significant Accounting Policies (Continued)

        The carrying value of goodwill is reviewed at least annually by the Company for possible impairment. The goodwill impairment test is a two-step process. The first step of the impairment analysis compares the fair value of the reporting unit to the net book value of the reporting unit. In determining fair value, several valuation methodologies are allowed, although quoted market prices are the best evidence of fair value. If the results of the first step demonstrate that the net book value is greater than the fair value, the Company must proceed to step two of the analysis. Step two of the analysis compares the implied fair value of goodwill to its carrying amount. If the carrying amount of goodwill exceeds its implied fair value, an impairment loss is recognized equal to that excess. The Company tests goodwill for impairment annually as of the first day of its fourth fiscal quarter and in interim periods if events occur that would indicate that the carrying value of goodwill may be impaired.

Revenue Recognition

        Revenues are generated almost exclusively by sales of the Company's ICs. The Company recognizes revenue when all of the following criteria are met: 1) there is persuasive evidence that an arrangement exists, 2) delivery of goods has occurred, 3) the sales price is fixed or determinable, and 4) collectibility is reasonably assured. Generally, revenue from product sales to direct customers and contract manufacturers is recognized upon shipment.

        A portion of the Company's sales are made to distributors under agreements allowing certain rights of return and price protection related to the final selling price to the end customers. Accordingly, the Company defers revenue and cost of revenue on such sales until the distributors sell the product to the end customers. The net balance of deferred revenue less deferred cost of revenue associated with inventory shipped to a distributor but not yet sold to an end customer is recorded in the deferred income on shipments to distributors liability on the Consolidated Balance Sheet. Such net deferred income balance reflects the Company's estimate of the impact of rights of return and price protection.

Shipping and Handling

        Shipping and handling costs are classified as a component of cost of revenues in the Consolidated Statements of Income.

Stock-Based Compensation

        The Company has stock-based compensation plans, which are more fully described in Note 13, Stock-Based Compensation. The Company accounts for those plans using a fair-value method and recognizes the expense in its Consolidated Statement of Income.

Research and Development

        Research and development costs are expensed as incurred. Research and development expense consists primarily of personnel-related expenses, including stock-based compensation, as well as new product masks, external consulting and services costs, equipment tooling, equipment depreciation, amortization of intangible assets, and an allocated portion of our occupancy costs. Assets purchased to support the Company's ongoing research and development activities are capitalized when related to products which have achieved technological feasibility or have an alternative future use, and are amortized over their estimated useful lives.

F-11

Silicon Laboratories Inc.
Notes to Consolidated Financial Statements
December 28, 2013 (Continued)

2. Significant Accounting Policies (Continued)

Advertising

        Advertising costs are expensed as incurred. Advertising expenses were $2.0 million, $1.7 million and $1.6 million in fiscal 2013, 2012 and 2011, respectively.

Income Taxes

        The Company accounts for income taxes using the asset and liability method whereby deferred tax asset and liability account balances are determined based on differences between financial reporting and the tax bases of assets and liabilities and are measured using the enacted tax laws and related rates that will be in effect when the differences are expected to reverse. These differences result in deferred tax assets and liabilities, which are included in the Company's Consolidated Balance Sheet. The Company then assesses the likelihood that the deferred tax assets will be realized. A valuation allowance is established against deferred tax assets to the extent the Company believes that it is more likely than not that the deferred tax assets will not be realized, taking into consideration the level of historical taxable income and projections for future taxable income over the periods in which the temporary differences are deductible.

        Uncertain tax positions must meet a more-likely-than-not threshold to be recognized in the financial statements and the tax benefits recognized are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon final settlement. See Note 17, Income Taxes, for additional information.

Recent Accounting Pronouncements

        In February 2013, the Financial Accounting Standards Board (FASB) issued FASB Accounting Standards Update (ASU) No. 2013-02, Comprehensive Income (Topic 220)—Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income. ASU 2013-02 requires an entity to provide information about the amounts reclassified out of accumulated other comprehensive income by component. In addition, an entity is required to present, either on the face of the financial statements or in the notes, significant amounts reclassified out of accumulated other comprehensive income by the respective line items of net income, but only if the amount reclassified is required under U.S. GAAP to be reclassified to net income in its entirety in the same reporting period. For amounts that are not required to be reclassified in their entirety to net income, an entity is required to cross-reference to other disclosures that provide additional details about those amounts. ASU 2013-02 is effective prospectively for reporting periods beginning after December 15, 2012. The adoption of this ASU did not have an impact on the Company's financial statements, but did amend the disclosures for accumulated other comprehensive loss.

F-12

Silicon Laboratories Inc.
Notes to Consolidated Financial Statements
December 28, 2013 (Continued)

3. Earnings Per Share

        The following table sets forth the computation of basic and diluted earnings per share (in thousands, except per share data):

	Year Ended
	December 28, 2013		December 29, 2012		December 31, 2011
Net income	$	49,819	$	63,548	$	35,472
Shares used in computing basic earnings per share		42,715		42,136		43,421
Effect of dilutive securities:
Stock options and other stock-based awards		822		970		1,411
Shares used in computing diluted earnings per share		43,537		43,106		44,832
Earnings per share:
Basic	$	1.17	$	1.51	$	0.82
Diluted	$	1.14	$	1.47	$	0.79

        For fiscal years ended December 28, 2013, December 29, 2012 and December 31, 2011, approximately 0.4 million, 0.5 million and 0.4 million shares, respectively, were not included in the diluted earnings per share calculation since the shares were anti-dilutive.

4. Cash, Cash Equivalents and Investments

        The Company's cash equivalents and short-term investments as of December 28, 2013 consisted of municipal bonds, money market funds, variable-rate demand notes, corporate bonds, certificates of deposit, commercial paper and asset backed securities. The Company's long-term investments consisted of auction-rate securities. In fiscal 2008, auctions for many of the Company's auction-rate securities failed because sell orders exceeded buy orders. As of December 28, 2013, the Company held $12.4 million par value auction-rate securities, all of which have experienced failed auctions. The underlying assets of the securities consisted of student loans and municipal bonds, of which $10.4 million were guaranteed by the U.S. government and the remaining $2.0 million were privately insured. As of December 28, 2013, $6.0 million had credit ratings of AA, $2.0 million had a credit rating of A and $4.4 million of the auction-rate securities had credit ratings of BBB. These securities have contractual maturity dates ranging from 2033 to 2046 at December 28, 2013. The Company is receiving the underlying cash flows on all of its auction-rate securities. The principal amounts associated with failed auctions are not expected to be accessible until a successful auction occurs, the issuer redeems the securities, a buyer is found outside of the auction process or the underlying securities mature. The Company is unable to predict if these funds will become available before their maturity dates.

        The Company does not expect to need access to the capital represented by any of its auction-rate securities prior to their maturities. The Company does not intend to sell, and believes it is not more likely than not that it will be required to sell, its auction-rate securities before their anticipated recovery in market value or final settlement at the underlying par value. The Company believes that the credit ratings and credit support of the security issuers indicate that they have the ability to settle

F-13

Silicon Laboratories Inc.
Notes to Consolidated Financial Statements
December 28, 2013 (Continued)

4. Cash, Cash Equivalents and Investments (Continued)

the securities at par value. As such, the Company has determined that no other-than-temporary impairment losses existed as of December 28, 2013.

        The Company's cash, cash equivalents and investments consisted of the following (in thousands):

	December 28, 2013
	Cost		Gross Unrealized Losses			Gross Unrealized Gains		Fair Value
Cash and Cash Equivalents:
Cash on hand	$	45,544	$	—		$	—	$	45,544
Available-for-sale securities:
Money market funds		39,538		—			—		39,538
Certificates of deposit		7,768		—			—		7,768
Commercial paper		2,499		—			—		2,499
Municipal bonds		451		—			—		451
Total available-for-sale securities		50,256		—			—		50,256
Total cash and cash equivalents	$	95,800	$	—		$	—	$	95,800
Short-term Investments:
Available-for-sale securities:
Municipal bonds	$	119,289	$	(11	)	$	182	$	119,460
Variable-rate demand notes		38,025		—			—		38,025
Corporate bonds		17,788		(4	)		60		17,844
Commercial paper		3,748		—			—		3,748
Asset-backed securities		515		—			1		516
Total short-term investments	$	179,365	$	(15	)	$	243	$	179,593
Long-term Investments:
Available-for-sale securities:
Auction rate securities	$	12,425	$	(1,793	)	$	—	$	10,632
Total long-term investments	$	12,425	$	(1,793	)	$	—	$	10,632

F-14

Silicon Laboratories Inc.
Notes to Consolidated Financial Statements
December 28, 2013 (Continued)

4. Cash, Cash Equivalents and Investments (Continued)

	December 29, 2012
	Cost		Gross Unrealized Losses			Gross Unrealized Gains		Fair Value
Cash and Cash Equivalents:
Cash on hand	$	56,690	$	—		$	—	$	56,690
Available-for-sale securities:
U.S. Treasury bills		25,049		—			1		25,050
Money market funds		22,685		—			1		22,686
Municipal bonds		1,000		—			—		1,000
Total available-for-sale securities		48,734		—			2		48,736
Total cash and cash equivalents	$	105,424	$	—		$	2	$	105,426
Short-term Investments:
Available-for-sale securities:
Corporate bonds	$	59,089	$	(5	)	$	267	$	59,351
Municipal bonds		45,646		(7	)		50		45,689
Variable-rate demand notes		41,785		—			—		41,785
Asset-backed securities		15,058		—			11		15,069
U.S. government bonds		12,638		—			25		12,663
International government bonds		1,991		—			17		2,008
Total short-term investments	$	176,207	$	(12	)	$	370	$	176,565
Long-term Investments:
Available-for-sale securities:
Auction rate securities	$	12,525	$	(1,156	)	$	—	$	11,369
Total long-term investments	$	12,525	$	(1,156	)	$	—	$	11,369

        The available-for-sale investments that were in a continuous unrealized loss position, aggregated by length of time that individual securities have been in a continuous loss position, were as follows (in thousands):

	Less Than 12 Months					12 Months or Greater					Total
As of December 28, 2013	Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses
Municipal bonds	$	11,079	$	(11	)	$	—	$	—		$	11,079	$	(11	)
Auction rate securities		—		—			10,632		(1,793	)		10,632		(1,793	)
Corporate bonds		2,605		(4	)		—		—			2,605		(4	)
	$	13,684	$	(15	)	$	10,632	$	(1,793	)	$	24,316	$	(1,808	)

F-15

Silicon Laboratories Inc.
Notes to Consolidated Financial Statements
December 28, 2013 (Continued)

4. Cash, Cash Equivalents and Investments (Continued)

	Less Than 12 Months					12 Months or Greater					Total
As of December 29, 2012	Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses
Municipal bonds	$	17,152	$	(7	)	$	—	$	—		$	17,152	$	(7	)
Auction rate securities		—		—			11,369		(1,156	)		11,369		(1,156	)
Corporate bonds		9,543		(5	)		—		—			9,543		(5	)
	$	26,695	$	(12	)	$	11,369	$	(1,156	)	$	38,064	$	(1,168	)

        The gross unrealized losses as of December 28, 2013 and December 29, 2012 were due primarily to the illiquidity of the Company's auction-rate securities and, to a lesser extent, to changes in market interest rates.

        The following summarizes the contractual underlying maturities of the Company's available-for-sale investments at December 28, 2013 (in thousands):

	Cost		Fair Value
Due in one year or less	$	115,109	$	115,177
Due after one year through ten years		80,987		81,147
Due after ten years		45,950		44,157
	$	242,046	$	240,481

5. Derivative Financial Instruments

        The Company is exposed to interest rate fluctuations in the normal course of its business, including through its Credit Facilities. The interest payments on the facility are calculated using a variable-rate of interest. The Company has entered into an interest rate swap agreement with an original notional value of $100 million (equal to the full amount borrowed under the Term Loan Facility) and, effectively, converted the LIBOR portion of the variable-rate interest payments to fixed-rate interest payments through July 2017 (the maturity date of the Term Loan Facility). The Company's interest rate swap agreement is designated and qualifies as a cash flow hedge.

        The Company's previous swap agreement with a notional value of $50.1 million was terminated in fiscal 2012 in connection with the Company's purchase of its corporate headquarters facilities. See Note 9, Acquisitions, for additional information.

        The Company estimates the fair values of derivatives based on quoted prices and market observable data of similar instruments. If the Term Loan Facility or the interest rate swap agreement is terminated prior to maturity, the fair value of the interest rate swap recorded in accumulated other comprehensive loss may be recognized in the Consolidated Statement of Income based on an assessment of the agreements at the time of termination. The termination of the Company's swap agreement with a notional value of $50.1 million resulted in its remaining fair value of $0.9 million that was previously recorded in accumulated other comprehensive loss to be reclassified into earnings during fiscal 2012. The Company did not discontinue any other cash flow hedges in the periods presented.

F-16

Silicon Laboratories Inc.
Notes to Consolidated Financial Statements
December 28, 2013 (Continued)

5. Derivative Financial Instruments (Continued)

        The Company measures the effectiveness of its cash flow hedge by comparing the change in fair value of the hedged variable interest payments with the change in fair value of the interest rate swap. The Company recognizes ineffective portions of the hedge, as well as amounts not included in the assessment of effectiveness, in the Consolidated Statement of Income. As of December 28, 2013, no portion of the gains or losses from the Company's hedging instrument was excluded from the assessment of effectiveness. Hedge ineffectiveness was not material for any of the periods presented.

        The Company's derivative financial instrument consisted of the following (in thousands):

		Fair Value
	Balance Sheet Location	December 28, 2013		December 29, 2012
Interest rate swap	Other assets, net	$	513	$	—
	Other non-current liabilities		—		658

        The before-tax effect of derivative instruments in cash flow hedging relationships was as follows (in thousands):

	Gain (Loss) Recognized in OCI on Derivatives (Effective Portion) during the Year Ended								Location of Loss Reclassified into Income	Loss Reclassified from Accumulated OCI into Income (Effective Portion) during the Year Ended
	December 28, 2013		December 29, 2012			December 31, 2011				December 28, 2013			December 29, 2012			December 31, 2011
Interest rate swaps	$	611	$	(956	)	$	(424	)	Rent expense	$	—		$	(2,197	)	$	(2,237	)
									Interest expense		(560	)		(98	)		—

        The Company expects to reclassify $0.5 million of its interest rate swap losses included in accumulated other comprehensive loss as of December 28, 2013 into earnings in the next 12 months, which would be offset by lower interest payments.

F-17

Silicon Laboratories Inc.
Notes to Consolidated Financial Statements
December 28, 2013 (Continued)

6. Fair Value of Financial Instruments

        The following summarizes the valuation of the Company's financial instruments (in thousands). The tables do not include either cash on hand or assets and liabilities that are measured at historical cost or any basis other than fair value.

	Fair Value Measurements at December 28, 2013 Using
Description	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Assets:
Cash Equivalents:
Money market funds	$	39,538	$	—	$	—	$	39,538
Certificates of deposit		—		7,768		—		7,768
Commercial paper		—		2,499		—		2,499
Municipal bonds		—		451		—		451
Total cash equivalents	$	39,538	$	10,718	$	—	$	50,256
Short-term Investments:
Municipal bonds	$	—	$	119,460	$	—	$	119,460
Variable-rate demand notes		—		38,025		—		38,025
Corporate bonds		—		17,844		—		17,844
Commercial paper		—		3,748		—		3,748
Asset-backed securities		—		516		—		516
Total short-term investments	$	—	$	179,593	$	—	$	179,593
Long-term Investments:
Auction rate securities	$	—	$	—	$	10,632	$	10,632
Total long-term investments	$	—	$	—	$	10,632	$	10,632
Other assets, net:
Derivative instruments	$	—	$	513	$	—	$	513
Total	$	—	$	513	$	—	$	513
Total	$	39,538	$	190,824	$	10,632	$	240,994
Other non-current liabilities:
Contingent consideration	$	—	$	—	$	12,919	$	12,919
Total	$	—	$	—	$	12,919	$	12,919

F-18

Silicon Laboratories Inc.
Notes to Consolidated Financial Statements
December 28, 2013 (Continued)

6. Fair Value of Financial Instruments (Continued)

	Fair Value Measurements at December 29, 2012 Using
Description	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Assets:
Cash Equivalents:
U.S. Treasury bills	$	25,050	$	—	$	—	$	25,050
Money market funds		22,686		—		—		22,686
Municipal bonds		—		1,000		—		1,000
Total cash equivalents	$	47,736	$	1,000	$	—	$	48,736
Short-term Investments:
Corporate bonds	$	—	$	59,351	$	—	$	59,351
Municipal bonds		—		45,689		—		45,689
Variable-rate demand notes		—		41,785		—		41,785
Asset-backed securities		—		15,069		—		15,069
U.S. government bonds		12,663		—		—		12,663
International government bonds		—		2,008		—		2,008
Total short-term investments	$	12,663	$	163,902	$	—	$	176,565
Long-term Investments:
Auction rate securities	$	—	$	—	$	11,369	$	11,369
Total long-term investments	$	—	$	—	$	11,369	$	11,369
Total	$	60,399	$	164,902	$	11,369	$	236,670
Liabilities:
Derivative instruments	$	—	$	658	$	—	$	658
Contingent consideration		—		—		2,750		2,750
Total	$	—	$	658	$	2,750	$	3,408

        The Company's cash equivalents and short-term investments that are classified as Level 1 are valued using quoted prices and other relevant information generated by market transactions involving identical assets. Cash equivalents and short-term investments classified as Level 2 are valued using non-binding market consensus prices that are corroborated with observable market data; quoted market prices for similar instruments in active markets; or pricing models, such as a discounted cash flow model, with all significant inputs derived from or corroborated with observable market data. Investments classified as Level 3 are valued using a discounted cash flow model. The assumptions used in preparing the discounted cash flow model include estimates for interest rates, amount of cash flows, expected holding periods of the securities and a discount to reflect the Company's inability to liquidate the securities. The Company's derivative instruments are valued using a discounted cash flow model. The assumptions used in preparing the discounted cash flow model include quoted interest swap rates and market observable data of similar instruments.

        The Company's contingent consideration is valued using a Monte Carlo simulation model or a probability weighted discounted cash flow model. The assumptions used in preparing the Monte Carlo

F-19

Silicon Laboratories Inc.
Notes to Consolidated Financial Statements
December 28, 2013 (Continued)

6. Fair Value of Financial Instruments (Continued)

simulation model include estimates for revenue growth rates, revenue volatility, contractual terms and discount rates. The assumptions used in preparing the discounted cash flow model include estimates for outcomes if milestone goals are achieved, the probability of achieving each outcome and discount rates.

        The following summarizes quantitative information about Level 3 fair value measurements.

Auction rate securities

Fair Value at December 28, 2013 (000s)	Valuation Technique	Unobservable Input	Weighted Average
$10,632	Discounted cash flow	Estimated yield	1.11%
		Expected holding period	10 years
		Estimated discount rate	4.05%

        The Company has followed an established internal control procedure used in valuing auction rate securities. The procedure involves the analysis of valuation techniques and evaluation of unobservable inputs commonly used by market participants to price similar instruments, and which have been demonstrated to provide reasonable estimates of prices obtained in actual market transactions. Outputs from the valuation process are assessed against various market sources when they are available, including marketplace quotes, recent trades of similar illiquid securities, benchmark indices and independent pricing services. The technique and unobservable input parameters may be recalibrated periodically to achieve an appropriate estimation of the fair value of the securities.

        Significant changes in any of the unobservable inputs used in the fair value measurement of auction rate securities in isolation could result in a significantly lower or higher fair value measurement. An increase in expected yield would result in a higher fair value measurement, whereas an increase in expected holding period or estimated discount rate would result in a lower fair value measurement. Generally, a change in the assumptions used for expected holding period is accompanied by a directionally similar change in the assumptions used for estimated yield and discount rate.

Contingent consideration

Fair Value at December 28, 2013 (000s)	Valuation Technique	Unobservable Input	Range
$12,919	Monte Carlo simulation	Expected revenue growth rate	26.2% - 51.9%
		Expected revenue volatility	20.0%
		Expected term	1.0 - 5.0 years
		Estimated discount rate	0.1% - 1.6%

        The Company has followed an established internal control procedure used in valuing contingent consideration. The valuation of contingent consideration for the Energy Micro acquisition is based on a Monte Carlo simulation model. The fair value of this valuation is estimated on a quarterly basis through a collaborative effort by the Company's sales, marketing and finance departments.

F-20

Silicon Laboratories Inc.
Notes to Consolidated Financial Statements
December 28, 2013 (Continued)

6. Fair Value of Financial Instruments (Continued)

        Significant changes in any of the unobservable inputs used in the fair value measurement of contingent consideration in isolation could result in a significantly lower or higher fair value. A change in projected revenue growth rates would be accompanied by a directionally similar change in fair value. A change in discount rate would be accompanied by a directionally opposite change in fair value.

        The following summarizes the activity in Level 3 financial instruments for the years ended December 28, 2013 and December 29, 2012 (in thousands):

Assets

	Year Ended
Auction Rate Securities	December 28, 2013			December 29, 2012
Beginning balance	$	11,369		$	17,477
Settlements		(100	)		(6,700	)
Gain (loss) included in other comprehensive income		(637	)		592
Ending balance	$	10,632		$	11,369

Liabilities

	Year Ended
Contingent Consideration (1)	December 28, 2013			December 29, 2012
Beginning balance	$	2,750		$	876
Issues		13,964			4,004
Gain recognized in earnings (2)		(3,795	)		(2,130	)
Ending balance	$	12,919		$	2,750
Net gain for the period included in earnings attributable to contingent consideration held at the end of the period:	$	1,045		$	1,254

(1)

In connection with the acquisition of Energy Micro, Ember and ChipSensors, the Company recorded contingent consideration based upon the expected achievement of certain milestone goals. Changes to the fair value of contingent consideration due to changes in assumptions used in preparing the valuation model are recorded in selling, general and administrative expenses in the Consolidated Statements of Income.

(2)

The Company reduced the estimated fair value of contingent consideration because certain milestone goals were either not achieved or were expected to be achieved at a lower outcome.

Fair values of other financial instruments

        The Company's Term Loan Facility bears interest at LIBOR plus an applicable margin. The fair value of the Company's Term Loan Facility approximates its carrying values as of December 28, 2013 and December 29, 2012, based on the estimated margin observed for loans to companies under similar

F-21

Silicon Laboratories Inc.
Notes to Consolidated Financial Statements
December 28, 2013 (Continued)

6. Fair Value of Financial Instruments (Continued)

terms and credit profiles. The Company's other financial instruments, including cash, accounts receivable and accounts payable, are recorded at amounts that approximate their fair values due to their short maturities.

7. Balance Sheet Details

        The following tables show the details of selected Consolidated Balance Sheet items (in thousands):

Inventories

	December 28, 2013		December 29, 2012
Work in progress	$	34,503	$	42,103
Finished goods		10,768		7,476
	$	45,271	$	49,579

Prepaid Expenses and Other Current Assets

	December 28, 2013		December 29, 2012
Distributor advances	$	31,839	$	21,260
Other		15,812		20,177
	$	47,651	$	41,437

Property and Equipment

	December 28, 2013			December 29, 2012
Buildings and improvements	$	94,221		$	90,900
Equipment		51,071			48,219
Computers and purchased software		25,556			27,294
Leasehold interest in ground leases		23,840			23,840
Furniture and fixtures		3,496			3,129
Leasehold improvements		7,784			7,587
		205,968			200,969
Accumulated depreciation		(73,523	)		(65,698	)
	$	132,445		$	135,271

F-22

Silicon Laboratories Inc.
Notes to Consolidated Financial Statements
December 28, 2013 (Continued)

7. Balance Sheet Details (Continued)

Accrued Expenses

	December 28, 2013		December 29, 2012
Accrued compensation and benefits	$	24,896	$	22,298
Other		21,079		18,112
	$	45,975	$	40,410

Other Non-current Liabilities

	December 28, 2013		December 29, 2012
Acquisition-related escrow	$	20,010	$	—
Contingent consideration		12,919		—
Acquired unfavorable leases		11,268		11,794
Other		11,744		8,821
	$	55,941	$	20,615

8. Risks and Uncertainties

Financial Instruments

        Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash equivalents, investments, accounts receivable and derivatives. The Company places its cash equivalents and investments primarily in municipal bonds, money market funds, variable-rate demand notes, corporate bonds, auction-rate securities, certificates of deposit, commercial paper and asset backed securities. Concentrations of credit risk with respect to accounts receivable are primarily due to customers with large outstanding balances. The Company's customers that accounted for greater than 10% of accounts receivable consisted of the following:

	December 28, 2013			December 29, 2012
Edom Technology		26	%		23	%
Arrow Electronics		10	%		**
Avnet		**			12	%

**

Less than 10% of accounts receivable

        The Company performs periodic credit evaluations of its customers' financial condition and generally requires no collateral from its customers. The Company provides an allowance for potential credit losses based upon the expected collectibility of such receivables. Losses have not been significant for any of the periods presented.

F-23

Silicon Laboratories Inc.
Notes to Consolidated Financial Statements
December 28, 2013 (Continued)

8. Risks and Uncertainties (Continued)

Distributor Advances

        On sales to distributors, the Company's payment terms often require the distributor to initially pay amounts owed to the Company for an amount in excess of their ultimate cost. The Company's sales price to its distributors may be higher than the amount that the distributors will ultimately owe the Company because distributors often negotiate price reductions after purchasing the product from the Company and such reductions are often significant. These negotiated price discounts are not granted until the distributor sells the product to the end customer, which may occur after the distributor has paid the original invoice amount to the Company. Payment of invoices prior to receiving an associated discount can have an adverse impact on the working capital of the Company's distributors. Accordingly, the Company has entered into agreements with certain distributors whereby it advances cash to the distributors to reduce the distributor's working capital requirements. The advance amounts are based on the distributor's inventory balance, and are adjusted quarterly. Such amounts are recorded in prepaid expenses and other current assets in the Consolidated Balance Sheet. The terms of these advances are set forth in binding legal agreements and are unsecured, bear no interest on unsettled balances and are due upon demand. The agreements governing these advances can be cancelled by the Company at any time.

Suppliers

        A significant portion of the Company's products are fabricated by Taiwan Semiconductor Manufacturing Co. (TSMC) or its affiliates. The inability of TSMC to deliver wafers to the Company on a timely basis could impact the production of the Company's products for a substantial period of time, which could have a material adverse effect on the Company's business, financial condition and results of operations.

Customers

        The Company sells directly to end customers, distributors and contract manufacturers. Although the Company actually sells the products to, and is paid by, distributors and contract manufacturers, the Company refers to the end customer as its customer. None of the Company's contract manufacturers accounted for greater than 10% of revenue during fiscal 2013, 2012 or 2011. The Company's end customers and distributors that accounted for greater than 10% of revenue consisted of the following:

	Year Ended
	December 28, 2013			December 29, 2012			December 31, 2011
End Customers
Samsung*		15	%		19	%		13	%
Distributors
Edom Technology		21	%		22	%		24	%
Avnet		11	%		11	%		12	%
Macnica		**			**			10	%

*

Samsung's purchases were across a variety of product areas.

**

Less than 10% of revenue

F-24

Silicon Laboratories Inc.
Notes to Consolidated Financial Statements
December 28, 2013 (Continued)

9. Acquisitions

Energy Micro

        On July 1, 2013, the Company acquired Energy Micro AS, a late-stage private company. Energy Micro designed and developed energy-efficient 32-bit microcontrollers based on ARM Cortex-M architecture. Energy Micro's energy-friendly solutions are designed to enable a broad range of power-sensitive applications for the Internet of Things (IoT), including smart energy, home automation, security and portable electronics markets.

        The Company acquired Energy Micro for approximately $140.6 million, including: 1) Initial consideration of $107.4 million; 2) Deferred consideration in the form of a promissory note with an estimated fair value of $19.2 million at the date of acquisition (the promissory note was subsequently exchanged for approximately 0.5 million shares of the Company's restricted stock after a mandatory two-month creditor notice.); and 3) Contingent consideration (the "Earn-Out") with an estimated fair value of $14.0 million at the date of acquisition. The Earn-Out is payable up to approximately $33.3 million based on the extent to which the annual revenue growth rate from certain Energy Micro and Silicon Laboratories products (the "Earn-Out Products") exceeds 25% per year, over a five-year period from fiscal 2014 through 2018 (the "Earn-Out Period"). The Earn-Out is payable on an annual basis and in no event shall exceed $6,666,666 per year, unless revenue from the Earn-Out Products exceeds $400 million in a single fiscal year during the Earn-Out Period (in which case, the entire Earn-Out amount less any amounts previously paid will become payable). Approximately $20.3 million of the initial consideration was held in escrow by the Company as security for breaches of representations and warranties and certain other expressly enumerated matters. The escrow obligation was recorded in other non-current liabilities in the Consolidated Balance Sheet.

        A portion of the Earn-Out (28.76%) is contingent on the continued employment of certain key employees for the three years following the acquisition date (the "Departure Percentage"). The Departure Percentage was accounted for as a transaction separate from the business combination based on its economic substance and will be recorded as post-combination compensation expense in the Company's financial statements during the Earn-Out period.

        The Company believes that this strategic acquisition will accelerate its deployment of energy-friendly solutions across the IoT industries, while further scaling the Company's engineering team. These factors contributed to a purchase price that was in excess of the fair value of the net assets

F-25

Silicon Laboratories Inc.
Notes to Consolidated Financial Statements
December 28, 2013 (Continued)

9. Acquisitions (Continued)

acquired and, as a result, the Company recorded goodwill. The goodwill is not deductible for tax purposes. The purchase price was allocated as follows (in thousands):

	Amount			Weighted-Average Amortization Period (Years)
Intangible assets:
In-process research and development	$	18,600		Not amortized
Core and developed technology		29,100		7
Customer relationships		6,400		8
Trademarks		1,300		8
		55,400
Cash and cash equivalents		919
Other current assets		6,486
Goodwill		98,515
Other non-current assets		3,117
Current liabilities		(8,000	)
Non-current deferred tax liabilities, net		(6,288	)
Long-term debt		(8,434	)
Other non-current liabilities		(1,133	)
Total purchase price	$	140,582

        The allocation of the purchase price is preliminary and subject to change, based on finalization of certain income tax matters. Accordingly, adjustments may be made to the values of the assets acquired and liabilities assumed as additional information is obtained about the facts and circumstances that existed at the valuation date.

        In-process research and development (IPR&D) represents acquired technology that had not achieved technological feasibility as of the acquisition date and had no alternative future use. The IPR&D recorded in connection with the acquisition of Energy Micro consisted of a multi-protocol wireless RF solution. The fair value of this technology was determined using the income approach. The discount rate applicable to the cash flows was 13.0%. The remaining research and development efforts include additional design, integration and testing. The significant risks associated with the successful completion of this project include the Company's potential inability to finish the product designs, produce working models and gain customer acceptance.

        Pro forma information related to this acquisition has not been presented because it would not be materially different from amounts reported. The Company recorded approximately $2.4 million of acquisition-related costs in selling, general and administrative expenses during fiscal 2013.

Ember

        On July 3, 2012, the Company acquired Ember Corporation, a privately held company. Ember's products integrate high-performance, low-power 2.4 GHz wireless ICs with reliable and scalable software into a flexible and robust networking platform. The Company acquired Ember for

F-26

Silicon Laboratories Inc.
Notes to Consolidated Financial Statements
December 28, 2013 (Continued)

9. Acquisitions (Continued)

approximately $79.0 million, including contingent consideration with an estimated fair value of $4.0 million at the date of acquisition.

        The Company believes that this strategic acquisition provides it with the technology and software expertise required to enable the low-power mesh sensor networks being deployed today in a wide range of residential, commercial and industrial applications. These factors contributed to a purchase price that was in excess of the fair value of the net assets acquired and, as a result, the Company recorded goodwill. The goodwill is not deductible for tax purposes. The purchase price was allocated as follows (in thousands):

	Amount			Weighted-Average Amortization Period (Years)
Intangible assets:
In-process research and development	$	14,810		Not amortized
Developed technology		17,800		11
Customer relationships		5,620		9
Trademarks		910		12
		39,140
Cash and cash equivalents		3,115
Accounts receivable		1,928
Inventories		4,749
Other current assets		324
Goodwill		14,777
Non-current deferred tax assets, net		16,449
Other non-current assets		1,776
Current liabilities		(3,287	)
Total purchase price	$	78,971

        The IPR&D recorded in connection with the acquisition of Ember consisted of a low-power RF transceiver. The fair value of this technology was determined using the income approach. The discount rate applicable to the cash flows was 12.5%.

        Pro forma information related to this acquisition has not been presented because it would not be materially different from amounts reported. Acquisition-related costs were not significant.

Corporate Headquarters Buildings

        The Company leased facilities at 400 W. Cesar Chavez ("400 WCC") and 200 W. Cesar Chavez ("200 WCC") in Austin, Texas for its corporate headquarters. During the terms of the leases, the Company had options to purchase the buildings for approximately $44.3 million for 400 WCC and $50.1 million for 200 WCC. In September 2012, the Company exercised such options and purchased the facilities.

        The buildings are located on land which is leased through 2099 from a third party. The rents for these ground leases were prepaid for the term of the leases by the previous lessee. The first floor of

F-27

Silicon Laboratories Inc.
Notes to Consolidated Financial Statements
December 28, 2013 (Continued)

9. Acquisitions (Continued)

each building was leased to the same third party for the term of the ground leases. The base rents for the first floor leases were prepaid to the previous owner of the buildings. Portions of the remaining floors were also leased to other tenants.

        The Company determined that the purchase of the facilities represented a business combination. Under the acquisition method of accounting, the assets acquired and liabilities assumed were recorded at their fair values as of the date of the acquisition. The purchase price was allocated as follows (in thousands):

	Amount
Buildings	$	90,900
Leasehold interest in ground leases		23,840
Acquired unfavorable leases		(11,925	)
Lease-related charges		(8	)
Net gain on purchase		(8,457	)
Total purchase price	$	94,350

        The buildings and leasehold interest in ground leases will be depreciated on a straight-line basis over their estimated useful lives of 40 years and 86 years, respectively. Acquired unfavorable leases represent the difference between contractual minimum rental payments due under previously-existing leases in each building and the market rates of those same leases. This amount was recorded in other non-current liabilities in the Consolidated Balance Sheet and will be amortized to rental income over the estimated terms of the leases.

        The purchase of the facilities resulted in a net gain of approximately $8.5 million, which was recorded in selling, general and administrative expenses in the Consolidated Statement of Income. The gain resulted primarily because the assets acquired and liabilities assumed were recorded at their fair values as of the date of the acquisition, which was substantially higher than the purchase prices of the facilities. The purchase prices were fixed at the beginning of the two leases in March 2006 and March 2008. While market prices for such facilities increased over the terms of the leases, the purchase prices remained the same.

Spectra Linear

        On January 25, 2011, the Company acquired Spectra Linear, Inc., a late-stage private company offering integrated timing solutions. The Company acquired Spectra Linear for approximately $28.6 million, including contingent consideration with an estimated fair value of $1.0 million at the date of acquisition. In addition, the Company assumed approximately $8.0 million of Spectra Linear net liabilities in connection with the acquisition.

        The Company paid an additional approximately $4.5 million of consideration to certain Spectra Linear employees in connection with an agreement between the employees and Spectra Linear. This agreement provided that upon the sale of Spectra Linear, a portion of the proceeds would be paid to such employees as bonuses. The agreement was accounted for as a transaction separate from the business combination based on its economic substance and was recorded as post-combination compensation expense in the Company's financial statements during fiscal 2011.

F-28

Silicon Laboratories Inc.
Notes to Consolidated Financial Statements
December 28, 2013 (Continued)

9. Acquisitions (Continued)

        The Company believes that the acquisition adds a broad family of timing ICs that will enable it to accelerate penetration in high-volume applications, while further scaling the Company's engineering team. These factors contributed to a purchase price that was in excess of the fair value of the net assets acquired and, as a result, the Company recorded goodwill. The goodwill is not deductible for tax purposes. The purchase price was allocated as follows (in thousands):

	Amount			Weighted-Average Amortization Period (Years)
Intangible assets:
Core and developed technology	$	16,560			10
Customer relationships		1,400			10
		17,960
Accounts receivable		1,759
Inventories		1,199
Other current assets		1,658
Goodwill		4,097
Deferred tax assets—non-current		12,316
Other non-current assets		597
Notes payable—current portion		(4,641	)
Current liabilities		(3,112	)
Non-current liabilities		(3,254	)
Total purchase price	$	28,579

        Pro forma information related to this acquisition has not been presented because it would not be materially different from amounts reported. Acquisition-related costs were not significant.

10. Goodwill and Other Intangible Assets

Goodwill

        The following summarizes the activity in goodwill for the years ended December 28, 2013 and December 29, 2012 (in thousands):

	Year Ended
	December 28, 2013		December 29, 2012
Beginning balance	$	130,265	$	115,489
Additions due to business combinations		98,516		14,776
Ending balance	$	228,781	$	130,265

F-29

Silicon Laboratories Inc.
Notes to Consolidated Financial Statements
December 28, 2013 (Continued)

10. Goodwill and Other Intangible Assets (Continued)

Other Intangible Assets

        The gross carrying amount and accumulated amortization of other intangible assets are as follows (in thousands):

		December 28, 2013					December 29, 2012
	Weighted-Average Amortization Period (Years)
		Gross Amount		Accumulated Amortization			Gross Amount		Accumulated Amortization
Intangible assets:
Subject to amortization:
Core and developed technology	9	$	138,340	$	(41,782	)	$	95,420	$	(30,145	)
Customer relationships	9		14,500		(2,330	)		8,100		(1,057	)
Patents	6		3,000		(750	)		3,000		(250	)
Trademarks	10		2,210		(195	)		910		(38	)
	9		158,050		(45,057	)		107,430		(31,490	)
Not subject to amortization:
In-process research and development	Not amortized		18,600		—			14,810		—
Total intangible assets		$	176,650	$	(45,057	)	$	122,240	$	(31,490	)

        Gross intangible assets increased $55.4 million in fiscal 2013 due to the acquisition of Energy Micro. This increase was offset by the removal of $1.0 million of fully amortized assets.

        Amortization expense related to intangible assets for fiscal 2013, 2012 and 2011 was $14.6 million, $10.7 million and $9.9 million, respectively. The estimated aggregate amortization expense for intangible assets subject to amortization for each of the five succeeding fiscal years is as follows (in thousands):

Fiscal Year
2014	$	17,060
2015		16,669
2016		16,019
2017		15,052
2018		14,309

11. Debt

        On July 31, 2012, the Company and certain of its domestic subsidiaries (the "Guarantors") entered into a $230 million five-year Credit Agreement (the "Agreement"). The Agreement consists of a $100 million Term Loan Facility and a $130 million Revolving Credit Facility (collectively, the "Credit Facilities").

        The Term Loan Facility provides for quarterly principal amortization (equal to 5% of the principal in each of the first two years and 10% of the principal in each of the next three years) with the remaining balance payable upon the maturity date. The Revolving Credit Facility includes a $25 million

F-30

Silicon Laboratories Inc.
Notes to Consolidated Financial Statements
December 28, 2013 (Continued)

11. Debt (Continued)

letter of credit sublimit and a $10 million swingline loan sublimit. The Company has an option to increase the size of the Revolving Credit Facility by up to an aggregate of $50 million in additional commitments, subject to certain conditions. On September 27, 2012, the Company borrowed $100 million under the Term Loan Facility. To date, the Company has not borrowed under the Revolving Credit Facility.

        The Term Loan Facility and Revolving Credit Facility, other than swingline loans, will bear interest at LIBOR plus an applicable margin or, at the option of the Company, a base rate (defined as the highest of the Bank of America prime rate, the Federal Funds rate plus 0.50% and a daily rate equal to one-month LIBOR plus 1.00%) plus an applicable margin. Swingline loans accrue interest at a per annum rate based on the base rate plus the applicable margin for base rate loans. The applicable margins for the LIBOR rate loans range from 1.50% to 2.50% and for base rate loans range from 0.50% to 1.50%, depending in each case, on the leverage ratio as defined in the Agreement. The Company also pays a commitment fee on the unused amount of the Revolving Credit Facility.

        In connection with the closing of the Credit Agreement, the Company entered into a security and pledge agreement. Under the security and pledge agreement, the Company pledged equity securities of certain of its subsidiaries, subject to exceptions and limitations. The Credit Facilities contain various conditions, covenants and representations with which the Company must be in compliance in order to borrow funds and to avoid an event of default, including financial covenants that the Company must maintain a leverage ratio (funded debt/EBITDA) of no more than 2.5 to 1 and a minimum fixed charge coverage ratio (EBITDA/debt payments, income taxes and capital expenditures) of no less than 1.50 to 1. As of December 28, 2013, the Company was in compliance with all covenants of the Credit Facilities.

        As of December 28, 2013, the remaining contractual maturities of the Term Loan Facility were as follows (in thousands):

Fiscal Year
2014	$	7,500
2015		10,000
2016		10,000
2017		67,500
Total	$	95,000

Interest Rate Swap Agreement

        In connection with the $100 million borrowed under the Term Loan Facility, the Company entered into an interest rate swap agreement as a hedge against the LIBOR portion of such variable interest payments. Under the terms of the swap agreement, the Company effectively converted the LIBOR portion of the interest on the Term Loan Facility to a fixed interest rate of 0.764% through the maturity date. As of December 28, 2013, the combined interest rate on the Term Loan Facility (which includes an applicable margin) was 2.514%. See Note 5, Derivative Financial Instruments, for additional information.

F-31

Silicon Laboratories Inc.
Notes to Consolidated Financial Statements
December 28, 2013 (Continued)

12. Stockholders' Equity

Common Stock

        The Company issued 1.6 million shares of common stock during fiscal 2013, including approximately 0.5 million shares issued in connection with the acquisition of Energy Micro.

Share Repurchase Programs

        The Board of Directors authorized the following share repurchase programs (in thousands):

Program Authorization Date	Program Termination Date	Program Amount
January 2014	January 2015	$	100,000
January 2013	January 2014	$	50,000
April 2012	January 2013	$	100,000
October 2011	April 2012	$	50,000
July 2010	August 2011	$	150,000

        These programs allow for repurchases to be made in the open market or in private transactions, including structured or accelerated transactions, subject to applicable legal requirements and market conditions. The Company repurchased 0.7 million shares, 1.7 million shares and 3.2 million shares of its common stock for $26.0 million, $62.0 million and $110.1 million during fiscal 2013, 2012 and 2011, respectively. These shares were retired upon repurchase.

F-32

Silicon Laboratories Inc.
Notes to Consolidated Financial Statements
December 28, 2013 (Continued)

12. Stockholders' Equity (Continued)

Accumulated Other Comprehensive Loss

        The components of accumulated other comprehensive loss, net of taxes, were as follows (in thousands):

	Unrealized Gain (Loss) on Cash Flow Hedge			Net Unrealized Losses on Available- For-Sale Securities			Total
Balance at January 1, 2011	$	(2,477	)	$	(1,171	)	$	(3,648	)
Other comprehensive income (loss) before reclassifications		(276	)		3			(273	)
Amount reclassified from accumulated other comprehensive loss		1,454			—			1,454
Net change for the period		1,178			3			1,181
Balance at December 31, 2011		(1,299	)		(1,168	)		(2,467	)
Other comprehensive income (loss) before reclassifications		(621	)		650			29
Amount reclassified from accumulated other comprehensive loss		1,492			—			1,492
Net change for the period		871			650			1,521
Balance at December 29, 2012		(428	)		(518	)		(946	)
Other comprehensive income (loss) before reclassifications		397			(348	)		49
Amount reclassified from accumulated other comprehensive loss		364			(151	)		213
Net change for the period		761			(499	)		262
Balance at December 28, 2013	$	333		$	(1,017	)	$	(684	)

Reclassifications From Accumulated Other Comprehensive Loss

	Year ended
Reclassification (in thousands)	December 28, 2013			December 29, 2012			December 31, 2011
Losses on cash flow hedges to:
Rent expense	$	—		$	(2,295	)	$	(2,237	)
Interest expense		(560	)		—			—
Gains on available-for-sales securities to:
Interest income		232			—			—
		(328	)		(2,295	)		(2,237	)
Income tax benefit		115			803			783
Total reclassifications	$	(213	)	$	(1,492	)	$	(1,454	)

F-33

Silicon Laboratories Inc.
Notes to Consolidated Financial Statements
December 28, 2013 (Continued)

12. Stockholders' Equity (Continued)

Income Tax Allocated to the Components of Other Comprehensive Income

        The income tax effects of the components of other comprehensive income were as follows (in thousands):

	Year ended
Income tax (expense) benefit on:	December 28, 2013			December 29, 2012			December 31, 2011
Net changes to available-for-sale securities:
Unrealized gains (losses) arising during the period	$	187		$	(350	)	$	(1	)
Reclassification for gains included in net income		81			—			—
Net changes to cash flow hedges:
Unrealized gains (losses) arising during the period		(214	)		335			148
Reclassification for losses included in net income		(196	)		(803	)		(783	)
Other comprehensive income	$	(142	)	$	(818	)	$	(636	)

13. Stock-Based Compensation

        In fiscal 2009, the stockholders of the Company approved the 2009 Stock Incentive Plan (the "2009 Plan") and the 2009 Employee Stock Purchase Plan (the "2009 Purchase Plan"). The 2009 Plan is currently effective, and has a term of 10 years from the shareholders' approval date. The 2009 Purchase Plan became effective on April 30, 2010.

2009 Stock Incentive Plan

        Under the 2009 Plan, the following may be granted: stock options, stock appreciation rights, performance shares, performance stock units, restricted stock units (RSUs), restricted stock awards (RSAs), performance-based awards and other awards (collectively, all such grants are referred to as "awards"). Awards of stock options and stock appreciation rights each deduct one share from the 2009 Plan shares available for issuance for each share granted, and full value awards (awards other than for which the participant is required to pay at least the fair market value of the underlying shares on the date of grant) deduct 1.55 shares from the 2009 Plan shares available for issuance for each share granted. Awards granted under the 2009 Plan generally contain vesting provisions ranging from three to four years. The exercise price of stock options offered under the 2009 Plan may not be less than 100% of the fair market value of a share of our common stock on the date of grant. To the extent awards granted under the 2009 Plan terminate, expire or lapse for any reason, or are settled in cash, shares subject to such awards will again be available for grant.

2000 Stock Incentive Plan

        In fiscal 2000, the Company's Board of Directors and stockholders approved the 2000 Plan. The 2000 Plan contains programs for (i) the discretionary granting of stock options to employees, non-employee board members and consultants for the purchase of shares of the Company's common stock, (ii) the discretionary issuance of common stock directly (as granted under direct issuance shares in RSAs and RSUs), (iii) the granting of special below-market stock options to executive officers and

F-34

Silicon Laboratories Inc.
Notes to Consolidated Financial Statements
December 28, 2013 (Continued)

13. Stock-Based Compensation (Continued)

other highly compensated employees of the Company for which the exercise price can be paid using payroll deductions and (iv) the automatic issuance of stock options to non-employee board members. The discretionary issuance of common stock, RSUs and stock options generally contain vesting provisions ranging from three to eight years. If permitted by the Company, stock options can be exercised immediately and, similar to the direct issuance shares, are subject to repurchase rights which generally lapse in accordance with the vesting schedule. The repurchase rights provide that upon certain defined events, the Company can repurchase unvested shares at the price paid per share. The term of each stock option is no more than ten years from the date of grant.

Stock Grants and Modifications

        The Company granted to its employees 1.1 million, 0.8 million and 0.8 million shares of full value awards and no stock options from the 2009 Plan during fiscal 2013, 2012 and 2011, respectively.

        The Company recorded $1.9 million in selling, general and administrative expense during fiscal 2012 in connection with modifications to certain stock awards. The Company accelerated the vesting of certain RSUs and Market Stock Units (MSUs) and extended the exercise period of stock options pursuant to a separation agreement between the Company and its former Chief Executive Officer (CEO). There were no other significant modifications made to any stock grants during fiscal 2013, 2012 or 2011.

        Included in the full value awards granted under the 2009 Plan in fiscal 2013, 2012 and 2011 were a total of 132 thousand, 110 thousand and 55 thousand market-based stock awards, respectively. The awards, also known as MSUs, provide the rights to acquire a number of shares of common stock for no cash consideration based upon achievement of specified levels of market conditions. The requisite service period for these MSUs is also the vesting period, which is generally three years. The performance criteria of the MSUs measure the difference between the total stockholders' return of the Company against that of the Philadelphia Semiconductor Sector Total Return Index.

2009 Employee Stock Purchase Plan

        The rights to purchase common stock granted under the 2009 Purchase Plan are intended to be treated as either (i) purchase rights granted under an "employee stock purchase plan," as that term is defined in Section 423(b) of the Internal Revenue Code (the "423(b) Plan"), or (ii) purchase rights granted under an employee stock purchase plan that is not subject to the terms and conditions of Section 423(b) of the Internal Revenue Code (the "Non-423(b) Plan"). The Company will retain the discretion to grant purchase rights under either the 423(b) Plan or the Non-423(b) Plan. Eligible employees may purchase a limited number of shares of the Company's common stock at no less than 85% of the fair market value of a share of common stock at prescribed purchase intervals during an offering period. Each offering period will be comprised of a series of one or more successive and/or overlapping purchase intervals and has a maximum term of 24 months. During fiscal 2013, 2012 and 2011, the Company issued 190 thousand, 181 thousand and 169 thousand shares, respectively, under the 2009 Purchase Plan to its employees. The weighted-average fair value for purchase rights granted in fiscal 2013 under the 2009 Purchase Plan was $9.34 per share.

F-35

Silicon Laboratories Inc.
Notes to Consolidated Financial Statements
December 28, 2013 (Continued)

13. Stock-Based Compensation (Continued)

Accounting for Stock-Based Compensation

        Stock-based compensation costs are based on the fair values on the date of grant for stock options and on the date of enrollment for the employee stock purchase plans, estimated by using the Black-Scholes option-pricing model. The fair values of stock awards and RSUs equal their intrinsic value on the date of grant. The fair values of market-based performance awards generally are estimated using a Monte Carlo simulation based on the date of grant.

        The Black-Scholes valuation calculation requires the Company to estimate key assumptions such as future stock price volatility, expected terms, risk-free rates and dividend yield. Expected stock price volatility is based upon a combination of both historical volatility and implied volatility derived from traded options on the Company's stock in the marketplace. Expected term is derived from an analysis of historical exercises and remaining contractual life of options. The risk-free rate is based on the U.S. Treasury yield curve in effect at the time of grant. The Company has never paid cash dividends and does not currently intend to pay cash dividends, thus it has assumed a 0% dividend yield.

        The Monte Carlo simulation used to calculate the fair value of the MSUs simulates the present value of the potential outcomes of future stock prices of the Company and the Philadelphia Semiconductor Sector Total Return Index over the requisite service period. The projection of stock prices are based on the risk-free rate of return, the volatilities of the stock price of the Company and the Index, and the correlation of the stock price of the Company with the Index.

        The Company must estimate potential forfeitures of stock grants and adjust compensation cost recorded accordingly. The estimate of forfeitures will be adjusted over the requisite service period to the extent that actual forfeitures differ, or are expected to differ, from such estimates. Changes in estimated forfeitures are recognized through a cumulative catch-up adjustment in the period of change and will also impact the amount of stock-based compensation expense to be recognized in future periods.

        The fair values of stock options and RSUs are amortized as compensation expense on a straight-line basis over the vesting period of the grants. The fair values of RSAs are fully expensed in the period of grant, when shares are immediately issued with no vesting restrictions. The fair values of MSUs are amortized as compensation expense on a straight-line basis over the performance and service periods of the grants. Compensation expense recognized is shown in the operating activities section of the Consolidated Statements of Cash Flows.

        The fair values estimated from the Black-Scholes option-pricing model were calculated using the following assumptions:

	Year Ended
	December 28, 2013			December 29, 2012			December 31, 2011
2009 Employee Stock Purchase Plan:
Expected volatility		27	%		38	%		27	%
Risk-free interest rate %		0.1	%		0.2	%		0.2	%
Expected term (in months)		7			15			11
Dividend yield		—			—			—

F-36

Silicon Laboratories Inc.
Notes to Consolidated Financial Statements
December 28, 2013 (Continued)

13. Stock-Based Compensation (Continued)

        A summary of stock-based compensation activity with respect to fiscal 2013 follows:

Stock Options	Shares (000s)			Weighted- Average Exercise Price		Weighted-Average Remaining Contractual Term (In Years)		Aggregate Intrinsic Value (000s)
Outstanding at December 29, 2012		1,696		$	35.86
Exercised		(480	)	$	34.72
Cancelled or expired		(127	)	$	46.87
Outstanding at December 28, 2013		1,089		$	35.09		1.96	$	9,688
Vested at December 28, 2013 and expected to vest		1,089		$	35.09		1.96	$	9,688
Exercisable at December 28, 2013		1,089		$	35.09		1.96	$	9,688

RSAs, RSUs and MSUs	Shares (000s)			Weighted- Average Purchase Price		Weighted-Average Remaining Vesting Term (In Years)		Aggregate Intrinsic Value (000s)
Outstanding at December 29, 2012		1,708		$	—
Granted		1,118		$	—
Issued		(553	)	$	—
Cancelled or expired		(192	)	$	—
Outstanding at December 28, 2013		2,081		$	—		1.25	$	88,135
Outstanding at December 28, 2013 and expected to vest		1,900		$	—		1.25	$	80,471

        The following summarizes the Company's weighted average fair value at the date of grant:

	Year Ended
	December 28, 2013		December 29, 2012		December 31, 2011
Per grant of RSAs, RSUs and MSUs	$	41.69	$	43.82	$	44.73

        The following summarizes the Company's stock-based payment and stock option values (in thousands):

	Year Ended
	December 28, 2013		December 29, 2012		December 31, 2011
Intrinsic value of stock options exercised	$	4,198	$	9,064	$	8,622
Intrinsic value of RSAs and RSUs that vested	$	23,649	$	40,105	$	38,769
Grant date fair value of RSAs and RSUs that vested	$	24,026	$	31,215	$	29,488

        The Company had approximately $51.2 million of total unrecognized compensation costs related to stock awards at December 28, 2013 that are expected to be recognized over a weighted-average period

F-37

Silicon Laboratories Inc.
Notes to Consolidated Financial Statements
December 28, 2013 (Continued)

13. Stock-Based Compensation (Continued)

of 2.1 years. There were no significant stock-based compensation costs capitalized into assets in any of the periods presented.

        The Company received cash of $15.3 million for the issuance of common stock, net of shares withheld for taxes, during fiscal 2013. The Company issues shares from the shares reserved under its stock plans upon the exercise of stock options, issuance of RSAs, vesting of RSUs and MSUs, and purchases through employee stock purchase plans. The Company does not currently expect to repurchase shares from any source to satisfy such obligation.

        The following table presents details of stock-based compensation costs recognized in the Consolidated Statements of Income (in thousands):

	Year Ended
	December 28, 2013		December 29, 2012		December 31, 2011
Cost of revenues	$	952	$	1,206	$	1,319
Research and development		14,530		12,602		14,872
Selling, general and administrative		15,318		17,368		19,924
		30,800		31,176		36,115
Income tax benefit		2,633		4,911		3,957
	$	28,167	$	26,265	$	32,158

        As of December 28, 2013, the Company had reserved shares of common stock for future issuance as follows (in thousands):

2000 Stock Incentive Plan	1,092
2009 Stock Incentive Plan	4,913
2009 Employee Stock Purchase Plan	636
Total shares reserved	6,641

14. Employee Benefit Plan

        The Company maintains a defined contribution or 401(k) Plan for its qualified U.S. employees. Participants may contribute a percentage of their compensation on a pre-tax basis, subject to a maximum annual contribution imposed by the Internal Revenue Code. The Company may make discretionary matching contributions as well as discretionary profit-sharing contributions to the 401(k) Plan. The Company contributed $3.0 million, $2.9 million and $2.7 million to the 401(k) Plan during fiscal 2013, 2012 and 2011, respectively.

F-38

Silicon Laboratories Inc.
Notes to Consolidated Financial Statements
December 28, 2013 (Continued)

15. Commitments and Contingencies

Operating Leases

        The Company leases certain facilities under operating lease agreements that expire at various dates through 2022. Some of these arrangements contain renewal options and require the Company to pay taxes, insurance and maintenance costs.

        Rent expense under operating leases was $4.2 million, $4.4 million and $4.5 million for fiscal 2013, 2012 and 2011, respectively. The minimum annual future rentals under the terms of these leases as of December 28, 2013 are as follows (in thousands):

Fiscal Year
2014	$	4,232
2015		3,704
2016		3,058
2017		2,350
2018		1,449
Thereafter		682
Total minimum lease payments	$	15,475

Litigation

Patent Litigation

        On January 21, 2014, Cresta Technology Corporation ("Cresta Technology"), a Delaware corporation, filed a lawsuit against the Company, Samsung Electronics Co., Ltd., Samsung Electronics America, Inc., LG Electronics Inc. and LG Electronics U.S.A., Inc. in the United States District Court in the District of Delaware, alleging infringement of United States Patent Nos. 7,075,585, 7,265,792 and 7,251,466. The lawsuit relates to the Company's family of television tuner products. Cresta Technology seeks unspecified compensatory and enhanced damages, attorney fees and a permanent injunction. On January 28, 2014, Cresta Technology also filed a complaint with the United States International Trade Commission alleging infringement of the same patents against the Company, Samsung and LG Electronics and seeking to prevent the importation and sale of allegedly infringing products in the United States. The Company intends to vigorously defend against these allegations. At this time, the Company cannot predict the outcome of these matters or the resulting financial impact to it, if any.

        In 2012, MaxLinear, Inc., a Delaware corporation, and the Company engaged one another in three patent infringement lawsuits filed in the United States District Court for the Southern District of California, San Diego Division, and in the United States District Court for the Western District of Texas, Austin Division. The Texas Court determined that the dispute concerning MaxLinear's patents would proceed in the California Court. On May 16, 2013, MaxLinear filed an additional patent infringement lawsuit against the Company in the United States District Court for the Southern District of California. On October 3, 2013, the Company and MaxLinear executed a Settlement Agreement resolving all of the lawsuits between them. MaxLinear granted the Company a license to its patent portfolio for the accused Company products, and the Company granted MaxLinear a license to its patent portfolio for the accused MaxLinear products. As part of the settlement, MaxLinear made a

F-39

Silicon Laboratories Inc.
Notes to Consolidated Financial Statements
December 28, 2013 (Continued)

15. Commitments and Contingencies (Continued)

one-time payment of $1.25 million to the Company. The Company and MaxLinear also entered into a 3-year covenant not to sue and agreed to dismiss all of the pending cases.

Other

        The Company is involved in various other legal proceedings that have arisen in the normal course of business. While the ultimate results of these matters cannot be predicted with certainty, the Company does not expect them to have a material adverse effect on its consolidated financial statements.

16. Related Party Transactions

        On March 26, 2013, the Company entered into an agreement to purchase consulting services in connection with the acquisition of Energy Micro. The fees for such services were $1.5 million during fiscal 2013. Mr. Bock, the Company's President, is also an independent contractor with the consulting entity. Mr. Bock is not providing consulting services to the Company on behalf of the entity. Mr. Bock and the entity have agreed that Mr. Bock will receive no compensation in conjunction with the agreement. Mr. Bock abstained from the negotiations with respect to the agreement between the Company and the entity.

        On July 1, 2013, Geir Førre joined the Company as senior vice president and general manager of microcontroller products. Mr. Førre was chief executive officer of Energy Micro, until it was acquired by the Company. Mr. Førre was the beneficial owner of approximately 32% of the Energy Micro equity and accordingly (a) received approximately $35 million of the initial consideration of $107.4 million, (b) may receive an additional approximately $6.5 million out of the $20.3 million holdback related to potential indemnification claims and (c) may receive up to approximately $10.5 million of the $33.3 million earn-out.

        On October 17, 2013, the Company appointed Alf-Egil Bogen to its board of directors. Mr. Bogen was chief marketing officer of Energy Micro, until it was acquired by the Company. Mr. Bogen was the beneficial owner of approximately 2% of the Energy Micro equity and accordingly (a) received approximately $0.9 million of the initial consideration of $107.4 million, (b) may receive an additional approximately $0.4 million out of the $20.3 million holdback related to potential indemnification claims and (c) may receive up to approximately $0.7 million of the $33.3 million earn-out. Mr. Bogen had invested approximately $0.8 million in Energy Micro prior to the acquisition.

F-40

Silicon Laboratories Inc.
Notes to Consolidated Financial Statements
December 28, 2013 (Continued)

17. Income Taxes

        Significant components of the provision for income taxes are as follows (in thousands):

	Year Ended
	December 28, 2013			December 29, 2012			December 31, 2011
Current:
Domestic	$	4,796		$	21,084		$	14,468
International		4,093			(3,009	)		2,845
Total Current		8,889			18,075			17,313
Deferred:
Domestic		5,591			5,444			(70	)
International		(2,272	)		(719	)		(375	)
Total Deferred		3,319			4,725			(445	)
	$	12,208		$	22,800		$	16,868

        The Company's provision for income taxes differs from the expected tax expense amount computed by applying the statutory federal income tax rate to income before income taxes as a result of the following:

	Year Ended
	December 28, 2013			December 29, 2012			December 31, 2011
Federal statutory rate		35.0	%		35.0	%		35.0	%
Foreign tax rate benefit		(8.2	)		(11.8	)		(11.0	)
Research and development tax credits		(14.6	)		(0.5	)		(8.5	)
Release of prior year unrecognized tax benefits		—			(8.4	)		—
Intercompany technology license		—			11.8			10.4
Excess officer compensation		1.9			1.0			3.2
Valuation allowance		3.8			—			—
Nondeductible acquisition costs		0.2			0.1			2.9
Other		1.6			(0.8	)		0.2
		19.7	%		26.4	%		32.2	%

        The effective tax rate for fiscal 2013 decreased from the prior period, primarily due to the prior period tax charge related to the intercompany license of certain technology associated with the acquisition of Ember during 2012 and the recognition of the fiscal 2012 and fiscal 2013 federal research and development tax credits in fiscal 2013 as a result of the enactment of the American Taxpayer Relief Act of 2012 (the "Act") on January 2, 2013. The decrease in the effective tax rate for fiscal 2013 was partially offset by the release during the prior period of unrecognized tax benefits that were determined to be effectively settled during 2012.

        The effective tax rate for fiscal 2012 decreased from the prior period, primarily due to the release of prior year unrecognized tax benefits that were determined to be effectively settled during fiscal 2012,

F-41

Silicon Laboratories Inc.
Notes to Consolidated Financial Statements
December 28, 2013 (Continued)

17. Income Taxes (Continued)

along with one-time nondeductible costs associated with the acquisition of Spectra Linear in fiscal 2011. The impact of these items was partially offset by the non-renewal of the federal research and development tax credit in fiscal 2012.

        Income before income taxes included the following components (in thousands):

	Year Ended
	December 28, 2013		December 29, 2012		December 31, 2011
Domestic	$	41,849	$	80,494	$	48,282
Foreign		20,178		5,854		4,058
	$	62,027	$	86,348	$	52,340

        Foreign income before income taxes increased from fiscal 2012 to fiscal 2013 predominantly due to intercompany technology license payments made by a foreign subsidiary in 2012. Foreign income before income taxes increased from fiscal 2011 to fiscal 2012 predominantly due to increases in product sales, offset in part by an increase in the intercompany technology license payments made by a foreign subsidiary.

        Deferred tax assets and liabilities are recorded for the estimated tax impact of temporary differences between the tax basis and book basis of assets and liabilities. A valuation allowance is established against a deferred tax asset when it is more likely than not that the deferred tax asset will not be realized. The Company recorded a valuation allowance of $1.7 million in fiscal 2013 related to certain state loss and research and development tax credit carryforwards. This figure is net of a valuation allowance release of $0.4 million, which was due to the expiration of certain state net operating loss carryforwards, and a reduction of $0.2 million related to an adjustment of certain acquired state net operating losses and research and development tax credit carryforwards which were fully valued, both of which were offset by changes in deferred tax assets rather than a charge to income tax expense. The Company has determined that it is more likely than not that a portion of the carryforwards will expire or go unutilized because the Company no longer expects to recognize sufficient income in the jurisdictions in which the attributes were created. No valuation allowance was recorded against other deferred tax assets for fiscal 2013 or 2012. Management believes that the Company's results of future operations will generate sufficient taxable income such that it is more likely than not that the remaining deferred tax assets will be realized.

F-42

Silicon Laboratories Inc.
Notes to Consolidated Financial Statements
December 28, 2013 (Continued)

17. Income Taxes (Continued)

        Significant components of the Company's deferred taxes as of December 28, 2013 and December 29, 2012 are as follows (in thousands):

	December 28, 2013			December 29, 2012
Deferred tax assets:
Net operating loss carryforwards	$	38,399		$	35,847
Research and development tax credit carryforwards		9,276			8,447
Stock-based compensation		6,757			8,133
Capitalized research and development		8,999			9,708
Deferred income on shipments to distributors		5,733			3,933
Accrued liabilities and other		8,302			7,503
		77,466			73,571
Less: Valuation allowance		(3,775	)		(2,114	)
		73,691			71,457
Deferred tax liabilities:
Acquired intangibles		38,444			28,653
Depreciation and amortization		2,022			1,076
Prepaid expenses and other		1,889			1,447
		42,355			31,176
Net deferred tax assets	$	31,336		$	40,281

        During fiscal 2013, the Company recorded a net deferred tax liability of approximately $5.3 million related to the acquisition of Energy Micro due to differences between book and tax bases of acquired assets and assumed liabilities.

        As of December 28, 2013, the Company had federal net operating loss and research and development credit carryforwards of approximately $77.5 million and $2.1 million, respectively, as a result of the Cygnal Integrated Products, Silicon Clocks, Spectra Linear and Ember acquisitions. These carryforwards expire in fiscal years 2019 through 2032. Recognition of these loss and credit carryforwards is subject to an annual limit, which may cause them to expire before they are used.

        As of December 28, 2013, the Company had foreign net operating loss carryforwards of approximately $29.6 million as a result of the Energy Micro acquisition. These loss carryforwards do not expire and recognition is not subject to an annual limit.

        The Company also had state loss and research and development credit carryforwards of approximately $63.9 million and $11.0 million, respectively. A portion of these loss and credit carryforwards was generated by the Company and a portion was acquired through the Integration Associates, Silicon Clocks, Spectra Linear and Ember acquisitions. Certain of these carryforwards expire in fiscal years 2013 through 2033 and others do not expire. Recognition of some of these loss and credit carryforwards is subject to an annual limit, which may cause them to expire before they are used.

F-43

Silicon Laboratories Inc.
Notes to Consolidated Financial Statements
December 28, 2013 (Continued)

17. Income Taxes (Continued)

        At the end of fiscal 2013, undistributed earnings of the Company's foreign subsidiaries of approximately $292.3 million are intended to be permanently reinvested outside the U.S. Accordingly, no provision for U.S. federal and state income taxes associated with a distribution of these earnings has been made. Determination of the amount of the unrecognized deferred tax liability on these unremitted earnings is not practicable.

        The Company's operations in Singapore are subject to reduced tax rates through 2019, as long as certain conditions are met. The income tax benefit (expense) from the reduced Singapore tax rate reflected in earnings was approximately $2.2 million (representing $0.05 per diluted share) in fiscal 2013, approximately $(13.3) million (representing $(0.31) per diluted share) in fiscal 2012 and approximately $2.5 million (representing $0.06 per diluted share) in fiscal 2011. The impact of the reduced Singapore tax rate in fiscal 2012 reflects the recognition of prior year unrecognized tax benefits.

        The following table reflects changes in the unrecognized tax benefits (in thousands):

	Year Ended
	December 28, 2013		December 29, 2012			December 31, 2011
Beginning balance	$	4,364	$	10,943		$	10,789
Additions based on tax positions related to current year		316		1,818			757
Additions based on tax positions related to prior years		318		—			—
Reductions for tax positions related to prior years		—		(8,397	)		(603	)
Ending balance	$	4,998	$	4,364		$	10,943

        As of December 28, 2013, December 29, 2012 and December 31, 2011, the Company had gross unrecognized tax benefits of $5.0 million, $4.4 million and $10.9 million, respectively, of which $4.8 million, $4.1 million and $9.9 million, respectively, would affect the effective tax rate if recognized. During fiscal 2013, the Company had gross increases of $0.6 million. During fiscal 2012, the Company had gross increases of $1.8 million to its current year unrecognized tax benefits, as well as a gross decrease of $8.4 million to its prior year unrecognized tax benefits related to an uncertain tax position that was determined to be effectively settled. A portion of these amounts in fiscal 2012 represents foreign currency remeasurement adjustments and was recognized in other income (expense), net.

        The Company recognizes interest and penalties related to unrecognized tax benefits in the provision for income taxes. The Company recognized less than $0.1 million of interest in the provision for income taxes in fiscal 2013. The Company did not recognize interest in the provision of income taxes in fiscal 2012 and 2011. The Company has an accrual of less than $0.1 million for the payment of interest related to unrecognized tax positions at the end of fiscal 2013, with no such accrual at the end of fiscal 2012 and 2011.

F-44

Silicon Laboratories Inc.
Notes to Consolidated Financial Statements
December 28, 2013 (Continued)

17. Income Taxes (Continued)

        The Company believes it is reasonably possible that the gross unrecognized tax benefits will decrease by approximately $1.5 million in the next 12 months due to the lapse of the statute of limitations applicable to a tax deduction claimed on a prior year foreign tax return.

        The tax years 2006 through 2013 remain open to examination by the major taxing jurisdictions to which the Company is subject. The examination of the Company's 2009 through 2011 federal income tax returns by the U.S. Internal Revenue Service was completed during the third quarter of 2013 with no material impact on the Company's financial statements. The Company is not currently under audit in any other major taxing jurisdiction.

18. Segment Information

        The Company has one operating segment, mixed-signal analog intensive ICs, consisting of numerous product areas. The Company's chief operating decision maker is considered to be its Chief Executive Officer. The chief operating decision maker allocates resources and assesses performance of the business and other activities at the operating segment level.

        The Company groups its products into three categories, based on the markets and applications in which its ICs may be used. The following summarizes the Company's revenue by product category (in thousands):

	Year Ended
	December 28, 2013		December 29, 2012		December 31, 2011
Broad-based	$	281,777	$	270,098	$	208,697
Broadcast		199,837		186,067		169,548
Access		98,473		107,129		113,380
Revenues	$	580,087	$	563,294	$	491,625

        Revenue is attributed to a geographic area based on the shipped-to location. The following summarizes the Company's revenue by geographic area (in thousands):

	Year Ended
	December 28, 2013		December 29, 2012		December 31, 2011
United States	$	68,566	$	64,856	$	67,432
China		253,261		219,400		152,533
Taiwan		55,036		64,150		59,208
Japan		32,557		31,315		50,270
South Korea		21,303		57,910		70,252
Rest of world		149,364		125,663		91,930
Total	$	580,087	$	563,294	$	491,625

F-45

Silicon Laboratories Inc.
Notes to Consolidated Financial Statements
December 28, 2013 (Continued)

18. Segment Information (Continued)

        The following summarizes the Company's property and equipment, net by geographic area (in thousands):

	December 28, 2013		December 29, 2012
United States	$	126,263	$	127,716
Rest of world		6,182		7,555
Total	$	132,445	$	135,271

F-46

Supplementary Financial Information (Unaudited)

        Quarterly financial information for fiscal 2013 and 2012 is as follows. All quarterly periods reported here had 13 weeks (in thousands, except per share amounts):

	Fiscal 2013
	Fourth Quarter		Third Quarter		Second Quarter		First Quarter
Revenues	$	146,236	$	146,933	$	141,543	$	145,375
Gross margin		88,598		88,161		88,773		87,372
Operating income		14,154		10,490		19,029		20,637
Net income	$	10,642	$	6,531	$	12,612	$	20,034
Earnings per share:
Basic	$	0.25	$	0.15	$	0.30	$	0.47
Diluted	$	0.24	$	0.15	$	0.29	$	0.46

	Fiscal 2012
	Fourth Quarter		Third Quarter		Second Quarter		First Quarter
Revenues	$	152,461	$	149,461	$	135,670	$	125,702
Gross margin		93,626		86,493		82,802		75,096
Operating income		25,302		27,230		16,379		16,764
Net income	$	18,695	$	10,024	$	20,509	$	14,320
Earnings per share:
Basic	$	0.45	$	0.24	$	0.48	$	0.34
Diluted	$	0.44	$	0.24	$	0.47	$	0.33

EX-21

QuickLinks -- Click here to rapidly navigate through this document

Exhibit 21

Subsidiaries of the Registrant

	Organized Under Law Of
Shenzhen Silicon Laboratories Technology Co. Ltd.	China
Silicon Laboratories France SAS	France
Silicon Laboratories GmbH	Germany
Silicon Laboratories Asia Pacific, Limited	Hong Kong
Silicon Laboratories Hungary Korlátolt Felelösségü Társaság	Hungary
Silicon Laboratories Semiconductors India Private Limited	India
Silicon Laboratories Ireland Limited	Ireland
Silicon Laboratories Italy, S.r.l.	Italy
Silicon Laboratories Y.K.	Japan
Silicon Laboratories Norway AS	Norway
Silicon Laboratories International Pte. Ltd.	Singapore
Silicon Laboratories Technology UK Limited	United Kingdom
Silicon Laboratories UK Limited	United Kingdom
Silicon Labs Spectra, Inc.	State of California
Silicon Laboratories Technology, LLC	State of Delaware
Silicon Labs Ember, Inc.	State of Delaware

QuickLinks

Exhibit 21

Subsidiaries of the Registrant

EX-23.1

QuickLinks -- Click here to rapidly navigate through this document

Exhibit 23.1

Consent of Independent Registered Public Accounting Firm

        We consent to the incorporation by reference in the Registration Statements (Form S-8 Nos. 333-39528, 333-45682, 333-60794, 333-83844, 333-104771, 333-112324, 333-122845, 333-131700, 333-140862, 333-149104 and 333-158938) pertaining to the stock incentive and employee stock purchase plans of Silicon Laboratories Inc. of our reports dated January 31, 2014, with respect to the consolidated financial statements and schedule of Silicon Laboratories Inc., and the effectiveness of internal control over financial reporting of Silicon Laboratories Inc., included in this Annual Report (Form 10-K) for the fiscal year ended December 28, 2013.

/s/ ERNST & YOUNG LLP

Austin, Texas
January 31, 2014

QuickLinks

Exhibit 23.1

Consent of Independent Registered Public Accounting Firm

EX-31.1

QuickLinks -- Click here to rapidly navigate through this document

Exhibit 31.1

Certification to the Securities and Exchange Commission
by Registrant's Chief Executive Officer, as required by Section 302
of the Sarbanes-Oxley Act of 2002

I, G. Tyson Tuttle, certify that:

1.

I have reviewed this report on Form 10-K of Silicon Laboratories Inc.;

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.

The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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;

c)

Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)

Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.

The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: January 31, 2014

/s/ G. TYSON TUTTLE
G. Tyson Tuttle
Chief Executive Officer
(Principal Executive Officer)

QuickLinks

Exhibit 31.1

Certification to the Securities and Exchange Commission by Registrant's Chief Executive Officer, as required by Section 302 of the Sarbanes-Oxley Act of 2002

EX-31.2

QuickLinks -- Click here to rapidly navigate through this document

Exhibit 31.2

Certification to the Securities and Exchange Commission
by Registrant's Chief Financial Officer, as required by Section 302
of the Sarbanes-Oxley Act of 2002

I, John C. Hollister, certify that:

1.

I have reviewed this report on Form 10-K of Silicon Laboratories Inc.;

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.

The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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;

c)

Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)

Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.

The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: January 31, 2014

/s/ JOHN C. HOLLISTER
John C. Hollister
Senior Vice President and Chief Financial Officer
(Principal Financial Officer)

QuickLinks

Exhibit 31.2

Certification to the Securities and Exchange Commission by Registrant's Chief Financial Officer, as required by Section 302 of the Sarbanes-Oxley Act of 2002

EX-32.1

QuickLinks -- Click here to rapidly navigate through this document

Exhibit 32.1

Certification of Chief Executive Officer and Chief Financial Officer

        Pursuant to 18 U.S.C. § 1350, as created by Section 906 of the Sarbanes-Oxley Act of 2002, each of the undersigned officers of Silicon Laboratories Inc. (the "Company") hereby certify that:

          (i)  the accompanying Annual Report on Form 10-K of the Company for the fiscal year ended December 28, 2013 as filed with the Securities and Exchange Commission (the "Report") fully complies with the requirements of Section 13(a) or Section 15(d), as applicable, of the Securities Exchange Act of 1934; and

         (ii)  the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

        A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities Exchange Commission or its staff upon request.

Date: January 31, 2014

/s/ G. TYSON TUTTLE
G. Tyson Tuttle
Chief Executive Officer

/s/ JOHN C. HOLLISTER
John C. Hollister
Senior Vice President and Chief Financial Officer

QuickLinks

Exhibit 32.1

Certification of Chief Executive Officer and Chief Financial Officer

XML

Commitments and Contingencies (Tables)

12 Months Ended

Dec. 28, 2013

Commitments and Contingencies

Schedule of minimum annual future rentals

The minimum annual future rentals under the terms of these leases as of December 28, 2013 are as follows (in thousands):

Fiscal Year
2014	$	4,232
2015		3,704
2016		3,058
2017		2,350
2018		1,449
Thereafter		682
Total minimum lease payments	$	15,475

XML

Balance Sheet Details (Details) (USD $) In Thousands, unless otherwise specified	Dec. 28, 2013	Dec. 29, 2012
Inventories
Work in progress	$ 34,503	$ 42,103
Finished goods	10,768	7,476
Total inventories	45,271	49,579
Prepaid Expenses and Other Current Assets
Distributor Advances	31,839	21,260
Other	15,812	20,177
Prepaid expenses and other current assets	47,651	41,437
Property and Equipment
Property and equipment, gross	205,968	200,969
Accumulated depreciation	(73,523)	(65,698)
Property and equipment, net	132,445	135,271
Accrued Expenses
Accrued compensation and benefits	24,896	22,298
Other	21,079	18,112
Accrued expenses	45,975	40,410
Other Non-current Liabilities
Acquisition-related escrow	20,010
Contingent consideration	12,919
Acquired unfavorable leases	11,268	11,794
Other	11,744	8,821
Other Non-current Liabilities	55,941	20,615
Buildings and improvements
Property and Equipment
Property and equipment, gross	94,221	90,900
Equipment
Property and Equipment
Property and equipment, gross	51,071	48,219
Computers and purchased software
Property and Equipment
Property and equipment, gross	25,556	27,294
Leasehold interest in ground leases
Property and Equipment
Property and equipment, gross	23,840	23,840
Furniture and fixtures
Property and Equipment
Property and equipment, gross	3,496	3,129
Leasehold improvements
Property and Equipment
Property and equipment, gross	$ 7,784	$ 7,587

XML

Derivative Financial Instruments (Details 3) (USD $)	12 Months Ended
	Dec. 28, 2013	Dec. 29, 2012	Dec. 31, 2011
Derivative Instruments, Gain (Loss)
Loss Reclassified from Accumulated OCI into Income (Effective Portion), included in rent and interest expense during period		$ 900,000
Reclassification of interest rate swap losses included in accumulated other comprehensive loss into earnings in the next 12 months	500,000
Cash flow hedges | Interest rate swaps
Derivative Instruments, Gain (Loss)
Gain (Loss) Recognized in OCI on Derivatives (Effective Portion) during period	611,000	(956,000)	(424,000)
Cash flow hedges | Interest rate swaps | Rent expenses
Derivative Instruments, Gain (Loss)
Loss Reclassified from Accumulated OCI into Income (Effective Portion), included in rent and interest expense during period		(2,197,000)	(2,237,000)
Cash flow hedges | Interest rate swaps | Interest expense
Derivative Instruments, Gain (Loss)
Loss Reclassified from Accumulated OCI into Income (Effective Portion), included in rent and interest expense during period	$ (560,000)	$ (98,000)

XML

Income Taxes (Details 3) (USD $)	12 Months Ended
	Dec. 28, 2013	Dec. 29, 2012	Dec. 31, 2011
Changes in unrecognized tax benefits
Unrecognized tax benefits, balance at the beginning of the period	$ 4,364,000	$ 10,943,000	$ 10,789,000
Additions based on tax positions related to current year	316,000	1,818,000	757,000
Additions based on tax positions related to prior years	318,000
Reductions for tax positions related to prior years		(8,397,000)	(603,000)
Unrecognized tax benefits, balance at the end of the period	4,998,000	4,364,000	10,943,000
Gross unrecognized tax benefits which would affect the effective tax rate if recognized	4,800,000	4,100,000	9,900,000
Gross increases in unrecognized tax benefits	600,000
Reasonably possible change in unrecognized tax position end in next twelve months
Significant Change in Unrecognized Tax Benefits is Reasonably Possible, Amount of Unrecorded Benefit	1,500,000
Income Taxes
Accrual for the payment of interest related to unrecognized tax positions		0	0
Maximum
Income Taxes
Interest in the provision for income taxes recognized	100,000
Accrual for the payment of interest related to unrecognized tax positions	$ 100,000

XML

Risks and Uncertainties (Details)	12 Months Ended
	Dec. 28, 2013	Dec. 29, 2012	Dec. 31, 2011
Risks and uncertainties
Interest rate on unsettled balances due upon demand (as a percent)	0.00%
Accounts receivable | Customers | Edom Technology
Risks and uncertainties
Concentrations of credit risk (as a percent)	26.00%	23.00%
Accounts receivable | Customers | Arrow Electronics
Risks and uncertainties
Concentrations of credit risk (as a percent)	10.00%
Accounts receivable | Customers | Arrow Electronics | High end of range
Risks and uncertainties
Concentrations of credit risk (as a percent)		10.00%
Accounts receivable | Customers | Avnet
Risks and uncertainties
Concentrations of credit risk (as a percent)		12.00%
Accounts receivable | Customers | Avnet | High end of range
Risks and uncertainties
Concentrations of credit risk (as a percent)	10.00%
Revenue | Edom Technology
Risks and uncertainties
Concentrations of credit risk (as a percent)	21.00%	22.00%	24.00%
Revenue | Avnet
Risks and uncertainties
Concentrations of credit risk (as a percent)	11.00%	11.00%	12.00%
Revenue | Macnica
Risks and uncertainties
Concentrations of credit risk (as a percent)			10.00%
Revenue | Macnica | High end of range
Risks and uncertainties
Concentrations of credit risk (as a percent)	10.00%	10.00%
Revenue | Customers | Samsung
Risks and uncertainties
Concentrations of credit risk (as a percent)	15.00%	19.00%	13.00%

XML

Derivative Financial Instruments (Details) (Cash flow hedges, Interest rate swaps, USD $) In Millions, unless otherwise specified	Dec. 28, 2013
Cash flow hedges | Interest rate swaps
Notional amount
Original notional value	$ 100

XML

Risks and Uncertainties (Tables) (Customers)

12 Months Ended

Dec. 28, 2013

Accounts receivable

Risks and uncertainties

Schedule of concentration risk

	December 28, 2013			December 29, 2012
Edom Technology		26	%		23	%
Arrow Electronics		10	%		**
Avnet		**			12	%

**

Less than 10% of accounts receivable

Revenue

Risks and uncertainties

Schedule of concentration risk

	Year Ended
	December 28, 2013			December 29, 2012			December 31, 2011
End Customers
Samsung*		15	%		19	%		13	%
Distributors
Edom Technology		21	%		22	%		24	%
Avnet		11	%		11	%		12	%
Macnica		**			**			10	%

*

Samsung's purchases were across a variety of product areas.

**

Less than 10% of revenue

XML

Goodwill and Other Intangible Assets (Details) (USD $)	12 Months Ended
	Dec. 28, 2013	Dec. 29, 2012	Dec. 31, 2011
Goodwill
Balance at the beginning of the period	$ 130,265,000	$ 115,489,000
Additions due to business combinations	98,516,000	14,776,000
Balance at the end of the period	228,781,000	130,265,000	115,489,000
Gross carrying amount and accumulated amortization of other intangible assets
Weighted-Average Amortization Period	9 years
Intangible assets subject to amortization, Gross Amount	158,050,000	107,430,000
Intangible assets subject to amortization, Accumulated Amortization	(45,057,000)	(31,490,000)
Total intangible assets, Gross Amount	176,650,000	122,240,000
Intangible assets acquired in acquisition of Energy Micro	55,400,000
Fully amortized intangible assets, gross	1,000,000
Amortization expense related to intangible assets	14,600,000	10,700,000	9,900,000
Estimated aggregate amortization expense for intangible assets subject to amortization for each of the five succeeding fiscal years
2014	17,060,000
2015	16,669,000
2016	16,019,000
2017	15,052,000
2018	14,309,000
In-process research and development
Gross carrying amount and accumulated amortization of other intangible assets
Intangible assets not subject to amortization, Gross and Net Amount	18,600,000	14,810,000
Core and developed technology
Gross carrying amount and accumulated amortization of other intangible assets
Weighted-Average Amortization Period	9 years
Intangible assets subject to amortization, Gross Amount	138,340,000	95,420,000
Intangible assets subject to amortization, Accumulated Amortization	(41,782,000)	(30,145,000)
Customer relationships
Gross carrying amount and accumulated amortization of other intangible assets
Weighted-Average Amortization Period	9 years
Intangible assets subject to amortization, Gross Amount	14,500,000	8,100,000
Intangible assets subject to amortization, Accumulated Amortization	(2,330,000)	(1,057,000)
Patents
Gross carrying amount and accumulated amortization of other intangible assets
Weighted-Average Amortization Period	6 years
Intangible assets subject to amortization, Gross Amount	3,000,000	3,000,000
Intangible assets subject to amortization, Accumulated Amortization	(750,000)	(250,000)
Trademarks
Gross carrying amount and accumulated amortization of other intangible assets
Weighted-Average Amortization Period	10 years
Intangible assets subject to amortization, Gross Amount	2,210,000	910,000
Intangible assets subject to amortization, Accumulated Amortization	$ (195,000)	$ (38,000)

XML

Segment Information (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 28, 2013 product segment	Dec. 29, 2012	Dec. 31, 2011
Segment Information
Number of operating segments	1
Number of product categories	3
Revenue and property and equipment, net by geographic area
Revenues	$ 580,087	$ 563,294	$ 491,625
Property and equipment, net	132,445	135,271
United States
Revenue and property and equipment, net by geographic area
Revenues	68,566	64,856	67,432
Property and equipment, net	126,263	127,716
China
Revenue and property and equipment, net by geographic area
Revenues	253,261	219,400	152,533
Taiwan
Revenue and property and equipment, net by geographic area
Revenues	55,036	64,150	59,208
Japan
Revenue and property and equipment, net by geographic area
Revenues	32,557	31,315	50,270
South Korea
Revenue and property and equipment, net by geographic area
Revenues	21,303	57,910	70,252
Rest of world
Revenue and property and equipment, net by geographic area
Revenues	149,364	125,663	91,930
Property and equipment, net	6,182	7,555
Broad-based
Revenue and property and equipment, net by geographic area
Revenues	281,777	270,098	208,697
Broadcast
Revenue and property and equipment, net by geographic area
Revenues	199,837	186,067	169,548
Access
Revenue and property and equipment, net by geographic area
Revenues	$ 98,473	$ 107,129	$ 113,380

XML

Segment Information

12 Months Ended

Dec. 28, 2013

Segment Information

Segment Information

18. Segment Information

        The Company has one operating segment, mixed-signal analog intensive ICs, consisting of numerous product areas. The Company's chief operating decision maker is considered to be its Chief Executive Officer. The chief operating decision maker allocates resources and assesses performance of the business and other activities at the operating segment level.

        The Company groups its products into three categories, based on the markets and applications in which its ICs may be used. The following summarizes the Company's revenue by product category (in thousands):

	Year Ended
	December 28, 2013		December 29, 2012		December 31, 2011
Broad-based	$	281,777	$	270,098	$	208,697
Broadcast		199,837		186,067		169,548
Access		98,473		107,129		113,380
Revenues	$	580,087	$	563,294	$	491,625

        Revenue is attributed to a geographic area based on the shipped-to location. The following summarizes the Company's revenue by geographic area (in thousands):

	Year Ended
	December 28, 2013		December 29, 2012		December 31, 2011
United States	$	68,566	$	64,856	$	67,432
China		253,261		219,400		152,533
Taiwan		55,036		64,150		59,208
Japan		32,557		31,315		50,270
South Korea		21,303		57,910		70,252
Rest of world		149,364		125,663		91,930
Total	$	580,087	$	563,294	$	491,625

        The following summarizes the Company's property and equipment, net by geographic area (in thousands):

	December 28, 2013		December 29, 2012
United States	$	126,263	$	127,716
Rest of world		6,182		7,555
Total	$	132,445	$	135,271

XML

Fair Value of Financial Instruments (Details 2) (Auction rate securities, Weighted Average, Discounted cash flow)	12 Months Ended
	Dec. 28, 2013
Auction rate securities | Weighted Average | Discounted cash flow
Quantitative information for Level 3 Fair Value Measurements Assets
Estimated yield (as a percent)	1.11%
Expected holding period	10 years
Estimated discount rate (as a percent)	4.05%

XML

Significant Accounting Policies (Details) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 28, 2013	Dec. 29, 2012	Dec. 31, 2011
Basis of Presentation and Principles of Consolidation
Length of fiscal year	364 days	364 days	364 days
Advertising
Advertising expenses	$ 2.0	$ 1.7	$ 1.6
Buildings
Property and Equipment
Useful life		40 years
Leasehold interest in ground leases
Property and Equipment
Useful life		86 years
Minimum
Basis of Presentation and Principles of Consolidation
Length of fiscal year	364 days	364 days	364 days
Property and Equipment
Useful life	3 years
Long-Lived Assets
Useful live of purchased intangible assets	6 years
Maximum
Basis of Presentation and Principles of Consolidation
Length of fiscal year	371 days	371 days	371 days
Property and Equipment
Useful life	7 years
Long-Lived Assets
Useful live of purchased intangible assets	12 years

XML

Stockholders' Equity (Tables)

12 Months Ended

Dec. 28, 2013

Stockholders' Equity

Schedule of share repurchase programs

 The Board of Directors authorized the following share repurchase programs (in thousands):

Program Authorization Date	Program Termination Date	Program Amount
January 2014	January 2015	$	100,000
January 2013	January 2014	$	50,000
April 2012	January 2013	$	100,000
October 2011	April 2012	$	50,000
July 2010	August 2011	$	150,000

Schedule of components of accumulated other comprehensive loss, net of taxes

The components of accumulated other comprehensive loss, net of taxes, were as follows (in thousands):

	Unrealized Gain (Loss) on Cash Flow Hedge			Net Unrealized Losses on Available- For-Sale Securities			Total
Balance at January 1, 2011	$	(2,477	)	$	(1,171	)	$	(3,648	)
Other comprehensive income (loss) before reclassifications		(276	)		3			(273	)
Amount reclassified from accumulated other comprehensive loss		1,454			—			1,454
Net change for the period		1,178			3			1,181
Balance at December 31, 2011		(1,299	)		(1,168	)		(2,467	)
Other comprehensive income (loss) before reclassifications		(621	)		650			29
Amount reclassified from accumulated other comprehensive loss		1,492			—			1,492
Net change for the period		871			650			1,521
Balance at December 29, 2012		(428	)		(518	)		(946	)
Other comprehensive income (loss) before reclassifications		397			(348	)		49
Amount reclassified from accumulated other comprehensive loss		364			(151	)		213
Net change for the period		761			(499	)		262
Balance at December 28, 2013	$	333		$	(1,017	)	$	(684	)

Schedule of Reclassifications From Accumulated Other Comprehensive Loss

	Year ended
Reclassification (in thousands)	December 28, 2013			December 29, 2012			December 31, 2011
Losses on cash flow hedges to:
Rent expense	$	—		$	(2,295	)	$	(2,237	)
Interest expense		(560	)		—			—
Gains on available-for-sales securities to:
Interest income		232			—			—
		(328	)		(2,295	)		(2,237	)
Income tax benefit		115			803			783
Total reclassifications	$	(213	)	$	(1,492	)	$	(1,454	)

Schedule of changes in the components of comprehensive income, tax effects

The income tax effects of the components of other comprehensive income were as follows (in thousands):

	Year ended
Income tax (expense) benefit on:	December 28, 2013			December 29, 2012			December 31, 2011
Net changes to available-for-sale securities:
Unrealized gains (losses) arising during the period	$	187		$	(350	)	$	(1	)
Reclassification for gains included in net income		81			—			—
Net changes to cash flow hedges:
Unrealized gains (losses) arising during the period		(214	)		335			148
Reclassification for losses included in net income		(196	)		(803	)		(783	)
Other comprehensive income	$	(142	)	$	(818	)	$	(636	)

XML

Fair Value of Financial Instruments (Details 4) (Assets and liabilities measured at fair value on recurring basis, Auction rate securities, USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 28, 2013	Dec. 29, 2012
Assets and liabilities measured at fair value on recurring basis | Auction rate securities
Fair value assets reconciliation of changes
Balance at the beginning of the period	$ 11,369	$ 17,477
Settlements	(100)	(6,700)
Gain (loss) included in other comprehensive income	(637)	592
Balance at the end of the period	$ 10,632	$ 11,369

XML

Related Party Transactions (Details) (USD $)	12 Months Ended	0 Months Ended		12 Months Ended	0 Months Ended
	Dec. 28, 2013	Oct. 17, 2013 Energy Micro	Jul. 01, 2013 Energy Micro	Dec. 28, 2013 Mr. Bock	Jul. 01, 2013 Mr. Forre Energy Micro	Oct. 17, 2013 Mr. Bogen Energy Micro
Related Party Transaction
Amount paid to related party	$ 1,500,000			$ 0
Beneficial ownership percentage					32.00%	2.00%
Initial consideration		107,400,000	107,400,000		35,000,000	900,000
Holdback amount related to potential indemnification claims		20,300,000	20,300,000		6,500,000	400,000
Contingent consideration		33,300,000	33,300,000		10,500,000	700,000
Investment in acquired entity by related party prior to the acquisition						$ 800,000

XML

Stock-Based Compensation (Details) (USD $)	12 Months Ended
	Dec. 29, 2012	Dec. 28, 2013 Market Stock Units	Dec. 31, 2009 2009 Stock Incentive Plan	Dec. 28, 2013 2009 Stock Incentive Plan Low end of range	Dec. 28, 2013 2009 Stock Incentive Plan High end of range	Dec. 28, 2013 2009 Stock Incentive Plan Stock options and stock appreciation rights	Dec. 28, 2013 2009 Stock Incentive Plan Stock options	Dec. 29, 2012 2009 Stock Incentive Plan Stock options	Dec. 31, 2011 2009 Stock Incentive Plan Stock options	Dec. 28, 2013 2009 Stock Incentive Plan Full value awards	Dec. 29, 2012 2009 Stock Incentive Plan Full value awards	Dec. 31, 2011 2009 Stock Incentive Plan Full value awards	Dec. 28, 2013 2009 Stock Incentive Plan Market Stock Units	Dec. 29, 2012 2009 Stock Incentive Plan Market Stock Units	Dec. 31, 2011 2009 Stock Incentive Plan Market Stock Units	Dec. 28, 2013 2000 Stock Incentive Plan Low end of range	Dec. 28, 2013 2000 Stock Incentive Plan High end of range	Dec. 28, 2013 2000 Stock Incentive Plan Stock options High end of range	Dec. 28, 2013 2009 Employee Stock Purchase Plan	Dec. 29, 2012 2009 Employee Stock Purchase Plan	Dec. 31, 2011 2009 Employee Stock Purchase Plan
Stock-based compensation costs
Term of plan			10 years
Number of shares deducted for each share granted under 2009 Stock Incentive Plan						1				1.55
Award vesting period				3 years	4 years								3 years			3 years	8 years
Minimum exercise price as percentage of fair market value of shares on the date of grant							100.00%												85.00%
Maximum term of offering																			24 months
Term of award																		10 years
Number of shares granted										1,100,000	800,000	800,000	132,000	110,000	55,000
Stock options granted (in shares)							0	0	0
Shares issued																			190,000	181,000	169,000
Net reduction in selling, general and administrative expense	$ 1,900,000
Weighted-average fair value for purchase rights granted (in dollars per share)																			$ 9.34
Fair value assumptions
Expected volatility (as a percent)																			27.00%	38.00%	27.00%
Risk-free interest rate %																			0.10%	0.20%	0.20%
Expected term																			7 months	15 months	11 months
Cash consideration based upon achievement of specified levels of market conditions		$ 0

XML

Derivative Financial Instruments (Details 2) (USD $)	12 Months Ended
	Dec. 28, 2013	Dec. 29, 2012
Derivative Financial Instruments
Description of variable rate	LIBOR
Notional value of interest rate swap agreement hedging headquarters lease		$ 50,100,000
Loss Reclassified from Accumulated OCI into Income (Effective Portion), included in rent and interest expense during period		900,000
Gains or losses from the hedging instrument which was excluded from the assessment of effectiveness	0
Other assets, net
Derivative financial instrument
Fair value of interest rate swap	513,000
Other non-current liabilities
Derivative financial instrument
Fair value of interest rate swap		$ 658,000

XML

Significant Accounting Policies

12 Months Ended

Dec. 28, 2013

Significant Accounting Policies

Significant Accounting Policies

2. Significant Accounting Policies

Basis of Presentation and Principles of Consolidation

        The Company prepares financial statements on a 52- or 53-week fiscal year that ends on the Saturday closest to December 31. Fiscal 2013, 2012 and 2011 were 52-week years and ended on December 28, 2013, December 29, 2012 and December 31, 2011, respectively. The accompanying Consolidated Financial Statements include the accounts of the Company and its wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation.

Foreign Currency Transactions

        The Company's foreign subsidiaries are considered to be extensions of the U.S. Company. The functional currency of the foreign subsidiaries is the U.S. dollar. Accordingly, gains and losses resulting from remeasuring transactions denominated in currencies other than U.S. dollars are included in other income (expense), net in the Consolidated Statements of Income.

Use of Estimates

        The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Among the significant estimates affecting the financial statements are those related to inventories, stock-based compensation, investments in auction-rate securities, acquired intangible assets, goodwill, long-lived assets and income taxes. Actual results could differ from those estimates, and such differences could be material to the financial statements.

Reclassifications

        Certain reclassifications have been made to prior year financial statements to conform to current year presentation.

Fair Value of Financial Instruments

        The fair values of the Company's financial instruments are recorded using a hierarchal disclosure framework based upon the level of subjectivity of the inputs used in measuring assets and liabilities. The three levels are described below:

• Level 1—Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date.

  Level 2—Inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.

  Level 3—Inputs are unobservable for the asset or liability and are developed based on the best information available in the circumstances, which might include the Company's own data.

Cash and Cash Equivalents

        Cash and cash equivalents consist of cash deposits, money market funds and investments in debt securities with original maturities of ninety days or less when purchased.

Investments

        The Company's investments typically have original maturities greater than ninety days as of the date of purchase and are classified as either available-for-sale or trading securities. Investments in available-for-sale securities are reported at fair value, with unrealized gains and losses, net of tax, recorded as a component of accumulated other comprehensive loss in the Consolidated Balance Sheet. Investments in trading securities are reported at fair value, with both realized and unrealized gains and losses recorded in other income (expense), net in the Consolidated Statement of Income. Investments in which the Company has the ability and intent, if necessary, to liquidate in order to support its current operations (including those with contractual maturities greater than one year from the date of purchase) are classified as short-term.

        The Company reviews its available-for-sale investments as of the end of each reporting period for other-than-temporary declines in fair value based on the specific identification method. The Company considers various factors in determining whether an impairment is other-than-temporary, including the severity and duration of the impairment, changes in underlying credit ratings, forecasted recovery, its intent to sell or the likelihood that it would be required to sell the investment before its anticipated recovery in market value and the probability that the scheduled cash payments will continue to be made. When the Company concludes that an other-than-temporary impairment has occurred, the Company assesses whether it intends to sell the security or if it is more likely than not that it will be required to sell the security before recovery. If either of these two conditions is met, the Company recognizes a charge in earnings equal to the entire difference between the security's amortized cost basis and its fair value. If the Company does not intend to sell a security and it is not more likely than not that it will be required to sell the security before recovery, the unrealized loss is separated into an amount representing the credit loss, which is recognized in earnings, and the amount related to all other factors, which is recorded in accumulated other comprehensive loss.

Derivative Financial Instruments

        The Company uses derivative financial instruments to manage certain exposures to the variability of interest rates. The Company's objective is to offset increases and decreases in expenses resulting from changes in interest rates with gains and losses on the derivative contracts, thereby reducing volatility of earnings. The Company does not use derivative contracts for speculative purposes. The effective portion of the gain or loss on interest rate swaps is recorded in accumulated other comprehensive loss as a separate component of stockholders' equity and is subsequently recognized in earnings when the hedged exposure affects earnings. Cash flows from derivatives are classified according to the nature of the cash receipt or payment in the Consolidated Statement of Cash Flows.

Inventories

        Inventories are stated at the lower of cost, determined using the first-in, first-out method, or market. The Company writes down the carrying value of inventory to net realizable value for estimated obsolescence or unmarketable inventory based upon assumptions about the age of inventory, future demand and market conditions. Inventory impairment charges establish a new cost basis for inventory and charges are not subsequently reversed to income even if circumstances later suggest that increased carrying amounts are recoverable.

Property and Equipment

        Property and equipment are stated at cost, net of accumulated depreciation. Depreciation is computed using the straight-line method over the useful lives of the assets ranging from three to seven years. Leasehold improvements are depreciated over the contractual lease period or their useful life, whichever is shorter.

        In fiscal 2012, the Company purchased the facilities it had previously leased for its headquarters in Austin, Texas. The buildings are located on land which is leased through 2099 from a third party. The rents for these ground leases were prepaid for the term of the leases by the previous lessee. The buildings and leasehold interest in ground leases are being depreciated on a straight-line basis over their estimated useful lives of 40 years and 86 years, respectively.

Business Combinations

        The Company records business combinations using the acquisition method of accounting and accordingly, allocates the fair value of purchase consideration to the assets acquired and liabilities assumed based on their fair values at the acquisition date. The excess of the fair value of purchase consideration over the fair value of the assets acquired and liabilities assumed is recorded as goodwill. The results of operations of the businesses acquired are included in the Company's consolidated results of operations beginning on the date of the acquisition.

Long-Lived Assets

        Purchased intangible assets are stated at cost, net of accumulated amortization, and are amortized using the straight-line method over their estimated useful lives, ranging from six to twelve years. Fair values are determined primarily using the income approach, in which the Company projects future expected cash flows and applies an appropriate discount rate.

        Long-lived assets "held and used" by the Company are reviewed for impairment whenever events or changes in circumstances indicate that their net book value may not be recoverable. When such factors and circumstances exist, the Company compares the projected undiscounted future cash flows associated with the related asset or group of assets over their estimated useful lives, against their respective carrying amounts. Impairment, if any, is based on the excess of the carrying amount over the fair value of those assets and is recorded in the period in which the determination was made.

        The carrying value of goodwill is reviewed at least annually by the Company for possible impairment. The goodwill impairment test is a two-step process. The first step of the impairment analysis compares the fair value of the reporting unit to the net book value of the reporting unit. In determining fair value, several valuation methodologies are allowed, although quoted market prices are the best evidence of fair value. If the results of the first step demonstrate that the net book value is greater than the fair value, the Company must proceed to step two of the analysis. Step two of the analysis compares the implied fair value of goodwill to its carrying amount. If the carrying amount of goodwill exceeds its implied fair value, an impairment loss is recognized equal to that excess. The Company tests goodwill for impairment annually as of the first day of its fourth fiscal quarter and in interim periods if events occur that would indicate that the carrying value of goodwill may be impaired.

Revenue Recognition

        Revenues are generated almost exclusively by sales of the Company's ICs. The Company recognizes revenue when all of the following criteria are met: 1) there is persuasive evidence that an arrangement exists, 2) delivery of goods has occurred, 3) the sales price is fixed or determinable, and 4) collectibility is reasonably assured. Generally, revenue from product sales to direct customers and contract manufacturers is recognized upon shipment.

        A portion of the Company's sales are made to distributors under agreements allowing certain rights of return and price protection related to the final selling price to the end customers. Accordingly, the Company defers revenue and cost of revenue on such sales until the distributors sell the product to the end customers. The net balance of deferred revenue less deferred cost of revenue associated with inventory shipped to a distributor but not yet sold to an end customer is recorded in the deferred income on shipments to distributors liability on the Consolidated Balance Sheet. Such net deferred income balance reflects the Company's estimate of the impact of rights of return and price protection.

Shipping and Handling

        Shipping and handling costs are classified as a component of cost of revenues in the Consolidated Statements of Income.

Stock-Based Compensation

        The Company has stock-based compensation plans, which are more fully described in Note 13, Stock-Based Compensation. The Company accounts for those plans using a fair-value method and recognizes the expense in its Consolidated Statement of Income.

Research and Development

        Research and development costs are expensed as incurred. Research and development expense consists primarily of personnel-related expenses, including stock-based compensation, as well as new product masks, external consulting and services costs, equipment tooling, equipment depreciation, amortization of intangible assets, and an allocated portion of our occupancy costs. Assets purchased to support the Company's ongoing research and development activities are capitalized when related to products which have achieved technological feasibility or have an alternative future use, and are amortized over their estimated useful lives.

Advertising

        Advertising costs are expensed as incurred. Advertising expenses were $2.0 million, $1.7 million and $1.6 million in fiscal 2013, 2012 and 2011, respectively.

Income Taxes

        The Company accounts for income taxes using the asset and liability method whereby deferred tax asset and liability account balances are determined based on differences between financial reporting and the tax bases of assets and liabilities and are measured using the enacted tax laws and related rates that will be in effect when the differences are expected to reverse. These differences result in deferred tax assets and liabilities, which are included in the Company's Consolidated Balance Sheet. The Company then assesses the likelihood that the deferred tax assets will be realized. A valuation allowance is established against deferred tax assets to the extent the Company believes that it is more likely than not that the deferred tax assets will not be realized, taking into consideration the level of historical taxable income and projections for future taxable income over the periods in which the temporary differences are deductible.

        Uncertain tax positions must meet a more-likely-than-not threshold to be recognized in the financial statements and the tax benefits recognized are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon final settlement. See Note 17, Income Taxes, for additional information.

Recent Accounting Pronouncements

        In February 2013, the Financial Accounting Standards Board (FASB) issued FASB Accounting Standards Update (ASU) No. 2013-02, Comprehensive Income (Topic 220)—Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income. ASU 2013-02 requires an entity to provide information about the amounts reclassified out of accumulated other comprehensive income by component. In addition, an entity is required to present, either on the face of the financial statements or in the notes, significant amounts reclassified out of accumulated other comprehensive income by the respective line items of net income, but only if the amount reclassified is required under U.S. GAAP to be reclassified to net income in its entirety in the same reporting period. For amounts that are not required to be reclassified in their entirety to net income, an entity is required to cross-reference to other disclosures that provide additional details about those amounts. ASU 2013-02 is effective prospectively for reporting periods beginning after December 15, 2012. The adoption of this ASU did not have an impact on the Company's financial statements, but did amend the disclosures for accumulated other comprehensive loss.

XML

Stock-Based Compensation (Details 2) (USD $) Share data in Thousands, except Per Share data, unless otherwise specified	12 Months Ended
	Dec. 28, 2013	Dec. 29, 2012	Dec. 31, 2011
Summary of stock-based payment and stock option values
Total unrecognized compensation costs related to awards	$ 51,200,000
Weighted-average period of recognition of unrecognized compensation costs	2 years 1 month 6 days
Cash received for the issuance of common stock, net of shares withheld for taxes	15,300,000
Stock options
Stock options activity
Outstanding at the beginning of the year (in shares)	1,696
Exercised (in shares)	(480)
Cancelled or expired (in shares)	(127)
Outstanding at the end of the period (in shares)	1,089	1,696
Vested and expected to vest at the end of the period (in shares)	1,089
Exercisable at the end of the period (in shares)	1,089
Weighted-Average Exercise Price
Outstanding at the beginning of the year (in dollars per share)	$ 35.86
Exercised (in dollars per share)	$ 34.72
Cancelled or expired (in dollars per share)	$ 46.87
Outstanding at the end of the year (in dollars per share)	$ 35.09	$ 35.86
Vested and expected to vest at the end of the period (in dollars per share)	$ 35.09
Exercisable at the end of the period (in dollars per share)	$ 35.09
Weighted-Average Remaining Contractual Term
Outstanding at the end of the period	1 year 11 months 16 days
Vested and expected to vest at the end of the period	1 year 11 months 16 days
Exercisable at the end of the period	1 year 11 months 16 days
Aggregate Intrinsic Value
Outstanding at the end of the period (in dollars)	9,688,000
Vested and expected to vest at the end of the period (in dollars)	9,688,000
Options exercisable at the end of the period (in dollars)	9,688,000
Summary of stock-based payment and stock option values
Intrinsic value of stock options exercised	4,198,000	9,064,000	8,622,000
RSAs and RSUs
Summary of stock-based payment and stock option values
Intrinsic value of RSAs and RSUs that vested	23,649,000	40,105,000	38,769,000
Grant date fair value of RSAs and RSUs that vested	24,026,000	31,215,000	29,488,000
RSAs, RSUs and MSUs
Summary of restricted stock awards and restricted stock units
Outstanding at the beginning the of year (in shares)	1,708
Granted (in shares)	1,118
Issued (in shares)	(553)
Cancelled or expired (in shares)	(192)
Outstanding at the end of the period (in shares)	2,081	1,708
Outstanding at the end of the period and expected to vest (in shares)	1,900
Weighted-Average Remaining Vesting Term
Outstanding at the end of period	1 year 3 months
Outstanding at the end of period and expected to vest	1 year 3 months
Aggregate Intrinsic Value
Outstanding at the end of the period (in dollars)	88,135,000
Outstanding at the end of the period and expected to vest (in dollars)	$ 80,471,000
Weighted-average grant date fair value
Per grant of RSAs, RSUs and MSUs (in dollars per share)	$ 41.69	$ 43.82	$ 44.73

XML

Earnings Per Share (Details) (USD $) In Thousands, except Share data, unless otherwise specified	12 Months Ended
	Dec. 28, 2013	Dec. 29, 2012	Dec. 31, 2011
Earnings Per Share
Net income	$ 49,819	$ 63,548	$ 35,472
Shares used in computing basic earnings per share	42,715,000	42,136,000	43,421,000
Effect of dilutive securities:
Stock options and other stock-based awards (in shares)	822,000	970,000	1,411,000
Shares used in computing diluted earnings per share	43,537,000	43,106,000	44,832,000
Earnings per share:
Basic (in dollars per share)	$ 1.17	$ 1.51	$ 0.82
Diluted (in dollars per share)	$ 1.14	$ 1.47	$ 0.79
Shares excluded from computation of diluted earning per share	400,000	500,000	400,000

XML

Cash, Cash Equivalents and Investments (Tables)

12 Months Ended

Dec. 28, 2013

Cash, Cash Equivalents and Investments

Schedule of cash, cash equivalents, and investments

  The Company's cash, cash equivalents and investments consisted of the following (in thousands):

	December 28, 2013
	Cost		Gross Unrealized Losses			Gross Unrealized Gains		Fair Value
Cash and Cash Equivalents:
Cash on hand	$	45,544	$	—		$	—	$	45,544
Available-for-sale securities:
Money market funds		39,538		—			—		39,538
Certificates of deposit		7,768		—			—		7,768
Commercial paper		2,499		—			—		2,499
Municipal bonds		451		—			—		451
Total available-for-sale securities		50,256		—			—		50,256
Total cash and cash equivalents	$	95,800	$	—		$	—	$	95,800
Short-term Investments:
Available-for-sale securities:
Municipal bonds	$	119,289	$	(11	)	$	182	$	119,460
Variable-rate demand notes		38,025		—			—		38,025
Corporate bonds		17,788		(4	)		60		17,844
Commercial paper		3,748		—			—		3,748
Asset-backed securities		515		—			1		516
Total short-term investments	$	179,365	$	(15	)	$	243	$	179,593
Long-term Investments:
Available-for-sale securities:
Auction rate securities	$	12,425	$	(1,793	)	$	—	$	10,632
Total long-term investments	$	12,425	$	(1,793	)	$	—	$	10,632

	December 29, 2012
	Cost		Gross Unrealized Losses			Gross Unrealized Gains		Fair Value
Cash and Cash Equivalents:
Cash on hand	$	56,690	$	—		$	—	$	56,690
Available-for-sale securities:
U.S. Treasury bills		25,049		—			1		25,050
Money market funds		22,685		—			1		22,686
Municipal bonds		1,000		—			—		1,000
Total available-for-sale securities		48,734		—			2		48,736
Total cash and cash equivalents	$	105,424	$	—		$	2	$	105,426
Short-term Investments:
Available-for-sale securities:
Corporate bonds	$	59,089	$	(5	)	$	267	$	59,351
Municipal bonds		45,646		(7	)		50		45,689
Variable-rate demand notes		41,785		—			—		41,785
Asset-backed securities		15,058		—			11		15,069
U.S. government bonds		12,638		—			25		12,663
International government bonds		1,991		—			17		2,008
Total short-term investments	$	176,207	$	(12	)	$	370	$	176,565
Long-term Investments:
Available-for-sale securities:
Auction rate securities	$	12,525	$	(1,156	)	$	—	$	11,369
Total long-term investments	$	12,525	$	(1,156	)	$	—	$	11,369

Schedule of available-for-sale investments in continuous unrealized loss position by length of time

The available-for-sale investments that were in a continuous unrealized loss position, aggregated by length of time that individual securities have been in a continuous loss position, were as follows (in thousands):

	Less Than 12 Months					12 Months or Greater					Total
As of December 28, 2013	Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses
Municipal bonds	$	11,079	$	(11	)	$	—	$	—		$	11,079	$	(11	)
Auction rate securities		—		—			10,632		(1,793	)		10,632		(1,793	)
Corporate bonds		2,605		(4	)		—		—			2,605		(4	)
	$	13,684	$	(15	)	$	10,632	$	(1,793	)	$	24,316	$	(1,808	)

	Less Than 12 Months					12 Months or Greater					Total
As of December 29, 2012	Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses
Municipal bonds	$	17,152	$	(7	)	$	—	$	—		$	17,152	$	(7	)
Auction rate securities		—		—			11,369		(1,156	)		11,369		(1,156	)
Corporate bonds		9,543		(5	)		—		—			9,543		(5	)
	$	26,695	$	(12	)	$	11,369	$	(1,156	)	$	38,064	$	(1,168	)

Summarization of contractual underlying maturities of available-for-sale investments

The following summarizes the contractual underlying maturities of the Company's available-for-sale investments at December 28, 2013 (in thousands):

	Cost		Fair Value
Due in one year or less	$	115,109	$	115,177
Due after one year through ten years		80,987		81,147
Due after ten years		45,950		44,157
	$	242,046	$	240,481

XML

Earnings Per Share (Tables)

12 Months Ended

Dec. 28, 2013

Earnings Per Share

Schedule of computation of basic and diluted earnings per share

The following table sets forth the computation of basic and diluted earnings per share (in thousands, except per share data):

	Year Ended
	December 28, 2013		December 29, 2012		December 31, 2011
Net income	$	49,819	$	63,548	$	35,472
Shares used in computing basic earnings per share		42,715		42,136		43,421
Effect of dilutive securities:
Stock options and other stock-based awards		822		970		1,411
Shares used in computing diluted earnings per share		43,537		43,106		44,832
Earnings per share:
Basic	$	1.17	$	1.51	$	0.82
Diluted	$	1.14	$	1.47	$	0.79

XML

Acquisitions (Details) (USD $) Share data in Millions, unless otherwise specified	12 Months Ended			12 Months Ended		0 Months Ended			0 Months Ended			12 Months Ended		0 Months Ended				12 Months Ended		1 Months Ended			12 Months Ended		0 Months Ended
	Dec. 28, 2013	Dec. 29, 2012	Dec. 31, 2011	Dec. 28, 2013 Customer relationships	Dec. 28, 2013 Trademarks	Oct. 17, 2013 Energy Micro	Jul. 01, 2013 Energy Micro	Dec. 28, 2013 Energy Micro	Jul. 01, 2013 Energy Micro Core and developed technology	Jul. 01, 2013 Energy Micro Customer relationships	Jul. 01, 2013 Energy Micro Trademarks	Dec. 28, 2013 Energy Micro In-process research and development	Jul. 01, 2013 Energy Micro In-process research and development	Jul. 03, 2012 Ember	Jul. 03, 2012 Ember Developed technology	Jul. 03, 2012 Ember Customer relationships	Jul. 03, 2012 Ember Trademarks	Dec. 28, 2013 Ember In-process research and development	Jul. 03, 2012 Ember In-process research and development	Sep. 30, 2012 Corporate Headquarters Buildings item	Sep. 30, 2012 400 WCC	Sep. 30, 2012 200 WCC	Dec. 31, 2011 Spectra Linear	Jan. 25, 2011 Spectra Linear	Jan. 25, 2011 Spectra Linear Core and developed technology	Jan. 25, 2011 Spectra Linear Customer relationships
Acquisition
Purchase price of acquisition							$ 140,600,000							$ 79,000,000
Estimated fair value														4,000,000										1,000,000
Initial consideration						107,400,000	107,400,000
Deferred consideration in the form of a promissory note, fair value							19,200,000
Restricted stock exchanged of promissory note in form of deferred consideration on acquisition							0.5
Mandatory period of creditor notice after which the deferred consideration in the form of a promissory note will be exchanged for the entity's restricted stock							2 months
Earn-Out, fair value	12,919,000						14,000,000
Additional consideration on acquisition						33,300,000	33,300,000
Minimum annual revenue growth for additional consideration (as a percent)							25.00%
Earn out period							5 years
Maximum annual Earn-Out payment							6,666,666
Minimum revenue in single fiscal year from Earn-Out products required to make the entire Earn-Out amount payable							400,000,000
Amount of initial consideration held in escrow by the company as security for breaches of representations and warranties and certain other expressly enumerated matters						20,300,000	20,300,000
Percentage of Earn-Out contingent on the continued employment of certain key employees							28.76%
Period of continued employment of key employees for calculating Earn-out portion following acquisition date							3 years
Net liabilities assumed																								8,000,000
Post combination expenses, additional compensation paid to employees of acquired entity																							4,500,000
Purchase price allocation
Intangible assets							55,400,000		29,100,000	6,400,000	1,300,000		18,600,000	39,140,000	17,800,000	5,620,000	910,000		14,810,000					17,960,000	16,560,000	1,400,000
Cash and cash equivalents							919,000							3,115,000
Accounts receivable														1,928,000										1,759,000
Inventories														4,749,000										1,199,000
Other current assets							6,486,000							324,000										1,658,000
Goodwill	228,781,000	130,265,000	115,489,000				98,515,000							14,777,000										4,097,000
Deferred tax assets - non-current														16,449,000										12,316,000
Other non-current assets							3,117,000							1,776,000										597,000
Notes payable - current portion																								(4,641,000)
Current liabilities							(8,000,000)							(3,287,000)										(3,112,000)
Non-current deferred tax liabilities, net							(6,288,000)
Long-term debt							(8,434,000)
Other non-current liabilities							(1,133,000)
Non-current liabilities																								(3,254,000)
Total purchase price							140,582,000							78,971,000						94,350,000				28,579,000
Acquisition-related costs recorded in selling, general and administrative expenses								2,400,000
Weighted-Average Amortization Period	9 years			9 years	10 years				7 years	8 years	8 years				11 years	9 years	12 years								10 years	10 years
Discount rate applicable to the cash flows (as a percent)												13.00%						12.50%
Purchase option price for buildings																					44,300,000	50,100,000
Buildings																				90,900,000
Leasehold interest in ground leases																				23,840,000
Acquired unfavorable leases																				(11,925,000)
Lease-related charges																				(8,000)
Net gain on purchase		$ (8,457,000)																		$ (8,457,000)
Useful life of building																				40 years
Useful life of leasehold interest in ground leases																				86 years
Number of leases for which purchase prices were fixed																				2

XML

Cash, Cash Equivalents and Investments (Details) (USD $)	12 Months Ended
	Dec. 28, 2013	Dec. 29, 2012
Cash, Cash Equivalents and Investments
Auction-rate securities guaranteed by the U.S. government	$ 10,400,000
Auction-rate securities privately insured	2,000,000
Auction-rate securities having credit rating 'AA'	6,000,000
Auction-rate securities having credit rating 'A'	2,000,000
Auction-rate securities having credit rating 'BBB'	4,400,000
Other-than-temporary impairment losses	0
Cash on hand, Cost	45,544,000	56,690,000
Cash on hand, Fair Value	45,544,000	56,690,000
Cash and cash equivalents, Cost	95,800,000	105,424,000
Cash and cash equivalents, Gross Unrealized Gains		2,000
Cash and cash equivalents, Fair Value	95,800,000	105,426,000
Cash Equivalents:
Available-for-sale securities
Available-for-sale securities, Cost	50,256,000	48,734,000
Available-for-sale securities, Gross Unrealized Gains		2,000
Available-for-sale securities, Fair Value	50,256,000	48,736,000
Short-term Investments:
Available-for-sale securities
Available-for-sale securities, Cost	179,365,000	176,207,000
Available-for-sale securities, Gross Unrealized Losses	(15,000)	(12,000)
Available-for-sale securities, Gross Unrealized Gains	243,000	370,000
Available-for-sale securities, Fair Value	179,593,000	176,565,000
Long-term Investments:
Available-for-sale securities
Available-for-sale securities, Cost	12,425,000	12,525,000
Available-for-sale securities, Gross Unrealized Losses	(1,793,000)	(1,156,000)
Available-for-sale securities, Fair Value	10,632,000	11,369,000
U.S. Treasury bills | Cash Equivalents:
Available-for-sale securities
Available-for-sale securities, Cost		25,049,000
Available-for-sale securities, Gross Unrealized Gains		1,000
Available-for-sale securities, Fair Value		25,050,000
Money market funds | Cash Equivalents:
Available-for-sale securities
Available-for-sale securities, Cost	39,538,000	22,685,000
Available-for-sale securities, Gross Unrealized Gains		1,000
Available-for-sale securities, Fair Value	39,538,000	22,686,000
Certificates of deposit | Cash Equivalents:
Available-for-sale securities
Available-for-sale securities, Cost	7,768,000
Available-for-sale securities, Fair Value	7,768,000
Commercial paper | Cash Equivalents:
Available-for-sale securities
Available-for-sale securities, Cost	2,499,000
Available-for-sale securities, Fair Value	2,499,000
Commercial paper | Short-term Investments:
Available-for-sale securities
Available-for-sale securities, Cost	3,748,000
Available-for-sale securities, Fair Value	3,748,000
Municipal bonds | Cash Equivalents:
Available-for-sale securities
Available-for-sale securities, Cost	451,000	1,000,000
Available-for-sale securities, Fair Value	451,000	1,000,000
Municipal bonds | Short-term Investments:
Available-for-sale securities
Available-for-sale securities, Cost	119,289,000	45,646,000
Available-for-sale securities, Gross Unrealized Losses	(11,000)	(7,000)
Available-for-sale securities, Gross Unrealized Gains	182,000	50,000
Available-for-sale securities, Fair Value	119,460,000	45,689,000
Corporate bonds | Short-term Investments:
Available-for-sale securities
Available-for-sale securities, Cost	17,788,000	59,089,000
Available-for-sale securities, Gross Unrealized Losses	(4,000)	(5,000)
Available-for-sale securities, Gross Unrealized Gains	60,000	267,000
Available-for-sale securities, Fair Value	17,844,000	59,351,000
Variable-rate demand notes | Short-term Investments:
Available-for-sale securities
Available-for-sale securities, Cost	38,025,000	41,785,000
Available-for-sale securities, Fair Value	38,025,000	41,785,000
Asset-backed securities | Short-term Investments:
Available-for-sale securities
Available-for-sale securities, Cost	515,000	15,058,000
Available-for-sale securities, Gross Unrealized Gains	1,000	11,000
Available-for-sale securities, Fair Value	516,000	15,069,000
U.S. government bonds | Short-term Investments:
Available-for-sale securities
Available-for-sale securities, Cost		12,638,000
Available-for-sale securities, Gross Unrealized Gains		25,000
Available-for-sale securities, Fair Value		12,663,000
International government bonds | Short-term Investments:
Available-for-sale securities
Available-for-sale securities, Cost		1,991,000
Available-for-sale securities, Gross Unrealized Gains		17,000
Available-for-sale securities, Fair Value		2,008,000
Auction rate securities | Long-term Investments:
Available-for-sale securities
Available-for-sale securities, Cost	12,425,000	12,525,000
Available-for-sale securities, Gross Unrealized Losses	(1,793,000)	(1,156,000)
Available-for-sale securities, Fair Value	$ 10,632,000	$ 11,369,000

XML

Derivative Financial Instruments (Tables)

12 Months Ended

Dec. 28, 2013

Derivative Financial Instruments

Schedule of derivative financial instrument

 The Company's derivative financial instrument consisted of the following (in thousands):

		Fair Value
	Balance Sheet Location	December 28, 2013		December 29, 2012
Interest rate swap	Other assets, net	$	513	$	—
	Other non-current liabilities		—		658

Schedule of before-tax effect of derivative instruments in cash flow hedging relationships

 The before-tax effect of derivative instruments in cash flow hedging relationships was as follows (in thousands):

	Gain (Loss) Recognized in OCI on Derivatives (Effective Portion) during the Year Ended								Location of Loss Reclassified into Income	Loss Reclassified from Accumulated OCI into Income (Effective Portion) during the Year Ended
	December 28, 2013		December 29, 2012			December 31, 2011				December 28, 2013			December 29, 2012			December 31, 2011
Interest rate swaps	$	611	$	(956	)	$	(424	)	Rent expense	$	—		$	(2,197	)	$	(2,237	)
									Interest expense		(560	)		(98	)		—

XML

Fair Value of Financial Instruments (Tables)

12 Months Ended

Dec. 28, 2013

Fair Value of Financial Instruments

Financial assets and liabilities measured at fair value on a recurring basis

The following summarizes the valuation of the Company's financial instruments (in thousands).

	Fair Value Measurements at December 28, 2013 Using
Description	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Assets:
Cash Equivalents:
Money market funds	$	39,538	$	—	$	—	$	39,538
Certificates of deposit		—		7,768		—		7,768
Commercial paper		—		2,499		—		2,499
Municipal bonds		—		451		—		451
Total cash equivalents	$	39,538	$	10,718	$	—	$	50,256
Short-term Investments:
Municipal bonds	$	—	$	119,460	$	—	$	119,460
Variable-rate demand notes		—		38,025		—		38,025
Corporate bonds		—		17,844		—		17,844
Commercial paper		—		3,748		—		3,748
Asset-backed securities		—		516		—		516
Total short-term investments	$	—	$	179,593	$	—	$	179,593
Long-term Investments:
Auction rate securities	$	—	$	—	$	10,632	$	10,632
Total long-term investments	$	—	$	—	$	10,632	$	10,632
Other assets, net:
Derivative instruments	$	—	$	513	$	—	$	513
Total	$	—	$	513	$	—	$	513
Total	$	39,538	$	190,824	$	10,632	$	240,994
Other non-current liabilities:
Contingent consideration	$	—	$	—	$	12,919	$	12,919
Total	$	—	$	—	$	12,919	$	12,919

	Fair Value Measurements at December 29, 2012 Using
Description	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Assets:
Cash Equivalents:
U.S. Treasury bills	$	25,050	$	—	$	—	$	25,050
Money market funds		22,686		—		—		22,686
Municipal bonds		—		1,000		—		1,000
Total cash equivalents	$	47,736	$	1,000	$	—	$	48,736
Short-term Investments:
Corporate bonds	$	—	$	59,351	$	—	$	59,351
Municipal bonds		—		45,689		—		45,689
Variable-rate demand notes		—		41,785		—		41,785
Asset-backed securities		—		15,069		—		15,069
U.S. government bonds		12,663		—		—		12,663
International government bonds		—		2,008		—		2,008
Total short-term investments	$	12,663	$	163,902	$	—	$	176,565
Long-term Investments:
Auction rate securities	$	—	$	—	$	11,369	$	11,369
Total long-term investments	$	—	$	—	$	11,369	$	11,369
Total	$	60,399	$	164,902	$	11,369	$	236,670
Liabilities:
Derivative instruments	$	—	$	658	$	—	$	658
Contingent consideration		—		—		2,750		2,750
Total	$	—	$	658	$	2,750	$	3,408

Summary of quantitative information about level 3 asset fair value measurements

Fair Value at December 28, 2013 (000s)	Valuation Technique	Unobservable Input	Weighted Average
$10,632	Discounted cash flow	Estimated yield	1.11%
		Expected holding period	10 years
		Estimated discount rate	4.05%

Summary of quantitative information about level 3 liability fair value measurements

Fair Value at December 28, 2013 (000s)	Valuation Technique	Unobservable Input	Range
$12,919	Monte Carlo simulation	Expected revenue growth rate	26.2% - 51.9%
		Expected revenue volatility	20.0%
		Expected term	1.0 - 5.0 years
		Estimated discount rate	0.1% - 1.6%

Summary of activity in Level 3 financial instruments

The following summarizes the activity in Level 3 financial instruments for the years ended December 28, 2013 and December 29, 2012 (in thousands):

Assets

	Year Ended
Auction Rate Securities	December 28, 2013			December 29, 2012
Beginning balance	$	11,369		$	17,477
Settlements		(100	)		(6,700	)
Gain (loss) included in other comprehensive income		(637	)		592
Ending balance	$	10,632		$	11,369

Liabilities

	Year Ended
Contingent Consideration (1)	December 28, 2013			December 29, 2012
Beginning balance	$	2,750		$	876
Issues		13,964			4,004
Gain recognized in earnings (2)		(3,795	)		(2,130	)
Ending balance	$	12,919		$	2,750
Net gain for the period included in earnings attributable to contingent consideration held at the end of the period:	$	1,045		$	1,254

(1)

In connection with the acquisition of Energy Micro, Ember and ChipSensors, the Company recorded contingent consideration based upon the expected achievement of certain milestone goals. Changes to the fair value of contingent consideration due to changes in assumptions used in preparing the valuation model are recorded in selling, general and administrative expenses in the Consolidated Statements of Income.

(2)

The Company reduced the estimated fair value of contingent consideration because certain milestone goals were either not achieved or were expected to be achieved at a lower outcome.

XML

Description of Business

12 Months Ended

Dec. 28, 2013

Description of Business

Description of Business

1. Description of Business

        Silicon Laboratories Inc. (the "Company"), a Delaware corporation, develops and markets mixed-signal analog intensive integrated circuits (ICs) for a broad range of applications for global markets. Within the semiconductor industry, the Company is known as a "fabless" company meaning that the ICs are manufactured by third-party foundry semiconductor companies.

XML

Balance Sheet Details (Tables)

12 Months Ended

Dec. 28, 2013

Balance Sheet Details

Inventories

      The following table show the details of selected Consolidated Balance Sheet items (in thousands):

Inventories

	December 28, 2013		December 29, 2012
Work in progress	$	34,503	$	42,103
Finished goods		10,768		7,476
	$	45,271	$	49,579

Prepaid Expenses and Other Current Assets

      The following table show the details of selected Consolidated Balance Sheet items (in thousands):

Prepaid Expenses and Other Current Assets

	December 28, 2013		December 29, 2012
Distributor advances	$	31,839	$	21,260
Other		15,812		20,177
	$	47,651	$	41,437

Property and Equipment

      The following table show the details of selected Consolidated Balance Sheet items (in thousands):

Property and Equipment

	December 28, 2013			December 29, 2012
Buildings and improvements	$	94,221		$	90,900
Equipment		51,071			48,219
Computers and purchased software		25,556			27,294
Leasehold interest in ground leases		23,840			23,840
Furniture and fixtures		3,496			3,129
Leasehold improvements		7,784			7,587
		205,968			200,969
Accumulated depreciation		(73,523	)		(65,698	)
	$	132,445		$	135,271

Accrued Expenses

      The following table show the details of selected Consolidated Balance Sheet items (in thousands):

Accrued Expenses

	December 28, 2013		December 29, 2012
Accrued compensation and benefits	$	24,896	$	22,298
Other		21,079		18,112
	$	45,975	$	40,410

Other Non-current Liabilities

      The following table show the details of selected Consolidated Balance Sheet items (in thousands):

Other Non-current Liabilities

	December 28, 2013		December 29, 2012
Acquisition-related escrow	$	20,010	$	—
Contingent consideration		12,919		—
Acquired unfavorable leases		11,268		11,794
Other		11,744		8,821
	$	55,941	$	20,615

XML

Income Taxes (Tables)

12 Months Ended

Dec. 28, 2013

Income Taxes

Components of the provision (benefit) for income taxes

Significant components of the provision for income taxes are as follows (in thousands):

	Year Ended
	December 28, 2013			December 29, 2012			December 31, 2011
Current:
Domestic	$	4,796		$	21,084		$	14,468
International		4,093			(3,009	)		2,845
Total Current		8,889			18,075			17,313
Deferred:
Domestic		5,591			5,444			(70	)
International		(2,272	)		(719	)		(375	)
Total Deferred		3,319			4,725			(445	)
	$	12,208		$	22,800		$	16,868

Summary of effective income tax rate reconciliation

	Year Ended
	December 28, 2013			December 29, 2012			December 31, 2011
Federal statutory rate		35.0	%		35.0	%		35.0	%
Foreign tax rate benefit		(8.2	)		(11.8	)		(11.0	)
Research and development tax credits		(14.6	)		(0.5	)		(8.5	)
Release of prior year unrecognized tax benefits		—			(8.4	)		—
Intercompany technology license		—			11.8			10.4
Excess officer compensation		1.9			1.0			3.2
Valuation allowance		3.8			—			—
Nondeductible acquisition costs		0.2			0.1			2.9
Other		1.6			(0.8	)		0.2
		19.7	%		26.4	%		32.2	%

Schedule of components of income before income taxes

 Income before income taxes included the following components (in thousands):

	Year Ended
	December 28, 2013		December 29, 2012		December 31, 2011
Domestic	$	41,849	$	80,494	$	48,282
Foreign		20,178		5,854		4,058
	$	62,027	$	86,348	$	52,340

Significant components of the Company's deferred taxes

Significant components of the Company's deferred taxes as of December 28, 2013 and December 29, 2012 are as follows (in thousands):

	December 28, 2013			December 29, 2012
Deferred tax assets:
Net operating loss carryforwards	$	38,399		$	35,847
Research and development tax credit carryforwards		9,276			8,447
Stock-based compensation		6,757			8,133
Capitalized research and development		8,999			9,708
Deferred income on shipments to distributors		5,733			3,933
Accrued liabilities and other		8,302			7,503
		77,466			73,571
Less: Valuation allowance		(3,775	)		(2,114	)
		73,691			71,457
Deferred tax liabilities:
Acquired intangibles		38,444			28,653
Depreciation and amortization		2,022			1,076
Prepaid expenses and other		1,889			1,447
		42,355			31,176
Net deferred tax assets	$	31,336		$	40,281

Schedule of changes in the unrecognized tax benefits

The following table reflects changes in the unrecognized tax benefits (in thousands):

	Year Ended
	December 28, 2013		December 29, 2012			December 31, 2011
Beginning balance	$	4,364	$	10,943		$	10,789
Additions based on tax positions related to current year		316		1,818			757
Additions based on tax positions related to prior years		318		—			—
Reductions for tax positions related to prior years		—		(8,397	)		(603	)
Ending balance	$	4,998	$	4,364		$	10,943

XML

Fair Value of Financial Instruments (Details 5) (Assets and liabilities measured at fair value on recurring basis, Contingent consideration, USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 28, 2013	Dec. 29, 2012
Assets and liabilities measured at fair value on recurring basis | Contingent consideration
Fair value liabilities reconciliation of changes
Balance at the beginning of the period	$ 2,750	$ 876
Issues	13,964	4,004
Gain recognized in earnings	(3,795)	(2,130)
Balance at the end of the period	12,919	2,750
Net gain for the period included in earnings attributable to contingent consideration held at the end of the period:	$ 1,045	$ 1,254

XML

SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS (Details) (Valuation Allowance for Deferred Tax Assets, USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 28, 2013	Dec. 29, 2012
Valuation Allowance for Deferred Tax Assets
Valuation Allowance
Balance at Beginning of Period	$ 2,114
Charged to Expenses	2,335
Charged to Goodwill		2,114
Deductions	(674)
Balance at End of Period	$ 3,775	$ 2,114

XML

Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Dec. 28, 2013	Dec. 29, 2012
Current assets:
Cash and cash equivalents	$ 95,800	$ 105,426
Short-term investments	179,593	176,565
Accounts receivable, net of allowances for doubtful accounts of $797 at December 28, 2013 and $670 at December 29, 2012	72,124	78,023
Inventories	45,271	49,579
Deferred income taxes	18,878	16,652
Prepaid expenses and other current assets	47,651	41,437
Total current assets	459,317	467,682
Long-term investments	10,632	11,369
Property and equipment, net	132,445	135,271
Goodwill	228,781	130,265
Other intangible assets, net	131,593	90,750
Other assets, net	28,382	36,629
Total assets	991,150	871,966
Current liabilities:
Accounts payable	22,126	29,622
Current portion of long-term debt	7,500	5,000
Accrued expenses	45,975	40,410
Deferred income on shipments to distributors	30,853	30,259
Income taxes	2,693	1,087
Total current liabilities	109,147	106,378
Long-term debt	87,500	95,000
Other non-current liabilities	55,941	20,615
Total liabilities	252,588	221,993
Commitments and contingencies
Stockholders' equity:
Preferred stock - $0.0001 par value; 10,000 shares authorized; no shares issued and outstanding
Common stock - $0.0001 par value; 250,000 shares authorized; 42,779 and 41,879 shares issued and outstanding at December 28, 2013 and December 29, 2012, respectively	4	4
Additional paid-in capital	48,630	10,122
Retained earnings	690,612	640,793
Accumulated other comprehensive loss	(684)	(946)
Total stockholders' equity	738,562	649,973
Total liabilities and stockholders' equity	$ 991,150	$ 871,966

XML

Cash, Cash Equivalents and Investments (Details 2) (USD $) In Thousands, unless otherwise specified	Dec. 28, 2013	Dec. 29, 2012
Continuous unrealized loss position, Fair Value
Fair value of available-for-sale securities, continuous loss position for less than twelve months	$ 13,684	$ 26,695
Fair value of available-for-sale securities, continuous loss position for twelve months or longer	10,632	11,369
Total fair value of available-for-sale securities, continuous loss position	24,316	38,064
Continuous unrealized loss position, Gross Unrealized Losses
Available-for-sale securities, continuous loss position for less than 12 months, gross unrealized losses	(15)	(12)
Available-for-sale securities, continuous loss position for 12 months or greater, gross unrealized losses	(1,793)	(1,156)
Available-for-sale securities, total gross unrealized losses	(1,808)	(1,168)
Cost
Due in one year or less, Cost	115,109
Due after one year through ten years, Cost	80,987
Due after ten years, Cost	45,950
Total Cost	242,046
Fair Value
Due in one year or less, Fair Value	115,177
Due after one year through ten years, Fair Value	81,147
Due after ten years, Fair Value	44,157
Total Fair Value	240,481
Municipal bonds
Continuous unrealized loss position, Fair Value
Fair value of available-for-sale securities, continuous loss position for less than twelve months	11,079	17,152
Total fair value of available-for-sale securities, continuous loss position	11,079	17,152
Continuous unrealized loss position, Gross Unrealized Losses
Available-for-sale securities, continuous loss position for less than 12 months, gross unrealized losses	(11)	(7)
Available-for-sale securities, total gross unrealized losses	(11)	(7)
Auction rate securities
Continuous unrealized loss position, Fair Value
Fair value of available-for-sale securities, continuous loss position for twelve months or longer	10,632	11,369
Total fair value of available-for-sale securities, continuous loss position	10,632	11,369
Continuous unrealized loss position, Gross Unrealized Losses
Available-for-sale securities, continuous loss position for 12 months or greater, gross unrealized losses	(1,793)	(1,156)
Available-for-sale securities, total gross unrealized losses	(1,793)	(1,156)
Corporate bonds
Continuous unrealized loss position, Fair Value
Fair value of available-for-sale securities, continuous loss position for less than twelve months	2,605	9,543
Total fair value of available-for-sale securities, continuous loss position	2,605	9,543
Continuous unrealized loss position, Gross Unrealized Losses
Available-for-sale securities, continuous loss position for less than 12 months, gross unrealized losses	(4)	(5)
Available-for-sale securities, total gross unrealized losses	$ (4)	$ (5)

XML

Consolidated Statements of Changes in Stockholders' Equity (USD $) In Thousands, unless otherwise specified	Total	Common Stock	Additional Paid-In Capital	Retained Earnings	Accumulated Other Comprehensive Loss
Balance at Jan. 01, 2011	$ 625,430	$ 4	$ 49,947	$ 579,127	$ (3,648)
Balance (in shares) at Jan. 01, 2011		43,933
Increase (Decrease) in Stockholders' Equity
Net income	35,472			35,472
Other comprehensive income	1,181				1,181
Stock issuances under employee plans, net of shares withheld for taxes	7,660		7,660
Stock issuances under employee plans, net of shares withheld for taxes (in shares)		1,290
Income tax benefit (detriment) from employee stock-based awards	2,707		2,707
Repurchases of common stock	(110,063)		(82,117)	(27,946)
Repurchases of common stock (in shares)	(3,200)	(3,155)
Stock-based compensation	36,552		36,552
Balance at Dec. 31, 2011	598,939	4	14,749	586,653	(2,467)
Balance (in shares) at Dec. 31, 2011		42,068
Increase (Decrease) in Stockholders' Equity
Net income	63,548			63,548
Other comprehensive income	1,521				1,521
Stock issuances under employee plans, net of shares withheld for taxes	15,148		15,148
Stock issuances under employee plans, net of shares withheld for taxes (in shares)		1,560
Income tax benefit (detriment) from employee stock-based awards	1,675		1,675
Repurchases of common stock	(62,019)		(52,611)	(9,408)
Repurchases of common stock (in shares)	(1,700)	(1,749)
Stock-based compensation	31,161		31,161
Balance at Dec. 29, 2012	649,973	4	10,122	640,793	(946)
Balance (in shares) at Dec. 29, 2012	41,879	41,879
Increase (Decrease) in Stockholders' Equity
Net income	49,819			49,819
Other comprehensive income	262				262
Stock issuances under employee plans, net of shares withheld for taxes	15,301		15,301
Stock issuances under employee plans, net of shares withheld for taxes (in shares)		1,057
Income tax benefit (detriment) from employee stock-based awards	(772)		(772)
Repurchases of common stock	(26,022)		(26,022)
Repurchases of common stock (in shares)	(700)	(661)
Stock-based compensation	30,753		30,753
Stock issued in business combination	19,248		19,248
Stock issued in business combination (in shares)	500	504
Balance at Dec. 28, 2013	$ 738,562	$ 4	$ 48,630	$ 690,612	$ (684)
Balance (in shares) at Dec. 28, 2013	42,779	42,779

XML

Stockholders' Equity (Details) (USD $) In Thousands, except Share data, unless otherwise specified	12 Months Ended									1 Months Ended
	Dec. 28, 2013	Dec. 29, 2012	Dec. 31, 2011	Dec. 28, 2013 Unrealized Gain (Loss) on Cash Flow Hedge	Dec. 29, 2012 Unrealized Gain (Loss) on Cash Flow Hedge	Dec. 31, 2011 Unrealized Gain (Loss) on Cash Flow Hedge	Dec. 28, 2013 Net Unrealized Losses on Available-For-Sale Securities	Dec. 29, 2012 Net Unrealized Losses on Available-For-Sale Securities	Dec. 31, 2011 Net Unrealized Losses on Available-For-Sale Securities	Jan. 31, 2014 Maximum	Jan. 31, 2013 Maximum	Apr. 30, 2012 Maximum	Oct. 31, 2011 Maximum	Jul. 31, 2010 Maximum
Stockholders' Equity
Number of shares of common stock issued	1,600,000
Number of shares issued in connection with the acquisition of Energy Micro	500,000
Stockholders' Equity
Program Amount authorized to repurchase										$ 100,000	$ 50,000	$ 100,000	$ 50,000	$ 150,000
Components of accumulated other comprehensive loss, net of taxes
Balance at beginning of the period	(946)	(2,467)	(3,648)	(428)	(1,299)	(2,477)	(518)	(1,168)	(1,171)
Other comprehensive income (loss) before reclassifications	49	29	(273)	397	(621)	(276)	(348)	650	3
Amounts reclassified from accumulated other comprehensive loss	213	1,492	1,454	364	1,492	1,454	(151)
Other comprehensive income	262	1,521	1,181	761	871	1,178	(499)	650	3
Balance at end of the period	(684)	(946)	(2,467)	333	(428)	(1,299)	(1,017)	(518)	(1,168)
Repurchase of common stock (in shares)	700,000	1,700,000	3,200,000
Repurchase of common stock	$ 26,022	$ 62,019	$ 110,063

XML

Goodwill and Other Intangible Assets (Tables)

12 Months Ended

Dec. 28, 2013

Goodwill and Other Intangible Assets

Summary of goodwill activity

The following summarizes the activity in goodwill for the years ended December 28, 2013 and December 29, 2012 (in thousands):

	Year Ended
	December 28, 2013		December 29, 2012
Beginning balance	$	130,265	$	115,489
Additions due to business combinations		98,516		14,776
Ending balance	$	228,781	$	130,265

Schedule of gross carrying amount and accumulated amortization of other intangible assets

 The gross carrying amount and accumulated amortization of other intangible assets are as follows (in thousands):

		December 28, 2013					December 29, 2012
	Weighted-Average Amortization Period (Years)
		Gross Amount		Accumulated Amortization			Gross Amount		Accumulated Amortization
Intangible assets:
Subject to amortization:
Core and developed technology	9	$	138,340	$	(41,782	)	$	95,420	$	(30,145	)
Customer relationships	9		14,500		(2,330	)		8,100		(1,057	)
Patents	6		3,000		(750	)		3,000		(250	)
Trademarks	10		2,210		(195	)		910		(38	)
	9		158,050		(45,057	)		107,430		(31,490	)
Not subject to amortization:
In-process research and development	Not amortized		18,600		—			14,810		—
Total intangible assets		$	176,650	$	(45,057	)	$	122,240	$	(31,490	)

Schedule of estimated aggregate amortization expense for intangible assets subject to amortization for each of the five succeeding fiscal years

The estimated aggregate amortization expense for intangible assets subject to amortization for each of the five succeeding fiscal years is as follows (in thousands):

Fiscal Year
2014	$	17,060
2015		16,669
2016		16,019
2017		15,052
2018		14,309

XML

Employee Benefit Plan (Details) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 28, 2013	Dec. 29, 2012	Dec. 31, 2011
Employee Benefit Plan
Contribution made to the 401 (k) Plan	$ 3.0	$ 2.9	$ 2.7

XML

Commitments and Contingencies

12 Months Ended

Dec. 28, 2013

Commitments and Contingencies

Commitments and Contingencies

15. Commitments and Contingencies

Operating Leases

        The Company leases certain facilities under operating lease agreements that expire at various dates through 2022. Some of these arrangements contain renewal options and require the Company to pay taxes, insurance and maintenance costs.

        Rent expense under operating leases was $4.2 million, $4.4 million and $4.5 million for fiscal 2013, 2012 and 2011, respectively. The minimum annual future rentals under the terms of these leases as of December 28, 2013 are as follows (in thousands):

Fiscal Year
2014	$	4,232
2015		3,704
2016		3,058
2017		2,350
2018		1,449
Thereafter		682
Total minimum lease payments	$	15,475

Litigation

• Patent Litigation

        On January 21, 2014, Cresta Technology Corporation ("Cresta Technology"), a Delaware corporation, filed a lawsuit against the Company, Samsung Electronics Co., Ltd., Samsung Electronics America, Inc., LG Electronics Inc. and LG Electronics U.S.A., Inc. in the United States District Court in the District of Delaware, alleging infringement of United States Patent Nos. 7,075,585, 7,265,792 and 7,251,466. The lawsuit relates to the Company's family of television tuner products. Cresta Technology seeks unspecified compensatory and enhanced damages, attorney fees and a permanent injunction. On January 28, 2014, Cresta Technology also filed a complaint with the United States International Trade Commission alleging infringement of the same patents against the Company, Samsung and LG Electronics and seeking to prevent the importation and sale of allegedly infringing products in the United States. The Company intends to vigorously defend against these allegations. At this time, the Company cannot predict the outcome of these matters or the resulting financial impact to it, if any.

        In 2012, MaxLinear, Inc., a Delaware corporation, and the Company engaged one another in three patent infringement lawsuits filed in the United States District Court for the Southern District of California, San Diego Division, and in the United States District Court for the Western District of Texas, Austin Division. The Texas Court determined that the dispute concerning MaxLinear's patents would proceed in the California Court. On May 16, 2013, MaxLinear filed an additional patent infringement lawsuit against the Company in the United States District Court for the Southern District of California. On October 3, 2013, the Company and MaxLinear executed a Settlement Agreement resolving all of the lawsuits between them. MaxLinear granted the Company a license to its patent portfolio for the accused Company products, and the Company granted MaxLinear a license to its patent portfolio for the accused MaxLinear products. As part of the settlement, MaxLinear made a one-time payment of $1.25 million to the Company. The Company and MaxLinear also entered into a 3-year covenant not to sue and agreed to dismiss all of the pending cases.

Other

        The Company is involved in various other legal proceedings that have arisen in the normal course of business. While the ultimate results of these matters cannot be predicted with certainty, the Company does not expect them to have a material adverse effect on its consolidated financial statements.

XML

Debt (Tables)

12 Months Ended

Dec. 28, 2013

Debt

Schedule of remaining contractual maturities of the Term Loan Facility

As of December 28, 2013, the remaining contractual maturities of the Term Loan Facility were as follows (in thousands):

Fiscal Year
2014	$	7,500
2015		10,000
2016		10,000
2017		67,500
Total	$	95,000

XML

Income Taxes

12 Months Ended

Dec. 28, 2013

Income Taxes

Income Taxes

17. Income Taxes

        Significant components of the provision for income taxes are as follows (in thousands):

	Year Ended
	December 28, 2013			December 29, 2012			December 31, 2011
Current:
Domestic	$	4,796		$	21,084		$	14,468
International		4,093			(3,009	)		2,845
Total Current		8,889			18,075			17,313
Deferred:
Domestic		5,591			5,444			(70	)
International		(2,272	)		(719	)		(375	)
Total Deferred		3,319			4,725			(445	)
	$	12,208		$	22,800		$	16,868

        The Company's provision for income taxes differs from the expected tax expense amount computed by applying the statutory federal income tax rate to income before income taxes as a result of the following:

	Year Ended
	December 28, 2013			December 29, 2012			December 31, 2011
Federal statutory rate		35.0	%		35.0	%		35.0	%
Foreign tax rate benefit		(8.2	)		(11.8	)		(11.0	)
Research and development tax credits		(14.6	)		(0.5	)		(8.5	)
Release of prior year unrecognized tax benefits		—			(8.4	)		—
Intercompany technology license		—			11.8			10.4
Excess officer compensation		1.9			1.0			3.2
Valuation allowance		3.8			—			—
Nondeductible acquisition costs		0.2			0.1			2.9
Other		1.6			(0.8	)		0.2
		19.7	%		26.4	%		32.2	%

        The effective tax rate for fiscal 2013 decreased from the prior period, primarily due to the prior period tax charge related to the intercompany license of certain technology associated with the acquisition of Ember during 2012 and the recognition of the fiscal 2012 and fiscal 2013 federal research and development tax credits in fiscal 2013 as a result of the enactment of the American Taxpayer Relief Act of 2012 (the "Act") on January 2, 2013. The decrease in the effective tax rate for fiscal 2013 was partially offset by the release during the prior period of unrecognized tax benefits that were determined to be effectively settled during 2012.

        The effective tax rate for fiscal 2012 decreased from the prior period, primarily due to the release of prior year unrecognized tax benefits that were determined to be effectively settled during fiscal 2012, along with one-time nondeductible costs associated with the acquisition of Spectra Linear in fiscal 2011. The impact of these items was partially offset by the non-renewal of the federal research and development tax credit in fiscal 2012.

        Income before income taxes included the following components (in thousands):

	Year Ended
	December 28, 2013		December 29, 2012		December 31, 2011
Domestic	$	41,849	$	80,494	$	48,282
Foreign		20,178		5,854		4,058
	$	62,027	$	86,348	$	52,340

        Foreign income before income taxes increased from fiscal 2012 to fiscal 2013 predominantly due to intercompany technology license payments made by a foreign subsidiary in 2012. Foreign income before income taxes increased from fiscal 2011 to fiscal 2012 predominantly due to increases in product sales, offset in part by an increase in the intercompany technology license payments made by a foreign subsidiary.

        Deferred tax assets and liabilities are recorded for the estimated tax impact of temporary differences between the tax basis and book basis of assets and liabilities. A valuation allowance is established against a deferred tax asset when it is more likely than not that the deferred tax asset will not be realized. The Company recorded a valuation allowance of $1.7 million in fiscal 2013 related to certain state loss and research and development tax credit carryforwards. This figure is net of a valuation allowance release of $0.4 million, which was due to the expiration of certain state net operating loss carryforwards, and a reduction of $0.2 million related to an adjustment of certain acquired state net operating losses and research and development tax credit carryforwards which were fully valued, both of which were offset by changes in deferred tax assets rather than a charge to income tax expense. The Company has determined that it is more likely than not that a portion of the carryforwards will expire or go unutilized because the Company no longer expects to recognize sufficient income in the jurisdictions in which the attributes were created. No valuation allowance was recorded against other deferred tax assets for fiscal 2013 or 2012. Management believes that the Company's results of future operations will generate sufficient taxable income such that it is more likely than not that the remaining deferred tax assets will be realized.

        Significant components of the Company's deferred taxes as of December 28, 2013 and December 29, 2012 are as follows (in thousands):

	December 28, 2013			December 29, 2012
Deferred tax assets:
Net operating loss carryforwards	$	38,399		$	35,847
Research and development tax credit carryforwards		9,276			8,447
Stock-based compensation		6,757			8,133
Capitalized research and development		8,999			9,708
Deferred income on shipments to distributors		5,733			3,933
Accrued liabilities and other		8,302			7,503
		77,466			73,571
Less: Valuation allowance		(3,775	)		(2,114	)
		73,691			71,457
Deferred tax liabilities:
Acquired intangibles		38,444			28,653
Depreciation and amortization		2,022			1,076
Prepaid expenses and other		1,889			1,447
		42,355			31,176
Net deferred tax assets	$	31,336		$	40,281

        During fiscal 2013, the Company recorded a net deferred tax liability of approximately $5.3 million related to the acquisition of Energy Micro due to differences between book and tax bases of acquired assets and assumed liabilities.

        As of December 28, 2013, the Company had federal net operating loss and research and development credit carryforwards of approximately $77.5 million and $2.1 million, respectively, as a result of the Cygnal Integrated Products, Silicon Clocks, Spectra Linear and Ember acquisitions. These carryforwards expire in fiscal years 2019 through 2032. Recognition of these loss and credit carryforwards is subject to an annual limit, which may cause them to expire before they are used.

        As of December 28, 2013, the Company had foreign net operating loss carryforwards of approximately $29.6 million as a result of the Energy Micro acquisition. These loss carryforwards do not expire and recognition is not subject to an annual limit.

        The Company also had state loss and research and development credit carryforwards of approximately $63.9 million and $11.0 million, respectively. A portion of these loss and credit carryforwards was generated by the Company and a portion was acquired through the Integration Associates, Silicon Clocks, Spectra Linear and Ember acquisitions. Certain of these carryforwards expire in fiscal years 2013 through 2033 and others do not expire. Recognition of some of these loss and credit carryforwards is subject to an annual limit, which may cause them to expire before they are used.

        At the end of fiscal 2013, undistributed earnings of the Company's foreign subsidiaries of approximately $292.3 million are intended to be permanently reinvested outside the U.S. Accordingly, no provision for U.S. federal and state income taxes associated with a distribution of these earnings has been made. Determination of the amount of the unrecognized deferred tax liability on these unremitted earnings is not practicable.

        The Company's operations in Singapore are subject to reduced tax rates through 2019, as long as certain conditions are met. The income tax benefit (expense) from the reduced Singapore tax rate reflected in earnings was approximately $2.2 million (representing $0.05 per diluted share) in fiscal 2013, approximately $(13.3) million (representing $(0.31) per diluted share) in fiscal 2012 and approximately $2.5 million (representing $0.06 per diluted share) in fiscal 2011. The impact of the reduced Singapore tax rate in fiscal 2012 reflects the recognition of prior year unrecognized tax benefits.

        The following table reflects changes in the unrecognized tax benefits (in thousands):

	Year Ended
	December 28, 2013		December 29, 2012			December 31, 2011
Beginning balance	$	4,364	$	10,943		$	10,789
Additions based on tax positions related to current year		316		1,818			757
Additions based on tax positions related to prior years		318		—			—
Reductions for tax positions related to prior years		—		(8,397	)		(603	)
Ending balance	$	4,998	$	4,364		$	10,943

        As of December 28, 2013, December 29, 2012 and December 31, 2011, the Company had gross unrecognized tax benefits of $5.0 million, $4.4 million and $10.9 million, respectively, of which $4.8 million, $4.1 million and $9.9 million, respectively, would affect the effective tax rate if recognized. During fiscal 2013, the Company had gross increases of $0.6 million. During fiscal 2012, the Company had gross increases of $1.8 million to its current year unrecognized tax benefits, as well as a gross decrease of $8.4 million to its prior year unrecognized tax benefits related to an uncertain tax position that was determined to be effectively settled. A portion of these amounts in fiscal 2012 represents foreign currency remeasurement adjustments and was recognized in other income (expense), net.

        The Company recognizes interest and penalties related to unrecognized tax benefits in the provision for income taxes. The Company recognized less than $0.1 million of interest in the provision for income taxes in fiscal 2013. The Company did not recognize interest in the provision of income taxes in fiscal 2012 and 2011. The Company has an accrual of less than $0.1 million for the payment of interest related to unrecognized tax positions at the end of fiscal 2013, with no such accrual at the end of fiscal 2012 and 2011.

        The Company believes it is reasonably possible that the gross unrecognized tax benefits will decrease by approximately $1.5 million in the next 12 months due to the lapse of the statute of limitations applicable to a tax deduction claimed on a prior year foreign tax return.

        The tax years 2006 through 2013 remain open to examination by the major taxing jurisdictions to which the Company is subject. The examination of the Company's 2009 through 2011 federal income tax returns by the U.S. Internal Revenue Service was completed during the third quarter of 2013 with no material impact on the Company's financial statements. The Company is not currently under audit in any other major taxing jurisdiction.

XML

Income Taxes (Details) (USD $)	12 Months Ended
	Dec. 28, 2013	Dec. 29, 2012	Dec. 31, 2011
Current:
Domestic	$ 4,796,000	$ 21,084,000	$ 14,468,000
International	4,093,000	(3,009,000)	2,845,000
Total Current	8,889,000	18,075,000	17,313,000
Deferred:
Domestic	5,591,000	5,444,000	(70,000)
International	(2,272,000)	(719,000)	(375,000)
Total Deferred	3,319,000	4,725,000	(445,000)
Provision for income taxes	12,208,000	22,800,000	16,868,000
Effective income tax rate reconciliation
Federal statutory rate (as a percent)	35.00%	35.00%	35.00%
Foreign tax rate benefit (as a percent)	(8.20%)	(11.80%)	(11.00%)
Research and development tax credits (as a percent)	(14.60%)	(0.50%)	(8.50%)
Release of prior year unrecognized tax benefits (as a percent)		(8.40%)
Intercompany technology license (as a percent)		11.80%	10.40%
Excess officer compensation (as a percent)	1.90%	1.00%	3.20%
Valuation allowance	3.80%
Nondeductible acquisition costs (as a percent)	0.20%	0.10%	2.90%
Other (as a percent)	1.60%	(0.80%)	0.20%
Effective income tax rate (as a percent)	19.70%	26.40%	32.20%
Undistributed earnings of foreign subsidiaries	292,300,000
Income before income taxes
Domestic	41,849,000	80,494,000	48,282,000
Foreign	20,178,000	5,854,000	4,058,000
Income before income taxes	62,027,000	86,348,000	52,340,000
Valuation allowance related to certain state loss and research and development tax credit carryforwards	1,700,000
Release of valuation allowance due to the expiration of certain state net operating loss carryforwards	400,000
Reduction of valuation allowance related to an adjustment of certain acquired state net operating losses and research and development tax credit carryforwards	200,000
Deferred tax assets:
Net operating loss carryforwards	38,399,000	35,847,000
Research and development tax credit carryforwards	9,276,000	8,447,000
Stock-based compensation	6,757,000	8,133,000
Capitalized research and development	8,999,000	9,708,000
Deferred income on shipments to distributors	5,733,000	3,933,000
Accrued liabilities and other	8,302,000	7,503,000
Deferred tax assets	77,466,000	73,571,000
Less: Valuation allowance	(3,775,000)	(2,114,000)
Deferred tax assets, net	73,691,000	71,457,000
Deferred tax liabilities:
Acquired intangibles	38,444,000	28,653,000
Depreciation and amortization	2,022,000	1,076,000
Prepaid expenses and other	1,889,000	1,447,000
Deferred tax liabilities	42,355,000	31,176,000
Net deferred tax assets	$ 31,336,000	$ 40,281,000

XML

Consolidated Statements of Cash Flows (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 28, 2013	Dec. 29, 2012	Dec. 31, 2011
Operating Activities
Net income	$ 49,819	$ 63,548	$ 35,472
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation of property and equipment	13,491	13,621	13,570
Net gain on the purchase of property and equipment		(8,457)
Amortization of other intangible assets and other assets	15,911	14,154	11,030
Impairment of long-lived assets		708	1,322
Stock-based compensation expense	30,800	31,176	36,115
Income tax benefit (detriment) from employee stock-based awards	(606)	1,827	2,814
Excess income tax benefit from employee stock-based awards	(290)	(1,294)	(2,404)
Deferred income taxes	3,319	4,725	(445)
Changes in operating assets and liabilities:
Accounts receivable	8,972	(20,743)	(8,562)
Inventories	5,588	(13,056)	5,334
Prepaid expenses and other assets	(2,514)	10,629	(5,948)
Accounts payable	(3,979)	7,217	(2,176)
Accrued expenses	(3,169)	(3,812)	(1,320)
Deferred income on shipments to distributors	(2,381)	4,623	(1,915)
Income taxes	5,189	(7,816)	5,855
Net cash provided by operating activities	120,150	97,050	88,742
Investing Activities
Purchases of available-for-sale investments	(213,883)	(192,450)	(178,676)
Proceeds from sales and maturities of available-for-sale investments	210,824	235,517	193,474
Purchases of property and equipment	(10,472)	(102,043)	(8,690)
Purchases of other assets	(5,939)	(8,508)	(4,018)
Acquisitions of businesses, net of cash acquired	(86,441)	(71,852)	(27,262)
Net cash used in investing activities	(105,911)	(139,336)	(25,172)
Financing Activities
Proceeds from issuance of common stock, net of shares withheld for taxes	15,301	15,148	7,660
Excess income tax benefit from employee stock-based awards	290	1,294	2,404
Repurchases of common stock	(26,022)	(62,019)	(110,063)
Proceeds from issuance of long-term debt, net		98,325
Payments on debt	(13,434)		(7,174)
Net cash provided by (used in) financing activities	(23,865)	52,748	(107,173)
Increase (decrease) in cash and cash equivalents	(9,626)	10,462	(43,603)
Cash and cash equivalents at beginning of period	105,426	94,964	138,567
Cash and cash equivalents at end of period	95,800	105,426	94,964
Supplemental Disclosure of Cash Flow Information:
Interest paid	2,925	677	35
Income taxes paid	3,838	23,564	8,241
Supplemental Disclosure of Non-Cash Activity:
Stock issued in business combination	$ 19,248

XML

Consolidated Balance Sheets (Parenthetical) (USD $) In Thousands, except Per Share data, unless otherwise specified	Dec. 28, 2013	Dec. 29, 2012
Consolidated Balance Sheets
Accounts receivable, allowances for doubtful accounts (in dollars)	$ 797	$ 670
Preferred stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Preferred stock, shares authorized	10,000	10,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Common stock, shares authorized	250,000	250,000
Common stock, shares issued	42,779	41,879
Common stock, shares outstanding	42,779	41,879

XML

Goodwill and Other Intangible Assets

12 Months Ended

Dec. 28, 2013

Goodwill and Other Intangible Assets

Goodwill and Other Intangible Assets

10. Goodwill and Other Intangible Assets

Goodwill

        The following summarizes the activity in goodwill for the years ended December 28, 2013 and December 29, 2012 (in thousands):

	Year Ended
	December 28, 2013		December 29, 2012
Beginning balance	$	130,265	$	115,489
Additions due to business combinations		98,516		14,776
Ending balance	$	228,781	$	130,265

Other Intangible Assets

        The gross carrying amount and accumulated amortization of other intangible assets are as follows (in thousands):

		December 28, 2013					December 29, 2012
	Weighted-Average Amortization Period (Years)
		Gross Amount		Accumulated Amortization			Gross Amount		Accumulated Amortization
Intangible assets:
Subject to amortization:
Core and developed technology	9	$	138,340	$	(41,782	)	$	95,420	$	(30,145	)
Customer relationships	9		14,500		(2,330	)		8,100		(1,057	)
Patents	6		3,000		(750	)		3,000		(250	)
Trademarks	10		2,210		(195	)		910		(38	)
	9		158,050		(45,057	)		107,430		(31,490	)
Not subject to amortization:
In-process research and development	Not amortized		18,600		—			14,810		—
Total intangible assets		$	176,650	$	(45,057	)	$	122,240	$	(31,490	)

        Gross intangible assets increased $55.4 million in fiscal 2013 due to the acquisition of Energy Micro. This increase was offset by the removal of $1.0 million of fully amortized assets.

        Amortization expense related to intangible assets for fiscal 2013, 2012 and 2011 was $14.6 million, $10.7 million and $9.9 million, respectively. The estimated aggregate amortization expense for intangible assets subject to amortization for each of the five succeeding fiscal years is as follows (in thousands):

Fiscal Year
2014	$	17,060
2015		16,669
2016		16,019
2017		15,052
2018		14,309

XML

Document and Entity Information (USD $)	12 Months Ended
	Dec. 28, 2013	Jan. 21, 2014	Jun. 28, 2013
Document and Entity Information
Entity Registrant Name	SILICON LABORATORIES INC
Entity Central Index Key	0001038074
Document Type	10-K
Document Period End Date	Dec. 28, 2013
Amendment Flag	false
Current Fiscal Year End Date	--12-28
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Public Float			$ 1,639,157,249
Entity Common Stock, Shares Outstanding		42,826,583
Document Fiscal Year Focus	2013
Document Fiscal Period Focus	FY

XML

Debt

12 Months Ended

Dec. 28, 2013

Debt

Debt

11. Debt

        On July 31, 2012, the Company and certain of its domestic subsidiaries (the "Guarantors") entered into a $230 million five-year Credit Agreement (the "Agreement"). The Agreement consists of a $100 million Term Loan Facility and a $130 million Revolving Credit Facility (collectively, the "Credit Facilities").

        The Term Loan Facility provides for quarterly principal amortization (equal to 5% of the principal in each of the first two years and 10% of the principal in each of the next three years) with the remaining balance payable upon the maturity date. The Revolving Credit Facility includes a $25 million letter of credit sublimit and a $10 million swingline loan sublimit. The Company has an option to increase the size of the Revolving Credit Facility by up to an aggregate of $50 million in additional commitments, subject to certain conditions. On September 27, 2012, the Company borrowed $100 million under the Term Loan Facility. To date, the Company has not borrowed under the Revolving Credit Facility.

        The Term Loan Facility and Revolving Credit Facility, other than swingline loans, will bear interest at LIBOR plus an applicable margin or, at the option of the Company, a base rate (defined as the highest of the Bank of America prime rate, the Federal Funds rate plus 0.50% and a daily rate equal to one-month LIBOR plus 1.00%) plus an applicable margin. Swingline loans accrue interest at a per annum rate based on the base rate plus the applicable margin for base rate loans. The applicable margins for the LIBOR rate loans range from 1.50% to 2.50% and for base rate loans range from 0.50% to 1.50%, depending in each case, on the leverage ratio as defined in the Agreement. The Company also pays a commitment fee on the unused amount of the Revolving Credit Facility.

        In connection with the closing of the Credit Agreement, the Company entered into a security and pledge agreement. Under the security and pledge agreement, the Company pledged equity securities of certain of its subsidiaries, subject to exceptions and limitations. The Credit Facilities contain various conditions, covenants and representations with which the Company must be in compliance in order to borrow funds and to avoid an event of default, including financial covenants that the Company must maintain a leverage ratio (funded debt/EBITDA) of no more than 2.5 to 1 and a minimum fixed charge coverage ratio (EBITDA/debt payments, income taxes and capital expenditures) of no less than 1.50 to 1. As of December 28, 2013, the Company was in compliance with all covenants of the Credit Facilities.

        As of December 28, 2013, the remaining contractual maturities of the Term Loan Facility were as follows (in thousands):

Fiscal Year
2014	$	7,500
2015		10,000
2016		10,000
2017		67,500
Total	$	95,000

Interest Rate Swap Agreement

        In connection with the $100 million borrowed under the Term Loan Facility, the Company entered into an interest rate swap agreement as a hedge against the LIBOR portion of such variable interest payments. Under the terms of the swap agreement, the Company effectively converted the LIBOR portion of the interest on the Term Loan Facility to a fixed interest rate of 0.764% through the maturity date. As of December 28, 2013, the combined interest rate on the Term Loan Facility (which includes an applicable margin) was 2.514%. See Note 5, Derivative Financial Instruments, for additional information.

XML

Consolidated Statements of Income (USD $) In Thousands, except Per Share data, unless otherwise specified	12 Months Ended
	Dec. 28, 2013	Dec. 29, 2012	Dec. 31, 2011
Consolidated Statements of Income
Revenues	$ 580,087	$ 563,294	$ 491,625
Cost of revenues	227,183	225,277	193,179
Gross margin	352,904	338,017	298,446
Operating expenses:
Research and development	157,799	137,952	135,953
Selling, general and administrative	130,795	114,390	112,419
Operating expenses	288,594	252,342	248,372
Operating income	64,310	85,675	50,074
Other income (expense):
Interest income	853	1,338	1,859
Interest expense	(3,293)	(1,149)	(37)
Other income (expense), net	157	484	444
Income before income taxes	62,027	86,348	52,340
Provision for income taxes	12,208	22,800	16,868
Net income	$ 49,819	$ 63,548	$ 35,472
Earnings per share:
Basic (in dollars per share)	$ 1.17	$ 1.51	$ 0.82
Diluted (in dollars per share)	$ 1.14	$ 1.47	$ 0.79
Weighted-average common shares outstanding:
Basic (in shares)	42,715	42,136	43,421
Diluted (in shares)	43,537	43,106	44,832

XML

Derivative Financial Instruments

12 Months Ended

Dec. 28, 2013

Derivative Financial Instruments

Derivative Financial Instruments

5. Derivative Financial Instruments

        The Company is exposed to interest rate fluctuations in the normal course of its business, including through its Credit Facilities. The interest payments on the facility are calculated using a variable-rate of interest. The Company has entered into an interest rate swap agreement with an original notional value of $100 million (equal to the full amount borrowed under the Term Loan Facility) and, effectively, converted the LIBOR portion of the variable-rate interest payments to fixed-rate interest payments through July 2017 (the maturity date of the Term Loan Facility). The Company's interest rate swap agreement is designated and qualifies as a cash flow hedge.

        The Company's previous swap agreement with a notional value of $50.1 million was terminated in fiscal 2012 in connection with the Company's purchase of its corporate headquarters facilities. See Note 9, Acquisitions, for additional information.

        The Company estimates the fair values of derivatives based on quoted prices and market observable data of similar instruments. If the Term Loan Facility or the interest rate swap agreement is terminated prior to maturity, the fair value of the interest rate swap recorded in accumulated other comprehensive loss may be recognized in the Consolidated Statement of Income based on an assessment of the agreements at the time of termination. The termination of the Company's swap agreement with a notional value of $50.1 million resulted in its remaining fair value of $0.9 million that was previously recorded in accumulated other comprehensive loss to be reclassified into earnings during fiscal 2012. The Company did not discontinue any other cash flow hedges in the periods presented.

        The Company measures the effectiveness of its cash flow hedge by comparing the change in fair value of the hedged variable interest payments with the change in fair value of the interest rate swap. The Company recognizes ineffective portions of the hedge, as well as amounts not included in the assessment of effectiveness, in the Consolidated Statement of Income. As of December 28, 2013, no portion of the gains or losses from the Company's hedging instrument was excluded from the assessment of effectiveness. Hedge ineffectiveness was not material for any of the periods presented.

        The Company's derivative financial instrument consisted of the following (in thousands):

		Fair Value
	Balance Sheet Location	December 28, 2013		December 29, 2012
Interest rate swap	Other assets, net	$	513	$	—
	Other non-current liabilities		—		658

        The before-tax effect of derivative instruments in cash flow hedging relationships was as follows (in thousands):

	Gain (Loss) Recognized in OCI on Derivatives (Effective Portion) during the Year Ended								Location of Loss Reclassified into Income	Loss Reclassified from Accumulated OCI into Income (Effective Portion) during the Year Ended
	December 28, 2013		December 29, 2012			December 31, 2011				December 28, 2013			December 29, 2012			December 31, 2011
Interest rate swaps	$	611	$	(956	)	$	(424	)	Rent expense	$	—		$	(2,197	)	$	(2,237	)
									Interest expense		(560	)		(98	)		—

        The Company expects to reclassify $0.5 million of its interest rate swap losses included in accumulated other comprehensive loss as of December 28, 2013 into earnings in the next 12 months, which would be offset by lower interest payments.

XML

Cash, Cash Equivalents and Investments

12 Months Ended

Dec. 28, 2013

Cash, Cash Equivalents and Investments

Cash, Cash Equivalents and Investments

4. Cash, Cash Equivalents and Investments

        The Company's cash equivalents and short-term investments as of December 28, 2013 consisted of municipal bonds, money market funds, variable-rate demand notes, corporate bonds, certificates of deposit, commercial paper and asset backed securities. The Company's long-term investments consisted of auction-rate securities. In fiscal 2008, auctions for many of the Company's auction-rate securities failed because sell orders exceeded buy orders. As of December 28, 2013, the Company held $12.4 million par value auction-rate securities, all of which have experienced failed auctions. The underlying assets of the securities consisted of student loans and municipal bonds, of which $10.4 million were guaranteed by the U.S. government and the remaining $2.0 million were privately insured. As of December 28, 2013, $6.0 million had credit ratings of AA, $2.0 million had a credit rating of A and $4.4 million of the auction-rate securities had credit ratings of BBB. These securities have contractual maturity dates ranging from 2033 to 2046 at December 28, 2013. The Company is receiving the underlying cash flows on all of its auction-rate securities. The principal amounts associated with failed auctions are not expected to be accessible until a successful auction occurs, the issuer redeems the securities, a buyer is found outside of the auction process or the underlying securities mature. The Company is unable to predict if these funds will become available before their maturity dates.

        The Company does not expect to need access to the capital represented by any of its auction-rate securities prior to their maturities. The Company does not intend to sell, and believes it is not more likely than not that it will be required to sell, its auction-rate securities before their anticipated recovery in market value or final settlement at the underlying par value. The Company believes that the credit ratings and credit support of the security issuers indicate that they have the ability to settle the securities at par value. As such, the Company has determined that no other-than-temporary impairment losses existed as of December 28, 2013.

        The Company's cash, cash equivalents and investments consisted of the following (in thousands):

	December 28, 2013
	Cost		Gross Unrealized Losses			Gross Unrealized Gains		Fair Value
Cash and Cash Equivalents:
Cash on hand	$	45,544	$	—		$	—	$	45,544
Available-for-sale securities:
Money market funds		39,538		—			—		39,538
Certificates of deposit		7,768		—			—		7,768
Commercial paper		2,499		—			—		2,499
Municipal bonds		451		—			—		451
Total available-for-sale securities		50,256		—			—		50,256
Total cash and cash equivalents	$	95,800	$	—		$	—	$	95,800
Short-term Investments:
Available-for-sale securities:
Municipal bonds	$	119,289	$	(11	)	$	182	$	119,460
Variable-rate demand notes		38,025		—			—		38,025
Corporate bonds		17,788		(4	)		60		17,844
Commercial paper		3,748		—			—		3,748
Asset-backed securities		515		—			1		516
Total short-term investments	$	179,365	$	(15	)	$	243	$	179,593
Long-term Investments:
Available-for-sale securities:
Auction rate securities	$	12,425	$	(1,793	)	$	—	$	10,632
Total long-term investments	$	12,425	$	(1,793	)	$	—	$	10,632

	December 29, 2012
	Cost		Gross Unrealized Losses			Gross Unrealized Gains		Fair Value
Cash and Cash Equivalents:
Cash on hand	$	56,690	$	—		$	—	$	56,690
Available-for-sale securities:
U.S. Treasury bills		25,049		—			1		25,050
Money market funds		22,685		—			1		22,686
Municipal bonds		1,000		—			—		1,000
Total available-for-sale securities		48,734		—			2		48,736
Total cash and cash equivalents	$	105,424	$	—		$	2	$	105,426
Short-term Investments:
Available-for-sale securities:
Corporate bonds	$	59,089	$	(5	)	$	267	$	59,351
Municipal bonds		45,646		(7	)		50		45,689
Variable-rate demand notes		41,785		—			—		41,785
Asset-backed securities		15,058		—			11		15,069
U.S. government bonds		12,638		—			25		12,663
International government bonds		1,991		—			17		2,008
Total short-term investments	$	176,207	$	(12	)	$	370	$	176,565
Long-term Investments:
Available-for-sale securities:
Auction rate securities	$	12,525	$	(1,156	)	$	—	$	11,369
Total long-term investments	$	12,525	$	(1,156	)	$	—	$	11,369

        The available-for-sale investments that were in a continuous unrealized loss position, aggregated by length of time that individual securities have been in a continuous loss position, were as follows (in thousands):

	Less Than 12 Months					12 Months or Greater					Total
As of December 28, 2013	Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses
Municipal bonds	$	11,079	$	(11	)	$	—	$	—		$	11,079	$	(11	)
Auction rate securities		—		—			10,632		(1,793	)		10,632		(1,793	)
Corporate bonds		2,605		(4	)		—		—			2,605		(4	)
	$	13,684	$	(15	)	$	10,632	$	(1,793	)	$	24,316	$	(1,808	)

	Less Than 12 Months					12 Months or Greater					Total
As of December 29, 2012	Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses
Municipal bonds	$	17,152	$	(7	)	$	—	$	—		$	17,152	$	(7	)
Auction rate securities		—		—			11,369		(1,156	)		11,369		(1,156	)
Corporate bonds		9,543		(5	)		—		—			9,543		(5	)
	$	26,695	$	(12	)	$	11,369	$	(1,156	)	$	38,064	$	(1,168	)

        The gross unrealized losses as of December 28, 2013 and December 29, 2012 were due primarily to the illiquidity of the Company's auction-rate securities and, to a lesser extent, to changes in market interest rates.

        The following summarizes the contractual underlying maturities of the Company's available-for-sale investments at December 28, 2013 (in thousands):

	Cost		Fair Value
Due in one year or less	$	115,109	$	115,177
Due after one year through ten years		80,987		81,147
Due after ten years		45,950		44,157
	$	242,046	$	240,481

XML

Related Party Transactions

12 Months Ended

Dec. 28, 2013

Related Party Transactions

Related Party Transactions

16. Related Party Transactions

        On March 26, 2013, the Company entered into an agreement to purchase consulting services in connection with the acquisition of Energy Micro. The fees for such services were $1.5 million during fiscal 2013. Mr. Bock, the Company's President, is also an independent contractor with the consulting entity. Mr. Bock is not providing consulting services to the Company on behalf of the entity. Mr. Bock and the entity have agreed that Mr. Bock will receive no compensation in conjunction with the agreement. Mr. Bock abstained from the negotiations with respect to the agreement between the Company and the entity.

        On July 1, 2013, Geir Førre joined the Company as senior vice president and general manager of microcontroller products. Mr. Førre was chief executive officer of Energy Micro, until it was acquired by the Company. Mr. Førre was the beneficial owner of approximately 32% of the Energy Micro equity and accordingly (a) received approximately $35 million of the initial consideration of $107.4 million, (b) may receive an additional approximately $6.5 million out of the $20.3 million holdback related to potential indemnification claims and (c) may receive up to approximately $10.5 million of the $33.3 million earn-out.

        On October 17, 2013, the Company appointed Alf-Egil Bogen to its board of directors. Mr. Bogen was chief marketing officer of Energy Micro, until it was acquired by the Company. Mr. Bogen was the beneficial owner of approximately 2% of the Energy Micro equity and accordingly (a) received approximately $0.9 million of the initial consideration of $107.4 million, (b) may receive an additional approximately $0.4 million out of the $20.3 million holdback related to potential indemnification claims and (c) may receive up to approximately $0.7 million of the $33.3 million earn-out. Mr. Bogen had invested approximately $0.8 million in Energy Micro prior to the acquisition.

XML

Stockholders' Equity

12 Months Ended

Dec. 28, 2013

Stockholders' Equity

Stockholders' Equity

12. Stockholders' Equity

Common Stock

        The Company issued 1.6 million shares of common stock during fiscal 2013, including approximately 0.5 million shares issued in connection with the acquisition of Energy Micro.

Share Repurchase Programs

        The Board of Directors authorized the following share repurchase programs (in thousands):

Program Authorization Date	Program Termination Date	Program Amount
January 2014	January 2015	$	100,000
January 2013	January 2014	$	50,000
April 2012	January 2013	$	100,000
October 2011	April 2012	$	50,000
July 2010	August 2011	$	150,000

        These programs allow for repurchases to be made in the open market or in private transactions, including structured or accelerated transactions, subject to applicable legal requirements and market conditions. The Company repurchased 0.7 million shares, 1.7 million shares and 3.2 million shares of its common stock for $26.0 million, $62.0 million and $110.1 million during fiscal 2013, 2012 and 2011, respectively. These shares were retired upon repurchase.

Accumulated Other Comprehensive Loss

        The components of accumulated other comprehensive loss, net of taxes, were as follows (in thousands):

	Unrealized Gain (Loss) on Cash Flow Hedge			Net Unrealized Losses on Available- For-Sale Securities			Total
Balance at January 1, 2011	$	(2,477	)	$	(1,171	)	$	(3,648	)
Other comprehensive income (loss) before reclassifications		(276	)		3			(273	)
Amount reclassified from accumulated other comprehensive loss		1,454			—			1,454
Net change for the period		1,178			3			1,181
Balance at December 31, 2011		(1,299	)		(1,168	)		(2,467	)
Other comprehensive income (loss) before reclassifications		(621	)		650			29
Amount reclassified from accumulated other comprehensive loss		1,492			—			1,492
Net change for the period		871			650			1,521
Balance at December 29, 2012		(428	)		(518	)		(946	)
Other comprehensive income (loss) before reclassifications		397			(348	)		49
Amount reclassified from accumulated other comprehensive loss		364			(151	)		213
Net change for the period		761			(499	)		262
Balance at December 28, 2013	$	333		$	(1,017	)	$	(684	)

Reclassifications From Accumulated Other Comprehensive Loss

	Year ended
Reclassification (in thousands)	December 28, 2013			December 29, 2012			December 31, 2011
Losses on cash flow hedges to:
Rent expense	$	—		$	(2,295	)	$	(2,237	)
Interest expense		(560	)		—			—
Gains on available-for-sales securities to:
Interest income		232			—			—
		(328	)		(2,295	)		(2,237	)
Income tax benefit		115			803			783
Total reclassifications	$	(213	)	$	(1,492	)	$	(1,454	)

Income Tax Allocated to the Components of Other Comprehensive Income

        The income tax effects of the components of other comprehensive income were as follows (in thousands):

	Year ended
Income tax (expense) benefit on:	December 28, 2013			December 29, 2012			December 31, 2011
Net changes to available-for-sale securities:
Unrealized gains (losses) arising during the period	$	187		$	(350	)	$	(1	)
Reclassification for gains included in net income		81			—			—
Net changes to cash flow hedges:
Unrealized gains (losses) arising during the period		(214	)		335			148
Reclassification for losses included in net income		(196	)		(803	)		(783	)
Other comprehensive income	$	(142	)	$	(818	)	$	(636	)

XML

Risks and Uncertainties

12 Months Ended

Dec. 28, 2013

Risks and Uncertainties

Risks and Uncertainties

8. Risks and Uncertainties

Financial Instruments

        Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash equivalents, investments, accounts receivable and derivatives. The Company places its cash equivalents and investments primarily in municipal bonds, money market funds, variable-rate demand notes, corporate bonds, auction-rate securities, certificates of deposit, commercial paper and asset backed securities. Concentrations of credit risk with respect to accounts receivable are primarily due to customers with large outstanding balances. The Company's customers that accounted for greater than 10% of accounts receivable consisted of the following:

	December 28, 2013			December 29, 2012
Edom Technology		26	%		23	%
Arrow Electronics		10	%		**
Avnet		**			12	%

**

Less than 10% of accounts receivable

        The Company performs periodic credit evaluations of its customers' financial condition and generally requires no collateral from its customers. The Company provides an allowance for potential credit losses based upon the expected collectibility of such receivables. Losses have not been significant for any of the periods presented.

Distributor Advances

        On sales to distributors, the Company's payment terms often require the distributor to initially pay amounts owed to the Company for an amount in excess of their ultimate cost. The Company's sales price to its distributors may be higher than the amount that the distributors will ultimately owe the Company because distributors often negotiate price reductions after purchasing the product from the Company and such reductions are often significant. These negotiated price discounts are not granted until the distributor sells the product to the end customer, which may occur after the distributor has paid the original invoice amount to the Company. Payment of invoices prior to receiving an associated discount can have an adverse impact on the working capital of the Company's distributors. Accordingly, the Company has entered into agreements with certain distributors whereby it advances cash to the distributors to reduce the distributor's working capital requirements. The advance amounts are based on the distributor's inventory balance, and are adjusted quarterly. Such amounts are recorded in prepaid expenses and other current assets in the Consolidated Balance Sheet. The terms of these advances are set forth in binding legal agreements and are unsecured, bear no interest on unsettled balances and are due upon demand. The agreements governing these advances can be cancelled by the Company at any time.

Suppliers

        A significant portion of the Company's products are fabricated by Taiwan Semiconductor Manufacturing Co. (TSMC) or its affiliates. The inability of TSMC to deliver wafers to the Company on a timely basis could impact the production of the Company's products for a substantial period of time, which could have a material adverse effect on the Company's business, financial condition and results of operations.

Customers

        The Company sells directly to end customers, distributors and contract manufacturers. Although the Company actually sells the products to, and is paid by, distributors and contract manufacturers, the Company refers to the end customer as its customer. None of the Company's contract manufacturers accounted for greater than 10% of revenue during fiscal 2013, 2012 or 2011. The Company's end customers and distributors that accounted for greater than 10% of revenue consisted of the following:

	Year Ended
	December 28, 2013			December 29, 2012			December 31, 2011
End Customers
Samsung*		15	%		19	%		13	%
Distributors
Edom Technology		21	%		22	%		24	%
Avnet		11	%		11	%		12	%
Macnica		**			**			10	%

*

Samsung's purchases were across a variety of product areas.

**

Less than 10% of revenue

XML

Stockholders' Equity (Details 2) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 28, 2013	Dec. 29, 2012	Dec. 31, 2011
Amounts Reclassified from AOCI
Rent expense	$ (4,200)	$ (4,400)	$ (4,500)
Interest expense	(3,293)	(1,149)	(37)
Interest income	853	1,338	1,859
Income before income taxes	62,027	86,348	52,340
Income tax benefit	(12,208)	(22,800)	(16,868)
Net income	49,819	63,548	35,472
Net changes to available-for-sale securities:
Unrealized gains (losses) arising during the period	187	(350)	(1)
Reclassification for gains included in net income	81
Net changes to cash flow hedges
Unrealized gains (losses) arising during the period	(214)	335	148
Reclassification for losses included in net income	(196)	(803)	(783)
Other comprehensive income	(142)	(818)	(636)
Reclassifications From Accumulated Other Comprehensive Loss
Amounts Reclassified from AOCI
Income before income taxes	(328)	(2,295)	(2,237)
Income tax benefit	115	803	783
Net income	(213)	(1,492)	(1,454)
Losses on cash flow hedge | Reclassifications From Accumulated Other Comprehensive Loss
Amounts Reclassified from AOCI
Rent expense		(2,295)	(2,237)
Interest expense	(560)
Gains on available-for-sales securities | Reclassifications From Accumulated Other Comprehensive Loss
Amounts Reclassified from AOCI
Interest income	$ 232

XML

Fair Value of Financial Instruments

12 Months Ended

Dec. 28, 2013

Fair Value of Financial Instruments

Fair Value of Financial Instruments

6. Fair Value of Financial Instruments

        The following summarizes the valuation of the Company's financial instruments (in thousands). The tables do not include either cash on hand or assets and liabilities that are measured at historical cost or any basis other than fair value.

	Fair Value Measurements at December 28, 2013 Using
Description	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Assets:
Cash Equivalents:
Money market funds	$	39,538	$	—	$	—	$	39,538
Certificates of deposit		—		7,768		—		7,768
Commercial paper		—		2,499		—		2,499
Municipal bonds		—		451		—		451
Total cash equivalents	$	39,538	$	10,718	$	—	$	50,256
Short-term Investments:
Municipal bonds	$	—	$	119,460	$	—	$	119,460
Variable-rate demand notes		—		38,025		—		38,025
Corporate bonds		—		17,844		—		17,844
Commercial paper		—		3,748		—		3,748
Asset-backed securities		—		516		—		516
Total short-term investments	$	—	$	179,593	$	—	$	179,593
Long-term Investments:
Auction rate securities	$	—	$	—	$	10,632	$	10,632
Total long-term investments	$	—	$	—	$	10,632	$	10,632
Other assets, net:
Derivative instruments	$	—	$	513	$	—	$	513
Total	$	—	$	513	$	—	$	513
Total	$	39,538	$	190,824	$	10,632	$	240,994
Other non-current liabilities:
Contingent consideration	$	—	$	—	$	12,919	$	12,919
Total	$	—	$	—	$	12,919	$	12,919

	Fair Value Measurements at December 29, 2012 Using
Description	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Assets:
Cash Equivalents:
U.S. Treasury bills	$	25,050	$	—	$	—	$	25,050
Money market funds		22,686		—		—		22,686
Municipal bonds		—		1,000		—		1,000
Total cash equivalents	$	47,736	$	1,000	$	—	$	48,736
Short-term Investments:
Corporate bonds	$	—	$	59,351	$	—	$	59,351
Municipal bonds		—		45,689		—		45,689
Variable-rate demand notes		—		41,785		—		41,785
Asset-backed securities		—		15,069		—		15,069
U.S. government bonds		12,663		—		—		12,663
International government bonds		—		2,008		—		2,008
Total short-term investments	$	12,663	$	163,902	$	—	$	176,565
Long-term Investments:
Auction rate securities	$	—	$	—	$	11,369	$	11,369
Total long-term investments	$	—	$	—	$	11,369	$	11,369
Total	$	60,399	$	164,902	$	11,369	$	236,670
Liabilities:
Derivative instruments	$	—	$	658	$	—	$	658
Contingent consideration		—		—		2,750		2,750
Total	$	—	$	658	$	2,750	$	3,408

        The Company's cash equivalents and short-term investments that are classified as Level 1 are valued using quoted prices and other relevant information generated by market transactions involving identical assets. Cash equivalents and short-term investments classified as Level 2 are valued using non-binding market consensus prices that are corroborated with observable market data; quoted market prices for similar instruments in active markets; or pricing models, such as a discounted cash flow model, with all significant inputs derived from or corroborated with observable market data. Investments classified as Level 3 are valued using a discounted cash flow model. The assumptions used in preparing the discounted cash flow model include estimates for interest rates, amount of cash flows, expected holding periods of the securities and a discount to reflect the Company's inability to liquidate the securities. The Company's derivative instruments are valued using a discounted cash flow model. The assumptions used in preparing the discounted cash flow model include quoted interest swap rates and market observable data of similar instruments.

        The Company's contingent consideration is valued using a Monte Carlo simulation model or a probability weighted discounted cash flow model. The assumptions used in preparing the Monte Carlo simulation model include estimates for revenue growth rates, revenue volatility, contractual terms and discount rates. The assumptions used in preparing the discounted cash flow model include estimates for outcomes if milestone goals are achieved, the probability of achieving each outcome and discount rates.

        The following summarizes quantitative information about Level 3 fair value measurements.

Auction rate securities

Fair Value at December 28, 2013 (000s)	Valuation Technique	Unobservable Input	Weighted Average
$10,632	Discounted cash flow	Estimated yield	1.11%
		Expected holding period	10 years
		Estimated discount rate	4.05%

        The Company has followed an established internal control procedure used in valuing auction rate securities. The procedure involves the analysis of valuation techniques and evaluation of unobservable inputs commonly used by market participants to price similar instruments, and which have been demonstrated to provide reasonable estimates of prices obtained in actual market transactions. Outputs from the valuation process are assessed against various market sources when they are available, including marketplace quotes, recent trades of similar illiquid securities, benchmark indices and independent pricing services. The technique and unobservable input parameters may be recalibrated periodically to achieve an appropriate estimation of the fair value of the securities.

        Significant changes in any of the unobservable inputs used in the fair value measurement of auction rate securities in isolation could result in a significantly lower or higher fair value measurement. An increase in expected yield would result in a higher fair value measurement, whereas an increase in expected holding period or estimated discount rate would result in a lower fair value measurement. Generally, a change in the assumptions used for expected holding period is accompanied by a directionally similar change in the assumptions used for estimated yield and discount rate.

Contingent consideration

Fair Value at December 28, 2013 (000s)	Valuation Technique	Unobservable Input	Range
$12,919	Monte Carlo simulation	Expected revenue growth rate	26.2% - 51.9%
		Expected revenue volatility	20.0%
		Expected term	1.0 - 5.0 years
		Estimated discount rate	0.1% - 1.6%

        The Company has followed an established internal control procedure used in valuing contingent consideration. The valuation of contingent consideration for the Energy Micro acquisition is based on a Monte Carlo simulation model. The fair value of this valuation is estimated on a quarterly basis through a collaborative effort by the Company's sales, marketing and finance departments.

        Significant changes in any of the unobservable inputs used in the fair value measurement of contingent consideration in isolation could result in a significantly lower or higher fair value. A change in projected revenue growth rates would be accompanied by a directionally similar change in fair value. A change in discount rate would be accompanied by a directionally opposite change in fair value.

        The following summarizes the activity in Level 3 financial instruments for the years ended December 28, 2013 and December 29, 2012 (in thousands):

Assets

	Year Ended
Auction Rate Securities	December 28, 2013			December 29, 2012
Beginning balance	$	11,369		$	17,477
Settlements		(100	)		(6,700	)
Gain (loss) included in other comprehensive income		(637	)		592
Ending balance	$	10,632		$	11,369

Liabilities

	Year Ended
Contingent Consideration (1)	December 28, 2013			December 29, 2012
Beginning balance	$	2,750		$	876
Issues		13,964			4,004
Gain recognized in earnings (2)		(3,795	)		(2,130	)
Ending balance	$	12,919		$	2,750
Net gain for the period included in earnings attributable to contingent consideration held at the end of the period:	$	1,045		$	1,254

(1)

In connection with the acquisition of Energy Micro, Ember and ChipSensors, the Company recorded contingent consideration based upon the expected achievement of certain milestone goals. Changes to the fair value of contingent consideration due to changes in assumptions used in preparing the valuation model are recorded in selling, general and administrative expenses in the Consolidated Statements of Income.

(2)

The Company reduced the estimated fair value of contingent consideration because certain milestone goals were either not achieved or were expected to be achieved at a lower outcome.

Fair values of other financial instruments

        The Company's Term Loan Facility bears interest at LIBOR plus an applicable margin. The fair value of the Company's Term Loan Facility approximates its carrying values as of December 28, 2013 and December 29, 2012, based on the estimated margin observed for loans to companies under similar terms and credit profiles. The Company's other financial instruments, including cash, accounts receivable and accounts payable, are recorded at amounts that approximate their fair values due to their short maturities.

XML

Balance Sheet Details

12 Months Ended

Dec. 28, 2013

Balance Sheet Details

Balance Sheet Details

7. Balance Sheet Details

        The following tables show the details of selected Consolidated Balance Sheet items (in thousands):

Inventories

	December 28, 2013		December 29, 2012
Work in progress	$	34,503	$	42,103
Finished goods		10,768		7,476
	$	45,271	$	49,579

Prepaid Expenses and Other Current Assets

	December 28, 2013		December 29, 2012
Distributor advances	$	31,839	$	21,260
Other		15,812		20,177
	$	47,651	$	41,437

Property and Equipment

	December 28, 2013			December 29, 2012
Buildings and improvements	$	94,221		$	90,900
Equipment		51,071			48,219
Computers and purchased software		25,556			27,294
Leasehold interest in ground leases		23,840			23,840
Furniture and fixtures		3,496			3,129
Leasehold improvements		7,784			7,587
		205,968			200,969
Accumulated depreciation		(73,523	)		(65,698	)
	$	132,445		$	135,271

Accrued Expenses

	December 28, 2013		December 29, 2012
Accrued compensation and benefits	$	24,896	$	22,298
Other		21,079		18,112
	$	45,975	$	40,410

Other Non-current Liabilities

	December 28, 2013		December 29, 2012
Acquisition-related escrow	$	20,010	$	—
Contingent consideration		12,919		—
Acquired unfavorable leases		11,268		11,794
Other		11,744		8,821
	$	55,941	$	20,615

XML

Acquisitions

12 Months Ended

Dec. 28, 2013

Acquisitions

Acquisitions

9. Acquisitions

Energy Micro

        On July 1, 2013, the Company acquired Energy Micro AS, a late-stage private company. Energy Micro designed and developed energy-efficient 32-bit microcontrollers based on ARM Cortex-M architecture. Energy Micro's energy-friendly solutions are designed to enable a broad range of power-sensitive applications for the Internet of Things (IoT), including smart energy, home automation, security and portable electronics markets.

        The Company acquired Energy Micro for approximately $140.6 million, including: 1) Initial consideration of $107.4 million; 2) Deferred consideration in the form of a promissory note with an estimated fair value of $19.2 million at the date of acquisition (the promissory note was subsequently exchanged for approximately 0.5 million shares of the Company's restricted stock after a mandatory two-month creditor notice.); and 3) Contingent consideration (the "Earn-Out") with an estimated fair value of $14.0 million at the date of acquisition. The Earn-Out is payable up to approximately $33.3 million based on the extent to which the annual revenue growth rate from certain Energy Micro and Silicon Laboratories products (the "Earn-Out Products") exceeds 25% per year, over a five-year period from fiscal 2014 through 2018 (the "Earn-Out Period"). The Earn-Out is payable on an annual basis and in no event shall exceed $6,666,666 per year, unless revenue from the Earn-Out Products exceeds $400 million in a single fiscal year during the Earn-Out Period (in which case, the entire Earn-Out amount less any amounts previously paid will become payable). Approximately $20.3 million of the initial consideration was held in escrow by the Company as security for breaches of representations and warranties and certain other expressly enumerated matters. The escrow obligation was recorded in other non-current liabilities in the Consolidated Balance Sheet.

        A portion of the Earn-Out (28.76%) is contingent on the continued employment of certain key employees for the three years following the acquisition date (the "Departure Percentage"). The Departure Percentage was accounted for as a transaction separate from the business combination based on its economic substance and will be recorded as post-combination compensation expense in the Company's financial statements during the Earn-Out period.

        The Company believes that this strategic acquisition will accelerate its deployment of energy-friendly solutions across the IoT industries, while further scaling the Company's engineering team. These factors contributed to a purchase price that was in excess of the fair value of the net assets acquired and, as a result, the Company recorded goodwill. The goodwill is not deductible for tax purposes. The purchase price was allocated as follows (in thousands):

	Amount			Weighted-Average Amortization Period (Years)
Intangible assets:
In-process research and development	$	18,600		Not amortized
Core and developed technology		29,100		7
Customer relationships		6,400		8
Trademarks		1,300		8
		55,400
Cash and cash equivalents		919
Other current assets		6,486
Goodwill		98,515
Other non-current assets		3,117
Current liabilities		(8,000	)
Non-current deferred tax liabilities, net		(6,288	)
Long-term debt		(8,434	)
Other non-current liabilities		(1,133	)
Total purchase price	$	140,582

        The allocation of the purchase price is preliminary and subject to change, based on finalization of certain income tax matters. Accordingly, adjustments may be made to the values of the assets acquired and liabilities assumed as additional information is obtained about the facts and circumstances that existed at the valuation date.

        In-process research and development (IPR&D) represents acquired technology that had not achieved technological feasibility as of the acquisition date and had no alternative future use. The IPR&D recorded in connection with the acquisition of Energy Micro consisted of a multi-protocol wireless RF solution. The fair value of this technology was determined using the income approach. The discount rate applicable to the cash flows was 13.0%. The remaining research and development efforts include additional design, integration and testing. The significant risks associated with the successful completion of this project include the Company's potential inability to finish the product designs, produce working models and gain customer acceptance.

        Pro forma information related to this acquisition has not been presented because it would not be materially different from amounts reported. The Company recorded approximately $2.4 million of acquisition-related costs in selling, general and administrative expenses during fiscal 2013.

Ember

        On July 3, 2012, the Company acquired Ember Corporation, a privately held company. Ember's products integrate high-performance, low-power 2.4 GHz wireless ICs with reliable and scalable software into a flexible and robust networking platform. The Company acquired Ember for approximately $79.0 million, including contingent consideration with an estimated fair value of $4.0 million at the date of acquisition.

        The Company believes that this strategic acquisition provides it with the technology and software expertise required to enable the low-power mesh sensor networks being deployed today in a wide range of residential, commercial and industrial applications. These factors contributed to a purchase price that was in excess of the fair value of the net assets acquired and, as a result, the Company recorded goodwill. The goodwill is not deductible for tax purposes. The purchase price was allocated as follows (in thousands):

	Amount			Weighted-Average Amortization Period (Years)
Intangible assets:
In-process research and development	$	14,810		Not amortized
Developed technology		17,800		11
Customer relationships		5,620		9
Trademarks		910		12
		39,140
Cash and cash equivalents		3,115
Accounts receivable		1,928
Inventories		4,749
Other current assets		324
Goodwill		14,777
Non-current deferred tax assets, net		16,449
Other non-current assets		1,776
Current liabilities		(3,287	)
Total purchase price	$	78,971

        The IPR&D recorded in connection with the acquisition of Ember consisted of a low-power RF transceiver. The fair value of this technology was determined using the income approach. The discount rate applicable to the cash flows was 12.5%.

        Pro forma information related to this acquisition has not been presented because it would not be materially different from amounts reported. Acquisition-related costs were not significant.

Corporate Headquarters Buildings

        The Company leased facilities at 400 W. Cesar Chavez ("400 WCC") and 200 W. Cesar Chavez ("200 WCC") in Austin, Texas for its corporate headquarters. During the terms of the leases, the Company had options to purchase the buildings for approximately $44.3 million for 400 WCC and $50.1 million for 200 WCC. In September 2012, the Company exercised such options and purchased the facilities.

        The buildings are located on land which is leased through 2099 from a third party. The rents for these ground leases were prepaid for the term of the leases by the previous lessee. The first floor of each building was leased to the same third party for the term of the ground leases. The base rents for the first floor leases were prepaid to the previous owner of the buildings. Portions of the remaining floors were also leased to other tenants.

        The Company determined that the purchase of the facilities represented a business combination. Under the acquisition method of accounting, the assets acquired and liabilities assumed were recorded at their fair values as of the date of the acquisition. The purchase price was allocated as follows (in thousands):

	Amount
Buildings	$	90,900
Leasehold interest in ground leases		23,840
Acquired unfavorable leases		(11,925	)
Lease-related charges		(8	)
Net gain on purchase		(8,457	)
Total purchase price	$	94,350

        The buildings and leasehold interest in ground leases will be depreciated on a straight-line basis over their estimated useful lives of 40 years and 86 years, respectively. Acquired unfavorable leases represent the difference between contractual minimum rental payments due under previously-existing leases in each building and the market rates of those same leases. This amount was recorded in other non-current liabilities in the Consolidated Balance Sheet and will be amortized to rental income over the estimated terms of the leases.

        The purchase of the facilities resulted in a net gain of approximately $8.5 million, which was recorded in selling, general and administrative expenses in the Consolidated Statement of Income. The gain resulted primarily because the assets acquired and liabilities assumed were recorded at their fair values as of the date of the acquisition, which was substantially higher than the purchase prices of the facilities. The purchase prices were fixed at the beginning of the two leases in March 2006 and March 2008. While market prices for such facilities increased over the terms of the leases, the purchase prices remained the same.

Spectra Linear

        On January 25, 2011, the Company acquired Spectra Linear, Inc., a late-stage private company offering integrated timing solutions. The Company acquired Spectra Linear for approximately $28.6 million, including contingent consideration with an estimated fair value of $1.0 million at the date of acquisition. In addition, the Company assumed approximately $8.0 million of Spectra Linear net liabilities in connection with the acquisition.

        The Company paid an additional approximately $4.5 million of consideration to certain Spectra Linear employees in connection with an agreement between the employees and Spectra Linear. This agreement provided that upon the sale of Spectra Linear, a portion of the proceeds would be paid to such employees as bonuses. The agreement was accounted for as a transaction separate from the business combination based on its economic substance and was recorded as post-combination compensation expense in the Company's financial statements during fiscal 2011.

        The Company believes that the acquisition adds a broad family of timing ICs that will enable it to accelerate penetration in high-volume applications, while further scaling the Company's engineering team. These factors contributed to a purchase price that was in excess of the fair value of the net assets acquired and, as a result, the Company recorded goodwill. The goodwill is not deductible for tax purposes. The purchase price was allocated as follows (in thousands):

	Amount			Weighted-Average Amortization Period (Years)
Intangible assets:
Core and developed technology	$	16,560			10
Customer relationships		1,400			10
		17,960
Accounts receivable		1,759
Inventories		1,199
Other current assets		1,658
Goodwill		4,097
Deferred tax assets—non-current		12,316
Other non-current assets		597
Notes payable—current portion		(4,641	)
Current liabilities		(3,112	)
Non-current liabilities		(3,254	)
Total purchase price	$	28,579

        Pro forma information related to this acquisition has not been presented because it would not be materially different from amounts reported. Acquisition-related costs were not significant.

XML

Stock-Based Compensation (Details 4) In Thousands, unless otherwise specified	Dec. 28, 2013
Stock-Based Compensation
Reserved shares of common stock for future issuance	6,641
2000 Stock Incentive Plan
Stock-Based Compensation
Reserved shares of common stock for future issuance	1,092
2009 Stock Incentive Plan
Stock-Based Compensation
Reserved shares of common stock for future issuance	4,913
2009 Employee Stock Purchase Plan
Stock-Based Compensation
Reserved shares of common stock for future issuance	636

XML

Commitments and Contingencies (Details) (USD $)	12 Months Ended			0 Months Ended	12 Months Ended
	Dec. 28, 2013	Dec. 29, 2012	Dec. 31, 2011	Oct. 03, 2013 MaxLinear	Dec. 29, 2012 MaxLinear item
Commitments and Contingencies
Rent expense under operating leases	$ 4,200,000	$ 4,400,000	$ 4,500,000
Minimum annual future rentals
2014	4,232,000
2015	3,704,000
2016	3,058,000
2017	2,350,000
2018	1,449,000
Thereafter	682,000
Total minimum lease payments	15,475,000
Patent Litigation
Number of patent infringement lawsuits filed					3
One-time payment receivable under the Settlement Agreement				$ 1,250,000
Covenant period related to not to sue				3 years

XML

Stock-Based Compensation (Details 3) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 28, 2013	Dec. 29, 2012	Dec. 31, 2011
Stock-based compensation costs
Share based compensation cost before tax	$ 30,800	$ 31,176	$ 36,115
Income tax benefit	2,633	4,911	3,957
Share based compensation cost after tax	28,167	26,265	32,158
Cost of revenues
Stock-based compensation costs
Share based compensation cost before tax	952	1,206	1,319
Research and development
Stock-based compensation costs
Share based compensation cost before tax	14,530	12,602	14,872
Selling, general and administrative
Stock-based compensation costs
Share based compensation cost before tax	$ 15,318	$ 17,368	$ 19,924

XML

Acquisitions (Tables)

12 Months Ended

Dec. 28, 2013

Energy Micro

Business acquisition

Schedule of purchase price allocation

The purchase price was allocated as follows (in thousands):

	Amount			Weighted-Average Amortization Period (Years)
Intangible assets:
In-process research and development	$	18,600		Not amortized
Core and developed technology		29,100		7
Customer relationships		6,400		8
Trademarks		1,300		8
		55,400
Cash and cash equivalents		919
Other current assets		6,486
Goodwill		98,515
Other non-current assets		3,117
Current liabilities		(8,000	)
Non-current deferred tax liabilities, net		(6,288	)
Long-term debt		(8,434	)
Other non-current liabilities		(1,133	)
Total purchase price	$	140,582

Ember

Business acquisition

Schedule of purchase price allocation

The purchase price was allocated as follows (in thousands):

	Amount			Weighted-Average Amortization Period (Years)
Intangible assets:
In-process research and development	$	14,810		Not amortized
Developed technology		17,800		11
Customer relationships		5,620		9
Trademarks		910		12
		39,140
Cash and cash equivalents		3,115
Accounts receivable		1,928
Inventories		4,749
Other current assets		324
Goodwill		14,777
Non-current deferred tax assets, net		16,449
Other non-current assets		1,776
Current liabilities		(3,287	)
Total purchase price	$	78,971

Corporate Headquarters Buildings

Business acquisition

Schedule of purchase price allocation

The purchase price was allocated as follows (in thousands):

	Amount
Buildings	$	90,900
Leasehold interest in ground leases		23,840
Acquired unfavorable leases		(11,925	)
Lease-related charges		(8	)
Net gain on purchase		(8,457	)
Total purchase price	$	94,350

Spectra Linear

Business acquisition

Schedule of purchase price allocation

The purchase price was allocated as follows (in thousands):

	Amount			Weighted-Average Amortization Period (Years)
Intangible assets:
Core and developed technology	$	16,560			10
Customer relationships		1,400			10
		17,960
Accounts receivable		1,759
Inventories		1,199
Other current assets		1,658
Goodwill		4,097
Deferred tax assets—non-current		12,316
Other non-current assets		597
Notes payable—current portion		(4,641	)
Current liabilities		(3,112	)
Non-current liabilities		(3,254	)
Total purchase price	$	28,579

XML

Fair Value of Financial Instruments (Details 3) (Contingent consideration, Monte Carlo simulation)	12 Months Ended
	Dec. 28, 2013
Quantitative information for Level 3 fair value measurements liabilities
Expected revenue volatility (as a percent)	20.00%
Low end of range
Quantitative information for Level 3 fair value measurements liabilities
Expected revenue growth rate (as a percent)	26.20%
Expected term	1 year
Estimated discount rate (as a percent)	0.10%
High end of range
Quantitative information for Level 3 fair value measurements liabilities
Expected revenue growth rate (as a percent)	51.90%
Expected term	5 years
Estimated discount rate (as a percent)	1.60%

XML

Employee Benefit Plan

12 Months Ended

Dec. 28, 2013

Employee Benefit Plan

Employee Benefit Plan

14. Employee Benefit Plan

        The Company maintains a defined contribution or 401(k) Plan for its qualified U.S. employees. Participants may contribute a percentage of their compensation on a pre-tax basis, subject to a maximum annual contribution imposed by the Internal Revenue Code. The Company may make discretionary matching contributions as well as discretionary profit-sharing contributions to the 401(k) Plan. The Company contributed $3.0 million, $2.9 million and $2.7 million to the 401(k) Plan during fiscal 2013, 2012 and 2011, respectively.

XML

SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS

12 Months Ended

Dec. 28, 2013

SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS

SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS

SILICON LABORATORIES INC.
VALUATION AND QUALIFYING ACCOUNTS

			Additions
Valuation Allowance for Deferred Tax Assets	Balance at Beginning of Period		Charged to Expenses		Charged to Goodwill		Deductions (1)			Balance at End of Period
					(in thousands)
Year ended December 28, 2013	$	2,114	$	2,335	$	—	$	(674	)	$	3,775
Year ended December 29, 2012	$	—	$	—	$	2,114	$	—		$	2,114

(1)

Represents adjustments to deferred tax assets

XML

Fair Value of Financial Instruments (Details) (USD $) In Thousands, unless otherwise specified	Dec. 28, 2013	Dec. 29, 2012
Financial assets and liabilities measured at fair value on a recurring basis
Total cash equivalents	$ 95,800	$ 105,426
Total short-term investments	179,593	176,565
Total long-term investments	10,632	11,369
Assets and liabilities measured at fair value on recurring basis | Quoted Prices in Active Markets for Identical Assets (Level 1)
Financial assets and liabilities measured at fair value on a recurring basis
Total cash equivalents	39,538	47,736
Total short-term investments		12,663
Total assets at fair value	39,538	60,399
Assets and liabilities measured at fair value on recurring basis | Quoted Prices in Active Markets for Identical Assets (Level 1) | U.S. Treasury bills
Financial assets and liabilities measured at fair value on a recurring basis
Total cash equivalents		25,050
Assets and liabilities measured at fair value on recurring basis | Quoted Prices in Active Markets for Identical Assets (Level 1) | Money market funds
Financial assets and liabilities measured at fair value on a recurring basis
Total cash equivalents	39,538	22,686
Assets and liabilities measured at fair value on recurring basis | Quoted Prices in Active Markets for Identical Assets (Level 1) | U.S. government bonds
Financial assets and liabilities measured at fair value on a recurring basis
Total short-term investments		12,663
Assets and liabilities measured at fair value on recurring basis | Significant Other Observable Inputs (Level 2)
Financial assets and liabilities measured at fair value on a recurring basis
Total cash equivalents	10,718	1,000
Total short-term investments	179,593	163,902
Derivative instruments	513
Other assets, net	513
Total assets at fair value	190,824	164,902
Derivative instruments		658
Total liabilities at fair value		658
Assets and liabilities measured at fair value on recurring basis | Significant Other Observable Inputs (Level 2) | Certificates of deposit
Financial assets and liabilities measured at fair value on a recurring basis
Total cash equivalents	7,768
Assets and liabilities measured at fair value on recurring basis | Significant Other Observable Inputs (Level 2) | Commercial paper
Financial assets and liabilities measured at fair value on a recurring basis
Total cash equivalents	2,499
Total short-term investments	3,748
Assets and liabilities measured at fair value on recurring basis | Significant Other Observable Inputs (Level 2) | Municipal bonds
Financial assets and liabilities measured at fair value on a recurring basis
Total cash equivalents	451	1,000
Total short-term investments	119,460	45,689
Assets and liabilities measured at fair value on recurring basis | Significant Other Observable Inputs (Level 2) | Variable-rate demand notes
Financial assets and liabilities measured at fair value on a recurring basis
Total short-term investments	38,025	41,785
Assets and liabilities measured at fair value on recurring basis | Significant Other Observable Inputs (Level 2) | Corporate bonds
Financial assets and liabilities measured at fair value on a recurring basis
Total short-term investments	17,844	59,351
Assets and liabilities measured at fair value on recurring basis | Significant Other Observable Inputs (Level 2) | Asset-backed securities
Financial assets and liabilities measured at fair value on a recurring basis
Total short-term investments	516	15,069
Assets and liabilities measured at fair value on recurring basis | Significant Other Observable Inputs (Level 2) | International government bonds
Financial assets and liabilities measured at fair value on a recurring basis
Total short-term investments		2,008
Assets and liabilities measured at fair value on recurring basis | Significant Unobservable Inputs (Level 3)
Financial assets and liabilities measured at fair value on a recurring basis
Total long-term investments	10,632	11,369
Total assets at fair value	10,632	11,369
Contingent consideration	12,919	2,750
Total liabilities at fair value	12,919	2,750
Assets and liabilities measured at fair value on recurring basis | Significant Unobservable Inputs (Level 3) | Auction rate securities
Financial assets and liabilities measured at fair value on a recurring basis
Total long-term investments	10,632	11,369
Assets and liabilities measured at fair value on recurring basis | Fair Value
Financial assets and liabilities measured at fair value on a recurring basis
Total cash equivalents	50,256	48,736
Total short-term investments	179,593	176,565
Total long-term investments	10,632	11,369
Derivative instruments	513
Other assets, net	513
Total assets at fair value	240,994	236,670
Derivative instruments		658
Contingent consideration	12,919	2,750
Total liabilities at fair value	12,919	3,408
Assets and liabilities measured at fair value on recurring basis | Fair Value | U.S. Treasury bills
Financial assets and liabilities measured at fair value on a recurring basis
Total cash equivalents		25,050
Assets and liabilities measured at fair value on recurring basis | Fair Value | Money market funds
Financial assets and liabilities measured at fair value on a recurring basis
Total cash equivalents	39,538	22,686
Assets and liabilities measured at fair value on recurring basis | Fair Value | Certificates of deposit
Financial assets and liabilities measured at fair value on a recurring basis
Total cash equivalents	7,768
Assets and liabilities measured at fair value on recurring basis | Fair Value | Commercial paper
Financial assets and liabilities measured at fair value on a recurring basis
Total cash equivalents	2,499
Total short-term investments	3,748
Assets and liabilities measured at fair value on recurring basis | Fair Value | Municipal bonds
Financial assets and liabilities measured at fair value on a recurring basis
Total cash equivalents	451	1,000
Total short-term investments	119,460	45,689
Assets and liabilities measured at fair value on recurring basis | Fair Value | Variable-rate demand notes
Financial assets and liabilities measured at fair value on a recurring basis
Total short-term investments	38,025	41,785
Assets and liabilities measured at fair value on recurring basis | Fair Value | Corporate bonds
Financial assets and liabilities measured at fair value on a recurring basis
Total short-term investments	17,844	59,351
Assets and liabilities measured at fair value on recurring basis | Fair Value | Asset-backed securities
Financial assets and liabilities measured at fair value on a recurring basis
Total short-term investments	516	15,069
Assets and liabilities measured at fair value on recurring basis | Fair Value | U.S. government bonds
Financial assets and liabilities measured at fair value on a recurring basis
Total short-term investments		12,663
Assets and liabilities measured at fair value on recurring basis | Fair Value | International government bonds
Financial assets and liabilities measured at fair value on a recurring basis
Total short-term investments		2,008
Assets and liabilities measured at fair value on recurring basis | Fair Value | Auction rate securities
Financial assets and liabilities measured at fair value on a recurring basis
Total long-term investments	$ 10,632	$ 11,369

XML

Segment Information (Tables)

12 Months Ended

Dec. 28, 2013

Segment Information

Summary of the Company's revenue by product category

The following summarizes the Company's revenue by product category (in thousands):

	Year Ended
	December 28, 2013		December 29, 2012		December 31, 2011
Broad-based	$	281,777	$	270,098	$	208,697
Broadcast		199,837		186,067		169,548
Access		98,473		107,129		113,380
Revenues	$	580,087	$	563,294	$	491,625

Schedule of revenue attributed to geographic area based on the end customer's shipped-to location

The following summarizes the Company's revenue by geographic area (in thousands):

	Year Ended
	December 28, 2013		December 29, 2012		December 31, 2011
United States	$	68,566	$	64,856	$	67,432
China		253,261		219,400		152,533
Taiwan		55,036		64,150		59,208
Japan		32,557		31,315		50,270
South Korea		21,303		57,910		70,252
Rest of world		149,364		125,663		91,930
Total	$	580,087	$	563,294	$	491,625

Schedule of property and equipment, net by geographic area

 The following summarizes the Company's property and equipment, net by geographic area (in thousands):

	December 28, 2013		December 29, 2012
United States	$	126,263	$	127,716
Rest of world		6,182		7,555
Total	$	132,445	$	135,271

XML

Consolidated Statements of Comprehensive Income (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 28, 2013	Dec. 29, 2012	Dec. 31, 2011
Consolidated Statements of Comprehensive Income
Net income	$ 49,819	$ 63,548	$ 35,472
Net changes to available-for-sale securities:
Unrealized gains (losses) arising during the period	(535)	1,000	4
Reclassification for gains included in net income	(232)
Net changes to cash flow hedges:
Unrealized gains (losses) arising during the period	611	(956)	(424)
Reclassification for losses included in net income	560	2,295	2,237
Other comprehensive income, before tax	404	2,339	1,817
Provision for income taxes	142	818	636
Other comprehensive income	262	1,521	1,181
Comprehensive income	$ 50,081	$ 65,069	$ 36,653

XML

Earnings Per Share

12 Months Ended

Dec. 28, 2013

Earnings Per Share

Earnings Per Share

3. Earnings Per Share

        The following table sets forth the computation of basic and diluted earnings per share (in thousands, except per share data):

	Year Ended
	December 28, 2013		December 29, 2012		December 31, 2011
Net income	$	49,819	$	63,548	$	35,472
Shares used in computing basic earnings per share		42,715		42,136		43,421
Effect of dilutive securities:
Stock options and other stock-based awards		822		970		1,411
Shares used in computing diluted earnings per share		43,537		43,106		44,832
Earnings per share:
Basic	$	1.17	$	1.51	$	0.82
Diluted	$	1.14	$	1.47	$	0.79

        For fiscal years ended December 28, 2013, December 29, 2012 and December 31, 2011, approximately 0.4 million, 0.5 million and 0.4 million shares, respectively, were not included in the diluted earnings per share calculation since the shares were anti-dilutive.

XML

Debt (Details) (USD $)	1 Months Ended			1 Months Ended	12 Months Ended		12 Months Ended
	Jul. 31, 2012 Term Loan Facility	Dec. 28, 2013 Term Loan Facility	Sep. 27, 2012 Term Loan Facility	Jul. 31, 2012 Agreement	Dec. 28, 2013 Agreement	Jul. 31, 2012 Revolving Credit Facility	Dec. 28, 2013 Term loan facility and revolving credit facility, other than swingline loans LIBOR	Dec. 28, 2013 Term loan facility and revolving credit facility, other than swingline loans LIBOR Low end of range	Dec. 28, 2013 Term loan facility and revolving credit facility, other than swingline loans LIBOR High end of range	Dec. 28, 2013 Term loan facility and revolving credit facility, other than swingline loans Prime Rate	Dec. 28, 2013 Term loan facility and revolving credit facility, other than swingline loans Federal Funds	Dec. 28, 2013 Term loan facility and revolving credit facility, other than swingline loans one-month LIBOR	Dec. 28, 2013 Term loan facility, revolving credit facility, swingline and other loans Base rate	Dec. 28, 2013 Term loan facility, revolving credit facility, swingline and other loans Base rate Low end of range	Dec. 28, 2013 Term loan facility, revolving credit facility, swingline and other loans Base rate High end of range
Debt
Maximum borrowing capacity	$ 100,000,000			$ 230,000,000		$ 130,000,000
Term of debt instrument				5 years
Percentage of principal amortization in each of the first two years	5.00%
Number of years for which the percentage of principal amortization is five percent	2 years
Percentage of principal amortization in each of the next three years	10.00%
Number of years for which the percentage of principal amortization is ten percent	3 years
Sublimit on letters of credit						25,000,000
Sublimit on swingline loan						10,000,000
Additional increase in borrowing capacity of the line of credit available at the entity's option						50,000,000
Amount borrowed under the term loan facility			100,000,000
Debt Instrument Base rate							LIBOR			Bank of America prime rate	Federal Funds rate	one-month LIBOR	base rate
Interest rate added to the base rate (as a percent)								1.50%	2.50%		0.50%	1.00%		0.50%	1.50%
Maximum leverage ratio					2.5
Minimum fixed charge coverage ratio					1.50
Fixed interest rate percentage		0.764%
Combined interest rate percentage		2.514%
Term Loan Facility
2014		7,500,000
2015		10,000,000
2016		10,000,000
2017		67,500,000
Total debt		$ 95,000,000

XML

Income Taxes (Details 2) (USD $)	12 Months Ended
	Dec. 28, 2013	Dec. 29, 2012	Dec. 31, 2011
Operating loss and tax credit carryforwards
Net deferred tax assets (Liabilities)	$ 31,336,000	$ 40,281,000
Provision for U.S. federal and state income taxes	0
Income tax benefit reflected in earnings	(12,208,000)	(22,800,000)	(16,868,000)
Singapore
Operating loss and tax credit carryforwards
Income tax benefit reflected in earnings	2,200,000	(13,300,000)	2,500,000
The income tax benefit per diluted share (in dollars per share)	$ 0.05	$ (0.31)	$ 0.06
State
Operating loss and tax credit carryforwards
Operating loss carryforwards	63,900,000
Research and development credit carryforwards	11,000,000
Cygnal Integrated Products, Silicon Clocks, Spectra Linear and Ember | Federal
Operating loss and tax credit carryforwards
Operating loss carryforwards	77,500,000
Research and development credit carryforwards	2,100,000
Energy Micro
Operating loss and tax credit carryforwards
Net deferred tax assets (Liabilities)	5,300,000
Energy Micro | Foreign
Operating loss and tax credit carryforwards
Operating loss carryforwards	$ 29,600,000

XML

Significant Accounting Policies (Policies)

12 Months Ended

Dec. 28, 2013

Significant Accounting Policies

Foreign Currency Transactions

Foreign Currency Transactions

        The Company's foreign subsidiaries are considered to be extensions of the U.S. Company. The functional currency of the foreign subsidiaries is the U.S. dollar. Accordingly, gains and losses resulting from remeasuring transactions denominated in currencies other than U.S. dollars are included in other income (expense), net in the Consolidated Statements of Income.

Use of Estimates

Use of Estimates

        The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Among the significant estimates affecting the financial statements are those related to inventories, stock-based compensation, investments in auction-rate securities, acquired intangible assets, goodwill, long-lived assets and income taxes. Actual results could differ from those estimates, and such differences could be material to the financial statements.

Reclassifications

Reclassifications

        Certain reclassifications have been made to prior year financial statements to conform to current year presentation.

Fair Value of Financial Instruments

Fair Value of Financial Instruments

        The fair values of the Company's financial instruments are recorded using a hierarchal disclosure framework based upon the level of subjectivity of the inputs used in measuring assets and liabilities. The three levels are described below:

• Level 1—Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date.

  Level 2—Inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.

  Level 3—Inputs are unobservable for the asset or liability and are developed based on the best information available in the circumstances, which might include the Company's own data.

Cash and Cash Equivalents

Cash and Cash Equivalents

        Cash and cash equivalents consist of cash deposits, money market funds and investments in debt securities with original maturities of ninety days or less when purchased.

Investments

Investments

        The Company's investments typically have original maturities greater than ninety days as of the date of purchase and are classified as either available-for-sale or trading securities. Investments in available-for-sale securities are reported at fair value, with unrealized gains and losses, net of tax, recorded as a component of accumulated other comprehensive loss in the Consolidated Balance Sheet. Investments in trading securities are reported at fair value, with both realized and unrealized gains and losses recorded in other income (expense), net in the Consolidated Statement of Income. Investments in which the Company has the ability and intent, if necessary, to liquidate in order to support its current operations (including those with contractual maturities greater than one year from the date of purchase) are classified as short-term.

        The Company reviews its available-for-sale investments as of the end of each reporting period for other-than-temporary declines in fair value based on the specific identification method. The Company considers various factors in determining whether an impairment is other-than-temporary, including the severity and duration of the impairment, changes in underlying credit ratings, forecasted recovery, its intent to sell or the likelihood that it would be required to sell the investment before its anticipated recovery in market value and the probability that the scheduled cash payments will continue to be made. When the Company concludes that an other-than-temporary impairment has occurred, the Company assesses whether it intends to sell the security or if it is more likely than not that it will be required to sell the security before recovery. If either of these two conditions is met, the Company recognizes a charge in earnings equal to the entire difference between the security's amortized cost basis and its fair value. If the Company does not intend to sell a security and it is not more likely than not that it will be required to sell the security before recovery, the unrealized loss is separated into an amount representing the credit loss, which is recognized in earnings, and the amount related to all other factors, which is recorded in accumulated other comprehensive loss.

Derivative Financial Instruments

Derivative Financial Instruments

        The Company uses derivative financial instruments to manage certain exposures to the variability of interest rates. The Company's objective is to offset increases and decreases in expenses resulting from changes in interest rates with gains and losses on the derivative contracts, thereby reducing volatility of earnings. The Company does not use derivative contracts for speculative purposes. The effective portion of the gain or loss on interest rate swaps is recorded in accumulated other comprehensive loss as a separate component of stockholders' equity and is subsequently recognized in earnings when the hedged exposure affects earnings. Cash flows from derivatives are classified according to the nature of the cash receipt or payment in the Consolidated Statement of Cash Flows.

Inventories

Inventories

        Inventories are stated at the lower of cost, determined using the first-in, first-out method, or market. The Company writes down the carrying value of inventory to net realizable value for estimated obsolescence or unmarketable inventory based upon assumptions about the age of inventory, future demand and market conditions. Inventory impairment charges establish a new cost basis for inventory and charges are not subsequently reversed to income even if circumstances later suggest that increased carrying amounts are recoverable.

Property and Equipment

Property and Equipment

        Property and equipment are stated at cost, net of accumulated depreciation. Depreciation is computed using the straight-line method over the useful lives of the assets ranging from three to seven years. Leasehold improvements are depreciated over the contractual lease period or their useful life, whichever is shorter.

        In fiscal 2012, the Company purchased the facilities it had previously leased for its headquarters in Austin, Texas. The buildings are located on land which is leased through 2099 from a third party. The rents for these ground leases were prepaid for the term of the leases by the previous lessee. The buildings and leasehold interest in ground leases are being depreciated on a straight-line basis over their estimated useful lives of 40 years and 86 years, respectively.

Business Combinations

Business Combinations

        The Company records business combinations using the acquisition method of accounting and accordingly, allocates the fair value of purchase consideration to the assets acquired and liabilities assumed based on their fair values at the acquisition date. The excess of the fair value of purchase consideration over the fair value of the assets acquired and liabilities assumed is recorded as goodwill. The results of operations of the businesses acquired are included in the Company's consolidated results of operations beginning on the date of the acquisition.

Long-Lived Assets

Long-Lived Assets

        Purchased intangible assets are stated at cost, net of accumulated amortization, and are amortized using the straight-line method over their estimated useful lives, ranging from six to twelve years. Fair values are determined primarily using the income approach, in which the Company projects future expected cash flows and applies an appropriate discount rate.

        Long-lived assets "held and used" by the Company are reviewed for impairment whenever events or changes in circumstances indicate that their net book value may not be recoverable. When such factors and circumstances exist, the Company compares the projected undiscounted future cash flows associated with the related asset or group of assets over their estimated useful lives, against their respective carrying amounts. Impairment, if any, is based on the excess of the carrying amount over the fair value of those assets and is recorded in the period in which the determination was made.

        The carrying value of goodwill is reviewed at least annually by the Company for possible impairment. The goodwill impairment test is a two-step process. The first step of the impairment analysis compares the fair value of the reporting unit to the net book value of the reporting unit. In determining fair value, several valuation methodologies are allowed, although quoted market prices are the best evidence of fair value. If the results of the first step demonstrate that the net book value is greater than the fair value, the Company must proceed to step two of the analysis. Step two of the analysis compares the implied fair value of goodwill to its carrying amount. If the carrying amount of goodwill exceeds its implied fair value, an impairment loss is recognized equal to that excess. The Company tests goodwill for impairment annually as of the first day of its fourth fiscal quarter and in interim periods if events occur that would indicate that the carrying value of goodwill may be impaired.

Revenue Recognition

Revenue Recognition

        Revenues are generated almost exclusively by sales of the Company's ICs. The Company recognizes revenue when all of the following criteria are met: 1) there is persuasive evidence that an arrangement exists, 2) delivery of goods has occurred, 3) the sales price is fixed or determinable, and 4) collectibility is reasonably assured. Generally, revenue from product sales to direct customers and contract manufacturers is recognized upon shipment.

        A portion of the Company's sales are made to distributors under agreements allowing certain rights of return and price protection related to the final selling price to the end customers. Accordingly, the Company defers revenue and cost of revenue on such sales until the distributors sell the product to the end customers. The net balance of deferred revenue less deferred cost of revenue associated with inventory shipped to a distributor but not yet sold to an end customer is recorded in the deferred income on shipments to distributors liability on the Consolidated Balance Sheet. Such net deferred income balance reflects the Company's estimate of the impact of rights of return and price protection.

Shipping and Handling

Shipping and Handling

        Shipping and handling costs are classified as a component of cost of revenues in the Consolidated Statements of Income.

Stock-Based Compensation

Stock-Based Compensation

        The Company has stock-based compensation plans, which are more fully described in Note 13, Stock-Based Compensation. The Company accounts for those plans using a fair-value method and recognizes the expense in its Consolidated Statement of Income.

Research and Development

Research and Development

        Research and development costs are expensed as incurred. Research and development expense consists primarily of personnel-related expenses, including stock-based compensation, as well as new product masks, external consulting and services costs, equipment tooling, equipment depreciation, amortization of intangible assets, and an allocated portion of our occupancy costs. Assets purchased to support the Company's ongoing research and development activities are capitalized when related to products which have achieved technological feasibility or have an alternative future use, and are amortized over their estimated useful lives.

Advertising

Advertising

        Advertising costs are expensed as incurred. Advertising expenses were $2.0 million, $1.7 million and $1.6 million in fiscal 2013, 2012 and 2011, respectively.

Income Taxes

Income Taxes

        The Company accounts for income taxes using the asset and liability method whereby deferred tax asset and liability account balances are determined based on differences between financial reporting and the tax bases of assets and liabilities and are measured using the enacted tax laws and related rates that will be in effect when the differences are expected to reverse. These differences result in deferred tax assets and liabilities, which are included in the Company's Consolidated Balance Sheet. The Company then assesses the likelihood that the deferred tax assets will be realized. A valuation allowance is established against deferred tax assets to the extent the Company believes that it is more likely than not that the deferred tax assets will not be realized, taking into consideration the level of historical taxable income and projections for future taxable income over the periods in which the temporary differences are deductible.

        Uncertain tax positions must meet a more-likely-than-not threshold to be recognized in the financial statements and the tax benefits recognized are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon final settlement. See Note 17, Income Taxes, for additional information.

XML

Stock-Based Compensation (Tables)

12 Months Ended

Dec. 28, 2013

Stock-Based Compensation

Schedule of assumptions used to estimate fair values using Black-Scholes option-pricing model

	Year Ended
	December 28, 2013			December 29, 2012			December 31, 2011
2009 Employee Stock Purchase Plan:
Expected volatility		27	%		38	%		27	%
Risk-free interest rate %		0.1	%		0.2	%		0.2	%
Expected term (in months)		7			15			11
Dividend yield		—			—			—

Summary of Stock Options activity

Stock Options	Shares (000s)			Weighted- Average Exercise Price		Weighted-Average Remaining Contractual Term (In Years)		Aggregate Intrinsic Value (000s)
Outstanding at December 29, 2012		1,696		$	35.86
Exercised		(480	)	$	34.72
Cancelled or expired		(127	)	$	46.87
Outstanding at December 28, 2013		1,089		$	35.09		1.96	$	9,688
Vested at December 28, 2013 and expected to vest		1,089		$	35.09		1.96	$	9,688
Exercisable at December 28, 2013		1,089		$	35.09		1.96	$	9,688

Summary of RSAs, RSUs and MSUs Activity

RSAs, RSUs and MSUs	Shares (000s)			Weighted- Average Purchase Price		Weighted-Average Remaining Vesting Term (In Years)		Aggregate Intrinsic Value (000s)
Outstanding at December 29, 2012		1,708		$	—
Granted		1,118		$	—
Issued		(553	)	$	—
Cancelled or expired		(192	)	$	—
Outstanding at December 28, 2013		2,081		$	—		1.25	$	88,135
Outstanding at December 28, 2013 and expected to vest		1,900		$	—		1.25	$	80,471

Summary of weighted average fair value at the date of grant

	Year Ended
	December 28, 2013		December 29, 2012		December 31, 2011
Per grant of RSAs, RSUs and MSUs	$	41.69	$	43.82	$	44.73

Summary of stock-based payment and stock option values

The following summarizes the Company's stock-based payment and stock option values (in thousands):

	Year Ended
	December 28, 2013		December 29, 2012		December 31, 2011
Intrinsic value of stock options exercised	$	4,198	$	9,064	$	8,622
Intrinsic value of RSAs and RSUs that vested	$	23,649	$	40,105	$	38,769
Grant date fair value of RSAs and RSUs that vested	$	24,026	$	31,215	$	29,488

Schedule of stock-based compensation costs recognized in the Consolidated Statements of Income

  The following table presents details of stock-based compensation costs recognized in the Consolidated Statements of Income (in thousands):

	Year Ended
	December 28, 2013		December 29, 2012		December 31, 2011
Cost of revenues	$	952	$	1,206	$	1,319
Research and development		14,530		12,602		14,872
Selling, general and administrative		15,318		17,368		19,924
		30,800		31,176		36,115
Income tax benefit		2,633		4,911		3,957
	$	28,167	$	26,265	$	32,158

Summary of shares reserved of common stock for future issuance

As of December 28, 2013, the Company had reserved shares of common stock for future issuance as follows (in thousands):

2000 Stock Incentive Plan	1,092
2009 Stock Incentive Plan	4,913
2009 Employee Stock Purchase Plan	636
Total shares reserved	6,641

XML

Stock-Based Compensation

12 Months Ended

Dec. 28, 2013

Stock-Based Compensation

Stock-Based Compensation

13. Stock-Based Compensation

        In fiscal 2009, the stockholders of the Company approved the 2009 Stock Incentive Plan (the "2009 Plan") and the 2009 Employee Stock Purchase Plan (the "2009 Purchase Plan"). The 2009 Plan is currently effective, and has a term of 10 years from the shareholders' approval date. The 2009 Purchase Plan became effective on April 30, 2010.

2009 Stock Incentive Plan

        Under the 2009 Plan, the following may be granted: stock options, stock appreciation rights, performance shares, performance stock units, restricted stock units (RSUs), restricted stock awards (RSAs), performance-based awards and other awards (collectively, all such grants are referred to as "awards"). Awards of stock options and stock appreciation rights each deduct one share from the 2009 Plan shares available for issuance for each share granted, and full value awards (awards other than for which the participant is required to pay at least the fair market value of the underlying shares on the date of grant) deduct 1.55 shares from the 2009 Plan shares available for issuance for each share granted. Awards granted under the 2009 Plan generally contain vesting provisions ranging from three to four years. The exercise price of stock options offered under the 2009 Plan may not be less than 100% of the fair market value of a share of our common stock on the date of grant. To the extent awards granted under the 2009 Plan terminate, expire or lapse for any reason, or are settled in cash, shares subject to such awards will again be available for grant.

2000 Stock Incentive Plan

        In fiscal 2000, the Company's Board of Directors and stockholders approved the 2000 Plan. The 2000 Plan contains programs for (i) the discretionary granting of stock options to employees, non-employee board members and consultants for the purchase of shares of the Company's common stock, (ii) the discretionary issuance of common stock directly (as granted under direct issuance shares in RSAs and RSUs), (iii) the granting of special below-market stock options to executive officers and other highly compensated employees of the Company for which the exercise price can be paid using payroll deductions and (iv) the automatic issuance of stock options to non-employee board members. The discretionary issuance of common stock, RSUs and stock options generally contain vesting provisions ranging from three to eight years. If permitted by the Company, stock options can be exercised immediately and, similar to the direct issuance shares, are subject to repurchase rights which generally lapse in accordance with the vesting schedule. The repurchase rights provide that upon certain defined events, the Company can repurchase unvested shares at the price paid per share. The term of each stock option is no more than ten years from the date of grant.

Stock Grants and Modifications

        The Company granted to its employees 1.1 million, 0.8 million and 0.8 million shares of full value awards and no stock options from the 2009 Plan during fiscal 2013, 2012 and 2011, respectively.

        The Company recorded $1.9 million in selling, general and administrative expense during fiscal 2012 in connection with modifications to certain stock awards. The Company accelerated the vesting of certain RSUs and Market Stock Units (MSUs) and extended the exercise period of stock options pursuant to a separation agreement between the Company and its former Chief Executive Officer (CEO). There were no other significant modifications made to any stock grants during fiscal 2013, 2012 or 2011.

        Included in the full value awards granted under the 2009 Plan in fiscal 2013, 2012 and 2011 were a total of 132 thousand, 110 thousand and 55 thousand market-based stock awards, respectively. The awards, also known as MSUs, provide the rights to acquire a number of shares of common stock for no cash consideration based upon achievement of specified levels of market conditions. The requisite service period for these MSUs is also the vesting period, which is generally three years. The performance criteria of the MSUs measure the difference between the total stockholders' return of the Company against that of the Philadelphia Semiconductor Sector Total Return Index.

2009 Employee Stock Purchase Plan

        The rights to purchase common stock granted under the 2009 Purchase Plan are intended to be treated as either (i) purchase rights granted under an "employee stock purchase plan," as that term is defined in Section 423(b) of the Internal Revenue Code (the "423(b) Plan"), or (ii) purchase rights granted under an employee stock purchase plan that is not subject to the terms and conditions of Section 423(b) of the Internal Revenue Code (the "Non-423(b) Plan"). The Company will retain the discretion to grant purchase rights under either the 423(b) Plan or the Non-423(b) Plan. Eligible employees may purchase a limited number of shares of the Company's common stock at no less than 85% of the fair market value of a share of common stock at prescribed purchase intervals during an offering period. Each offering period will be comprised of a series of one or more successive and/or overlapping purchase intervals and has a maximum term of 24 months. During fiscal 2013, 2012 and 2011, the Company issued 190 thousand, 181 thousand and 169 thousand shares, respectively, under the 2009 Purchase Plan to its employees. The weighted-average fair value for purchase rights granted in fiscal 2013 under the 2009 Purchase Plan was $9.34 per share.

Accounting for Stock-Based Compensation

        Stock-based compensation costs are based on the fair values on the date of grant for stock options and on the date of enrollment for the employee stock purchase plans, estimated by using the Black-Scholes option-pricing model. The fair values of stock awards and RSUs equal their intrinsic value on the date of grant. The fair values of market-based performance awards generally are estimated using a Monte Carlo simulation based on the date of grant.

        The Black-Scholes valuation calculation requires the Company to estimate key assumptions such as future stock price volatility, expected terms, risk-free rates and dividend yield. Expected stock price volatility is based upon a combination of both historical volatility and implied volatility derived from traded options on the Company's stock in the marketplace. Expected term is derived from an analysis of historical exercises and remaining contractual life of options. The risk-free rate is based on the U.S. Treasury yield curve in effect at the time of grant. The Company has never paid cash dividends and does not currently intend to pay cash dividends, thus it has assumed a 0% dividend yield.

        The Monte Carlo simulation used to calculate the fair value of the MSUs simulates the present value of the potential outcomes of future stock prices of the Company and the Philadelphia Semiconductor Sector Total Return Index over the requisite service period. The projection of stock prices are based on the risk-free rate of return, the volatilities of the stock price of the Company and the Index, and the correlation of the stock price of the Company with the Index.

        The Company must estimate potential forfeitures of stock grants and adjust compensation cost recorded accordingly. The estimate of forfeitures will be adjusted over the requisite service period to the extent that actual forfeitures differ, or are expected to differ, from such estimates. Changes in estimated forfeitures are recognized through a cumulative catch-up adjustment in the period of change and will also impact the amount of stock-based compensation expense to be recognized in future periods.

        The fair values of stock options and RSUs are amortized as compensation expense on a straight-line basis over the vesting period of the grants. The fair values of RSAs are fully expensed in the period of grant, when shares are immediately issued with no vesting restrictions. The fair values of MSUs are amortized as compensation expense on a straight-line basis over the performance and service periods of the grants. Compensation expense recognized is shown in the operating activities section of the Consolidated Statements of Cash Flows.

        The fair values estimated from the Black-Scholes option-pricing model were calculated using the following assumptions:

	Year Ended
	December 28, 2013			December 29, 2012			December 31, 2011
2009 Employee Stock Purchase Plan:
Expected volatility		27	%		38	%		27	%
Risk-free interest rate %		0.1	%		0.2	%		0.2	%
Expected term (in months)		7			15			11
Dividend yield		—			—			—

        A summary of stock-based compensation activity with respect to fiscal 2013 follows:

Stock Options	Shares (000s)			Weighted- Average Exercise Price		Weighted-Average Remaining Contractual Term (In Years)		Aggregate Intrinsic Value (000s)
Outstanding at December 29, 2012		1,696		$	35.86
Exercised		(480	)	$	34.72
Cancelled or expired		(127	)	$	46.87
Outstanding at December 28, 2013		1,089		$	35.09		1.96	$	9,688
Vested at December 28, 2013 and expected to vest		1,089		$	35.09		1.96	$	9,688
Exercisable at December 28, 2013		1,089		$	35.09		1.96	$	9,688

RSAs, RSUs and MSUs	Shares (000s)			Weighted- Average Purchase Price		Weighted-Average Remaining Vesting Term (In Years)		Aggregate Intrinsic Value (000s)
Outstanding at December 29, 2012		1,708		$	—
Granted		1,118		$	—
Issued		(553	)	$	—
Cancelled or expired		(192	)	$	—
Outstanding at December 28, 2013		2,081		$	—		1.25	$	88,135
Outstanding at December 28, 2013 and expected to vest		1,900		$	—		1.25	$	80,471

        The following summarizes the Company's weighted average fair value at the date of grant:

	Year Ended
	December 28, 2013		December 29, 2012		December 31, 2011
Per grant of RSAs, RSUs and MSUs	$	41.69	$	43.82	$	44.73

        The following summarizes the Company's stock-based payment and stock option values (in thousands):

	Year Ended
	December 28, 2013		December 29, 2012		December 31, 2011
Intrinsic value of stock options exercised	$	4,198	$	9,064	$	8,622
Intrinsic value of RSAs and RSUs that vested	$	23,649	$	40,105	$	38,769
Grant date fair value of RSAs and RSUs that vested	$	24,026	$	31,215	$	29,488

        The Company had approximately $51.2 million of total unrecognized compensation costs related to stock awards at December 28, 2013 that are expected to be recognized over a weighted-average period of 2.1 years. There were no significant stock-based compensation costs capitalized into assets in any of the periods presented.

        The Company received cash of $15.3 million for the issuance of common stock, net of shares withheld for taxes, during fiscal 2013. The Company issues shares from the shares reserved under its stock plans upon the exercise of stock options, issuance of RSAs, vesting of RSUs and MSUs, and purchases through employee stock purchase plans. The Company does not currently expect to repurchase shares from any source to satisfy such obligation.

        The following table presents details of stock-based compensation costs recognized in the Consolidated Statements of Income (in thousands):

	Year Ended
	December 28, 2013		December 29, 2012		December 31, 2011
Cost of revenues	$	952	$	1,206	$	1,319
Research and development		14,530		12,602		14,872
Selling, general and administrative		15,318		17,368		19,924
		30,800		31,176		36,115
Income tax benefit		2,633		4,911		3,957
	$	28,167	$	26,265	$	32,158

        As of December 28, 2013, the Company had reserved shares of common stock for future issuance as follows (in thousands):

2000 Stock Incentive Plan	1,092
2009 Stock Incentive Plan	4,913
2009 Employee Stock Purchase Plan	636
Total shares reserved	6,641