10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2013

OR

¨ 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 000-50857

Volterra Semiconductor Corporation

(Exact name of registrant as specified in its charter)

Delaware	94-3251865
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)

47467 Fremont Blvd.

Fremont, CA 94538

(Address of principal executive offices)

Registrant’s telephone number, including area code: (510) 743-1200

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

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

Indicate by check mark 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	¨	Accelerated filer	x
Non-accelerated filer	¨  (Do not check if a smaller reporting company)	Smaller reporting company	¨

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

As of July 31, 2013, the registrant had 25,103,644 shares of common stock outstanding.

Cautionary Note Regarding Forward-Looking Statements

This quarterly report on Form 10-Q contains forward-looking statements that involve many risks and uncertainties. These statements relate to future events and our future performance and are based on current expectations, estimates, forecasts and projections about the industries in which we operate and the beliefs and assumptions of our management. In some cases, you can identify forward-looking statements by terms such as “would,” “could,” “may,” “will,” “should,” “expect,” “intend,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “targets,” “seek,” or “continue,” the negative of these terms or other variations of such terms. In addition, any statements that refer to projections of our future financial performance, our anticipated growth and trends in our business and other characterizations of future events or circumstances are forward-looking statements. These statements are only predictions based upon assumptions made that are believed to be reasonable at the time, and are subject to risk and uncertainties. Therefore, actual events or results may differ materially and adversely from those expressed in any forward-looking statement. In evaluating these statements, you should specifically consider the risks described under “Risk Factors” in Item 1A of Part II and elsewhere in this Form 10-Q. These factors may cause our actual results to differ materially from any forward-looking statements. Except as required by law, we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

2

Volterra Semiconductor Corporation and Subsidiaries

	Page
PART I. FINANCIAL INFORMATION		4
Item 1. Financial Statements		4
Condensed Consolidated Balance Sheets as of June 30, 2013 and December 31, 2012		4
Condensed Consolidated Statements of Operations for the three and six months ended June  30, 2013 and 2012		5
Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2013 and 2012		6
Notes to the Condensed Consolidated Financial Statements		7
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		14
Item 3. Quantitative and Qualitative Disclosures About Market Risk		21
Item 4. Controls and Procedures		21
PART II. OTHER INFORMATION		21
Item 1. Legal Proceedings		21
Item 1A. Risk Factors		22
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		37
Item 6. Exhibits		38
SIGNATURE		40
EXHIBIT 31.1
EXHIBIT 31.2
EXHIBIT 32.1
EXHIBIT 32.2

3

PART I. FINANCIAL INFORMATION

ITEM 1. Financial Statements

VOLTERRA SEMICONDUCTOR CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In thousands, except per share amounts)

(Unaudited)

	June 30, 2013			December 31, 2012
Assets
Current assets:
Cash and cash equivalents	$	153,988		$	148,364
Short-term investments		1,000			2,000
Accounts receivable, net of allowances of $1,632 and $2,066, respectively		21,944			24,487
Inventories		21,213			18,719
Prepaid expenses and other current assets		2,239			3,103
Total current assets		200,384			196,673
Property and equipment, net		11,520			11,013
Indefinite-lived intangibles		3,100			3,100
Goodwill		2,486			2,486
Other assets		510			535
Total assets	$	218,000		$	213,807
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	9,054		$	7,073
Accrued liabilities		9,894			13,974
Total current liabilities		18,948			21,047
Other long-term liabilities		3,599			3,561
Total liabilities		22,547			24,608
Stockholders’ equity:
Preferred stock, $0.001 par value; 5,000 shares authorized; none issued and outstanding		—			—
Common stock, $0.001 par value; 200,000 shares authorized; 29,091 and 28,793 shares issued, respectively 25,050 and 25,152 shares outstanding, respectively		29			29
Additional paid-in capital		182,126			174,056
Retained earnings		69,829			66,053
Treasury stock at cost, 4,041 and 3,641 shares, respectively		(56,531	)		(50,939	)
Total stockholders’ equity		195,453			189,199
Total liabilities and stockholders’ equity	$	218,000		$	213,807

The accompanying notes are an integral part of these condensed consolidated financial statements.

4

VOLTERRA SEMICONDUCTOR CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per share amounts)

(Unaudited)

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2013		2012		2013		2012
Net revenue	$	34,396	$	43,574	$	74,315	$	85,636
Cost of revenue		14,403		18,292		31,626		36,188
Gross profit		19,993		25,282		42,689		49,448
Operating expenses:
Research and development		10,878		10,995		22,392		21,393
Selling, general and administrative		7,101		6,805		14,307		13,714
Litigation		1,019		1,279		1,816		1,979
Total operating expenses		18,998		19,079		38,515		37,086
Income from operations		995		6,203		4,174		12,362
Non-operating expense (income), net		50		58		98		(30	)
Income before income taxes		945		6,145		4,076		12,392
Income tax expense		205		131		300		188
Net income		740	$	6,014	$	3,776	$	12,204
Net income per share:
Basic	$	0.03	$	0.24	$	0.15	$	0.48
Diluted	$	0.03	$	0.22	$	0.15	$	0.45
Weighted average shares outstanding:
Basic		25,055		25,412		25,109		25,267
Diluted		25,488		26,922		25,637		26,837

The accompanying notes are an integral part of these condensed consolidated financial statements.

5

VOLTERRA SEMICONDUCTOR CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

	Six Months Ended
	June 30,
	2013			2012
Cash flows from operating activities:
Net income	$	3,776		$	12,204
Adjustments to reconcile net income to net cash provided by operating activities:
Stock-based compensation		5,255			4,876
Depreciation and amortization		1,869			1,544
Loss on disposal of fixed assets		5			4
Release of allowance for doubtful accounts		(12	)		(13	)
Changes in operating assets and liabilities:
Accounts receivable		2,555			(3,314	)
Inventories		(2,468	)		(2,320	)
Prepaid expenses and other assets		889			537
Accounts payable		1,999			795
Accrued liabilities and long-term liabilities		(86	)		1,219
Net cash provided by operating activities		13,782			15,532
Cash flows from investing activities:
Purchases of property and equipment		(2,493	)		(2,436	)
Purchases of short-term investments		(4,000	)		(4,000	)
Proceeds from maturity of short-term investments		5,000			2,000
Cash paid for acquisitions, net		(3,861	)		—
Net cash used in investing activities		(5,354	)		(4,436	)
Cash flows from financing activities:
Proceeds from issuance of common stock, net		2,904			9,059
Repurchase of common stock		(5,592	)		(1,994	)
Taxes paid related to net share settlement of equity awards		(116	)		(102	)
Net cash provided by financing activities		(2,804	)		6,963
Net increase in cash and cash equivalents		5,624			18,059
Cash and cash equivalents, beginning of period		148,364			126,733
Cash and cash equivalents, end of period	$	153,988		$	144,792
Supplemental disclosure of cash flows:
Cash paid for income taxes	$	288		$	153

The accompanying notes are an integral part of these condensed consolidated financial statements.

6

VOLTERRA SEMICONDUCTOR CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except per share data)

(Unaudited)

1. Description of Business and Significant Accounting Policies

Volterra Semiconductor Corporation (the “Company” or “Volterra”) was incorporated in Delaware in 1996, and its principal offices are located in Fremont, California. The Company designs, develops and markets proprietary, high-performance analog and mixed-signal power management semiconductors.

Basis of Presentation

The accompanying condensed 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. The functional currency of the Company and its significant subsidiaries is the United States dollar. Foreign currency transaction gains and losses are recorded in income. For all periods presented, there have been no material foreign currency transaction or translation gains or losses.

The Company’s accompanying condensed consolidated financial statements have been prepared without audit in accordance with the rules and regulations of the Securities and Exchange Commission (SEC). Certain information and disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States have been condensed or omitted in accordance with these rules and regulations. The information in this report should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto included in its 2012 annual report on Form 10-K for the fiscal year ended December 31, 2012 as filed with the SEC on March 6, 2013.

In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all adjustments (consisting only of normal recurring adjustments) necessary to present fairly the Company’s financial position, results of operations and cash flows for the interim periods presented. The operating results for the six months ended June 30, 2013 are not necessarily indicative of the results that may be expected for any other future interim period or full year. The condensed consolidated balance sheet as of December 31, 2012 is derived from the audited consolidated financial statements as of the year then ended.

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the financial statements and the accompanying notes.

The accounting estimates that require our most significant, difficult and subjective judgments include:

• determination of sales return allowances;

• the recognition and measurement of current and deferred income taxes (including the measurement of uncertain tax positions);

• the valuation of inventory;

• measurement of stock-based compensation;

• valuation of indefinite-lived intangible assets; and

• valuation of goodwill.

Actual results could differ from those estimates.

7

VOLTERRA SEMICONDUCTOR CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except per share data)

(Unaudited)

Concentrations of Credit Risk

The Company sells its products to distributors and original equipment manufacturers (and their outsourced suppliers) in the computing, storage, networking, and consumer electronic industries. The Company performs credit evaluations of its customers’ financial condition and generally does not require collateral from its customers. An allowance is provided for bad debts when it is probable and estimable that accounts receivable will not be collected.

Financial Instruments

Financial instruments consist of cash equivalents, short-term investments, accounts receivable, and accounts payable. The carrying value of the Company’s financial instruments approximates the respective fair value due to the relatively short maturities of these instruments. Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of investments and trade accounts receivable.

The Company maintains cash, cash equivalents, and short-term investments with high credit quality financial institutions. Cash equivalents consist of highly liquid investments maturing in 90 days or less from the date of purchase. Short-term investments are comprised of U.S. Treasury and debt securities with remaining contractual maturities on the date of purchase greater than 90 days but less than one year. Investments in debt securities are classified as held-to-maturity and carried at amortized cost. The fair value of these instruments would be categorized as Level 1 of the fair value hierarchy. The following table reconciles the amortized cost to the fair value of short-term investments:

	As of June 30,		As of December 31,
	2013		2012
Amortized cost	$	1,000	$	2,000
Unrealized gains		—		—
Fair value	$	1,000	$	2,000

Segment Reporting and Significant Customers

The Company is organized and operates as a single business segment: analog and mixed-signal power management semiconductors. The Company’s chief operating decision maker, the Chief Executive Officer, reviews financial information presented on a consolidated basis for the purposes of making operating decisions and assessing financial performance.

8

VOLTERRA SEMICONDUCTOR CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except per share data)

(Unaudited)

Significant customers are those customers directly accounting for more than 10% of the Company’s net revenue or accounts receivable. For each significant customer, net revenue as a percentage of total net revenue and accounts receivable as a percentage of total accounts receivable are as follows:

	Net Revenue						Net Revenue						Accounts Receivable
	Three Months Ended						Six Months Ended						As of
	June 30,						June 30,						June 30,			December 31,
Customer	2013			2012			2013			2012			2013			2012
A		21	%		*			20	%		*			29	%		23	%
B		18	%		22	%		21	%		23	%		20	%		28	%
C		17	%		26	%		17	%		26	%		13	%		12	%
D		*			15	%		*			14	%		*			10	%
E		*			*			*			10	%		*			*

* Less than 10%

The Company reports its net revenue by geographic areas according to the destination to which the product was shipped. The geographic area to which a product was shipped is not necessarily the same location in which the product is ultimately used. In all periods, substantially all of the Company’s net revenue was denominated in U.S. dollars. Net revenue by geographic area was as follows:

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2013			2012			2013			2012
China		68	%		69	%		67	%		66	%
Singapore		20			25			24			27
United States		4			1			2			1
Other		8			5			7			6
		100	%		100	%		100	%		100	%

Revenue Recognition

Revenue from the sale of semiconductor products is recognized upon shipment when title transfers to the customer provided that persuasive evidence of an arrangement exists, the price is fixed or determinable, and collection of the resulting receivable is reasonably assured. An allowance is recorded at the time of sale to provide for estimated future sales returns. The allowance is based upon historical experience, current trends, and the Company’s expectations regarding future return activity. Sales returns must be authorized by Volterra and are generally limited to instances of product failure under the Company’s warranty that generally provides that products will be free from defects for a limited period of time, generally not longer than twelve months.

Volterra’s sales to distributors are made under agreements that do not provide for price adjustments after purchase and provide limited return rights under the Company’s standard warranty. Revenue on these sales is recognized upon shipment when title passes to the distributor. Volterra estimates future distributor sales returns based on historical data and current business expectations and reduces revenue for estimated future returns through the allowance for sales returns.

Revenue generally is recognized net of any taxes collected from customers and subsequently remitted to governmental authorities.

9

VOLTERRA SEMICONDUCTOR CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except per share data)

(Unaudited)

Stock-Based Compensation

Stock-based compensation costs are calculated on the date of grant based on the estimated fair value of the award. The compensation cost is recognized on a straight-line basis over the vesting period.

The effect of stock-based compensation was as follows:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2013		2012		2013		2012
Stock-based compensation expense:
Cost of revenue	$	157	$	193	$	338	$	422
Research and development		1,208		1,023		2,323		1,993
Sales, general and administrative		1,131		1,266		2,594		2,461
Effect on net income	$	2,496	$	2,482	$	5,255	$	4,876
Effect on basic net income per share	$	0.10	$	0.10	$	0.21	$	0.19
Effect on diluted net income per share	$	0.10	$	0.09	$	0.20	$	0.18

The Company has not recognized any tax benefit related to stock-based compensation expense as a result of the full valuation allowance on its net domestic deferred tax assets.

Provision for Income Taxes

Income taxes are accounted for under the assets and liability method. Deferred tax assets and liabilities are recognized for future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted income tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in income tax rates is recognized in income in the period that includes the enactment date.

As of June 30, 2013, the total amount of unrecognized tax benefits was $8,593 of which $1,462 would affect the effective tax rate if recognized. The remaining $7,131 in unrecognized tax benefits would not result in a tax benefit since it would be fully offset with a valuation allowance.

As of December 31, 2012, the total amount of unrecognized tax benefits was $7,564, of which $1,381 would affect the effective tax rate if recognized. The remaining $6,183 in unrecognized tax benefits would not result in a tax benefit since it would be fully offset with a valuation allowance.

The Company recognizes interest and penalties related to uncertain tax positions in income tax expense. Cumulative interest and penalties through the second quarter of 2013 are immaterial.

The Company files U.S. federal, state and foreign income tax returns and is subject to examination in these jurisdictions for all tax years since inception. Although timing of the resolution or closure on audits is highly uncertain, the Company believes it is reasonably possible that there would be immaterial changes in its currently unrecognized tax benefits in the next 12 months.

Earnings Per Share

Basic net income per share is calculated by dividing net income by the weighted average shares of common stock outstanding during the period. Diluted net income per share is calculated by dividing the net

10

VOLTERRA SEMICONDUCTOR CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except per share data)

(Unaudited)

income by the weighted average shares outstanding of common stock and dilutive potential common shares outstanding during the period. Dilutive potential common shares consist of dilutive shares issuable upon the exercise of outstanding stock options and the vesting of outstanding restricted stock units, computed using the treasury stock method. The sum of the quarterly net income per share will not necessarily equal the net income per share for the total period due to the effects of rounding.

The following table sets forth for all periods presented the computation of basic and diluted net income per share, including the reconciliation of the numerator and denominator used in the calculation:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2013		2012		2013		2012
Numerator:
Net income	$	740	$	6,014	$	3,776	$	12,204
Denominator:
Weighted average shares outstanding, basic		25,055		25,412		25,109		25,267
Effect of dilutive securities:
Stock options and restricted stock units		433		1,510		528		1,570
Weighted average shares outstanding, diluted		25,488		26,922		25,637		26,837
Basic net income per share	$	0.03	$	0.24	$	0.15	$	0.48
Diluted net income per share	$	0.03	$	0.22	$	0.15	$	0.45

Stock options and restricted stock units outstanding in the amount of 4,600 and 1,404 shares for the three months ended June 30, 2013 and 2012, respectively, and 4,327 and 1,332 shares for the six months ended June 30, 2013 and 2012, respectively, were excluded from the computation of diluted earnings per share because their effect was anti-dilutive in the period. These securities outstanding as of June 30, 2013 could dilute net income per share in the future.

Long-lived Assets and Indefinite-lived Intangible Assets

We assess the impairment of long-lived assets and indefinite-lived intangible assets and in-process research and development (“IPR&D”), whenever events or changes in circumstances indicate that the carrying value of such assets may not be recoverable. Whenever events or changes in circumstances suggest that the carrying amount of long-lived assets and indefinite-lived intangible assets may not be recoverable, we estimate the future undiscounted cash flows expected to be generated by the asset from its use or eventual disposition. If the sum of the expected future undiscounted cash flows, which includes revenue, is less than the carrying amount of those assets, we recognize an impairment loss based on the excess of the carrying amount over the fair value of the assets. Significant management judgment is required in the forecasts of future operating results that are used in the discounted cash flow method of valuation. IPR&D is tested for impairments annually. If a particular IPR&D project were to be abandoned and have no future alternative use then its value would be reduced.

Goodwill

Goodwill is recorded as the difference, if any, between the aggregate consideration paid for an acquisition and the fair value of the net tangible and indefinite-lived intangible assets acquired and liabilities assumed. We evaluate goodwill for impairment at least on an annual basis or whenever events and changes in circumstances suggest that the carrying amount may not be recoverable from its estimated future cash flow. We perform the goodwill impairment test for each reporting unit. If the fair value of the reporting unit exceeds the carrying value of the reporting unit, goodwill is not impaired. We perform our goodwill impairment assessment at the Company level, which is our sole reporting unit.

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VOLTERRA SEMICONDUCTOR CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except per share data)

(Unaudited)

Accounting for Lease Incentives

As part of the Company’s existing leased facilities, the Company has received various lease incentives which take the form of a fixed allowance towards lease improvements on the facility. The Company used the allowance to make leasehold improvements which will be depreciated over the useful life of the assets or the lease term, whichever is shorter. The offsetting lease incentives liability is being amortized on a straight-line basis over the term of the lease as an offset to rent expense.

2. Inventories

Inventories consisted of the following:

	June 30,		December 31,
	2013		2012
Work-in-process	$	12,265	$	11,286
Finished goods		8,948		7,433
	$	21,213	$	18,719

3. Property and Equipment

Property and equipment consisted of the following:

	June 30,			December 31,
	2013			2012
Computer hardware	$	2,449		$	2,098
Computer software		9,891			8,477
Equipment		14,175			13,731
Furniture		1,229			1,213
Leasehold improvements		3,920			3,883
		31,664			29,402
Less accumulated depreciation and amortization		(20,144	)		(18,389	)
	$	11,520		$	11,013

4. Goodwill and Indefinite-lived Intangible Assets

As a result of the acquisition of Element Energy, Inc. on December 31, 2012, the Company recorded $2,486 of goodwill and $3,100 of indefinite-lived intangible assets which consist of in-process research and development. There was no impairment of goodwill or indefinite-lived intangible asset during the three and six months ended June 30, 2013.

5. Stock Repurchases

Our board of directors authorized an initial repurchase plan of $15 million in July 2007, which was

12

VOLTERRA SEMICONDUCTOR CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except per share data)

(Unaudited)

completed in January 2008. Our board of directors has since authorized an additional $60 million of repurchases in additional increments in January 2008, October 2008, April 2009, May 2010, October 2010 and July 2012, and the Company repurchased 272 thousand shares during the three months ended June 30, 2013 for $3.7 million, at an average cost of $13.67 per share including commissions. The Company repurchased 401 thousand shares during the six months ended June 30, 2013 for $5.6 million, at an average cost of $13.96 per share, including commissions. The Company repurchased 34 thousand shares during the three months ended June 30, 2012 for $1.0 million, at an average cost of $29.22 per share, including commissions. The Company repurchased 68 thousand shares during the six months ended June 30, 2012 for $2.0 million, at an average cost of $29.47 per share, including commissions.

The Company’s policy is to consider shares to have been repurchased upon the settlement date of the transaction, which is typically three days subsequent to the trading date. Shares repurchased during the three months ended June 30, 2013 have been reported as treasury stock. As of June 30, 2013, this repurchase program has $3.5 million remaining under the Company’s repurchase authorization.

6. Fair Value Measurements

The Company currently has only cash and cash equivalents held and used in the ordinary course of business that must be measured at fair value on a recurring basis. The Company does not have other financial or non-financial assets or liabilities that are required to be measured at fair value on a recurring basis.

Based on the nature of cash and cash equivalents and the underlying securities, there are no realized or unrealized gains and losses recorded from holding these assets.

Short-term investments have remaining contractual maturities on the date of purchase greater than 90 days but less than one year. Investments in debt securities are classified as held-to-maturity. Unrealized gain and losses were not material at June 30, 2013.

The fair value of financial assets measured at fair value on a recurring basis was determined using the following inputs:

	June 30, 2013
	Fair value measurements at reporting date using
	Total		Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Money market funds	$	99,564	$	99,564	$	—	$	—
Total	$	99,564	$	99,564	$	—	$	—
	December 31, 2012
	Fair value measurements at reporting date using
	Total		Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Money market funds	$	98,562	$	98,562	$	—	$	—
Total	$	98,562	$	98,562	$	—	$	—

In addition, the Company held $1 million and $2 million of Level 1 U.S. Treasuries at June 30, 2013 and December 31, 2013, respectively, which are measured at fair value on a non-recurring basis as these investments are held-to-maturity.

13

VOLTERRA SEMICONDUCTOR CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except per share data)

(Unaudited)

7. Litigation

As initially disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2008, and as updated in subsequent public filings, we filed a lawsuit in November 2008 in the United States District Court in the Northern District of California against Infineon Technologies AG, Infineon Technologies North America Corporation, and Primarion, Inc., (collectively, the “Defendants”) for infringement of several of our patents, seeking damages, enhanced damages for willful infringement and injunctive relief.

A trial related to our integrated power stage patents, U.S. Patent Nos. 6,278,264 and 6,462,522 was held in May 2011. The court had determined that Volterra’s asserted claims were infringed by Defendant’s accused products, and a unanimous jury found that all asserted claims were also valid and not obvious. A trial date to determine damages or willfulness has been tentatively set for November 4, 2013. There have been no further material developments in these litigation proceedings during the quarter ended June 30, 2013.

As initially disclosed in the Company’s Annual Report on Form 10-K for the year ended December 2009, and as updated in subsequent public filings, Infineon Technologies AG filed a lawsuit against us in Delaware for infringement of four patents assigned to Infineon, seeking damages, enhanced damages for willful infringement and injunctive relief. Such case was subsequently transferred to, and is currently being heard in, the United States District Court, Northern District of California. There have been no further material developments in these litigation proceedings during the quarter ended June 30, 2013.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion should be read in conjunction with our condensed consolidated financial statements and the related notes contained elsewhere in this quarterly report on Form 10-Q. All statements in the following discussion that are not reports of historical information or descriptions of current accounting policy are forward-looking statements. Please see the “Cautionary Note Regarding Forward-Looking Statements” at the beginning of this quarterly report and consider our forward-looking statements in light of the factors that may affect operating results set forth herein.

Overview

We design, develop, and market proprietary, high-performance analog and mixed-signal power management semiconductors. We sell integrated voltage regulator semiconductors, integrated power protection and distribution semiconductors and scalable voltage regulator semiconductor chipsets in the computing, storage, networking, and consumer markets, primarily to original equipment manufacturers, or OEMs, original design manufacturers, or ODMs, contract equipment manufacturers, or CEMs, or merchant power supply manufacturers.

Our net revenue was $156.0 million and $168.0 million in 2011 and 2012, respectively, and $74.3 million for the six months ending June 30, 2013. We generated net income of $20.6 million and $22.8 million in 2011 and 2012, respectively, and $3.8 million in the six months ending June 30, 2013. As of June 30, 2013, we had retained earnings of $69.8 million.

Our net revenue consists primarily of sales of our power management semiconductor products. When evaluating our net revenue, we categorize our sales into three major markets: servers and storage; networking and communications; and consumer and portable. We are now developing products for the energy market, but such products did not generate any revenue as of June 30, 2013, and as such, this discussion and analysis will be focused on our sales in the three major markets described above. The electronics manufacturing industry is complex and disaggregated, and electronic system producers typically utilize distributors and outsourced suppliers to provide procurement, manufacturing, design, and other supply chain related services within the industry. We attempt to quantify the amount of sales within the major markets identified above, but such quantified amounts are approximations only, as we must rely

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upon estimates and assumptions regarding the incorporation of our products sold to distributors or other outsourced suppliers into the systems of the OEMs, ODMs, CEMs, or merchant power supply manufacturers for each particular market. In the second quarter of 2013, we estimate that 68% of our net revenue was derived from sales in the server and storage market, 25% from the consumer and portable market and 7% from the networking and communications market. We believe that the most significant portion of our revenues for the remainder of the current fiscal year will continue to be derived from sales in the server and storage market. We expect revenues in our consumer and portable market will decline over time as we de-emphasize our activities in that market, and focus our resources on other growth opportunities, such as the energy market.

Our sales and accounts receivable are currently concentrated with a small group of customers, and we expect this to continue in the future. In the second quarter of 2013, three customers each accounted for more than 10% of our net revenue, and collectively accounted for 56% of our net revenue. In the second quarter of 2012, three customers each accounted for more than 10% of our net revenue, and collectively accounted for 63% of our net revenue. While we report revenue for direct sales to particular customers, our sales data may not accurately reflect the additional “indirect” demand from distributors and outsourced suppliers who purchase our products pursuant to their business relationships with these same customers. Because we have less visibility into and are not able to quantify this “indirect” demand, we are unable to determine how much additional revenue these customers may generate. In addition, our sales data also may not identify customers who do not directly account for 10% of our net revenue, but may be significant in that such customers also generate substantial “indirect” demand from distributors and outsourced suppliers. If any such customer were to stop incorporating our products or third party products containing our components into its designs, we would not only lose the direct revenue we receive from the customer, but we could also lose a portion of the indirect revenue from third parties who do business with such customer. If we were to lose or experience a significant reduction in demand from one or more of our key customers either to which we sell directly or which generates “indirect” demand or if we were to fail to collect our accounts receivable from one or more of our key customers, our operating results and financial position would be materially adversely impacted.

Because demand for our products is impacted by demand for our customers’ products, our revenue depends on the timing, size, and speed of commercial introductions of systems that use our products, the continued acceptance of our customers’ products, and our customers’ ability to manage their inventory in relationship to such demand. We continue to expect a significant amount of our revenue to come from the commercial introduction of new systems, which is often more difficult to forecast than ongoing demand for previously introduced systems. A number of our customers’ applications, particularly in the consumer and portable market, are subject to short product cycles and prone to delays in development and commercial introduction or significant changes in demand, making it inherently difficult to accurately forecast demand for such applications in any period. A number of our customers, such as ODMs, CEMs, and merchant power supply manufacturers, also are dependent upon the demand of other companies, which makes sales to such parties more difficult to forecast accurately. These fluctuations in demand could materially affect our operating results on a period by period basis.

We recognize revenue on our sales upon shipment with a provision for estimated sales returns and allowances. A portion of our revenues comes from customer orders that are both received and shipped against within the same quarter, or “turns business,” which is inherently difficult to forecast. We estimate turns business as a percent of net revenue as the ratio of net revenue less beginning backlog to net revenue making adjustments for the effect of sales return reserves or other adjustments to net revenue not included in backlog. Turns business was between 20% and 30% in the second quarter of 2013, between 15% and 25% in the first quarter of 2013 and the second quarter of 2012. If our turns business increases, forecasting revenue becomes more difficult. Generally, our current sales practice allows customers to, and customers routinely do, revise and cancel orders and reschedule delivery dates on relatively short notice pursuant to changes in the customer’s requirements. In addition, in circumstances where we have achieved our objectives in a period or when we have limited or insufficient inventory available, we may delay shipment of orders. For these reasons, backlog has limited value as a predictor of future revenues.

We typically sell directly through our internal sales force to customers in North America. We sell both

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directly and indirectly through distributors internationally, under agreements that generally do not provide for price adjustments after purchase and provide limited return rights in the event of product failure. We have made no U.S. sales to distributors. During the second quarter of 2013, sales to international distributors represented 28% of net revenue, compared to 24% in the first quarter of 2013 and 31% in the second quarter of 2012. We expect the sales channels we use and the mix of business between distribution and direct sales to change as our product offerings and customers evolve.

Our cost of revenue consists primarily of purchases of silicon wafers and related costs of assembly, test and shipment of our products, and compensation and related costs of personnel and equipment associated with production management and quality assurance. Our gross margins have historically varied significantly, and may continue to vary, based on a variety of factors, including changes in the relative mix of the products we sell, the markets and geographies where we sell, the size and nature of our customers in these markets, the levels of sales to distributors, manufacturing volumes and yields, discounts or other financial incentives to customers and inventory and overhead costs. Generally, as we introduce new products, we initially incur higher unit production costs, and as the product ramp progresses, our overall unit production costs decrease as manufacturing efficiency improves. In addition, because our power management products are highly complex and the manufacturing process for our products is technically challenging, previously undetected design defects and minor deviations in the manufacturing process can cause substantial decreases in yields or quality. Such decreases in yields or quality can impact our gross margins due to a reduction in our revenue as a result of significant product returns, may cause us to incur product replacement costs, and may cause us to rework or scrap inventory that had been manufactured with the defect. If we are unable to manage these risks, our revenue and gross margins and financial position may be materially adversely impacted. Finally, consistent with the overall market for power management solutions, we expect to face price pressure over time. In order to maintain or improve our gross margins, we will need to introduce new, lower cost products, increase volumes, reduce unit costs or achieve a combination of these objectives.

We purchase our inventory pursuant to standard purchase orders. As lead times at our manufacturing vendors can be up to three months or more, we typically build inventory based on our sales forecasts rather than customers’ orders, subjecting us to inventory risk. If, after initial orders are placed, we change certain features of our product to accommodate customer requirements, we may create additional inventory that we may not be able to sell. In the event of an inventory write-down either because the inventory exceeds demand, becomes obsolete, or contains previously undetected defects and must be reworked or scrapped, our gross margins could be materially adversely impacted. On the other hand, because our manufacturing lead times tend to be longer than our order lead times and capacity at our manufacturing vendors may be constrained, our net revenue and relationship with our customers could be adversely impacted if we do not have adequate inventory available to meet customer demand. Our inventory levels were $21.2 million at the end of the second quarter of 2013, and inventory turns, calculated as our annualized cost of revenue for the quarter divided by our inventories as of the end of such quarter, decreased to 2.7 in the second quarter of 2013 compared to 3.8 turns in first quarter of 2013 and 4.3 turns in the second quarter of 2012. If the amount of inventory we are holding increases or our inventory turns decrease, the risk of a potential inventory write-down and adverse impact on our gross margins increases.

Our research and development expense consists primarily of compensation and related costs for employees involved in the design and development of our products, prototyping and other development expense, and the depreciation costs related to equipment being used for research and development. All research and development costs are expensed as incurred. Research and development expenses can fluctuate as a result of long design cycles with periods of relatively low expenses punctuated with increased expenditures for prototypes and product development toward the end of the design cycle.

Selling, general and administrative expense consists primarily of compensation and related costs for employees involved in sales and marketing, applications engineering, general management, finance, human resources and information technology, as well as expenses related to professional services, insurance and business travel.

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Litigation expenses consist primarily of attorneys’ fees and costs and expenses associated with our litigation matters described in Item 1 of Part II - Legal Proceedings, and such legal proceedings may continue for the current year and beyond. Our litigation expenses were approximately $1.0 million in the second quarter of 2013 and $1.8 million for the six months ended June 30, 2013.

Our income tax provision is dependent on our estimated annual effective tax rate. Our annual effective tax rate has fluctuated and is dependent on the mix of income and losses between domestic and international operations. Additionally, our annual effective tax rate may be impacted by any future utilization of available net operating loss and carryforwards to offset taxable income, the utilization of tax credit carry forwards to offset income tax in the U.S. and changing statutory income tax rates. Our domestic deferred tax assets are fully offset by a valuation allowance because, based on the available objective evidence, we believe it is more likely than not that the net deferred tax assets will not be realized. If we later determine that it is more likely than not that the deferred tax assets would be realized, we may revise this assessment, which could result in a favorable adjustment to the reported income tax provision in the period of re-assessment followed by higher reported tax rates in subsequent periods. Our foreign income is typically subject to lower statutory rates than our domestic income. We expect that both our geographical mix of taxable income and losses as well as the statutory income tax rates we are subject to internationally may change over time, resulting in changes to our effective tax rate and reported income tax provision.

Element Energy Acquisition

On December 31, 2012, we completed the acquisition of Element Energy, Inc., a privately held company that has developed technology that improves the performance, lifetime, reliability and cost of large battery packs used in a wide range of applications including hybrid and electric vehicles and stationary and renewable energy storage. Element Energy, Inc. was acquired for $4.5 million cash consideration, of which $500,000 is being held in escrow as recourse for indemnifiable claims and expenses that may arise in the first 12 months following the closing.

Critical Accounting Policies

There have been no significant changes to our critical accounting policies during the six months ended June 30, 2013 as compared to the previous disclosures in Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our annual report on Form 10-K for the fiscal year ended December 31, 2012, as filed with the SEC on March 6, 2013.

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Results of Operations

The following table sets forth our results of operations as a percentage of net revenue for the periods indicated:

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2013			2012			2013			2012
Net revenue		100	%		100	%		100	%		100	%
Cost of revenue		42			42			43			42
Gross margin		58			58			57			58
Operating expenses:
Research and development		31			25			30			25
Selling, general and administrative		21			16			19			16
Litigation		3			3			3			3
Total operating expenses		55			44			52			44
Income from operations		3			14			5			14
Non-operating expense (income), net		—			—			—			—
Income before income taxes		3			14			5			14
Income tax expense		1			—			—			—
Net income		2	%		14	%		5	%		14	%

Comparison of Three Months Ended June 30, 2013 to Three Months Ended June 30, 2012

Net Revenue. Net revenue was $34.4 million in the three months ended June 30, 2013 and $43.6 million in the three months ended June 30, 2012, a decrease of 21%. Revenues decreased approximately $7.3 million in consumer and portable and $2.2 million in server and storage, and increased $0.4 million in networking and communications.

Cost of Revenue and Gross Profit. Cost of revenue was $14.4 million for the three months ended June 30, 2013 and $18.3 million for the three months ended June 30, 2012, a decrease of 21%. Gross profit was $20.0 million for the three months ended June 30, 2013 and $25.3 million for the three months ended June 30, 2012, a decrease of 21%, due to a decrease in overall shipments. Gross margin was 58% for the three months ended June 30, 2013 compared to 58% for the three months ended June 30, 2012.

Research and Development. Research and development expenses were $10.9 million for the three months ended June 30, 2013 and $11.0 million for the three months ended June 30, 2012, a decrease of 1%. The decrease was due primarily to a reduction of $0.1 million in wages and related expenses and a reduction of $0.2 million in product development expenses, partially offset by an increase of $0.2 million in stock-based compensation expense.

Selling, General and Administrative. Selling, general and administrative expenses were $7.1 million for the three months ended June 30, 2013 and $6.8 million for the three months ended June 30, 2012, an increase of 4%. The increase was due primarily to an increase of $0.4 million in customer related expenses, partially offset by a decrease of $0.1 million in stock-based compensation expense.

Litigation. Litigation expenses were approximately $1.0 million for the three months ended June 30, 2013 and $1.3 million for the three months ended June 30, 2012, a decrease of 20%. The decrease was primarily due to a decrease in activity related to the litigation described in Item 1 of Part II - Legal Proceedings.

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Provision for Income Tax. Income tax provision was $205 thousand and $131 thousand for the three months ended June 30, 2013 and 2012, respectively.

Comparison of Six Months Ended June 30, 2013 to Six Months Ended June 30, 2012

Net Revenue. Net revenue was $74.3 million in the six months ended June 30, 2013 and $85.6 million in the six months ended June 30, 2012, a decrease of 13%. The decrease in net revenue was primarily due to decreases of $11.5 million and $0.4 million in sales to the consumer and portable and the server and storage markets, respectively, partially offset by an increase of $0.5 million in sales to the networking and communications market.

Cost of Revenue and Gross Profit. Cost of revenue was $31.6 million for the six months ended June 30, 2013 and $36.2 million for the six months ended June 30, 2012, a decrease of 13%. Gross profit was $42.7 million for the six months ended June 30, 2013 and $49.4 million for the six months ended June 30, 2012, a decrease of 14%. Gross margin was 57% for the six months ended June 30, 2013 and 58% for the six months ended June 30, 2012. The decrease in gross margin for the six months ended June 30, 2013 compared to the six months ended June 30, 2012 was primarily due to lower yields.

Research and Development. Research and development expenses were $22.4 million for the six months ended June 30, 2013 and $21.4 million for the six months ended June 30, 2012, an increase of 5%. The increase was primarily due to increases in wages and related expenses of $0.7 million, stock-based compensation expense of $0.3 million and higher depreciation of $0.2 million, partially offset by lower performance based bonus accruals of $0.4 million.

Selling, General and Administrative. Selling, general and administrative expenses were $14.3 million for the six months ended June 30, 2013 and $13.7 million for the six months ended June 30, 2012, an increase of 4%. The increase was primarily due to an increase in customer related expenses of $0.6 million, and patent related legal costs of $0.3 million, partially offset by decreased wages and performance based bonus accruals of $0.5 million.

Litigation. Litigation expenses were approximately $1.8 million for the six months ended June 30, 2013 and $2.0 million for the six months ended June 30, 2012, a decrease of 8%. The decrease was primarily due to the decrease in activity related to the litigation described in Item 1 of Part II - Legal Proceedings.

Provision for Income Tax. Income tax provision was $300 thousand and $188 thousand for the six months ended June 30, 2013 and 2012, respectively.

Liquidity and Capital Resources

As of June 30, 2013, we had working capital of $181.4 million, including cash, cash equivalents and short-term investments of $155.0 million, compared to working capital of $175.6 million, including cash and cash equivalents of $150.4 million, as of December 31, 2012. Our cash, cash equivalents and short-term investments increased by $4.6 million in the six months ended June 30, 2013. We currently have no debt and believe that our current cash, cash equivalents, and short-term investments as well as expected cash flows from operations will be sufficient to continue to fund our operations and meet our capital needs for the current fiscal year and the foreseeable future.

Cash provided by operating activities is net income adjusted for certain non-cash items and changes in operating assets and liabilities. Our operating activities provided net cash of $13.8 million and $15.5 million for the six months ended June 30, 2013 and 2012, respectively.

Cash provided from operating activities for the six months ended June 30, 2013 was primarily due to net income of $3.8 million, adjustments for non-cash items of $7.1 million, a decrease in accounts receivable of $2.6 million, and increase in accounts payable of $2.0 million. The primary non-cash items were stock-based compensation of $5.3 million and depreciation and amortization of $1.9 million. The decrease in accounts receivable was primarily due to decreased net revenue and the increase in accounts payable was primarily due to the timing of payments for accrued expenses. The above increases in cash were partially offset an increase of inventories of $2.5 million. The increase in inventories was primarily to support ongoing customer demand.

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Cash provided from operating activities for the six months ended June 30, 2012 was primarily due to net income of $12.2 million, adjustments for non-cash items of $6.4 million and an increase in other liabilities of $1.2 million, which was primarily due to an increase in profit-dependent accruals. The primary non-cash items were stock-based compensation of $4.9 million and depreciation and amortization of $1.5 million. The above increases in cash were partially offset by increases in accounts receivable and inventories of $3.3 million and $2.3 million, respectively. The increase in accounts receivable was primarily due to an increase in net revenue and the increase in inventories was primarily to support customer demand.

Our investing activities used net cash of $5.4 million and $4.4 million in the six months ended June 30, 2013 and 2012, respectively. The primary use of cash for the six months ended June 30, 2013 was cash paid for acquisitions of $3.9 million, the purchase of short-term investments of $4.0 million and purchases of property and equipment of $2.5 million, partially offset by maturities of short-term investments of $5.0 million. The primary use of cash for the six months ended June 30, 2012 was the purchase of short-term investments of $4.0 million and purchases of property and equipment of $2.4 million, partially offset by maturities of short-term investments of $2.0 million.

Our financing activities used net cash of $2.8 million in the six months ended June 30, 2013, and provided net cash of $7.0 million for the six months ended June 30, 2012. The primary use of cash for the six months ended June 30, 2013 was the repurchase of our common stock of $5.6 million, partially offset by proceeds from the sale of securities under the stock option and employee stock purchase plan of $2.9 million. The sources of cash for the six months ended June 30, 2012 were from proceeds from the sale of securities under the stock option and employee stock purchase plan of $9.1 million, partially offset by offset by repurchases of our common stock of $2.0 million.

As June 30, 2013, the cash, cash equivalents and short-term investments held by our foreign subsidiaries was approximately $85.6 million. If these funds were repatriated to the U.S., under current tax law, we could be required to accrue and pay U.S. taxes on a portion of these funds. Our current plan is to permanently reinvest these funds outside the U.S.

Contractual Obligations

The following table sets forth our contractual obligations as of June 30, 2013 (in thousands) and the periods in which such obligations are expected to be settled:

Fiscal Year	Purchase obligations		Operating lease obligations
2013	$	4,172	$	1,043
2014		—		1,463
2015		—		1,227
2016		—		968
2017		—		927
Thereafter		—		155
Total	$	4,172	$	5,783

Operating lease obligations consist of the estimated obligations under our real property or facility leases. Purchase obligations are comprised of the estimated obligation for non-cancellable in-process silicon wafers. We depend entirely upon third-party foundries to manufacture our silicon wafers. Due to lengthy foundry lead times, we typically order these materials up to three months or more in advance of required delivery dates, and we are obligated to pay for the materials in accordance with the contractual payment terms, which typically require payment within one month of delivery.

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The amounts in the table above exclude $1.5 million of non-current income tax liabilities as we are unable to reasonably estimate the timing of settlement.

Recent Accounting Pronouncements

We have determined that there were no recent accounting pronouncements issued during the three months ended June 30, 2013 that are expected to have a material impact on the our financial position or results of operations.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

During the six months ended June 30, 2013, there were no material changes to the quantitative and qualitative disclosures about market risk related to our investment activities as disclosed under Part II, Item 7A of our annual report on Form 10-K for the year ended December 31, 2012, filed with the SEC on March 6, 2013.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

As of the end of the period covered by this report, an evaluation was performed under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer (collectively, our “certifying officers”), of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended) as required by Rules 13a-15(b) or 15d-15(b) of the Securities Exchange Act of 1934, as amended. Based on their evaluation, our certifying officers concluded that these disclosure controls and procedures were effective.

We believe that a system of internal controls, no matter how well designed and operated, is based in part upon certain assumptions about the likelihood of future events, and can be affected by limitations inherent in all internal controls systems including the realities that human judgment in decision-making can be faulty, that persons responsible for establishing controls need to consider their relative costs and benefits, that breakdowns can occur because of human failures such as simple error or mistake, and that controls can be circumvented by collusion of two or more people. Accordingly, we believe that our system of internal controls, while effective, can only provide reasonable, not absolute, assurance that the objectives of the controls system are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within our company have been detected.

We have reviewed our internal controls over financial reporting and have made no changes during the quarter ended June 30, 2013, that our certifying officers concluded materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

From time to time, we may become subject to legal proceedings in the ordinary course of our business. Except as set forth below, we are not currently involved in any legal proceedings that we believe will, either individually or in the aggregate, materially and adversely affect our business.

As initially disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2008, and as updated in subsequent public filings, we filed a lawsuit in November 2008 in the United States District Court in the Northern District of California against Infineon Technologies AG, Infineon

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Technologies North America Corporation, and Primarion, Inc., (collectively, the “Defendants”) for infringement of several of our patents, seeking damages, enhanced damages for willful infringement and injunctive relief.

A trial related to our integrated power stage patents, U.S. Patent Nos. 6,278,264 and 6,462,522 was held in May 2011. The court had determined that Volterra’s asserted claims were infringed by Defendant’s accused products, and a unanimous jury found that all asserted claims were also valid and not obvious. A trial date to determine damages or willfulness has been tentatively set for November 4, 2013. There have been no further material developments in these litigation proceedings during the quarter ended June 30, 2013.

As initially disclosed in the Company’s Annual Report on Form 10-K for the year ended December 2009, and as updated in subsequent public filings, Infineon Technologies AG filed a lawsuit against us in Delaware for infringement of four patents assigned to Infineon, seeking damages, enhanced damages for willful infringement and injunctive relief. Such case was subsequently transferred to, and is currently being heard in, the United States District Court, Northern District of California. There have been no further material developments in these litigation proceedings during the quarter ended June 30, 2013.

The semiconductor industry is characterized by frequent claims of infringement and litigation regarding patent and intellectual property rights. Further litigation may be necessary to enforce our intellectual property rights, or we may have to defend ourselves against additional claims. These actions have consumed significant financial resources and could subject us to further expense or liability for damages, or could invalidate our proprietary rights, any of which could have a material adverse effect on our business.

Item 1A. Risk Factors

Included below is a description of risk factors related to our business to enable readers to assess, and be appropriately apprised of, many of the risks and uncertainties applicable to the forward-looking statements made in this quarterly report on Form 10-Q. The risks and uncertainties set forth below are not all of the risks and uncertainties facing our business, but we do believe that they reflect important ones. You should carefully consider the risks described below and elsewhere in this report, which could materially and adversely affect our business, results of operations or financial condition. In those cases, the trading price of our common stock could decline and you may lose all or part of your investment. Given these risks and uncertainties, you are cautioned not to place undue reliance on forward-looking statements.

The risk factors described in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2012, as filed with the SEC on March 6, 2013, are set forth below. These risk factors have not substantively changed, except for those identified by asterisk below. Risk factors marked with a “⁺” have been reordered from the presentation in the Annual Report.

Risks Related to our Financial Performance

Our financial performance in the past has fluctuated and may continue to do so in the future.*

We have been profitable on an annual basis since 2004, following annual net losses from 1996 through 2003, but our revenues have fluctuated significantly over such years and on a period to period basis and may continue to do so. From 2011 to 2012, our annual net revenue increased 8% from $156.0 million to $168.0 million, while from 2010 to 2011, our annual net revenue increased only 2%. In the first and second quarters of 2012, our revenue increased 8% and 4%, sequentially, and in the third and fourth quarters of 2012, our revenue decreased 3% and 4%, sequentially. We expect our quarterly and annual revenue to continue to fluctuate. Accordingly, you should not rely on the results of any prior quarterly or annual periods as an indication of our future revenue growth or financial results.

We may also not be able to maintain profitability on a quarterly or annual basis. Our ability to maintain profitability on a quarterly or annual basis depends in part on the rate of growth of our target markets, the continued acceptance of our and our customers’ products, the competitive position of our products, our ability to develop new products, our ability to secure adequate manufacturing capacity and

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our ability to manage expenses. Because many of our expenses are fixed in the short term or incurred in advance of anticipated revenue, we may not be able to decrease our expenses in a timely manner or we may elect to not reduce expenses, to offset any shortfall in revenue.

Our operating results have fluctuated in the past, and we expect a number of factors to cause our operating results to fluctuate in the future, making it difficult for us to accurately forecast our operating results.*

In the past, our net revenue and operating results have fluctuated from quarter to quarter and year to year, and we expect them to continue to do so in the future. A number of factors, many of which are beyond our control, are likely to cause our net revenue and operating results to fluctuate. These factors include, but are not limited to:

• our ability to develop new products or new generations and versions of our existing products that achieve market acceptance in a timely manner;

• demand for our products or the electronic systems into which our products are incorporated and our ability to accurately forecast such demand;

• our ability to develop products that comply with new technologies and system requirements;

• varying order patterns in the markets in which we sell our products;

• the loss of one or more key customers;

• claims related to undetected design or process errors or defects, or failure to meet our customers’ specifications;

• a significant reduction in sales to, or significant product returns by, one or more key customers;

• our management of our own inventory levels to meet changes in demand;

• changes in orders both received and shipped during the same quarter (our “turns business”);

• the volatile nature of the semiconductor industry;

• changes in the condition of the world economy;

• the loss of one or more key distributors, or a significant reduction in orders from one or more key distributors, which we are unable to replace;

• our customers’ failure to pay us on a timely basis, or at all;

• the timing of introductions of competing products or technologies;

• litigation involving us or our products;

• disputes regarding intellectual property rights;

• changes in the prices of our products or the electronic systems into which our products are incorporated;

• our ability to obtain sufficient capacity from foundries and other third-party subcontractors to manufacture, assemble and test our products on a timely and cost-effective basis;

• the ability of our foundries and third-party subcontractors to achieve satisfactory yields or quality;

• the ability of our manufacturing subcontractors to manufacture our products on a timely and cost effective basis;

• our ability to fulfill orders for our products in a timely manner, or at all; and

• our ability to adequately support our future growth.

Due to these and other factors discussed in this report, you should not rely upon the results of any prior quarter or year as an indication of our future operating performance.

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Our stock price will fluctuate and may be volatile, which could result in substantial losses for investors and significant costs related to litigation.

The market price of our common stock may fluctuate significantly in response to a number of factors, some of which are beyond our control, which could result in substantial losses for investors. These factors include, but are not limited to:

• actual or anticipated fluctuations in our revenue, operating results or growth rate;

• failure to meet the expectations of securities analysts or investors with respect to our financial performance;

• actual or anticipated fluctuations in our competitors’ operating results or changes in their growth rates;

• sales of our common stock or other securities in the future;

• stock market price and trading volume fluctuations of publicly-traded companies in general and semiconductor companies in particular;

• the trading volume of our common stock;

• changes in financial estimates and ratings by securities analysts for us, our customers or competitors or companies in the semiconductor industry generally;

• changes in the condition of the financial markets, the economy as a whole, the semiconductor industry, our customers or our competitors;

• publicity about the semiconductor industry, our competitors or our customers; and

• changes in key personnel.

For example, as disclosed in Part II – Market Information and Stockholders of our Annual Report on Form 10-K for the year ended December 31, 2012, the high and low of our stock price fluctuated significantly within each period. Between the start of 2012 through the end of the fiscal year at December 31, 2012, our closing stock price has traded in a broad range from $16.46 to $34.42. The stock market in general, and the Nasdaq Global Select Market in particular, has experienced extreme price and volume fluctuations in recent years that have often been unrelated or disproportionate to the operating performance of the listed companies. Broad market and industry factors may materially harm the market price of our common stock, regardless of our operating performance.

In the past, securities class action litigation has often been brought against companies following periods of volatility and decline in the market price of their securities. If our stock price is volatile or declines, we may be the target of similar litigation in the future. Securities litigation could result in significant costs and divert management’s attention and resources, which could seriously harm our business and operating results.

Risks Related to our Markets and Customers

We target our sales and marketing efforts in particular markets, and in these markets we have experienced varying order patterns. If demand for our products in these markets declines, or if we are unable to adjust to the varying order patterns in these markets or to expand into new markets, our business would be harmed.*

We target our sales and marketing efforts in specific markets, where we believe our proprietary technology provides us with certain advantages over competitive voltage regulator solutions. Within our markets, we sell or plan to sell products for systems that are developed for certain technologies, specifications, standards or architectures that have specific technical requirements, such as current or power levels. In 2012, 94% of our net revenue was derived from the sale of our products in the server and storage and the consumer and portable markets, but we expect revenues in our consumer and portable market will decline over time as we de-emphasize our activities in that market, and focus our resources on other growth opportunities, such as the energy market. We are also looking to expand our presence in our networking and communications market, and will also look to develop our business in the energy market. Technological requirements such as power levels and architectures in any particular market may change in a way that increases or decreases the advantages and benefits that our products can provide. If the demand for our products in these markets declines, or if demand for products in the other markets we are targeting does not develop, we may need to further diversify and expand our product portfolio or our target markets. If we are unable to do so in a timely and cost-effective manner, our business and operating results could be harmed.

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Entrance into new or developing markets will increase demands on our operations and may have an adverse impact on our financial performance.

In 2012, we announced our new energy product group and also announced our acquisition of Element Energy, Inc., a company that has developed technology designed to improve the performance, lifetime, reliability and cost of large battery packs used in a wide range of applications including hybrid and electric vehicles and stationary and renewable energy storage. As we focus on new market opportunities such as these, we will be entering into new markets that we are not familiar with, and this may result in inefficiencies in our operations that may create a distraction of management from current operations. We must learn about new technology, customers, competitors, product cycles, customer demand, terms and conditions and other industry specific issues, and if we are not able to effectively do so, our future business will suffer. We will incur significant expenses in advance of obtaining revenue, and there can be no assurance that we will generate sufficient revenue from our products to offset these expenses or that these expenditures will result in products that would be broadly adopted or that can effectively compete for these market opportunities.

If we are unable to timely develop new products or new generations and versions of our existing products that achieve market acceptance, or comply with prevailing technological standards, our operating results and competitive position could be harmed.

Our industry is characterized by intense competition, rapidly evolving technology, and continually changing customer requirements. We develop products that are better suited for particular technological specifications or customer requirements, which we believe allow us to provide a meaningful advantage over competitive voltage regulator solutions. In our computing, storage, networking and consumer markets, for example, we compete most favorably in systems that deal with higher current levels and require greater voltage regulator efficiency and therefore require more sophisticated power management solutions. In addition, a significant number of these products are developed to operate in computing systems that are based on Intel CPU specifications, architectures and power requirements, which Intel may periodically modify or change, or may develop new specifications or architectures. Accordingly, our ability to compete in the future will depend on our ability to successfully adapt to new technologies and requirements, and to continue to develop and market new products that achieve market acceptance on a timely and cost-effective basis. Some of the factors affecting our ability to compete successfully include, but are not limited to:

• our ability to timely and effectively identify and address new technologies, power architectures, power requirements, specifications, industry standards or consumer preferences;

• our ability to allocate our resources to markets that best suit our products and technology;

• timely development of new designs that meet customer program requirements and demands;

• timely qualification and certification of our products for use in electronic systems;

• commercial acceptance and production of the electronic systems into which our products are incorporated;

• availability, quality, price, performance, and size of our products relative to competing products and technologies;

• our customer service and support capabilities and responsiveness;

• our ability to effectively recruit, motivate and retain skilled engineering and research and development staff;

• successful development of relationships with existing and potential new customers; and

• successful development of relationships with key developers of advanced digital semiconductors.

Products we have recently developed or which we are currently developing, such as our products in our new energy market, may not achieve market acceptance, particularly if specifications, architectures, or efficiency or power requirements are modified or changed in a manner that reduces our advantage over

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competitive solutions. Many of these new products and processes require significant expenditures of company resources, and there is no guarantee that these expenditures will contribute to the development of commercially successful products. If these products fail to achieve market acceptance, or if we fail to timely develop new products that achieve market acceptance, our business, operating results, and competitive position could be adversely affected.

We sell a limited number of products and a reduction in demand for these products would harm our business and operating results.

We derive substantially all of our net revenue from the sale of integrated voltage regulator semiconductors, integrated power protection and distribution semiconductors and scalable voltage regulator semiconductor chipsets, and we expect to continue to derive substantially all of our net revenue from these products. Factors that could cause the demand for our products to decline include downturns in the semiconductor industry or general economic conditions, changes in technological or customer requirements that reduce our competitive advantage, introduction of competing products, our pricing strategies and the pricing strategies of our competitors, or a decline in demand for the electronic systems into which our products are incorporated.

We depend on a small number of customers for substantially all of our net revenue and the loss of, or a significant reduction in orders from, any of them could significantly reduce our net revenue and adversely affect our operating results.*

We sell our computing, storage, networking and consumer products primarily to original equipment manufacturers, or OEMs, original design manufacturers, or ODMs, contract equipment manufacturers, or CEMs, and merchant power supply manufacturers, either directly through our internal sales force or indirectly through distributors and outsourced suppliers. Certain of these customers in turn sell more broadly to multiple companies that directly address consumer demand. The markets in which we sell products are prone to significant and unpredictable changes in demand, and our product sales are directly affected by the ability of our concentrated customer base to sell their products or electronic systems that incorporate our products. If these electronic systems are not commercially successful or if the development or commercial introduction of such electronic systems is delayed or fails to occur as planned or forecasted, or if our customers do not consistently manage their inventory of products we sell to them, our operating results will be adversely affected. We expect a significant amount of our revenue to continue to come from the commercial introduction of new systems making our revenue more difficult to forecast.

In the second quarter of 2013, three customers each accounted for more than 10% of our net revenue, and collectively accounted for at least 56% of our net revenue. In the second quarter of 2012, three customers each accounted for more than 10% of our net revenue, and collectively accounted for at least 63% of our net revenue. In the second quarter of 2013, all of our revenue was in our computing, storage, networking and consumer markets. While we report revenue for direct sales to particular customers, our sales data may not accurately reflect the additional “indirect” demand from distributors and outsourced suppliers who purchase our products pursuant to their business relationships with such significant customers. Because we have less visibility into and are not able to quantify this “indirect” demand, we are unable to determine how much additional revenue these significant customers may affect. In addition, our sales data also may not identify customers who do not directly account for 10% of our net revenue, but may be significant in that such customers also generate significant “indirect” demand from distributors and outsourced suppliers. If any such significant customer were to stop incorporating our products or third party products containing our components into its designs, we would not only lose the direct revenue we receive from the significant customer, but we could also lose a portion of the revenue from third parties who do business with such significant customer. We expect demand from a small number of customers to continue to account for a substantial portion of our net revenue for the current fiscal year, and consolidation among our customers may increase our customer concentration. The loss of any of our major customers, or the inability of such major customer to pay us, could materially adversely impact our operating results and financial position.

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We are subject to the highly cyclical nature of the semiconductor industry and any future downturns could significantly harm our business. ⁺

Our business is heavily influenced by the cyclical nature of the semiconductor industry. The semiconductor industry has experienced significant downturns, often in connection with, or in anticipation of, maturing product cycles of both semiconductor companies and their customers and declines in general economic conditions. These downturns have been characterized by production overcapacity, high inventory levels, and accelerated erosion of average selling prices. Any future downturns could significantly harm our business or reduce our revenue from one period to the next or for a prolonged period of time. From time to time, the semiconductor industry also has experienced periods of increased demand and production capacity constraints. We may experience substantial changes in future operating results due to factors that affect the semiconductor industry generally.

Because we often manufacture products in advance of receiving purchase orders, or if existing purchase orders are changed or cancelled, we are subject to inventory risks and manufacturing costs that could negatively impact our operating results.*

To ensure availability of our products for our customers, we typically start the manufacturing of our products based on forecasts provided by these customers in advance of receiving purchase orders. However, these forecasts do not represent binding purchase commitments, and we do not recognize revenue from these products until they are shipped to the customer. In addition, because we sell our products to distributors and outsourced suppliers and not always directly to electronic system producers, we may have more limited visibility into ultimate product demand, which makes forecasting more difficult for us. We incur inventory and manufacturing costs in advance of anticipated revenue. Demand for our products may not materialize and if we overestimate customer demand for our products, manufacturing based on forecasts subjects us to risks of high inventory carrying costs and obsolescence and may increase our costs. Similarly, if we underestimate demand, we may not have sufficient product inventories and may lose market share and damage customer relationships, which also could harm our business.

In addition, our current sales practice generally allows customers to, and customers routinely do, revise and cancel orders and reschedule delivery dates on relatively short notice pursuant to changes in the customer’s requirements. If, after initial orders are placed, we change certain features of our product to accommodate customer requirements, we may create additional inventories that we may not be able to sell. If purchase orders are changed or cancelled, or if shipments are delayed, we may end up with excess inventories that we cannot sell, which could result in the loss of anticipated revenue and an increase in our costs due to excess inventory charges which could materially impact our financial results.

Our inventory levels were $21.2 million at the end of the second quarter of 2013, and inventory turns, calculated as our annualized cost of revenue for the quarter divided by our inventories as of the end of such quarter, decreased to 2.7 turns in the second quarter of 2013 compared to 3.8 turns in the first quarter of 2013 and 4.3 turns in the second quarter of 2012. As the amount of inventories we are holding increases or our inventory turns decrease, the risk of a future potential inventory write-down and adverse impact on our financial results increases.

We rely on a small number of distributors to market and distribute our products, and if we fail to manage these relationships, our net revenue may decline.*

Many purchases of our products are made through a concentrated group of distributors, which group may change over time. Our sales to distributors accounted for 28% of our net revenue in the second quarter of 2013 compared to 31% in the second quarter of 2012. None of our distributors are required to purchase a specified minimum level of products from us. Currently, our sales to distributors are made pursuant to standard purchase orders rather than long-term contracts and although we do not grant them a right of return pursuant to these purchase orders, their orders may be cancelled or changed more readily than if we had long-term purchase commitments. In the event of a cancellation, reduction or delay of an order, we may not have enough time to reduce operating expenses, or may elect to not reduce expenses, to minimize the effect of the lost revenue on our business. We also rely on our distributors to provide certain support services and other customer service to our customers. If they fail to provide appropriate levels of support and service to our customers on a timely basis, our relationships with our customers will suffer.

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We need to maintain our relationships with our distributors while expanding additional channels for the marketing and sale of our products. If we fail to manage these relationships, our distributors may decide not to include our products among those that they sell or they may not make marketing and selling our products a priority. In addition, our distributors may sell product lines that are competitive with ours. If we fail to successfully manage our relationships with distributors while we look for additional channels for marketing and selling our products, our business would be harmed.

We are exposed to credit risk and payment delinquencies on our accounts receivable.

None of our outstanding accounts receivables are covered by collateral or credit insurance. In addition, our standard terms and conditions permit payment within a specified number of days following shipment of product. While we have procedures to monitor and limit exposure to credit risk on our receivables, there can be no assurance such procedures will effectively limit our credit risk and avoid losses. As economic conditions change, certain of our customers may face liquidity issues and may be unable or unwilling to satisfy their payment obligations, which could have a material adverse effect on our financial condition and operating results. In addition, our accounts receivable tend to be concentrated with a small group of customers and we expect this to continue, which could further exacerbate these risks.

Risks Related to Competition, Intellectual Property, Litigation and Regulation

We face significant competition and many of our competitors have greater resources than we have, and thus we may be unsuccessful in competing against current and future competitors.

The markets for semiconductors generally, and power management semiconductors in particular, are intensely competitive, and we expect competition to increase and intensify in the future as new or larger semiconductor manufacturers enter our market. Increased competition may result in price pressure, reduced profitability, and loss of market share, any of which could seriously harm our business, revenue, and operating results. Our ability to compete effectively and to expand our business will depend on a number of factors, including, but not limited to:

• our ability to continue to recruit and retain engineering talent;

• our ability to introduce new products in a timely manner;

• the pricing of components used in competing solutions;

• the pace at which our customers incorporate our products into their systems;

• the continued acceptance of our customers’ products;

• the availability of foundry, assembly, and test capacity for our products;

• protection of our products by effective utilization of intellectual property laws; and

• general economic conditions.

We consider our primary competitors to include Infineon Technologies, International Rectifier, Intersil, Linear Technology, Maxim Integrated Products, and Texas Instruments. In addition, we compete with a number of other companies, some of which may become significant competitors. We may also face competition from new and emerging companies that may enter our existing or future markets. Many of our competitors and potential competitors have longer operating histories, greater name recognition, complementary product offerings, a larger customer base, longer relationships with customers and distributors, and significantly greater financial, sales, marketing, manufacturing, distribution, technical, and other resources than we do. As a result, they may be able to respond more quickly to customer requirements, to devote greater resources to the development, promotion, and sales of their products and to influence industry acceptance of their products better than we can. These competitors may also be able to adapt more quickly to new or emerging technologies or standards and may be able to deliver products with performance comparable or superior to that of our products at a lower cost.

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In addition, in the event of a manufacturing capacity shortage, these competitors may have their own silicon wafer fabrication operations, or may be able to obtain silicon wafer fabrication capacity that is not also available to us. We expect our competitors to continue to introduce new or enhanced products technologies with greater performance and improved pricing, which could cause our products to become obsolete or uncompetitive and harm our operating results.

We rely on the services of our key personnel, 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 rely upon the continued service and performance of a number of key technical and senior management personnel, and compete with larger competitors to hire and retain our personnel. There are a limited number of qualified technical personnel with significant experience in the design, development, manufacture, and sale of power management semiconductors, and we may face challenges in hiring and retaining these types of employees. We rely on these individuals for the management of our company, development of our products and business strategy, and management of our strategic relationships, and for the reliability of our financial reporting and the design and maintenance of our internal controls over financial reporting. If we are unable to retain any of our key technical or senior management personnel, such as Jeffrey Staszak, our President and Chief Executive Officer, or are unable to fill key positions, our business could be harmed.

Our ability to compete will be harmed if we are unable to adequately protect our intellectual property.*

We rely primarily on a combination of patent, trademark, trade secret, and copyright law and contractual restrictions to protect our intellectual property. These afford only limited protection. Despite our efforts to protect our proprietary rights, unauthorized parties may attempt to obtain, copy, or use information that we regard as proprietary, such as product design and manufacturing process expertise. We are currently involved in a patent infringement lawsuit in the United States District Court in the Northern District of California against Infineon Technologies AG, Infineon Technologies North America Corporation and Primarion, Inc., (collectively, the “Defendants”) for infringement of several of our patents, to which Defendants have filed affirmative defenses and counterclaims, including claims for declaratory relief for inequitable conduct before the U.S. patent office and for Sherman Act violations. We are also involved in a patent infringement lawsuit in the United States District Court for the Northern District of California against Infineon Technologies AG in which we are accused of infringing four patents assigned to Infineon. These actions, and other potentially similar actions, consume significant financial and other resources. In the three months ended June 30, 2013, our litigation related expenses were approximately $1.0 million and in 2012 were approximately $3.5 million. While we believe in the strength of our positions, we are unable to assess the ultimate outcome or possible losses relating to these cases, and there is no guarantee that any such proceedings would be successful on its merits or that we will receive monetary damages awards or recoup our legal expenses. Because of the nature and inherent uncertainties of litigation, should the outcome of these actions be unfavorable, our business, financial condition, results of operations or cash flows could be materially adversely affected.

As of June 30, 2013, we had 105 patents issued and 93 patent applications pending in the United States, and five foreign patents issued and 66 foreign patent applications pending. These patents have expiration dates ranging from December 2017 to August 2031. Our pending patent applications and any future applications may not result in issued patents or may not be sufficiently broad to protect our proprietary technologies. Moreover, policing any unauthorized use of our products is difficult and costly, and we cannot be certain that the measures we have implemented will prevent misappropriation or unauthorized use of our technologies, particularly in foreign jurisdictions where the laws may not protect our proprietary rights as fully as the laws of the United States. The enforcement of patents by others may harm our ability to conduct our business. Others may independently develop substantially equivalent intellectual property or otherwise gain access to our trade secrets or intellectual property. Furthermore, changes in either the intellectual property laws or in interpretations of intellectual property laws in the

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United States and other countries may diminish the value of our intellectual property. For instance, the U.S. recently enacted changes to the U.S. patent system under the Leahy-Smith America Invents Act, including changes that would transition the U.S. from a “first-to-invent” system to a “first to file” system and alter the processes for challenging issued patents. These changes could increase the uncertainties and costs surrounding the prosecution of our patent applications and the enforcement or defense of our issued patents. The enforcement of patents by others may harm our ability to conduct our business. If we fail to effectively protect our intellectual property, our business could be harmed.

Assertions by third parties of infringement by us or our vendors of their intellectual property rights could result in significant costs and cause our operating results to suffer.

The semiconductor industry is characterized by vigorous protection and pursuit of intellectual property rights and positions, which has resulted in protracted and expensive litigation for many companies. In the future we may receive communications from various industry participants alleging infringement of patents, trade secrets or other intellectual property rights. Any lawsuits resulting from such allegations could subject us to significant liability for damages and invalidate our proprietary rights. These lawsuits, regardless of their success, would likely be time-consuming and expensive to resolve and would divert management’s time and attention. Any potential intellectual property litigation also could force us to take steps that may be harmful to our business, including, but not limited to:

• stop selling products or using technology that contain the allegedly infringing intellectual property;

• pay damages to the party claiming infringement;

• attempt to obtain a license to the relevant intellectual property, which may not be available on reasonable terms or at all; and

• attempt to redesign those products that contain the allegedly infringing intellectual property.

In addition, the third-party foundries or subcontractors that manufacture our products may also face litigation for claims of intellectual property. Although not directly creating liabilities for us, such litigation may cause such third parties to cease providing services to us, or may cause us to incur increased costs, either of which may harm our business. We may also initiate claims or litigation against third parties for infringement of our proprietary rights or to establish the validity of our proprietary rights. In some cases, we may have an existing direct or indirect relationship with these third parties, such as customers, vendors, partners or companies within the industry that generally affect our business. Such claims or litigation could not only affect our intellectual property or proprietary rights, but may also affect and disrupt our business relationship with such third parties, impairing our ability to conduct our business and adversely affecting our financial and operational results.

Any potential dispute involving our patents or other intellectual property could also include our customers, which could trigger our indemnification obligations to them and result in substantial expense to us.

In any potential dispute involving our patents or other intellectual property, our customers could also become the target of litigation in connection with their sales of products that incorporate our products and technology. Because we generally indemnify our customers against claims made against them based on allegations that our products infringe intellectual property rights, such litigation could result in substantial expense for us. In addition to the time and expense required for us to indemnify our customers, any such litigation could hurt our relations with our customers and cause our operating results to be harmed.

The average selling prices of our products could decrease rapidly, which may negatively impact our net revenue and operating results.

The average selling prices for power management solutions have historically declined over time. Factors that we expect to cause downward pressure on the average selling price for our products include competitive pricing pressures, the cost sensitivity of our customers, particularly in the higher-volume

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markets, new product introductions by us or our competitors, and other factors. To maintain acceptable operating results, we will need to offset any reduction in the average selling prices of our products by developing and introducing new products and developing new generations and versions of existing products on a timely basis, increasing sales volume, and reducing costs. If the average selling prices for our products decline and we are unable to offset those reductions, our operating results will suffer.

Environmental laws and regulations could cause a disruption in our business and operations.

We are subject to various state, federal and international laws and regulations governing the environment, including those restricting the presence of certain substances in electronic products and making manufacturers of those products financially responsible for the collection, treatment, recycling and disposal of certain products. Such laws and regulations have been passed in several jurisdictions in which we operate, including various European Union member countries. In addition, certain provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act will soon require us to report on any “conflict materials” that may be used in our products and the due diligence plan we put in place to track whether such minerals originate from the Democratic Republic of Congo and adjoining countries. The implementation of these requirements could affect the sourcing and availability of minerals used in certain of our products. We will need to ensure that we comply with such laws and regulations as they are enacted, and that our third-party semiconductor foundries and test and assembly subcontractors timely comply with such laws and regulations. Because we work with subcontractors to make specified modifications to their standard processes, transitioning the manufacturing of our products can require substantial lead time. Any future delay resulting from such transition could negatively affect product performance, delivery, and yields or increase manufacturing costs. If we, or the subcontractors that we use, fail to timely comply with such laws, our customers may refuse to purchase our products. Such refusal or delay could have a materially adverse effect on our business, financial condition and results of operations.

Risks Related to our Manufacturing and Development Activities

The nature of the design process requires us to incur expenses prior to earning revenue associated with those expenses, and we will have difficulty selling our products and generating profits if electronic system producers do not design our products into their electronic systems. ⁺

We devote significant time and resources in working with electronic system producers to get our products designed into their systems for particular product launches or periodic product updates. If the system producer chooses a competitor’s product for its electronic system, it becomes significantly more difficult for us to sell our products for use in that electronic system because changing suppliers involves significant cost, time, effort, and risk for electronic system producers. If electronic system producers do not design our products into their systems, our business would be materially adversely affected.

We often incur significant expenditures in the development of a new product development launch or update without any assurance that electronic system producers will select our product for use in their electronic systems. If we incur such expenditures and fail to be selected, or if we are selected and subsequently excluded from such designs, our operating results will be adversely affected. Furthermore, even if electronic system producers use our products in their electronic systems, we cannot be assured that these systems will be commercially successful or that we will receive any associated revenue.

Even if our products are selected for design into a particular electronic system, a substantial period of time will elapse before we generate revenue related to the significant expenses we have incurred. The reasons for this delay generally include, but are not limited to, the following:

• it can typically take up to 12 months from the time our products are selected to complete the design process, and in some cases such design process may take substantially more time to complete;

• it can typically take an additional six to 12 months to complete commercial introduction of the electronic systems that use our products, and in some cases such introduction may take substantially more time to complete, if they are introduced at all;

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• our customers usually require a comprehensive technical evaluation of our products before they incorporate them into their electronic systems, which may also result in our products being excluded from the system design for reasons other than our design specifications;

• OEMs typically limit the initial release of their electronic systems to evaluate performance and consumer demand; and

• the development and commercial introduction of products incorporating new technology are frequently delayed.

As a result, we may be unable to accurately forecast the volume and timing of our orders and revenue. In addition, incurring research and development expenses prior to generating revenue may cause our operating results to fluctuate significantly from period to period.

Our dependence on third-party semiconductor manufacturers, or foundries, reduces our control over the manufacture of our products and increases our exposure to third party solvency risks, which could harm our business.

We are a fabless semiconductor company and, as such, we rely on third-party semiconductor manufacturers, or foundries, such as GlobalFoundries and Taiwan Semiconductor Manufacturing Corporation, or TSMC. The ability of these foundries to provide silicon wafers to us is limited by their available capacity. Moreover, the price of our silicon wafers has in the past fluctuated and is expected to continue to fluctuate, based on changes in available industry capacity. We do not have long-term supply contracts with any of our foundries. Therefore, our manufacturers could choose to prioritize capacity for other customers, particularly larger customers, reduce or eliminate deliveries to us on short notice or increase the prices they charge us. There are significant risks associated with our reliance on these third-party manufacturers, including, but not limited to:

• inability to increase production and achieve acceptable yields on a timely basis;

• reduced control over delivery schedules and product quality;

• inability of our foundries to obtain an adequate supply of the raw materials used in the manufacturing of our products on a timely and cost-effective basis;

• increased exposure to potential misappropriation of our intellectual property;

• limited warranties on silicon wafers or products supplied to us;

• labor shortages or labor strikes;

• natural disasters affecting countries in which we conduct our business or in which our products are manufactured; and

• political instability in countries where our products are manufactured.

In addition, these third party manufacturers may elect or may be forced to shut down particular facilities for reasons beyond our control, which may require us to transition the manufacturing of our products to other facilities of such third party manufacturer or to other third party manufacturers. Because we work with foundries to make specified modifications to their standard process technologies, transitioning the manufacturing of our products to other foundries or other facilities of an existing foundry can require process design changes and may require substantial lead time. Any such delay resulting from such transition could negatively affect product performance, delivery, and yields or increase manufacturing costs. If we are not able to obtain foundry capacity as required, our relationships with our customers would be harmed and our net revenue would likely decline. Deterioration of worldwide economic conditions and financial markets and tightening in credit markets may adversely impact the financial position of our third party manufacturers. If our third party manufacturers are unable to obtain the necessary capital to operate their business, this may also impact their ability to provide us with the foundry capacity we need, or may adversely affect their ability to provide timely services or to make timely deliveries of products to us. Any such result could adversely affect our operations and financial condition.

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We rely on third-party subcontractors to assemble and test our products and our failure to successfully manage our relationships with these subcontractors could damage our relationships with our customers, decrease our net revenue, and limit our growth.

We rely on third-party subcontractors, such as Advanced Semiconductor Engineering, Amkor Technology, Carsem, JCAP, SilTech, STATS ChipPAC Ltd. and UTAC, to assemble and test our products. None of these third-party vendors are obligated to perform services or supply products to us for any specific period, or in any specific quantities, except as may be provided in a particular purchase order. Moreover, none of our assembly and test subcontractors have provided contractual assurances to us that adequate capacity will be available to us to meet future demand for our products. We are subject to many of the same risks with these vendors as with our foundries, including risks related to the ability of such vendors to continue to provide us with the agreed-upon services or products as needed, and our ability to control delivery schedules and product quality. If we do not successfully manage these relationships, the quality of products shipped to our customers may decline, which could damage our relationships with customers, decrease our net revenue, and negatively impact our growth.

Our products are highly complex and may require modifications to resolve previously undetected design or process errors or defects and to meet our customers’ specifications, which could lead to an increase in our costs, a loss of revenue and customers, a delay in market acceptance of our products, or product liability claims.*

Our power management products are highly complex and may contain previously undetected errors or defects in design that may significantly affect yields or quality. If we deliver products with undiscovered errors or defects, these products may be the subject of a warranty claim or a claim related to product performance, and we may suffer a reduction in or deferral of our revenue or other financial claims or liabilities that could materially impact our operating results and financial position. We may incur product replacement costs, and we may have to rework or scrap inventory that is returned. In addition, we may incur additional manufacturing and/or development costs to fix the defect or error and may have to rework or scrap inventory that had been built with the error or defect resulting in additional costs. If we are unable to fully recover or be reimbursed for all or a portion of these costs, our financial position and operating results may be adversely impacted. Also, as a result of shipping products with defects or errors, our credibility and the market acceptance of our products could be harmed and these defects or errors could harm our relationships with our customers. Defects could also lead to liability for defective products as a result of lawsuits against our customers or us. We have agreed to indemnify our customers in some circumstances against liability from defects in our products. In the future, as we increase the amount of business with any given customer, we may be expected to agree upon additional terms and conditions of sale regarding product quality or product defects which may increase our costs, obligations and liabilities in connection with our product sales. We maintain limited insurance coverage to defray potential costs from lawsuits, including lawsuits arising from product liability, but if liabilities arise that are not effectively limited or covered by such insurance, a successful product liability claim could require us to pay a significant amount of damages, which could have a material adverse impact on our financial results and financial position.

Our products comprise only part of the complex electronic systems in which they are used. As a result, our products must operate according to specifications with the other components in the electronic system. If other components of the electronic system fail to operate properly with our products, we may be required to incur additional development time and costs to enable interoperability of our products with these other components and may not be able to sell our existing inventories resulting in additional cost of revenue and materially adversely affecting our financial results.

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Any disruption to our operations or the operations of our foundries or assembly and test subcontractors resulting from earthquakes, tsunamis, droughts, or other natural disasters, public health issues or other catastrophic events beyond our control could significantly delay the production or shipment of our products.

Our principal offices are located in California and we rely on foundries and assembly and test subcontractors in China, Malaysia, Philippines, Singapore, Taiwan and Thailand. The risk of natural disasters in these Pacific Rim locations is significant. The occurrence of an earthquake, tsunami, drought, floods, fires or other natural disaster near our principal offices or our subcontractors’ locations could result in damage, power outages, and other disruptions that impair our design, manufacturing, and assembly capacity and otherwise interfere with our ability to conduct our business. Any disruption resulting from such events could cause significant delays in the shipment of our products until we were able to shift our fabrication, assembling, testing or other operations from the affected subcontractor to another third-party vendor.

Because we rely on third party foundries and assembly and test subcontractors, we may experience delays in the manufacture, development and introduction of our new products, which may harm our business and operating results.

The development of our products is highly complex, costly and inherently risky. Because we rely on third party foundries and assembly and test subcontractors, we may experience delays in the manufacture, development and introduction of new products or new generations and versions of our existing products. If we are unable to manufacture, develop or introduce products on a timely basis, we may lose new or existing market and customer opportunities and our financial results or competitive position could be harmed. We cannot assure you that the procedures that we have implemented to minimize delays will be effective or that delays may not occur in the future. In particular, we expect to continue to bring new products to production in new manufacturing and assembly processes. Any future delays in the introduction of new products or new generations or versions of our existing products could materially harm our business and operating results.

Risks Related to our International Activities

We have significant international activities and customers, and plan to continue such efforts, which subjects us to additional business risks including increased logistical complexity, additional regulatory restrictions and political instability.*

A number of our customers are multinational corporations, with operations located throughout the world. In the second quarter of 2013, 96% of our net revenue was attributable to customers, or customers’ operations, located outside of the United States, primarily in China and Singapore, and we anticipate that a significant portion of our future revenue will continue to be generated by sales to these customers or to the customers’ operations in China and Singapore. We have engineering, sales, and operations personnel in, China, Japan, Singapore, Taiwan and the United Kingdom. Our foundries, assembly and test subcontractors, and distributors are also primarily located in Asia. Our international operations and sales are subject to a number of risks, including, but not limited to:

• cultural and language barriers;

• increased complexity and costs of managing international operations;

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

• multiple, conflicting and changing laws and regulatory and tax environments;

• potentially longer and more difficult collection periods;

• political instability, international terrorism, and anti-American sentiment, particularly in emerging markets;

• highly volatile economies in Asia;

• difficulty in hiring qualified management, technical sales personnel, and applications engineers; and

• less effective protection of intellectual property than is afforded to us in the United States.

Our inability to overcome these risks could adversely affect our foreign operations, and some of our customers and suppliers, and could harm our business and operating results.

34

We could be adversely affected by violations of the United States’ Foreign Corrupt Practices Act and similar worldwide anti-bribery laws.

The United States’ Foreign Corrupt Practices Act, or FCPA and similar anti-bribery laws in other jurisdictions generally prohibit companies, their subsidiaries and their intermediaries from making improper payments to government officials for the purpose of obtaining or retaining business. While our policies mandate compliance with the FCPA and these anti-bribery laws, there can be no assurance that our internal controls and procedures will protect us from improper acts committed by our employees or agents. If we are found to be liable for FCPA violations, we could suffer from criminal or civil penalties or other sanctions, which could have a material adverse effect on our business.

We do not hedge fluctuations in currency exchange rates, which could harm our financial results.*

Substantially all sales to international customers and purchases of production materials and manufacturing services from international suppliers in 2012 and during the six months ended June 30, 2013 were denominated in U.S. dollars. However, fluctuations in currency exchange rates could have an effect on our results of operations and financial condition. 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 the prices of our products less competitive. If the value of the U.S. dollar decreases relative to foreign currencies, this could result in an increase in the effective costs of working with our international vendors or suppliers, and our ability to control our cost structure and maintain our financial results could be harmed.

Risks Related to our Growth and Acquisitions

We may undertake acquisitions to expand our business that may pose risks to our business and dilute the ownership of our existing stockholders.

We will evaluate opportunities to acquire other businesses, products or technologies that would complement our current offerings, expand the breadth of markets we can address or enhance our technical capabilities. For example, we closed a transaction on December 31, 2012 to acquire Element Energy, Inc., a company that has developed technology designed to improve the performance, lifetime, reliability and cost of large battery packs used in a wide range of applications including hybrid and electric vehicles and stationary and renewable energy storage. Acquisitions entail a number of risks that could materially adversely affect our operating and financial results, including, but not limited to:

• the failure of markets for the products of acquired companies to develop as expected;

• our lack of experience acquiring other businesses;

• 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;

• the need for financial resources above our planned investment levels;

• overestimation of potential synergies or a delay in realizing those synergies;

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

• risks associated with entering markets in which we lack prior experience; and

• the potential loss of key employees of the acquired company.

Future acquisitions also could cause us to incur debt or contingent liabilities or cause us to issue equity securities that would reduce the ownership percentages of existing stockholders. Furthermore, acquisitions could result in adverse tax consequences, substantial depreciation, deferred compensation charges, impairment of goodwill, or the amortization of amounts related to deferred compensation and to identifiable purchased indefinite-lived intangible assets, any of which would negatively affect our operating results.

35

If we do not effectively manage our growth, our resources, systems, and controls may be strained and our operating results may suffer.

We intend to increase the scope of our operations to expand into new product areas, 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 operational and financial systems, procedures, and controls, including the improvement of our accounting and other internal management systems. We also will need to continue to expand, train, manage, and motivate our workforce, and manage our customer and distributor relationships, develop our internal sales force, and manage our foundry and assembly and test subcontractors. All of these endeavors will require substantial resources, management effort and skill, and we anticipate that we will require additional personnel and internal processes to manage these efforts. Our growth in recent years has also caused several key employees and members of management to take on new and greater responsibilities within our organization. If the transition to these new roles and responsibilities is not successful or completed on a timely basis, we may be unable to take full advantage of additional growth opportunities and our business could be adversely affected. We plan to fund the costs of our operational and financial systems, additional personnel, and internal processes from current cash balances and funds generated from operations. If we are unable to effectively manage our expanding operations, our revenue and operating results could be materially adversely affected.

We evaluate our internal controls over financial reporting in order to allow management to report on, and our independent auditors to attest to, the effectiveness of our internal controls over financial reporting, as required by Section 404 of the Sarbanes-Oxley Act of 2002 and the rules and regulations of the SEC, which we collectively refer to as Section 404. As we grow and implement new and upgraded operational and financial systems, procedures, and controls, we will need to maintain effective internal controls over financial reporting. In addition, in the course of our Section 404 compliance, we may identify deficiencies in our internal controls, some of which may be categorized as a significant deficiency or a material weakness. If we fail to correct the deficiencies that we identify and to maintain the adequacy of our internal control over financial reporting, as such standards are modified, supplemented or amended from time to time, we may not be able to ensure that we can conclude on an ongoing basis that we have effective internal control over financial reporting in accordance with Section 404. If we cannot favorably assess our internal controls, or if our independent registered public accountants are unable to provide an unqualified report on the effectiveness of our internal control over financial reporting, investor confidence in the reliability of our financial reports may be adversely affected, which could have a material adverse effect on our stock price.

Our principal stockholders have significant voting power and may influence actions that may not be in the best interests of our other stockholders.

Our executive officers, directors, and principal stockholders collectively hold a substantial portion of our outstanding common stock. As a result, these stockholders, acting together, may have the ability to exert substantial influence over matters requiring approval of our stockholders, including the election and removal of directors and the approval of mergers or other business combinations. This concentration of beneficial ownership could be disadvantageous to other stockholders whose interests are different from those of our executive officers, directors, and principal stockholders. For example, our executive officers, directors, and principal stockholders, acting together with stockholders owning a relatively small percentage of our outstanding stock, could delay or prevent an acquisition or merger even if the transaction would benefit other stockholders.

36

Anti-takeover provisions of our charter documents and Delaware law could prevent or delay transactions resulting in a change in control.

Our certificate of incorporation and our bylaws may make more difficult or discourage, delay or prevent a change in the ownership of our company or a change in our management or our board of directors. The following are examples of provisions that are included in our certificate of incorporation and bylaws that might have those effects:

• our board of directors is classified so that not all members of our board of directors may be elected at one time;

• directors may only be removed “for cause” and only with the approval of stockholders holding a majority of our outstanding voting stock;

• the ability of our stockholders to call a special meeting of stockholders is prohibited;

• advance notice is required for nominations for election to our board of directors or for proposing matters that can be acted upon at stockholder meetings;

• stockholder action by written consent is prohibited, thereby requiring all stockholder actions to be taken at a meeting of our stockholders; and

• our board of directors may designate the terms of, and issue new series of, preferred stock, commonly referred to as “blank check” preferred stock, with rights senior to those of common stock without stockholder approval.

In addition, we are also subject to Section 203 of the Delaware General Corporation Law, which provides, subject to enumerated exceptions, that if a person acquires 15% or more of our voting stock, the person is an “interested stockholder” and may not engage in “business combinations” with us for a period of three years from the time the person acquired 15% or more of our voting stock.

These provisions may have the effect of entrenching our management team and may deprive you of the opportunity to sell your shares to potential acquirers at a premium over prevailing prices. This potential inability to obtain a premium could reduce the price of our common stock.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

The following table provides information about our share repurchase activity for the three months ended June 30, 2013:

Period	Total Number of Shares Purchased		Average Price Paid per Share2		Total Number of Shares Purchased as Part of Publicly Announced Program1		Approximate Dollar Value of Shares that May Yet Be  Purchased Under the Program
April 1, 2013 to April 30, 2013		102,750	$	13.51		102,750	$	5,796,618
May 1, 2013 to May 31, 2013		90,902	$	13.53		90,902	$	4,566,976
June 1, 2013 to June 30, 2013		78,248	$	14.04		78,248	$	3,468,420
Total		271,900	$	13.67		271,900

1 Represents shares of Common Stock repurchased in the open market in connection with our share repurchase program. Our board of director authorized an initial repurchase plan of $15 million in July 2007, which was completed in January 2008. Our board of directors has since authorized an additional $60 million of repurchases in additional increments in January 2008, October 2008, April 2009, May 2010, October 2010 and July 2012. As of June 30, 2013, of the $75 million total share repurchases that have been authorized, $71.5 million has been repurchased, and $3.5 million remains authorized. There is no expiration date associated with our share repurchase program.

2 Includes $0.02 per share broker commission.

37

Item 6. Exhibits

Exhibit No.	Description
3.1 (1)	Amended and Restated Certificate of Incorporation of Volterra Semiconductor Corporation.
3.2 (2)	Amended and Restated Bylaws of Volterra Semiconductor Corporation.
4.1	Reference is made to Exhibits 3.1 and 3.2.
4.2 (3)	Specimen stock certificate.
31.1	Certification of Chief Executive Officer required under Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended.
31.2	Certification of Chief Financial Officer required under Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended.
32.1*	Certification of Chief Executive Officer required under Rule 13a-14(b) or Rule 15d-14(b) of the Securities Exchange Act of 1934, as amended, and 18 U.S.C. Section 1350.
32.2*	Certification of Chief Financial Officer required under Rule 13a-14(b) or Rule 15d-14(b) of the Securities Exchange Act of 1934, as amended and 18 U.S.C. Section 1350.
101.INS**	XBRL Instance Document
101.SCH**	XBRL Taxonomy Extension Schema
101.CAL**	XBRL Taxonomy Extension Calculation Linkbase
101.DEF**	XBRL Taxonomy Extension Definition Linkbase
101.LAB**	XBRL Taxonomy Extension Label Linkbase
101.PRE**	XBRL Taxonomy Extension Presentation Linkbase

(1) Previously filed as Exhibit 3.1 to Volterra Semiconductor Corporation’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2004, as filed with the Securities and Exchange Commission on September 9, 2004, and incorporated by reference herein.

(2) Previously filed as Exhibit 3.2 to Volterra Semiconductor Corporation’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2007, as filed with the Securities and Exchange Commission on November 1, 2007, and incorporated by reference herein.

(3) Previously filed as Exhibit 4.2 to Volterra Semiconductor Corporation’s Registration Statement on Form S-1/A (No. 333-115614), as filed with the Securities and Exchange Commission on July 9, 2004, as amended, and incorporated by reference herein.

38

* The certifications attached as Exhibits 32.1 and 32.2 accompany this Quarterly Report on Form 10-Q pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not be deemed “filed” by Volterra Semiconductor Corporation for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.

** Pursuant to Rule 406T of Regulation S-T, these interactive data files are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933 or Section 18 of the Securities Exchange Act of 1934 and otherwise are not subject to liability.

39

Signature

Pursuant to the requirements 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.

Dated: August 5, 2013	VOLTERRA SEMICONDUCTOR CORPORATION
	By:	/s/ Mike Burns
		Mike Burns
		Chief Financial Officer
		(Principal Financial, Chief Accounting and Duly Authorized Officer)

40

EXHIBIT INDEX

Exhibit No.	Description
3.1 (1)	Amended and Restated Certificate of Incorporation of Volterra Semiconductor Corporation.
3.2 (2)	Amended and Restated Bylaws of Volterra Semiconductor Corporation.
4.1	Reference is made to Exhibits 3.1 and 3.2.
4.2 (3)	Specimen stock certificate.
31.1	Certification of Chief Executive Officer required under Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended.
31.2	Certification of Chief Financial Officer required under Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended.
32.1*	Certification of Chief Executive Officer required under Rule 13a-14(b) or Rule 15d-14(b) of the Securities Exchange Act of 1934, as amended, and 18 U.S.C. Section 1350.
32.2*	Certification of Chief Financial Officer required under Rule 13a-14(b) or Rule 15d-14(b) of the Securities Exchange Act of 1934, as amended and 18 U.S.C. Section 1350.
101.INS**	XBRL Instance Document
101.SCH**	XBRL Taxonomy Extension Schema
101.CAL**	XBRL Taxonomy Extension Calculation Linkbase
101.DEF**	XBRL Taxonomy Extension Definition Linkbase
101.LAB**	XBRL Taxonomy Extension Label Linkbase
101.PRE**	XBRL Taxonomy Extension Presentation Linkbase

(1) Previously filed as Exhibit 3.1 to Volterra Semiconductor Corporation’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2004, as filed with the Securities and Exchange Commission on September 9, 2004, and incorporated by reference herein.

(2) Previously filed as Exhibit 3.2 to Volterra Semiconductor Corporation’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2007, as filed with the Securities and Exchange Commission on November 1, 2007, and incorporated by reference herein.

(3) Previously filed as Exhibit 4.2 to Volterra Semiconductor Corporation’s Registration Statement on Form S-1/A (No. 333-115614), as filed with the Securities and Exchange Commission on July 9, 2004, as amended, and incorporated by reference herein.

* The certifications attached as Exhibits 32.1 and 32.2 accompany this Quarterly Report on Form 10-Q pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not be deemed “filed” by Volterra Semiconductor Corporation for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.

** Pursuant to Rule 406T of Regulation S-T, these interactive data files are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933 or Section 18 of the Securities Exchange Act of 1934 and otherwise are not subject to liability.

41

EX-31.1

Exhibit 31.1

CERTIFICATION

I, Jeffrey Staszak, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Volterra Semiconductor Corporation;

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 registrant’s most recent fiscal quarter (the registrant’s fourth 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: August 5, 2013	By:	/s/ Jeffrey Staszak
		Jeffrey Staszak       Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION

I, Mike Burns, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Volterra Semiconductor Corporation;

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 registrant’s most recent fiscal quarter (the registrant’s fourth 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: August 5, 2013	By:	/s/ Mike Burns
		Mike Burns
		Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION

Pursuant to the requirement set forth in Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Section 1350 of Chapter 63 of Title 18 of the United States Code (18 U.S.C. §1350), Jeffrey Staszak, Chief Executive Officer of Volterra Semiconductor Corporation (the “Company”), hereby certifies that, to the best of his knowledge:

1. The Company’s Quarterly Report on Form 10-Q for the period ended June 30, 2013, to which this Certification is attached as Exhibit 32.1 (the “Quarterly Report”) fully complies with the requirements of Section 13(a) or Section 15(d) of the Exchange Act, and

2. The information contained in the Quarterly Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

In Witness Whereof, the undersigned has set his hand hereto as of the 5^th day of August, 2013.

By:	/s/ Jeffrey Staszak
	Jeffrey Staszak       Chief Executive Officer

This certification accompanies the Form 10-Q to which it relates, is not deemed filed with the Securities and Exchange Commission and is not to be incorporated by reference into any filing of Volterra Semiconductor Corporation under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended (whether made before or after the date of the Form 10-Q), irrespective of any general incorporation language contained in such filing.

EX-32.2

Exhibit 32.2

CERTIFICATION

Pursuant to the requirement set forth in Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Section 1350 of Chapter 63 of Title 18 of the United States Code (18 U.S.C. §1350), Mike Burns, Chief Financial Officer of Volterra Semiconductor Corporation (the “Company”), hereby certifies that, to the best of his knowledge:

1. The Company’s Quarterly Report on Form 10-Q for the period ended June 30, 2013, to which this Certification is attached as Exhibit 32.2 (the “Quarterly Report”) fully complies with the requirements of Section 13(a) or Section 15(d) of the Exchange Act, and

2. The information contained in the Quarterly Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

In Witness Whereof, the undersigned has set his hand hereto as of the 5^th day of August, 2013.

By:	/s/ Mike Burns
	Mike Burns       Chief Financial Officer

This certification accompanies the Form 10-Q to which it relates, is not deemed filed with the Securities and Exchange Commission and is not to be incorporated by reference into any filing of Volterra Semiconductor Corporation under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended (whether made before or after the date of the Form 10-Q), irrespective of any general incorporation language contained in such filing.

XML

Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2013

Fair Value Disclosures [Abstract]

Fair Value of Financial Assets Measured on Recurring Basis

The fair value of financial assets measured at fair value on a recurring basis was determined using the following inputs:

	June 30, 2013
	Fair value measurements at reporting date using
	Total		Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Money market funds	$	99,564	$	99,564	$	—	$	—
Total	$	99,564	$	99,564	$	—	$	—
	December 31, 2012
	Fair value measurements at reporting date using
	Total		Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Money market funds	$	98,562	$	98,562	$	—	$	—
Total	$	98,562	$	98,562	$	—	$	—

XML

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Income Statement [Abstract]
Net revenue	$ 34,396	$ 43,574	$ 74,315	$ 85,636
Cost of revenue	14,403	18,292	31,626	36,188
Gross profit	19,993	25,282	42,689	49,448
Operating expenses:
Research and development	10,878	10,995	22,392	21,393
Selling, general and administrative	7,101	6,805	14,307	13,714
Litigation	1,019	1,279	1,816	1,979
Total operating expenses	18,998	19,079	38,515	37,086
Income from operations	995	6,203	4,174	12,362
Non-operating expense (income), net	50	58	98	(30)
Income before income taxes	945	6,145	4,076	12,392
Income tax expense	205	131	300	188
Net income	$ 740	$ 6,014	$ 3,776	$ 12,204
Net income per share:
Basic	$ 0.03	$ 0.24	$ 0.15	$ 0.48
Diluted	$ 0.03	$ 0.22	$ 0.15	$ 0.45
Weighted average shares outstanding:
Basic	25,055	25,412	25,109	25,267
Diluted	25,488	26,922	25,637	26,837

XML

Stock Repurchases

6 Months Ended

Jun. 30, 2013

Other Liabilities Disclosure [Abstract]

Stock Repurchases

5. Stock Repurchases

Our board of directors authorized an initial repurchase plan of $15 million in July 2007, which was completed in January 2008. Our board of directors has since authorized an additional $60 million of repurchases in additional increments in January 2008, October 2008, April 2009, May 2010, October 2010 and July 2012, and the Company repurchased 272 thousand shares during the three months ended June 30, 2013 for $3.7 million, at an average cost of $13.67 per share including commissions. The Company repurchased 401 thousand shares during the six months ended June 30, 2013 for $5.6 million, at an average cost of $13.96 per share, including commissions. The Company repurchased 34 thousand shares during the three months ended June 30, 2012 for $1.0 million, at an average cost of $29.22 per share, including commissions. The Company repurchased 68 thousand shares during the six months ended June 30, 2012 for $2.0 million, at an average cost of $29.47 per share, including commissions.

The Company’s policy is to consider shares to have been repurchased upon the settlement date of the transaction, which is typically three days subsequent to the trading date. Shares repurchased during the three months ended June 30, 2013 have been reported as treasury stock. As of June 30, 2013, this repurchase program has $3.5 million remaining under the Company’s repurchase authorization.

XML

Description of Business and Significant Accounting Policies - Schedule of Computation of Basic and Diluted Net Income Per Share (Detail) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Numerator:
Net income	$ 740	$ 6,014	$ 3,776	$ 12,204
Denominator:
Weighted average shares outstanding, basic	25,055	25,412	25,109	25,267
Effect of dilutive securities:
Stock options and restricted stock units	433	1,510	528	1,570
Weighted average shares outstanding, diluted	25,488	26,922	25,637	26,837
Basic net income per share	$ 0.03	$ 0.24	$ 0.15	$ 0.48
Diluted net income per share	$ 0.03	$ 0.22	$ 0.15	$ 0.45

XML

Description of Business and Significant Accounting Policies - Additional Information (Detail) (USD $) In Thousands, unless otherwise specified	6 Months Ended		3 Months Ended	6 Months Ended	3 Months Ended	6 Months Ended
	Jun. 30, 2013	Dec. 31, 2012	Jun. 30, 2012 Restricted stock units [Member]	Jun. 30, 2012 Restricted stock units [Member]	Jun. 30, 2013 Stock options [Member]	Jun. 30, 2013 Stock options [Member]
Summary Of Significant Accounting Policies [Line Items]
Year of incorporation	1996
Cash equivalents maximum maturity period, in days	90 days
Short-term investments minimum maturity period, in days	90 days
Short-term investments maximum maturity period, in years	1 year
Percentage of company's net revenue or accounts receivable to be considered significant customer	10.00%
Net revenue from customer less than specified percentage	10.00%
General maximum product warranty period, months	12 months
Unrecognized tax benefits	$ 8,593	$ 7,564
Unrecognized tax benefits that would affect the effective tax rate if recognized	1,462	1,381
Unrecognized tax benefits fully offset with a valuation allowance	$ 7,131	$ 6,183
Changes in unrecognized tax benefits over a period	12 months
Stock options and restricted stock units outstanding excluded from the computation of diluted earnings per share			1,404	1,332	4,600	4,327

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Goodwill and Indefinite-lived Intangible Assets - Additional Information (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended	6 Months Ended	12 Months Ended
	Jun. 30, 2013	Jun. 30, 2013	Dec. 31, 2012
Goodwill And Intangible Assets Disclosure [Abstract]
Goodwill			$ 2,486
Intangible assets			3,100
Impairment of goodwill and indefinite-lived intangible assets	$ 0	$ 0

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Property and Equipment - Summary of Property and Equipment (Detail) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2013	Dec. 31, 2012
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 31,664	$ 29,402
Less accumulated depreciation and amortization	(20,144)	(18,389)
Property and equipment, net	11,520	11,013
Computer hardware [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	2,449	2,098
Computer software [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	9,891	8,477
Equipment [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	14,175	13,731
Furniture [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	1,229	1,213
Leasehold improvements [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 3,920	$ 3,883

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Litigation - Additional Information (Detail)	6 Months Ended
	Jun. 30, 2013 Patents
Commitments And Contingencies Disclosure [Abstract]
Lawsuit filings Period	2008-11
Number of patents assigned for infringement	4

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Inventories - Schedule of Inventories (Detail) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2013	Dec. 31, 2012
Inventory Disclosure [Abstract]
Work-in-process	$ 12,265	$ 11,286
Finished goods	8,948	7,433
Inventories, net	$ 21,213	$ 18,719

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Description of Business and Significant Accounting Policies

6 Months Ended

Jun. 30, 2013

Accounting Policies [Abstract]

Description of Business and Significant Accounting Policies

1. Description of Business and Significant Accounting Policies

Volterra Semiconductor Corporation (the “Company” or “Volterra”) was incorporated in Delaware in 1996, and its principal offices are located in Fremont, California. The Company designs, develops and markets proprietary, high-performance analog and mixed-signal power management semiconductors.

Basis of Presentation

The accompanying condensed 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. The functional currency of the Company and its significant subsidiaries is the United States dollar. Foreign currency transaction gains and losses are recorded in income. For all periods presented, there have been no material foreign currency transaction or translation gains or losses.

The Company’s accompanying condensed consolidated financial statements have been prepared without audit in accordance with the rules and regulations of the Securities and Exchange Commission (SEC). Certain information and disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States have been condensed or omitted in accordance with these rules and regulations. The information in this report should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto included in its 2012 annual report on Form 10-K for the fiscal year ended December 31, 2012 as filed with the SEC on March 6, 2013.

In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all adjustments (consisting only of normal recurring adjustments) necessary to present fairly the Company’s financial position, results of operations and cash flows for the interim periods presented. The operating results for the six months ended June 30, 2013 are not necessarily indicative of the results that may be expected for any other future interim period or full year. The condensed consolidated balance sheet as of December 31, 2012 is derived from the audited consolidated financial statements as of the year then ended.

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the financial statements and the accompanying notes.

The accounting estimates that require our most significant, difficult and subjective judgments include:

• determination of sales return allowances;

• the recognition and measurement of current and deferred income taxes (including the measurement of uncertain tax positions);

• the valuation of inventory;

• measurement of stock-based compensation;

• valuation of indefinite-lived intangible assets; and

• valuation of goodwill.

Actual results could differ from those estimates.

Concentrations of Credit Risk

The Company sells its products to distributors and original equipment manufacturers (and their outsourced suppliers) in the computing, storage, networking, and consumer electronic industries. The Company performs credit evaluations of its customers’ financial condition and generally does not require collateral from its customers. An allowance is provided for bad debts when it is probable and estimable that accounts receivable will not be collected.

Financial Instruments

Financial instruments consist of cash equivalents, short-term investments, accounts receivable, and accounts payable. The carrying value of the Company’s financial instruments approximates the respective fair value due to the relatively short maturities of these instruments. Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of investments and trade accounts receivable.

The Company maintains cash, cash equivalents, and short-term investments with high credit quality financial institutions. Cash equivalents consist of highly liquid investments maturing in 90 days or less from the date of purchase. Short-term investments are comprised of U.S. Treasury and debt securities with remaining contractual maturities on the date of purchase greater than 90 days but less than one year. Investments in debt securities are classified as held-to-maturity and carried at amortized cost. The fair value of these instruments would be categorized as Level 1 of the fair value hierarchy. The following table reconciles the amortized cost to the fair value of short-term investments:

	As of June 30,		As of December 31,
	2013		2012
Amortized cost	$	1,000	$	2,000
Unrealized gains		—		—
Fair value	$	1,000	$	2,000

Segment Reporting and Significant Customers

The Company is organized and operates as a single business segment: analog and mixed-signal power management semiconductors. The Company’s chief operating decision maker, the Chief Executive Officer, reviews financial information presented on a consolidated basis for the purposes of making operating decisions and assessing financial performance.

Significant customers are those customers directly accounting for more than 10% of the Company’s net revenue or accounts receivable. For each significant customer, net revenue as a percentage of total net revenue and accounts receivable as a percentage of total accounts receivable are as follows:

	Net Revenue						Net Revenue						Accounts Receivable
	Three Months Ended						Six Months Ended						As of
	June 30,						June 30,						June 30,			December 31,
Customer	2013			2012			2013			2012			2013			2012
A		21	%		*			20	%		*			29	%		23	%
B		18	%		22	%		21	%		23	%		20	%		28	%
C		17	%		26	%		17	%		26	%		13	%		12	%
D		*			15	%		*			14	%		*			10	%
E		*			*			*			10	%		*			*

* Less than 10%

The Company reports its net revenue by geographic areas according to the destination to which the product was shipped. The geographic area to which a product was shipped is not necessarily the same location in which the product is ultimately used. In all periods, substantially all of the Company’s net revenue was denominated in U.S. dollars. Net revenue by geographic area was as follows:

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2013			2012			2013			2012
China		68	%		69	%		67	%		66	%
Singapore		20			25			24			27
United States		4			1			2			1
Other		8			5			7			6
		100	%		100	%		100	%		100	%

Revenue Recognition

Revenue from the sale of semiconductor products is recognized upon shipment when title transfers to the customer provided that persuasive evidence of an arrangement exists, the price is fixed or determinable, and collection of the resulting receivable is reasonably assured. An allowance is recorded at the time of sale to provide for estimated future sales returns. The allowance is based upon historical experience, current trends, and the Company’s expectations regarding future return activity. Sales returns must be authorized by Volterra and are generally limited to instances of product failure under the Company’s warranty that generally provides that products will be free from defects for a limited period of time, generally not longer than twelve months.

Volterra’s sales to distributors are made under agreements that do not provide for price adjustments after purchase and provide limited return rights under the Company’s standard warranty. Revenue on these sales is recognized upon shipment when title passes to the distributor. Volterra estimates future distributor sales returns based on historical data and current business expectations and reduces revenue for estimated future returns through the allowance for sales returns.

Revenue generally is recognized net of any taxes collected from customers and subsequently remitted to governmental authorities.

Stock-Based Compensation

Stock-based compensation costs are calculated on the date of grant based on the estimated fair value of the award. The compensation cost is recognized on a straight-line basis over the vesting period.

The effect of stock-based compensation was as follows:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2013		2012		2013		2012
Stock-based compensation expense:
Cost of revenue	$	157	$	193	$	338	$	422
Research and development		1,208		1,023		2,323		1,993
Sales, general and administrative		1,131		1,266		2,594		2,461
Effect on net income	$	2,496	$	2,482	$	5,255	$	4,876
Effect on basic net income per share	$	0.10	$	0.10	$	0.21	$	0.19
Effect on diluted net income per share	$	0.10	$	0.09	$	0.20	$	0.18

The Company has not recognized any tax benefit related to stock-based compensation expense as a result of the full valuation allowance on its net domestic deferred tax assets.

Provision for Income Taxes

Income taxes are accounted for under the assets and liability method. Deferred tax assets and liabilities are recognized for future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted income tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in income tax rates is recognized in income in the period that includes the enactment date.

As of June 30, 2013, the total amount of unrecognized tax benefits was $8,593 of which $1,462 would affect the effective tax rate if recognized. The remaining $7,131 in unrecognized tax benefits would not result in a tax benefit since it would be fully offset with a valuation allowance.

As of December 31, 2012, the total amount of unrecognized tax benefits was $7,564, of which $1,381 would affect the effective tax rate if recognized. The remaining $6,183 in unrecognized tax benefits would not result in a tax benefit since it would be fully offset with a valuation allowance.

The Company recognizes interest and penalties related to uncertain tax positions in income tax expense. Cumulative interest and penalties through the second quarter of 2013 are immaterial.

The Company files U.S. federal, state and foreign income tax returns and is subject to examination in these jurisdictions for all tax years since inception. Although timing of the resolution or closure on audits is highly uncertain, the Company believes it is reasonably possible that there would be immaterial changes in its currently unrecognized tax benefits in the next 12 months.

Earnings Per Share

Basic net income per share is calculated by dividing net income by the weighted average shares of common stock outstanding during the period. Diluted net income per share is calculated by dividing the net income by the weighted average shares outstanding of common stock and dilutive potential common shares outstanding during the period. Dilutive potential common shares consist of dilutive shares issuable upon the exercise of outstanding stock options and the vesting of outstanding restricted stock units, computed using the treasury stock method. The sum of the quarterly net income per share will not necessarily equal the net income per share for the total period due to the effects of rounding.

The following table sets forth for all periods presented the computation of basic and diluted net income per share, including the reconciliation of the numerator and denominator used in the calculation:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2013		2012		2013		2012
Numerator:
Net income	$	740	$	6,014	$	3,776	$	12,204
Denominator:
Weighted average shares outstanding, basic		25,055		25,412		25,109		25,267
Effect of dilutive securities:
Stock options and restricted stock units		433		1,510		528		1,570
Weighted average shares outstanding, diluted		25,488		26,922		25,637		26,837
Basic net income per share	$	0.03	$	0.24	$	0.15	$	0.48
Diluted net income per share	$	0.03	$	0.22	$	0.15	$	0.45

Stock options and restricted stock units outstanding in the amount of 4,600 and 1,404 shares for the three months ended June 30, 2013 and 2012, respectively, and 4,327 and 1,332 shares for the six months ended June 30, 2013 and 2012, respectively, were excluded from the computation of diluted earnings per share because their effect was anti-dilutive in the period. These securities outstanding as of June 30, 2013 could dilute net income per share in the future.

Long-lived Assets and Indefinite-lived Intangible Assets

We assess the impairment of long-lived assets and indefinite-lived intangible assets and in-process research and development (“IPR&D”), whenever events or changes in circumstances indicate that the carrying value of such assets may not be recoverable. Whenever events or changes in circumstances suggest that the carrying amount of long-lived assets and indefinite-lived intangible assets may not be recoverable, we estimate the future undiscounted cash flows expected to be generated by the asset from its use or eventual disposition. If the sum of the expected future undiscounted cash flows, which includes revenue, is less than the carrying amount of those assets, we recognize an impairment loss based on the excess of the carrying amount over the fair value of the assets. Significant management judgment is required in the forecasts of future operating results that are used in the discounted cash flow method of valuation. IPR&D is tested for impairments annually. If a particular IPR&D project were to be abandoned and have no future alternative use then its value would be reduced.

Goodwill

Goodwill is recorded as the difference, if any, between the aggregate consideration paid for an acquisition and the fair value of the net tangible and indefinite-lived intangible assets acquired and liabilities assumed. We evaluate goodwill for impairment at least on an annual basis or whenever events and changes in circumstances suggest that the carrying amount may not be recoverable from its estimated future cash flow. We perform the goodwill impairment test for each reporting unit. If the fair value of the reporting unit exceeds the carrying value of the reporting unit, goodwill is not impaired. We perform our goodwill impairment assessment at the Company level, which is our sole reporting unit.

Accounting for Lease Incentives

As part of the Company’s existing leased facilities, the Company has received various lease incentives which take the form of a fixed allowance towards lease improvements on the facility. The Company used the allowance to make leasehold improvements which will be depreciated over the useful life of the assets or the lease term, whichever is shorter. The offsetting lease incentives liability is being amortized on a straight-line basis over the term of the lease as an offset to rent expense.

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Property and Equipment

6 Months Ended

Jun. 30, 2013

Property Plant And Equipment [Abstract]

Property and Equipment

3. Property and Equipment

Property and equipment consisted of the following:

	June 30,			December 31,
	2013			2012
Computer hardware	$	2,449		$	2,098
Computer software		9,891			8,477
Equipment		14,175			13,731
Furniture		1,229			1,213
Leasehold improvements		3,920			3,883
		31,664			29,402
Less accumulated depreciation and amortization		(20,144	)		(18,389	)
	$	11,520		$	11,013

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Fair Value Measurements

6 Months Ended

Jun. 30, 2013

Fair Value Disclosures [Abstract]

Fair Value Measurements

6. Fair Value Measurements

The Company currently has only cash and cash equivalents held and used in the ordinary course of business that must be measured at fair value on a recurring basis. The Company does not have other financial or non-financial assets or liabilities that are required to be measured at fair value on a recurring basis.

Based on the nature of cash and cash equivalents and the underlying securities, there are no realized or unrealized gains and losses recorded from holding these assets.

Short-term investments have remaining contractual maturities on the date of purchase greater than 90 days but less than one year. Investments in debt securities are classified as held-to-maturity. Unrealized gain and losses were not material at June 30, 2013.

The fair value of financial assets measured at fair value on a recurring basis was determined using the following inputs:

	June 30, 2013
	Fair value measurements at reporting date using
	Total		Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Money market funds	$	99,564	$	99,564	$	—	$	—
Total	$	99,564	$	99,564	$	—	$	—
	December 31, 2012
	Fair value measurements at reporting date using
	Total		Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Money market funds	$	98,562	$	98,562	$	—	$	—
Total	$	98,562	$	98,562	$	—	$	—

In addition, the Company held $1 million and $2 million of Level 1 U.S. Treasuries at June 30, 2013 and December 31, 2013, respectively, which are measured at fair value on a non-recurring basis as these investments are held-to-maturity.

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Goodwill and Indefinite-lived Intangible Assets

6 Months Ended

Jun. 30, 2013

Goodwill And Intangible Assets Disclosure [Abstract]

Goodwill and Indefinite-lived Intangible Assets

4. Goodwill and Indefinite-lived Intangible Assets

As a result of the acquisition of Element Energy, Inc. on December 31, 2012, the Company recorded $2,486 of goodwill and $3,100 of indefinite-lived intangible assets which consist of in-process research and development. There was no impairment of goodwill or indefinite-lived intangible asset during the three and six months ended June 30, 2013.

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Stock Repurchases - Additional Information (Detail) (USD $) In Millions, except Share data in Thousands, unless otherwise specified	1 Months Ended		3 Months Ended		6 Months Ended
	Jan. 31, 2008	Jul. 31, 2007	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]
Additional repurchase amount	$ 60
Authorized repurchase amount		15
Shares repurchased			272	34	401	68
Shares repurchase amount			3.7	1.0	5.6	2.0
Average cost including commissions			$ 13.67	$ 29.22	$ 13.96	$ 29.47
Period between settlement date and trading date			3 days
Remaining purchase amount			$ 3.5		$ 3.5

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CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) In Thousands, except Per Share data, unless otherwise specified	Jun. 30, 2013	Dec. 31, 2012
Statement Of Financial Position [Abstract]
Accounts receivable, allowances	$ 1,632	$ 2,066
Preferred stock, par value	$ 0.001	$ 0.001
Preferred stock, shares authorized	5,000	5,000
Preferred stock, shares issued
Preferred stock, shares outstanding
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	200,000	200,000
Common stock, shares issued	29,091	28,793
Common stock, shares outstanding	25,050	25,152
Treasury stock at cost	4,041	3,641

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Description of Business and Significant Accounting Policies (Tables)

6 Months Ended

Jun. 30, 2013

Accounting Policies [Abstract]

Schedule of Amortized Cost to Fair Value of Short-Term Investments

The following table reconciles the amortized cost to the fair value of short-term investments:

	As of June 30,		As of December 31,
	2013		2012
Amortized cost	$	1,000	$	2,000
Unrealized gains		—		—
Fair value	$	1,000	$	2,000

Schedule of Customers Directly Accounting for More Than 10% of Company's Net Revenue or Accounts Receivable

For each significant customer, net revenue as a percentage of total net revenue and accounts receivable as a percentage of total accounts receivable are as follows:

	Net Revenue						Net Revenue						Accounts Receivable
	Three Months Ended						Six Months Ended						As of
	June 30,						June 30,						June 30,			December 31,
Customer	2013			2012			2013			2012			2013			2012
A		21	%		*			20	%		*			29	%		23	%
B		18	%		22	%		21	%		23	%		20	%		28	%
C		17	%		26	%		17	%		26	%		13	%		12	%
D		*			15	%		*			14	%		*			10	%
E		*			*			*			10	%		*			*

* Less than 10%

Schedule of Net Revenue by Geographic Area

Net revenue by geographic area was as follows:

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2013			2012			2013			2012
China		68	%		69	%		67	%		66	%
Singapore		20			25			24			27
United States		4			1			2			1
Other		8			5			7			6
		100	%		100	%		100	%		100	%

Effect of Stock-based Compensation

The effect of stock-based compensation was as follows:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2013		2012		2013		2012
Stock-based compensation expense:
Cost of revenue	$	157	$	193	$	338	$	422
Research and development		1,208		1,023		2,323		1,993
Sales, general and administrative		1,131		1,266		2,594		2,461
Effect on net income	$	2,496	$	2,482	$	5,255	$	4,876
Effect on basic net income per share	$	0.10	$	0.10	$	0.21	$	0.19
Effect on diluted net income per share	$	0.10	$	0.09	$	0.20	$	0.18

Schedule of Computation of Basic and Diluted Net Income Per Share

The following table sets forth for all periods presented the computation of basic and diluted net income per share, including the reconciliation of the numerator and denominator used in the calculation:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2013		2012		2013		2012
Numerator:
Net income	$	740	$	6,014	$	3,776	$	12,204
Denominator:
Weighted average shares outstanding, basic		25,055		25,412		25,109		25,267
Effect of dilutive securities:
Stock options and restricted stock units		433		1,510		528		1,570
Weighted average shares outstanding, diluted		25,488		26,922		25,637		26,837
Basic net income per share	$	0.03	$	0.24	$	0.15	$	0.48
Diluted net income per share	$	0.03	$	0.22	$	0.15	$	0.45

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012
Cash flows from operating activities:
Net income	$ 3,776	$ 12,204
Adjustments to reconcile net income to net cash provided by operating activities:
Stock-based compensation	5,255	4,876
Depreciation and amortization	1,869	1,544
Loss on disposal of fixed assets	5	4
Release of allowance for doubtful accounts	(12)	(13)
Changes in operating assets and liabilities:
Accounts receivable	2,555	(3,314)
Inventories	(2,468)	(2,320)
Prepaid expenses and other assets	889	537
Accounts payable	1,999	795
Accrued liabilities and long-term liabilities	(86)	1,219
Net cash provided by operating activities	13,782	15,532
Cash flows from investing activities:
Purchases of property and equipment	(2,493)	(2,436)
Purchases of short-term investments	(4,000)	(4,000)
Proceeds from maturity of short-term investments	5,000	2,000
Cash paid for acquisitions, net	(3,861)
Net cash used in investing activities	(5,354)	(4,436)
Cash flows from financing activities:
Proceeds from issuance of common stock, net	2,904	9,059
Repurchase of common stock	(5,592)	(1,994)
Taxes paid related to net share settlement of equity awards	(116)	(102)
Net cash provided by financing activities	(2,804)	6,963
Net increase in cash and cash equivalents	5,624	18,059
Cash and cash equivalents, beginning of period	148,364	126,733
Cash and cash equivalents, end of period	153,988	144,792
Supplemental disclosure of cash flows:
Cash paid for income taxes	$ 288	$ 153

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CONSOLIDATED BALANCE SHEETS (USD $) In Thousands, unless otherwise specified	Jun. 30, 2013	Dec. 31, 2012
Current assets:
Cash and cash equivalents	$ 153,988	$ 148,364
Short-term investments	1,000	2,000
Accounts receivable, net of allowances of $1,632 and $2,066, respectively	21,944	24,487
Inventories	21,213	18,719
Prepaid expenses and other current assets	2,239	3,103
Total current assets	200,384	196,673
Property and equipment, net	11,520	11,013
Indefinite-lived intangibles	3,100	3,100
Goodwill	2,486	2,486
Other assets	510	535
Total assets	218,000	213,807
Current liabilities:
Accounts payable	9,054	7,073
Accrued liabilities	9,894	13,974
Total current liabilities	18,948	21,047
Other long-term liabilities	3,599	3,561
Total liabilities	22,547	24,608
Stockholders' equity:
Preferred stock, $0.001 par value; 5,000 shares authorized; none issued and outstanding
Common stock, $0.001 par value; 200,000 shares authorized; 29,091 and 28,793 shares issued, respectively 25,050 and 25,152 shares outstanding, respectively	29	29
Additional paid-in capital	182,126	174,056
Retained earnings	69,829	66,053
Treasury stock at cost, 4,041 and 3,641 shares, respectively	(56,531)	(50,939)
Total stockholders' equity	195,453	189,199
Total liabilities and stockholders' equity	$ 218,000	$ 213,807

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Fair Value Measurements - Additional Information (Detail) (USD $)	6 Months Ended
	Jun. 30, 2013	Jun. 30, 2013 Maximum [Member]	Jun. 30, 2013 Minimum [Member]	Jun. 30, 2013 U.S. treasuries [Member] Quoted prices in active markets for identical assets (Level 1) [Member]	Dec. 31, 2012 U.S. treasuries [Member] Quoted prices in active markets for identical assets (Level 1) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Short-term investments minimum maturity period, in days		1 year	90 days
Unrealized gain and losses	$ 0
Investments held-to-maturity measured on non-recurring basis				$ 1,000,000	$ 2,000,000

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Description of Business and Significant Accounting Policies - Effect of Stock-based Compensation (Detail) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Stock-based compensation expense:
Stock-based compensation	$ 2,496	$ 2,482	$ 5,255	$ 4,876
Effect on basic net income per share	$ 0.10	$ 0.10	$ 0.21	$ 0.19
Effect on diluted net income per share	$ 0.10	$ 0.09	$ 0.20	$ 0.18
Cost of revenue [Member]
Stock-based compensation expense:
Stock-based compensation	157	193	338	422
Research and development [Member]
Stock-based compensation expense:
Stock-based compensation	1,208	1,023	2,323	1,993
Sales, general and administrative [Member]
Stock-based compensation expense:
Stock-based compensation	$ 1,131	$ 1,266	$ 2,594	$ 2,461

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Description of Business and Significant Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2013

Accounting Policies [Abstract]

Basis of Presentation

Basis of Presentation

The accompanying condensed 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. The functional currency of the Company and its significant subsidiaries is the United States dollar. Foreign currency transaction gains and losses are recorded in income. For all periods presented, there have been no material foreign currency transaction or translation gains or losses.

The Company’s accompanying condensed consolidated financial statements have been prepared without audit in accordance with the rules and regulations of the Securities and Exchange Commission (SEC). Certain information and disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States have been condensed or omitted in accordance with these rules and regulations. The information in this report should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto included in its 2012 annual report on Form 10-K for the fiscal year ended December 31, 2012 as filed with the SEC on March 6, 2013.

In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all adjustments (consisting only of normal recurring adjustments) necessary to present fairly the Company’s financial position, results of operations and cash flows for the interim periods presented. The operating results for the six months ended June 30, 2013 are not necessarily indicative of the results that may be expected for any other future interim period or full year. The condensed consolidated balance sheet as of December 31, 2012 is derived from the audited consolidated financial statements as of the year then ended.

Use of Estimates

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the financial statements and the accompanying notes.

The accounting estimates that require our most significant, difficult and subjective judgments include:

• determination of sales return allowances;

• the recognition and measurement of current and deferred income taxes (including the measurement of uncertain tax positions);

• the valuation of inventory;

• measurement of stock-based compensation;

• valuation of indefinite-lived intangible assets; and

• valuation of goodwill.

Actual results could differ from those estimates.

Concentrations of Credit Risk

Concentrations of Credit Risk

The Company sells its products to distributors and original equipment manufacturers (and their outsourced suppliers) in the computing, storage, networking, and consumer electronic industries. The Company performs credit evaluations of its customers’ financial condition and generally does not require collateral from its customers. An allowance is provided for bad debts when it is probable and estimable that accounts receivable will not be collected.

Financial Instruments

Financial Instruments

Financial instruments consist of cash equivalents, short-term investments, accounts receivable, and accounts payable. The carrying value of the Company’s financial instruments approximates the respective fair value due to the relatively short maturities of these instruments. Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of investments and trade accounts receivable.

The Company maintains cash, cash equivalents, and short-term investments with high credit quality financial institutions. Cash equivalents consist of highly liquid investments maturing in 90 days or less from the date of purchase. Short-term investments are comprised of U.S. Treasury and debt securities with remaining contractual maturities on the date of purchase greater than 90 days but less than one year. Investments in debt securities are classified as held-to-maturity and carried at amortized cost. The fair value of these instruments would be categorized as Level 1 of the fair value hierarchy. The following table reconciles the amortized cost to the fair value of short-term investments:

	As of June 30,		As of December 31,
	2013		2012
Amortized cost	$	1,000	$	2,000
Unrealized gains		—		—
Fair value	$	1,000	$	2,000

Segment Reporting and Significant Customers

Segment Reporting and Significant Customers

The Company is organized and operates as a single business segment: analog and mixed-signal power management semiconductors. The Company’s chief operating decision maker, the Chief Executive Officer, reviews financial information presented on a consolidated basis for the purposes of making operating decisions and assessing financial performance.

Significant customers are those customers directly accounting for more than 10% of the Company’s net revenue or accounts receivable. For each significant customer, net revenue as a percentage of total net revenue and accounts receivable as a percentage of total accounts receivable are as follows:

	Net Revenue						Net Revenue						Accounts Receivable
	Three Months Ended						Six Months Ended						As of
	June 30,						June 30,						June 30,			December 31,
Customer	2013			2012			2013			2012			2013			2012
A		21	%		*			20	%		*			29	%		23	%
B		18	%		22	%		21	%		23	%		20	%		28	%
C		17	%		26	%		17	%		26	%		13	%		12	%
D		*			15	%		*			14	%		*			10	%
E		*			*			*			10	%		*			*

* Less than 10%

The Company reports its net revenue by geographic areas according to the destination to which the product was shipped. The geographic area to which a product was shipped is not necessarily the same location in which the product is ultimately used. In all periods, substantially all of the Company’s net revenue was denominated in U.S. dollars. Net revenue by geographic area was as follows:

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2013			2012			2013			2012
China		68	%		69	%		67	%		66	%
Singapore		20			25			24			27
United States		4			1			2			1
Other		8			5			7			6
		100	%		100	%		100	%		100	%

Revenue Recognition

Revenue Recognition

Revenue from the sale of semiconductor products is recognized upon shipment when title transfers to the customer provided that persuasive evidence of an arrangement exists, the price is fixed or determinable, and collection of the resulting receivable is reasonably assured. An allowance is recorded at the time of sale to provide for estimated future sales returns. The allowance is based upon historical experience, current trends, and the Company’s expectations regarding future return activity. Sales returns must be authorized by Volterra and are generally limited to instances of product failure under the Company’s warranty that generally provides that products will be free from defects for a limited period of time, generally not longer than twelve months.

Volterra’s sales to distributors are made under agreements that do not provide for price adjustments after purchase and provide limited return rights under the Company’s standard warranty. Revenue on these sales is recognized upon shipment when title passes to the distributor. Volterra estimates future distributor sales returns based on historical data and current business expectations and reduces revenue for estimated future returns through the allowance for sales returns.

Revenue generally is recognized net of any taxes collected from customers and subsequently remitted to governmental authorities.

Stock-Based Compensation

Stock-Based Compensation

Stock-based compensation costs are calculated on the date of grant based on the estimated fair value of the award. The compensation cost is recognized on a straight-line basis over the vesting period.

The effect of stock-based compensation was as follows:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2013		2012		2013		2012
Stock-based compensation expense:
Cost of revenue	$	157	$	193	$	338	$	422
Research and development		1,208		1,023		2,323		1,993
Sales, general and administrative		1,131		1,266		2,594		2,461
Effect on net income	$	2,496	$	2,482	$	5,255	$	4,876
Effect on basic net income per share	$	0.10	$	0.10	$	0.21	$	0.19
Effect on diluted net income per share	$	0.10	$	0.09	$	0.20	$	0.18

The Company has not recognized any tax benefit related to stock-based compensation expense as a result of the full valuation allowance on its net domestic deferred tax assets.

Provision for Income Taxes

Provision for Income Taxes

Income taxes are accounted for under the assets and liability method. Deferred tax assets and liabilities are recognized for future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted income tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in income tax rates is recognized in income in the period that includes the enactment date.

As of June 30, 2013, the total amount of unrecognized tax benefits was $8,593 of which $1,462 would affect the effective tax rate if recognized. The remaining $7,131 in unrecognized tax benefits would not result in a tax benefit since it would be fully offset with a valuation allowance.

As of December 31, 2012, the total amount of unrecognized tax benefits was $7,564, of which $1,381 would affect the effective tax rate if recognized. The remaining $6,183 in unrecognized tax benefits would not result in a tax benefit since it would be fully offset with a valuation allowance.

The Company recognizes interest and penalties related to uncertain tax positions in income tax expense. Cumulative interest and penalties through the second quarter of 2013 are immaterial.

The Company files U.S. federal, state and foreign income tax returns and is subject to examination in these jurisdictions for all tax years since inception. Although timing of the resolution or closure on audits is highly uncertain, the Company believes it is reasonably possible that there would be immaterial changes in its currently unrecognized tax benefits in the next 12 months.

Earnings Per Share

Earnings Per Share

Basic net income per share is calculated by dividing net income by the weighted average shares of common stock outstanding during the period. Diluted net income per share is calculated by dividing the net income by the weighted average shares outstanding of common stock and dilutive potential common shares outstanding during the period. Dilutive potential common shares consist of dilutive shares issuable upon the exercise of outstanding stock options and the vesting of outstanding restricted stock units, computed using the treasury stock method. The sum of the quarterly net income per share will not necessarily equal the net income per share for the total period due to the effects of rounding.

The following table sets forth for all periods presented the computation of basic and diluted net income per share, including the reconciliation of the numerator and denominator used in the calculation:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2013		2012		2013		2012
Numerator:
Net income	$	740	$	6,014	$	3,776	$	12,204
Denominator:
Weighted average shares outstanding, basic		25,055		25,412		25,109		25,267
Effect of dilutive securities:
Stock options and restricted stock units		433		1,510		528		1,570
Weighted average shares outstanding, diluted		25,488		26,922		25,637		26,837
Basic net income per share	$	0.03	$	0.24	$	0.15	$	0.48
Diluted net income per share	$	0.03	$	0.22	$	0.15	$	0.45

Stock options and restricted stock units outstanding in the amount of 4,600 and 1,404 shares for the three months ended June 30, 2013 and 2012, respectively, and 4,327 and 1,332 shares for the six months ended June 30, 2013 and 2012, respectively, were excluded from the computation of diluted earnings per share because their effect was anti-dilutive in the period. These securities outstanding as of June 30, 2013 could dilute net income per share in the future.

Long-lived Assets and Indefinite-lived Intangible Assets

Long-lived Assets and Indefinite-lived Intangible Assets

We assess the impairment of long-lived assets and indefinite-lived intangible assets and in-process research and development (“IPR&D”), whenever events or changes in circumstances indicate that the carrying value of such assets may not be recoverable. Whenever events or changes in circumstances suggest that the carrying amount of long-lived assets and indefinite-lived intangible assets may not be recoverable, we estimate the future undiscounted cash flows expected to be generated by the asset from its use or eventual disposition. If the sum of the expected future undiscounted cash flows, which includes revenue, is less than the carrying amount of those assets, we recognize an impairment loss based on the excess of the carrying amount over the fair value of the assets. Significant management judgment is required in the forecasts of future operating results that are used in the discounted cash flow method of valuation. IPR&D is tested for impairments annually. If a particular IPR&D project were to be abandoned and have no future alternative use then its value would be reduced.

Goodwill

Goodwill

Goodwill is recorded as the difference, if any, between the aggregate consideration paid for an acquisition and the fair value of the net tangible and indefinite-lived intangible assets acquired and liabilities assumed. We evaluate goodwill for impairment at least on an annual basis or whenever events and changes in circumstances suggest that the carrying amount may not be recoverable from its estimated future cash flow. We perform the goodwill impairment test for each reporting unit. If the fair value of the reporting unit exceeds the carrying value of the reporting unit, goodwill is not impaired. We perform our goodwill impairment assessment at the Company level, which is our sole reporting unit.

Accounting for Lease Incentives

Accounting for Lease Incentives

As part of the Company’s existing leased facilities, the Company has received various lease incentives which take the form of a fixed allowance towards lease improvements on the facility. The Company used the allowance to make leasehold improvements which will be depreciated over the useful life of the assets or the lease term, whichever is shorter. The offsetting lease incentives liability is being amortized on a straight-line basis over the term of the lease as an offset to rent expense.

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Fair Value Measurements - Fair Value of Financial Assets Measured on Recurring Basis (Detail) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2013	Dec. 31, 2012
Fair value on a recurring basis [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total fair value	$ 99,564	$ 98,562
Money market funds [Member] | Fair value on a recurring basis [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value Measurement	99,564	98,562
Quoted prices in active markets for identical assets (Level 1) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value Measurement	1,000	2,000
Quoted prices in active markets for identical assets (Level 1) [Member] | Fair value on a recurring basis [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total fair value	99,564	98,562
Quoted prices in active markets for identical assets (Level 1) [Member] | Money market funds [Member] | Fair value on a recurring basis [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value Measurement	99,564	98,562
Significant other observable inputs (Level 2) [Member] | Fair value on a recurring basis [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total fair value
Significant other observable inputs (Level 2) [Member] | Money market funds [Member] | Fair value on a recurring basis [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value Measurement
Significant unobservable inputs (Level 3) [Member] | Fair value on a recurring basis [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total fair value
Significant unobservable inputs (Level 3) [Member] | Money market funds [Member] | Fair value on a recurring basis [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value Measurement

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Property and Equipment (Tables)

6 Months Ended

Jun. 30, 2013

Property Plant And Equipment [Abstract]

Summary of Property and Equipment

Property and equipment consisted of the following:

	June 30,			December 31,
	2013			2012
Computer hardware	$	2,449		$	2,098
Computer software		9,891			8,477
Equipment		14,175			13,731
Furniture		1,229			1,213
Leasehold improvements		3,920			3,883
		31,664			29,402
Less accumulated depreciation and amortization		(20,144	)		(18,389	)
	$	11,520		$	11,013

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Litigation

6 Months Ended

Jun. 30, 2013

Commitments And Contingencies Disclosure [Abstract]

Litigation

7. Litigation

As initially disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2008, and as updated in subsequent public filings, we filed a lawsuit in November 2008 in the United States District Court in the Northern District of California against Infineon Technologies AG, Infineon Technologies North America Corporation, and Primarion, Inc., (collectively, the “Defendants”) for infringement of several of our patents, seeking damages, enhanced damages for willful infringement and injunctive relief.

A trial related to our integrated power stage patents, U.S. Patent Nos. 6,278,264 and 6,462,522 was held in May 2011. The court had determined that Volterra’s asserted claims were infringed by Defendant’s accused products, and a unanimous jury found that all asserted claims were also valid and not obvious. A trial date to determine damages or willfulness has been tentatively set for November 4, 2013. There have been no further material developments in these litigation proceedings during the quarter ended June 30, 2013.

As initially disclosed in the Company’s Annual Report on Form 10-K for the year ended December 2009, and as updated in subsequent public filings, Infineon Technologies AG filed a lawsuit against us in Delaware for infringement of four patents assigned to Infineon, seeking damages, enhanced damages for willful infringement and injunctive relief. Such case was subsequently transferred to, and is currently being heard in, the United States District Court, Northern District of California. There have been no further material developments in these litigation proceedings during the quarter ended June 30, 2013.

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Inventories

6 Months Ended

Jun. 30, 2013

Inventory Disclosure [Abstract]

Inventories

2. Inventories

Inventories consisted of the following:

	June 30,		December 31,
	2013		2012
Work-in-process	$	12,265	$	11,286
Finished goods		8,948		7,433
	$	21,213	$	18,719

XML

Description of Business and Significant Accounting Policies - Schedule of Amortized Cost to Fair Value of Short-Term Investments (Detail) (Quoted prices in active markets for identical assets (Level 1) [Member], USD $) In Thousands, unless otherwise specified	Jun. 30, 2013	Dec. 31, 2012
Quoted prices in active markets for identical assets (Level 1) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Amortized cost	$ 1,000	$ 2,000
Unrealized gains
Fair value	$ 1,000	$ 2,000

XML

Inventories (Tables)

6 Months Ended

Jun. 30, 2013

Inventory Disclosure [Abstract]

Schedule of Inventories

Inventories consisted of the following:

	June 30,		December 31,
	2013		2012
Work-in-process	$	12,265	$	11,286
Finished goods		8,948		7,433
	$	21,213	$	18,719

XML

Description of Business and Significant Accounting Policies - Schedule of Net Revenue by Geographic Area (Detail)	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Revenue, Major Customer [Line Items]
Net Revenue	100.00%	100.00%	100.00%	100.00%
Reportable Geographical Components [Member] | China [Member]
Revenue, Major Customer [Line Items]
Net Revenue	68.00%	69.00%	67.00%	66.00%
Reportable Geographical Components [Member] | Singapore [Member]
Revenue, Major Customer [Line Items]
Net Revenue	20.00%	25.00%	24.00%	27.00%
Reportable Geographical Components [Member] | United States [Member]
Revenue, Major Customer [Line Items]
Net Revenue	4.00%	1.00%	2.00%	1.00%
Reportable Geographical Components [Member] | Other [Member]
Revenue, Major Customer [Line Items]
Net Revenue	8.00%	5.00%	7.00%	6.00%

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Description of Business and Significant Accounting Policies - Schedule of Customers Directly Accounting for More Than 10% of Company's Net Revenue or Accounts Receivable (Detail)	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012	Dec. 31, 2012
Revenue, Major Customer [Line Items]
Net Revenue	100.00%	100.00%	100.00%	100.00%
Customer A [Member]
Revenue, Major Customer [Line Items]
Accounts Receivable	29.00%		29.00%		23.00%
Net Revenue	21.00%		20.00%
Customer B [Member]
Revenue, Major Customer [Line Items]
Accounts Receivable	20.00%		20.00%		28.00%
Net Revenue	18.00%	22.00%	21.00%	23.00%
Customer C [Member]
Revenue, Major Customer [Line Items]
Accounts Receivable	13.00%		13.00%		12.00%
Net Revenue	17.00%	26.00%	17.00%	26.00%
Customer D [Member]
Revenue, Major Customer [Line Items]
Accounts Receivable					10.00%
Net Revenue		15.00%		14.00%
Customer E [Member]
Revenue, Major Customer [Line Items]
Accounts Receivable
Net Revenue				10.00%

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Document and Entity Information	6 Months Ended
	Jun. 30, 2013	Jul. 31, 2013
Document Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2013
Document Fiscal Year Focus	2013
Document Fiscal Period Focus	Q2
Entity Registrant Name	VOLTERRA SEMICONDUCTOR CORP
Entity Central Index Key	0001050550
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		25,103,644

XML

Description of Business and Significant Accounting Policies - Schedule of Customers Directly Accounting for More Than 10% of Company's Net Revenue or Accounts Receivable (Parenthetical) (Detail)	6 Months Ended
	Jun. 30, 2013
Accounting Policies [Abstract]
Less than 10%	10.00%