Amendment No. 3 to Form S-1

(Address, including zip code, and telephone number, including area code, of Registrant’s principal executive offices)

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If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box. ¨

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨

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. (Check one):

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities, and we are not soliciting an offer to buy these securities, in any state where the offer or sale is not permitted.

This is the initial public offering of common stock by Beceem Communications Inc. We are offering shares of common stock. The estimated initial public offering price is between $ and $ per share.

We have applied to have our common stock listed on The NASDAQ Global Market under the symbol “BECM.”

Investing in our common stock involves risks. See “Risk Factors” beginning on page 9 of this prospectus.

We have granted the underwriters a 30-day option to purchase up to an additional shares from Beceem on the same terms and conditions set forth above if the underwriters sell more than shares of common stock in this offering.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

You should rely only on the information contained in this prospectus or in any free writing prospectus we may authorize to be delivered or made available to you. We have not, and the underwriters have not, authorized anyone to provide you with additional or different information. We are not, and the underwriters are not, making an offer to sell these securities in any jurisdiction where an offer or sale is not permitted. The information contained in this prospectus is accurate only as of the date of this prospectus, regardless of the time of delivery of this prospectus or any sale of shares of our common stock. Our business, financial condition, results of operations and prospects may have changed since that date.

Until , 2010, all dealers that buy, sell or trade shares of our common stock, whether or not participating in this offering, may be required to deliver a prospectus. This delivery requirement is in addition to the obligation of dealers to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions.

No action is being taken in any jurisdiction outside the United States to permit a public offering of our common stock or possession or distribution of this prospectus in that jurisdiction. Persons who come into possession of this prospectus in a jurisdiction outside the United States are required to inform themselves about, and to observe any restrictions as to, this offering and the distribution of this prospectus applicable to that jurisdiction.

In this prospectus, we refer to third-party information and statistics regarding the industries and the markets in which we compete.

The Gartner report referenced herein represents data, research opinion or viewpoints published, as part of a syndicated subscription service, by Gartner, Inc., or Gartner, and are not representations of fact. The Gartner report speaks as of its January 15, 2010 publication date and not as of the date of this prospectus.

PROSPECTUS SUMMARY

This summary highlights information contained elsewhere in this prospectus and does not contain all of the information that you should consider in making your investment decision. Before investing in our common stock, you should carefully read this entire prospectus, including our consolidated financial statements and the related notes and the information set forth under the headings “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” in each case included elsewhere in this prospectus.

Overview

We are a leading designer, developer and supplier of high-performance, highly-integrated and cost-effective 4G wireless semiconductor solutions for mobile broadband communications devices. We leverage our advanced wireless technology and system-level design expertise to enable original equipment manufacturers, or OEMs, and original design manufacturers, or ODMs, to provide highly differentiated 4G wireless solutions for mobile and fixed applications. Our semiconductor solutions incorporate proprietary signal processing techniques, algorithms and software to deliver industry-leading performance as measured by network throughput, signal reach and power consumption. Currently, WiMAX, or worldwide interoperability for microwave access, and LTE, or long term evolution, are commonly accepted as the 4G technologies. We refer to WiMAX as 4G-WiMAX and LTE as 4G-LTE. Since the first commercial shipments of our semiconductor solutions in 2005, we have shipped over 4 million 4G-WiMAX semiconductor solutions. In 2009, we shipped more than 2.5 million 4G-WiMAX semiconductor solutions, which solutions include our baseband chipset, and represented approximately 65% of the total WiMAX baseband chipset shipments in 2009 according to Techno Systems Research, or TSR, a Japanese market research firm. Based on volumes shipped and our market share in 2009, we believe that we are the leading supplier of 4G-WiMAX solutions. We are leveraging our experience with 4G-WiMAX by currently developing 4G-LTE semiconductor solutions, as we believe that market will provide additional growth opportunities.

We are a fabless semiconductor company that offers baseband and radio frequency, or RF, integrated circuits, complete reference designs and software solutions to enable our customers to quickly and easily integrate our 4G solutions into a wide variety of end user devices, including universal serial bus, or USB, dongles for mobile computers, modems, gateways, mobile routers, smartphones and other wireless mobile devices. Our semiconductor solutions are also used in a variety of industrial devices for machine-to-machine communication, smart grid meters and video surveillance devices.

Currently, our products are utilized in 4G-WiMAX networks globally, including those in Brazil, India, Japan, Korea, Malaysia, Mexico, Russia and the United States. According to the WiMAX Forum, as of June 2010, more than 590 4G-WiMAX networks have been deployed globally. In addition to the 4G-WiMAX networks deployed today, we expect 4G-LTE networks to be deployed globally as existing 3G networks are upgraded. Our recently announced BCS500 4G multi-protocol semiconductor solution will be designed to support both 4G-WiMAX and 4G-LTE and to enable seamless global roaming across different 4G networks. We believe that our ability to support both 4G-WiMAX and 4G-LTE in the same product will be a key differentiator for us as 4G-LTE networks develop and become more prevalent. We currently expect that the BCS500, our initial multi-protocol semiconductor solution, will be available for customer evaluation in early 2011 and expect that customers may order commercial quantities of our initial product for their production needs in late 2011.

Although we have not entered into formal terms or agreements with telecommunications operators, on an ongoing basis we discuss infrastructure plans and next generation product roadmaps and technical requirements with leading operators such as Clearwire Corporation, Sprint Nextel Corporation and UQ Communications Inc., telecom equipment manufacturers, or TEMs, such as Alvarion Ltd. and Motorola, Inc., and OEM and ODM customers such as Accton Wireless Broadband Corp., C-motech Co. Ltd., Gemtek Technology Co., Ltd., Motorola, NEC Access Technica, Ltd., or NEC AT, Novatel Wireless, Inc., Quanta Computer Incorporated, Sierra Wireless, Inc., Ubee Interactive Inc. and ZTE Corporation, to help ensure that our product roadmap meets the needs of our key customers and the operators. We received 63% of our revenue in 2009 from our top two

customers. Our total revenue increased from $13.9 million in 2007 to $43.7 million in 2009, and we became profitable in the fourth quarter of 2009, with total revenue of $20.9 million. During the same periods, our annual net loss decreased from $37.5 million in 2007 to $16.9 million in 2009. We received 70% and 50% of our revenue for the six months ended June 30, 2009 and 2010, from our top two customers and top three customers, respectively. Our total revenue increased from $10.7 million for the six months ended June 30, 2009 to $45.5 million during the same period in 2010. During the same periods, our net loss decreased from $12.2 million in 2009 to $10.2 million in 2010.

Industry Background

Two key trends are expected to drive growth in the global communications industry: the emergence of the mobile Internet which allows businesses and consumers high-speed wireless access to rich media content available on the Internet and the continued penetration of broadband access to the Internet in areas around the world where the existing infrastructure has not been able to provide cost-effective access.

The proliferation of rich media content and data-oriented mobile devices is driving a rapid increase in the amount of mobile data traffic. 4G-WiMAX and 4G-LTE have emerged as the next generation of mobile broadband communications standards to address the need for faster and higher capacity wireless networks. Both solutions utilize orthogonal frequency-division multiple access, or OFDMA, and multiple-input and multiple-output, or MIMO, and share similar core technologies in radio design, coding schemes and signal processing algorithms. Operators who have deployed 4G-WiMAX often include new market entrants or greenfield operators who are looking for competitive differentiation from the incumbent operators. Operators who will choose to deploy 4G-LTE networks will typically be incumbents that are looking to upgrade their existing 3G networks to 4G networks.

Wireless functionalities in mobile devices are provided primarily by semiconductor solutions. With the large number of wireless standards deployed around the world, the ability of a single semiconductor solution to handle multiple wireless networks and protocols has become a key differentiator as customers seek to reduce complexity and cost. However this process is inherently complex and in order to achieve long term success, wireless semiconductor providers must have a comprehensive understanding of carrier expectations and system requirements. In addition, wireless semiconductor providers must be able to implement 4G technologies while achieving functional integration and to develop innovative semiconductor architectures that deliver highly reliable performance in the field.

Our Solutions and Competitive Strengths

Our semiconductor solutions incorporate proprietary signal processing techniques, algorithms and software to enable our customers to provide highly differentiated 4G wireless solutions for mobile and fixed applications. Our current wireless broadband communications solutions are used in a variety of applications including fixed and mobile 4G-WiMAX end user devices. Our next generation products are designed to seamlessly support multiple wireless broadband communications protocols for a broad range of 4G-enabled devices. We believe our competitive strengths include:

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Market leadership in 4G semiconductor solutions. In 2009, we shipped more than 2.5 million 4G-WiMAX semiconductor solutions, which solutions include our baseband chipset, and represented approximately 65% of the total 4G-WiMAX baseband chipset shipments in 2009, according to TSR.

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Silicon mapping expertise in wireless communications and history of industry leadership. Developing semiconductor solutions involves the successful integration of system-level architecture, algorithms and software into silicon with functionalities that are compliant with industry standards. We have developed and commercially deployed five generations of our products, which we believe has given us significant expertise and leadership in the 4G wireless broadband communications industry.

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Key wireless broadband communications technologies expertise. We have extensive expertise in OFDMA and MIMO, the core technologies that enable the higher data rate and improved signal reach supported by next-generation wireless broadband devices.

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Key global relationships across the wireless broadband communications value chain with leading operators, TEMs and OEMs. We have established longstanding strategic relationships with leading operators, TEMs and OEMs in 4G wireless communications. We believe these relationships enable us to closely align our product roadmaps with market needs and the product roadmaps of our customers.

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System-level design expertise in wireless broadband communications. Through our strategic relationships with key operators, TEMs and OEMs, we have built extensive system-level design expertise in wireless broadband equipment and mobile devices. We believe this allows us to deliver targeted solutions that our customers can deploy rapidly and cost-effectively.

Our Growth Strategy

We intend to leverage our position as a leading global provider of wireless broadband solutions for both fixed and mobile applications in 4G-WiMAX into a leading position in the emerging multi-protocol 4G market in which we expect 4G-WiMAX and 4G-LTE to co-exist. Key elements of our growth strategy include:

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Leverage our technical expertise, strategic relationships and market share in 4G-WiMAX to expand our product platform to support 4G-LTE. We intend to use our technical expertise to provide a range of products for the 4G-WiMAX market. According to the In-Stat WiMAX chipset market forecast as of January 2010, the 4G-WiMAX semiconductor market is expected to grow from approximately 10 million units in 2010 to approximately 40 million units in 2013. In addition, we are planning to address the emerging 4G-LTE market opportunity, which we believe may provide additional growth opportunities in the future. For example, we recently announced plans to develop our BCS500 platform, and expect to sample products based on the platform in the fourth quarter of 2010. Products based on our BCS500 platform are being designed to support both 4G-WiMAX, including support for the IEEE 802.16m standard for mobile devices, and 4G-LTE protocols. We expect that these products will allow users to seamlessly access different 4G wireless networks and allow global roaming between 4G-WiMAX and 4G-LTE networks.

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Continue to innovate and deliver market-leading, differentiated solutions that are backwards-compatible with current wireless networks. We intend to continue to deliver highly-integrated and flexible solutions while decreasing size and power consumption. We are investing in intellectual property in order to integrate 3G-HSPA, or 3G high speed packet access, 2G-EDGE, or 2G global system for mobile communication-enhanced data GSM environment, and 4G-LTE functionalities into our products in anticipation of operators requiring multi-protocol and backwards-compatibility. We intend to combine this intellectual property with our anticipated dual-mode 4G-WiMAX and 4G-LTE platform to enable us to pursue significant incremental market opportunities that require multi-protocol and backwards-compatibility.

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Extend the markets for 4G technology. We intend to continue to work directly with network operators and TEMs globally to provide solutions that can reduce their infrastructure investment costs in under-penetrated markets. We are also supplying products used in a number of emerging applications using 4G technologies, including smart grids and machine-to-machine communication.

Risks Affecting Us

Our business is subject to numerous risks, which are highlighted in the section entitled “Risk Factors” immediately following this prospectus summary. These risks represent challenges to the successful implementation of our strategy and to the growth and future profitability of our business. Some of these risks are:

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We currently derive substantially all of our revenue from sales of our semiconductor solutions for the 4G-WiMAX market and therefore our business and operating results depend on the continued growth of this market;

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We intend to expand our product platform to support multiple 4G protocols, including the emerging 4G-LTE protocol and if this market does not develop, or develops more slowly than expected, or if we fail to accurately predict market requirements or demand for multi-protocol and backwards-compatibility, our business and operating results would suffer;

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We depend on the commercial deployment and upgrades of 4G wireless communications equipment, products and services to grow our business;

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We must successfully develop and sell new products and penetrate new markets, including the 4G-LTE market;

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We receive a substantial portion of our revenue from a limited number of customers, and the loss of, or a significant reduction in, orders from one or a few of our major customers would adversely affect our operations and financial condition;

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We will have difficulty selling our semiconductor solutions if our customers do not design our semiconductor solutions into their product offerings or if our customers’ product offerings are not commercially successful;

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We expect our operating results, including our revenue and expense levels, to fluctuate in the future, which make it difficult to predict our future operating results and could cause the market price of our common stock to decline; and

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We were established in 2003 and have not been profitable in any fiscal year since we were formed and may not achieve or sustain profitability in the future. We experienced a net loss of $37.5 million, $32.3 million and $16.9 million in 2007, 2008 and 2009, respectively, and $12.2 million and $10.2 million for the six months ended June 30, 2009 and 2010, respectively.

For further discussion of these and other risks you should consider before making an investment in our common stock, see the section entitled “Risk Factors” immediately following this prospectus summary.

Corporate Information

We were incorporated in Delaware in October 2003. Our principal executive offices are located at 3960 Freedom Circle, Floor 1, Santa Clara, CA 95054, and our telephone number is (408) 387-5000. Our web site address is www.beceem.com. The information on, or accessible through, our web site is not part of this prospectus. Unless the context requires otherwise, references in this prospectus to “Beceem,” “company,” “we,” “us” and “our” refer to Beceem Communications Inc. and its wholly-owned subsidiaries on a consolidated basis.

We use various trademarks and trade names, including without limitation “Beceem,” “Beceem Communications” and “Mobilizing Broadband.” This prospectus also includes other trademarks of Beceem Communications Inc. and trademarks of other persons that are the property of their respective holders.

THE OFFERING

Common stock offered by us

Common stock to be outstanding after this offering

Option to purchase additional shares offered by us

Use of proceeds

While we have not designated the use of the net proceeds from this offering for any specific purpose, we expect to use the net proceeds of this offering for working capital and other general corporate purposes, which may include sales and marketing expenditures, general and administrative expenditures, funding capital expenditures and research and development of new products. See “Use of Proceeds.”

Risk factors

You should read the “Risk Factors” section of this prospectus for a discussion of factors to consider carefully before deciding to invest in shares of our common stock.

NASDAQ Global Market symbol

“BECM”

The number of shares of common stock to be outstanding after this offering is based on 91,885,139 shares outstanding as of June 30, 2010, and excludes:

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20,064,365 shares of common stock issuable upon exercise of stock options outstanding as of June 30, 2010, at a weighted average exercise price of $0.69 per share;

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1,929,481 shares of common stock issuable upon exercise of warrants to purchase common stock outstanding as of June 30, 2010, at a weighted average exercise price of $1.26 per share; and

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31,767,804 shares of common stock reserved for issuance under our 2010 Equity Incentive Plan and our 2010 Employee Stock Purchase Plan, less options exercised under our 2003 Equity Incentive Plan, as well as any automatic increases in the number of shares of our common stock reserved for future issuance under these plans.

Except as otherwise indicated, all information in this prospectus assumes:

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the automatic conversion of each outstanding share of our Series A-1 and Series A-2 preferred stock into one share of common stock, upon completion of this offering;

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no exercise by the underwriters of their option to purchase up to an additional shares of common stock from us; and

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the filing of our amended and restated certificate of incorporation prior to completion of this offering.

SUMMARY CONSOLIDATED FINANCIAL DATA

The following tables summarize our summary consolidated statements of operations data for each of the years ended December 31, 2007, 2008 and 2009, and our summary consolidated balance sheet data as of June 30, 2010, which have been derived from our audited consolidated financial statements included elsewhere in this prospectus and our summary consolidated statements of operations data for the six months ended June 30, 2009 and 2010, which have been derived from our unaudited consolidated financial statements for the six months ended June 30, 2009 and 2010, included elsewhere in this prospectus. You should read this information together with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our audited and unaudited consolidated financial statements and related notes, each included elsewhere in this prospectus. Our historical results are not necessarily indicative of the results to be expected in any future period.

The pro forma net loss per common share data is computed using the weighted average number of shares of common stock outstanding, after giving effect to the conversion (using the if-converted method) of all shares of our mandatorily redeemable preferred stock into 75,636,792 shares of common stock and the conversion of 1,098,618 shares of mandatorily redeemable common stock into ordinary common stock, as though these transactions had occurred on January 1, 2009.


	Year Ended December 31,						Six Months Ended June 30, (Unaudited)
	2007		2008		2009		2009		2010
	(In thousands, except share and per share data)
Consolidated Statement of Operations Data:
Revenue:
Product revenue	$	5,958	$	7,577	$	40,955	$	8,793	$	45,013
Services and other revenue		7,942		6,308		2,698		1,884		500

Total revenue		13,900		13,885		43,653		10,677		45,513

Cost of revenue:
Cost of product revenue		3,116		4,383		21,821		5,749		25,009
Cost of services and other revenue		6,879		2,554		475		363		28

Total cost of revenue		9,995		6,937		22,296		6,112		25,037

Gross profit		3,905		6,948		21,357		4,565		20,476

Operating expenses:
Research and development		35,919		32,769		28,765		13,311		25,515
Sales, general and administrative		6,965		7,602		6,338		3,457		5,075

Total operating expenses		42,884		40,371		35,103		16,768		30,590

Loss from operations		(38,979)		(33,423)		(13,746)		(12,203)		(10,114)
Interest income (expense), net		2,087		398		118		81		(86)
Warrant revaluation income (expense)		(242)		808		(3,598)		(50)		432
Other income (expense), net		(204)		3		186		(45)		(348)

Total interest and other income (expense), net		1,641		1,209		(3,294)		(14)		(2)

Loss before income taxes		(37,338)		(32,214)		(17,040)		(12,217)		(10,116)
Provision (benefit) for income taxes		154		51		(119)		(6)		117

Net loss		(37,492)		(32,265)		(16,921)		(12,211)		(10,233)
Gain on exchange of mandatorily redeemable preferred stock in connection with recapitalization		—		—		57,434		57,434		—

Net income (loss) available to common and preferred stockholders	$	(37,492)	$	(32,265)	$	40,513	$	45,223	$	(10,233)

Net income (loss) per share attributable to common stockholders:
Basic (1)	$	(7.75)	$	(6.39)	$	0.59	$	0.97	$	(0.74)
Diluted (1)	$	(7.75)	$	(6.39)	$	0.52	$	0.97	$	(0.74)

Weighted-average number of shares used in computing net income (loss) per share attributable to common stockholders:
Basic (1)		4,836,139		5,045,811		7,847,304		7,894,816		13,778,488
Diluted (1)		4,836,139		5,045,811		16,057,962		8,218,427		13,778,488

Pro forma net loss per share attributable to common stockholders (unaudited):
Basic (1)					$	(0.20)			$	(0.11)
Diluted (1)					$	(0.20)			$	(0.11)

Pro forma weighted-average shares of common stock outstanding (unaudited):
Basic (1)						84,506,024				89,415,280
Diluted (1)						84,506,024				89,415,280

(1)	See Note 5 in the notes to our consolidated financial statements for an explanation of the method used to calculate basic and diluted net income (loss) per common share and unaudited pro forma basic and diluted net income per share.

Stock-based compensation expense included in the above line items was as follows:


	Year Ended December 31,						Six Months Ended June 30, (Unaudited)
	2007		2008		2009		2009		2010
	(In thousands)
Cost of revenue	$	237	$	58	$	62	$	35	$	38
Research and development		1,931		2,205		2,139		1,121		966
Sales, general and administrative		1,206		1,118		1,280		1,074		821

Total stock-based compensation	$	3,374	$	3,381	$	3,481	$	2,230	$	1,825

The following table sets forth our consolidated balance sheet data as of June 30, 2010:

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on an actual basis;

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on a pro forma basis to reflect (1) the conversion of all outstanding shares of our mandatorily redeemable preferred stock into 75,636,792 shares of common stock immediately prior to the completion of this offering, (2) exclusion of the gain on exchange of mandatorily redeemable preferred stock in connection with the recapitalization and (3) the conversion of 1,098,618 shares of mandatorily redeemable common stock to ordinary common stock; and

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on a pro forma as adjusted basis to reflect (1) the conversion of all outstanding shares of our mandatorily redeemable preferred stock into 75,636,792 shares of common stock immediately prior to the completion of this offering, (2) exclusion of the gain on exchange of mandatorily redeemable preferred stock in connection with the recapitalization, (3) the conversion of 1,098,618 shares of mandatorily redeemable common stock to ordinary common stock of this offering and (4) the sale of shares of common stock in this offering at an assumed initial public offering price of $ per share, the mid-point of the initial public offering price range reflected on the cover page of this prospectus, after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us.


	As of June 30, 2010
	Actual			Pro Forma		Pro Forma As Adjusted
	(In thousands)
	(Unaudited)
Consolidated Balance Sheet Data:
Cash, cash equivalents and restricted cash	$	11,974		$	11,974
Working capital		21,919			21,919
Total assets		43,289			43,289
Technology license obligations under capital lease		2,591			2,591
Warrants on mandatorily redeemable preferred stock and on mandatorily redeemable common stock		—			—
Total liabilities		21,029			21,029
Mandatorily redeemable preferred stock		26,076			—
Mandatorily redeemable common stock		3,195			—
Total stockholders’ equity (deficit)		(7,011	)		22,260

Investing in our common stock involves a high degree of risk. You should carefully consider the following risk factors, as well as the other information in this prospectus, before deciding whether to invest in shares of our common stock. The occurrence of any of the following risks, or other risks that are currently unknown or unforeseen by us, could harm our business, financial condition, results of operations or growth prospects. In that case, the trading price of our common stock could decline, and you may lose all or part of your investment.

We currently derive substantially all of our revenue from sales of our semiconductor solutions for the 4G-WiMAX market. If the 4G-WiMAX market declines, does not continue to grow or does not grow as expected, our business and operating results would suffer.

We currently derive substantially all of our revenue from the sale of our semiconductor solutions for the 4G-WiMAX market and expect to do so through at least 2011. If the 4G-WiMAX market declines, does not continue to grow or does not grow as expected, our business and operating results would suffer. In addition to the impact of factors unique to the 4G-WiMAX market and the impact of global economic factors, the 4G-WiMAX market is likely to be adversely impacted in anticipation of 4G-LTE deployments. If customers believe 4G-LTE deployments will provide the same coverage as 4G-WiMAX networks in the near future, customers may prefer to adopt 4G-LTE services and products instead of 4G-WiMAX, which in turn is likely to cause the 4G-WiMAX market to grow at a slower pace than expected, and cause our business, operating results and financial condition to be harmed.

We intend to expand our product platform to support multiple 4G protocols, including the emerging 4G-LTE protocol. If the 4G-LTE market does not develop or develops more slowly than expected, or if we fail to accurately predict market requirements or market demand for multi-protocol and backwards-compatible devices, our business and operating results would suffer.

We intend to expand our product platform to support multiple 4G protocols, including the emerging 4G-LTE protocol. If we fail to accurately predict market requirements or market demand for multi-protocol and backwards-compatible devices, or if our multi-protocol semiconductor solutions are not successfully developed or competitive in the industry, our business would suffer. We are currently investing significant resources to develop semiconductor solutions that can support both 4G-WiMAX and 4G-LTE and provide backwards-compatibility with, or the ability to work with, existing 2G and 3G networks. If 4G-LTE networks are deployed to a lesser extent or more slowly than we currently anticipate, or if other competing 4G protocols achieve greater market acceptance or operators do not migrate to 4G-LTE, we may not realize any benefits from this investment. As a result, our business, competitive position, market share and operating results would suffer.

We depend on the commercial deployment and upgrades of 4G wireless communications equipment, products and services to grow our business, and our business may be harmed if wireless network operators delay or are unsuccessful in the commercial deployment or upgrade of 4G technology or if they deploy other technologies.

We depend upon the commercial deployment and upgrades of 4G wireless communications equipment, products and services based on our technology. Although wireless network operators have commercially deployed 3G networks, we cannot predict the timing or success of further commercial deployments or expansions or upgrades of 3G networks. Deployment of new networks by carriers requires significant capital expenditures, well in advance of any revenue from such networks. In the past, operators have cancelled or delayed planned deployments of 4G networks. If existing deployments are not commercially successful or do not continue to grow their subscriber base, or if new commercial deployments of 4G networks are delayed or unsuccessful, our business and financial results may be harmed. During network deployment, operators often anticipate a certain rate of subscriber additions and in response, operators typically procure devices to satisfy the forecasted subscriber needs. If the deployment of new networks is not as widely adopted by users, the rate of subscriber

additions may be slower than expected, which will cause inventory build up from OEMs and ODMs. This in turn could negatively impact sales of our semiconductor solutions. A limited number of wireless operators have started testing 4G networks utilizing OFDMA and MIMO technology, but the timing and extent of 4G network deployments is uncertain, and we might not be successful in developing and marketing our semiconductor solutions targeting 4G markets.

If we are unsuccessful in developing and selling new products or in penetrating new markets, including the 4G-LTE market, our business and operating results would suffer.

The markets in which we and our customers compete or plan to compete are characterized by rapidly changing technologies and industry standards and technological obsolescence. Our ability to compete successfully depends on our ability to design, develop, manufacture, assemble, test, market and support new products and enhancements on a timely and cost effective basis. A fundamental shift in technologies in any of our target markets could harm our competitive position within these markets. Our failure to anticipate these shifts, to develop new technologies or to react to changes in existing technologies could materially delay our development of new products, which could result in product obsolescence, decreased revenue and a loss of design wins to our competitors. The development of new technologies and products generally require substantial investment before they are commercially viable. We intend to continue to make substantial investments in developing new technologies and products and it is possible that our development efforts will not be successful and that our new technologies and products will not result in meaningful revenue. For example, we currently invest significant resources to develop multi-protocol semiconductor solutions that can support both 4G-WiMAX and 4G-LTE and provide backwards-compatibility with existing 2G and 3G networks. If the semiconductor solutions we develop fail to meet market or customer requirements or do not achieve market acceptance, our operating results and competitive position would suffer.

The success of our new products will depend on accurate forecasts of long-term market demand, customer and consumer requirements and future technological developments, as well as on a variety of specific implementation factors, including:

If we fail to introduce new products that meet the demands of our customers or our target markets, or if we fail to penetrate new markets, our revenue will likely decrease over time and our financial condition could suffer.

We depend on a small number of customers for a significant portion of our revenue. If we fail to retain or expand customer relationships, our revenue could decline.

We derive a significant portion of our total revenue from a small number of customers, and we anticipate that we will continue to do so for the foreseeable future. These customers may decide not to purchase our semiconductor solutions at all, to purchase fewer semiconductor solutions than they did in the past or to alter their purchasing patterns in some other way.

In the six months ended June 30, 2010, Motorola, Uniquest and Ubee accounted for 18%, 19% and 13% of our total revenue, respectively. In 2009, Motorola and Uniquest Corporation accounted for 51% and 12% of our total revenue, respectively. In 2008, Motorola, NEC AT, ZTE and Accton accounted for 29%, 17%, 15% and 10% of our total revenue, respectively. In 2007, NEC AT, Motorola and Samsung Corporation accounted for 41%, 26% and 13% of our total revenue, respectively. We expect that these customers may continue to be significant customers in future periods. Some of our OEM customers are also ODM customers, which may increase the impact of the loss of any customer. We must obtain orders from new customers on an ongoing basis to increase our revenue and grow our business. Sales of our semiconductor solutions fluctuate from period to period due to seasonality of the semiconductor markets. We believe that sales will likely continue to fluctuate in the future as we enter into new markets. The loss of any significant customer, a significant reduction in sales we make to them in general or during any period, or any issues with collection of receivables from customers would likely harm our financial condition and results of operations.

If customers do not design our semiconductor solutions into their product offerings or if our customers’ product offerings are not commercially successful, we would have difficulty selling our semiconductor solutions and our business would suffer.

We sell our semiconductor solutions directly to OEMs who include our semiconductor solutions in their products, and to ODMs who include our semiconductor solutions in the products they supply to OEMs. Our semiconductor solutions are generally incorporated into our customers’ products at the design stage. As a result, we rely on OEMs to design our semiconductor solutions into the products they sell. Without these design wins, our business would be materially and adversely affected. We often incur significant expenditures on the development of a new semiconductor solution without any assurance that an OEM will select our semiconductor solution for design into its own product. Once an OEM designs a competitor’s semiconductor into its product offering, it becomes significantly more difficult for us to sell our semiconductor solutions to that customer because changing suppliers involves significant cost, time, effort and risk for the customer. Furthermore, even if an OEM designs one of our semiconductor solutions into its product offering, we cannot be assured that its product will be commercially successful and that we will receive any revenue from that OEM. If our customers’ products incorporating our semiconductor solutions fail to meet the demands of their customers or otherwise fail to achieve market acceptance, our revenue and business would suffer.

If demand for our semiconductor solutions declines or does not grow, we will be unable to increase or sustain our revenue and our business will be severely harmed.

We derive substantially all of our revenue from the sale of semiconductor solutions for wireless and mobile applications. We currently expect our semiconductor solutions for wireless and mobile applications to account for substantially all of our revenue for the foreseeable future. If we are unable to develop new products in a timely manner or demand for our semiconductor solutions declines as a result of competition or technological changes, it would have a material negative impact on our business, operating results and financial position and our competitive position. The markets for our semiconductor solutions are characterized by frequent introduction of next generation and new products, short product life cycles and significant price competition. If we or our customers are unable to manage product transitions in a timely and cost-effective manner, our business and results of operations would suffer. In addition, frequent technology changes and introduction of next generation products may result in inventory obsolescence, which could reduce our gross margins and adversely affect our operating performance.

If we are unable to compete effectively, we may not increase or maintain our revenue or market share.

We may not be able to compete successfully against current or potential competitors. If we do not compete successfully, our revenue and market share may decline. In the 4G-WiMAX market, we compete with large semiconductor manufacturers, such as Intel Corporation, MediaTek Inc. and Samsung Semiconductor, Inc., and start-up integrated circuit companies such as GCT Semiconductor, Inc. and Sequans Communications Inc. In the 4G-LTE market, we face competition from established semiconductor companies with expertise such as

Broadcom Corporation, Icera Inc., Infineon Technologies AG, Marvell Technology Group Ltd., Qualcomm Incorporated and ST-Ericsson Inc., as well as start-up companies such as Altair-Semiconductor, Inc. and Sequans. We may also face competition from OEMs that may build their own semiconductor solutions, such as LG Electronics Inc., Motorola, Nokia Corporation and Samsung Electronics Co. Ltd., as well as from TD-SCDMA, or time division-synchronous code division multiple access, chip suppliers.

Most of our current and potential competitors have longer operating histories, significantly greater resources and brand recognition and a larger base of customers than us. This may allow them to respond more quickly than us to new or emerging technologies or changes in customer requirements. In addition, these competitors may have greater credibility with our existing and potential customers. Moreover, our competitors have been doing business with customers for a longer period of time and have established relationships, which may provide them with information regarding future trends and requirements that may not be available to us. In addition, some of our larger competitors may be able to provide greater incentives to customers through rebates and marketing development funds and similar programs. Some of our competitors with multiple product lines may bundle their products to offer a broader product portfolio or integrate wireless functionality into other products that we do not sell, which may make it difficult for us to gain or maintain market share.

Our potential competitors may also establish cooperative relationships among themselves or with third parties or acquire companies that provide similar products to ours. As a result, new competitors or alliances may emerge that could acquire significant market share. In addition, future development efforts by our competitors could render our products obsolete. Any of these factors, alone or in combination with others, could harm our business and result in a loss of market share and an increase in pricing pressure.

Fluctuations in our operating results on a quarterly and annual basis could cause the market price of our common stock to decline.

Our revenue and operating results have fluctuated significantly from period to period in the past and are likely to do so in the future. As a result, you should not rely on period to period comparisons of our operating results as an indication of our future performance. In future periods, our revenue and results of operations may be below the expectations of analysts and investors, which could cause the market price of our common stock to decline.

Moreover, the semiconductor industry has historically been cyclical in nature, reflecting overall economic conditions as well as budgeting and buying patterns of consumers. We expect these cyclical conditions to continue. Our expense levels are relatively fixed in the short-term and are based, in part, on our expectations of future revenue. If revenue levels are below our expectations, we may experience declines in margins and profitability or incur a loss from our operations. As a result, our quarterly operating results are difficult to predict, even in the near term.

We have a history of losses, and we may not achieve or sustain profitability in the future, on a quarterly or annual basis.

We were established in 2003 and have incurred losses since inception. We experienced net losses of $37.5 million, $32.3 million and $16.9 million in 2007, 2008 and 2009, respectively, and $10.2 million in the six months ended June 30, 2010. As of June 30, 2010, our accumulated deficit was $83.2 million. We expect to incur significant expense related to the development of our products and expansion of our business, including research and development and sales and administrative expenses. As a public company, we will also incur significant legal, accounting and other expenses that we did not incur as a private company. Additionally, we may encounter unforeseen difficulties, complications, product delays and other unknown factors that require additional expense. As a result of these increased expenditures, we may have to generate and sustain substantially increased revenue to achieve profitability. Our revenue growth trends in prior periods may not be sustainable. Accordingly, we may not be able to achieve or maintain profitability and we may continue to incur significant losses in the future.

The average selling prices of semiconductor solutions in our markets have historically decreased over time and will likely do so in the future, which could harm our revenue and gross profits.

Average selling prices of semiconductor products in the markets we serve have historically decreased over time and we expect such declines to continue to occur for our products over time. Our gross profits and financial results will suffer if we are unable to offset reductions in our average selling prices by reducing our costs, developing new or enhanced semiconductor solutions on a timely basis with higher selling prices or gross profits, or increasing our sales volumes. Additionally, because we do not operate our own manufacturing, assembly or testing facilities, we may not be able to reduce our costs as rapidly as companies that operate their own facilities,

and our costs may even increase, which could also reduce our margins. We have reduced the prices of our semiconductor solutions in anticipation of future competitive pricing pressures, new product introductions by us or our competitors and other factors. We expect that we will have to do so again in the future.

If we do not sustain our growth rate, or if we are unable to manage any future growth, we may not be able to execute our business plan and our operating results could suffer.

We have experienced significant growth in a short period of time. Our total revenue increased from $13.9 million in 2007 to $43.7 million in 2009. We may not achieve similar growth rates in future periods. You should not rely on our revenue growth, gross margins or operating results for any prior quarterly or annual periods as an indication of our future operating performance. If we are unable to maintain adequate revenue growth, our financial results could suffer and our stock price could decline.

Our future operating results depend to a large extent on our ability to successfully manage any expansion and growth. To manage our growth successfully and handle the responsibilities of being a public company, we believe we must effectively, among other things:

We are increasing our investment in research and development, sales and marketing, general and administrative and other functions to grow our business. We are likely to incur the costs associated with these increased investments earlier than some of the anticipated benefits and the return on these investments, if any, may be lower, may develop more slowly than we expect, or may not materialize.

If we are unable to manage our growth effectively, we may not be able to take advantage of market opportunities or develop new products and we may fail to satisfy customer requirements, maintain product quality, execute our business plan or respond to competitive pressures.

We have a limited operating history and if we experience difficulty in managing our budget and expenses, it will be difficult for us to achieve or maintain profitability, which in turn could affect our stock price.

We were established in 2003. Our limited operating experience, the rapidly evolving market in which we sell our products, our dependence on a limited number of customers, as well as other factors make it difficult for us to forecast quarterly and annual revenue accurately. As a result, we could experience budgeting and cash flow management problems, unexpected fluctuations in our results of operations and other difficulties, any of which would make it difficult for us to gain and maintain profitability and could increase the volatility of the market price of our common stock.

Our customers may cancel their orders, change production quantities or delay production, and if we fail to forecast demand for our products accurately, we may incur product shortages, delays in product shipments or excess or insufficient product inventory.

We do not obtain firm, long-term purchase commitments from our customers. Substantially all of our sales are made on a purchase order basis which permits our customers to cancel, change or delay product purchase

commitments with little or no notice to us and without penalty. Because production lead times often exceed the amount of time required to fulfill orders, we often must build in advance of orders, relying on an imperfect demand forecast to project volumes and product mix. Our ability to accurately forecast demand can be adversely affected by a number of factors, including inaccurate forecasting by our customers, changes in market conditions, adverse changes in our product order mix and demand for our customers’ products. Even after an order is received, our customers may cancel these orders or request a decrease in production quantities. Any such cancellation or decrease subjects us to a number of risks, most notably that our projected sales will not materialize on schedule or at all, leading to unanticipated revenue shortfalls and excess or obsolete inventory which we may be unable to sell to other customers. Alternatively, if we are unable to project customer requirements accurately, we may not build enough semiconductor solutions, which could lead to delays in product shipments and lost sales opportunities in the near term, as well as force our customers to identify alternative sources, which could affect our ongoing relationships with these customers. We have in the past had customers significantly increase their requested production quantities with little or no advance notice. If we do not fulfill customer demands in a timely manner, our customers may cancel their orders and we may be subject to customer claims for cost of replacement. Either underestimating or overestimating demand would lead to insufficient, excess or obsolete inventory, which could harm our operating results, cash flow and financial condition, as well as our relationships with our customers.

Rapidly changing standards could make our semiconductor solutions obsolete, which would cause our operating results to suffer.

We design our semiconductor solutions to conform to standards set by industry standards bodies such as the Institute of Electrical and Electronics Engineers, Inc., or IEEE, and the 3^rd Generation Partnership Project, or 3GPP. We also depend on industry groups such as the WiMAX Forum to certify and maintain certification of our semiconductor solutions. If our customers adopt new or competing industry standards with which our semiconductor solutions are not compatible, or such industry groups fail to adopt standards with which our semiconductor solutions are compatible, our existing semiconductor solutions would become less desirable to our customers and our sales would suffer. The emergence of markets for our products is affected by a variety of factors beyond our control. In particular, our semiconductor solutions are designed to conform to current specific industry standards. Competing standards may emerge that are preferred by our customers, which could also reduce our sales and require us to make significant expenditures to develop new semiconductor solutions. Governments and foreign regulators may adopt standards with which our semiconductor solutions are not compatible, favor alternative technologies such as 4G-LTE, or adopt stringent regulations that would impair or make commercially unviable the deployment of our semiconductor solutions. In addition, existing standards may be challenged as infringing upon the intellectual property rights of other companies and may become obsolete.

The complexity of our semiconductor solutions could result in unforeseen delays or expenses from undetected defects, errors or bugs in hardware or software, which could reduce the market acceptance for our new semiconductor solutions, damage our reputation with current or prospective customers and adversely affect our operating costs.

Highly complex semiconductor solutions such as ours frequently contain defects, errors and bugs when they are first introduced or as new versions are released. We have in the past and may in the future experience these defects, errors and bugs. If any of our semiconductor solutions have reliability, quality, or compatibility problems, we may not be able to successfully correct these problems in a timely manner or at all. In addition, if any of our proprietary features contain defects, errors or bugs when first introduced or as new versions are released, we may be unable to correct these problems. Consequently, our reputation may be damaged and customers may be reluctant to buy our semiconductor solutions, which could harm our ability to retain existing customers and attract new customers and our financial results. In addition, these defects, errors or bugs could interrupt or delay sales to our customers. If any of these problems are not found until after we have commenced commercial production of a new semiconductor solution, we may be required to incur additional development costs and product recalls, repairs or replacement costs. These problems may also result in claims against us by our customers or others.

The loss of any of our key personnel could seriously harm our business, and our failure to attract or retain specialized technical, management or sales and marketing talent could impair our ability to grow our business.

We believe our future success will depend in large part upon our ability to attract, retain and motivate highly skilled management, engineering, sales and marketing personnel. The loss of any key employees or the inability to attract, retain or motivate qualified personnel, including engineers and sales and marketing personnel, could delay the development and introduction of and harm our ability to sell our semiconductor solutions. We believe that our future success is dependent on the contributions of Surendra Babu Mandava, our co-founder, President and Chief Executive Officer, and Arogyaswami Paulraj, our co-founder and Chief Technology Officer. All of our employees are at-will. The loss of the services of Mr. Mandava, Dr. Paulraj, other executive officers or certain other key personnel could materially and adversely affect our business, financial condition and results of operations. For example, if any of these individuals were to leave unexpectedly, we could face substantial difficulty in hiring qualified successors and could experience a loss in productivity during the search for any such successor and while any successor is integrated into our business and operations.

Our key technical and engineering personnel represent a significant asset and serve as the source of our technological and product innovations. We plan to recruit design and application engineers with expertise in wireless broadband communications technologies. We may not be successful in attracting, retaining and motivating sufficient numbers of technical and engineering personnel to support our anticipated growth.

In addition, to expand our customer base and increase sales to existing customers, we will need to hire additional qualified sales personnel. The competition for qualified marketing, sales, technical and engineering personnel in our industry, and particularly in the Silicon Valley, is very intense. If we are unable to hire, train and retain qualified marketing, sales, technical and engineering personnel in a timely manner, our ability to grow our business will be impaired. In addition, if we are unable to retain our existing sales personnel, our ability to maintain or grow our current level of revenue will be adversely affected.

We outsource our wafer fabrication, assembly, testing, warehousing and shipping operations to third parties, and if these parties fail to produce and deliver our products according to requested demands in specification, quantity, cost and time, our reputation, customer relationships and operating results could suffer.

We rely on third parties for substantially all of our manufacturing operations, including wafer fabrication, assembly, testing, warehousing and shipping. We rely on Taiwan Semiconductor Manufacturing Company Limited, or TSMC, to manufacture all of our wafers. We also rely on Advanced Semiconductor Engineering, Inc., or ASE, STATS ChipPAC Ltd., and United Test and Assembly Center Ltd., or UTAC, and other third-party assembly and test subcontractors to assemble, package and test our products. We further rely on JSI Logistics Corporation for logistics and storage. We depend on these parties to supply us with material of a requested quantity in a timely manner that meets our standards for yield, cost and manufacturing quality. We do not have any long-term supply agreements with our manufacturing suppliers. If one or more of these vendors terminates its relationship with us, or if we encounter any problems with our manufacturing supply chain, it could adversely impact our ability to ship our products to our customers on time and in the quantity required, which in turn could cause an unanticipated decline in our sales and possibly damage our customer relationships.

If our foundry vendor does not achieve satisfactory yields or quality, our reputation and customer relationships could be harmed.

The fabrication of chipsets is a complex and technically demanding process. Minor deviations in the manufacturing process can cause substantial decreases in yields, and in some cases, cause production to be suspended. Our foundry vendor could, from time to time, experience manufacturing defects and reduced manufacturing yields. Changes in manufacturing processes or the inadvertent use of defective or contaminated materials by our foundry vendor could result in lower than anticipated manufacturing yields or unacceptable

performance. Many of these problems are difficult to detect at an early stage of the manufacturing process and may be time consuming and expensive to correct. Poor yields from our foundry vendor, or defects, integration issues or other performance problems in our products could cause us significant customer relations and business reputation problems, harm our financial results and result in financial or other damages to our customers. Our customers could also seek damages from us for their losses. A product liability claim brought against us, even if unsuccessful, would likely be time consuming and costly to defend.

Our semiconductor solutions are manufactured at a limited number of locations. If we experience manufacturing problems at a particular location, we would be required to transfer manufacturing to a backup location or supplier. Converting or transferring manufacturing from a primary location or supplier to a backup fabrication facility could be expensive and could take one to two quarters. During such a transition, we would be required to meet customer demand from our then-existing inventory, as well as any partially finished goods that can be modified to the required product specifications. We do not seek to maintain sufficient inventory to address a lengthy transition period because we believe it is uneconomical to keep more than minimal inventory on hand. As a result, we may not be able to meet customer needs during such a transition, which could delay shipments, cause a production delay or stoppage for our customers, result in a decline in our sales and damage our customer relationships. In addition, a significant portion of our sales are to customers that practice just-in-time order management from their suppliers, which gives us a very limited amount of time in which to process and complete these orders. As a result, delays in our production or shipping by the parties to whom we outsource these functions could reduce our sales, damage our customer relationships and our reputation in the marketplace, any of which could harm our business, results of operations and financial condition.

Any increase in the manufacturing cost of our products could reduce our gross margins and operating profit.

The semiconductor business exhibits ongoing competitive pricing pressure from customers and competitors. Accordingly, any increase in the cost of our products, whether by adverse purchase price variances or adverse manufacturing cost variances, will reduce our gross margins and operating profit. We do not have any long-term supply agreements with our manufacturing suppliers and we typically negotiate pricing on a purchase order by purchase order basis. Consequently, we may not be able to obtain price reductions or anticipate or prevent future price increases from our suppliers. We cannot assure you that our foundry vendor will be able to deliver enough semiconductor wafers to us at reasonable prices. These and other related factors could impair our ability to meet our customers’ needs and have a material and adverse effect on our operating results.

We do not have long-term supply contracts with our third-party manufacturing vendors and they may allocate capacity to other customers and may not allocate sufficient capacity to us to meet future demands for our products.

We currently do not have long-term supply contracts with any of our third-party vendors. Therefore, they are not obligated to perform services or supply products to us for any specific period, in any specific quantities, or at any specific price, except as may be provided in a particular purchase order. Availability of foundry capacity has in the recent past been reduced due to strong demand. The ability of our foundry vendor to provide us with semiconductor products is limited by its available capacity and existing obligations. Foundry capacity may not be available when we need it or at reasonable prices. None of our third-party foundry or assembly and test vendors has provided contractual assurances to us that adequate capacity will be available to us to meet future demand for our products. Our foundry vendor and assembly and test vendors may allocate capacity to the production of other companies’ products while reducing deliveries to us on short notice. In particular, other customers that are larger and better financed than us or that have long-term agreements with our foundry vendor or assembly and test vendors may cause our foundry vendor or assembly and test vendors to reallocate capacity to those customers, decreasing the capacity available to us. We do not have long-term supply contracts with our third-party manufacturing vendors and if we enter into costly arrangements with suppliers that include nonrefundable deposits or loans in exchange for capacity commitments, commitments to purchase specified quantities over extended periods or investment in a foundry, our operating results could be harmed. We may not

be able to make any such arrangement in a timely fashion or at all, and any arrangements may be costly, reduce our financial flexibility, and not be on terms favorable to us. Moreover, if we are able to secure foundry capacity, we may be obligated to use all of that capacity or incur penalties. These penalties may be expensive and could harm our financial results. To date, we have not entered into such arrangements with our suppliers. If we need another foundry or assembly and test subcontractor because of increased demand, or the inability to obtain timely and adequate deliveries from our providers, we might not be able to cost-effectively and quickly retain other vendors to satisfy our requirements.

We may experience difficulties in transitioning to new wafer fabrication process technologies or in achieving higher levels of design integration, which may result in reduced manufacturing yields, delays in product deliveries and increased costs.

To remain competitive, we expect to continue to transition our semiconductor products to increasingly smaller geometries and to achieve higher levels of design integration. These ongoing efforts require us from time to time to modify the manufacturing processes for our products and to redesign some products, which in turn may result in delays in product deliveries. We periodically evaluate the benefits of migrating to new process technologies to reduce cost and improve performance. We may face difficulties, delays and increased expenses as we transition our products to new processes and potentially to new foundries. We depend on our relationship with TSMC and our subcontractors to transition to new processes successfully. We cannot assure you that TSMC or our subcontractors will be able to effectively manage the transition or that we will be able to maintain our relationship with TSMC or develop relationships with new foundries. If TSMC, any of our subcontractors or we experience significant delays in transitioning to smaller geometries or fail to efficiently implement transitions, we could experience reduced manufacturing yields, delays in product deliveries and increased costs, all of which could harm our relationships with our customers and our operating results. As new processes become more prevalent, we expect to continue to integrate greater levels of functionality, as well as end customer and third-party intellectual property, into our products. However, we may not be able to achieve higher levels of design integration or deliver new integrated products on a timely basis.

Our failure to protect our intellectual property rights adequately could impair our ability to compete effectively or to defend ourselves from litigation, which could harm our business, financial condition and results of operations.

We rely primarily on patent, copyright, trademark and trade secret laws, as well as confidentiality and non-disclosure agreements and other methods, to protect our proprietary technologies and know-how. We have 27 issued and allowed patents in the United States, 56 pending and 10 provisional patent applications in the United States, and 26 pending foreign patent applications. Even if the pending patent applications are granted, the rights granted to us may not be meaningful or provide us with any commercial advantage. For example, these patents could be opposed, contested, circumvented or designed around by our competitors or be declared invalid or unenforceable in judicial or administrative proceedings. The failure of our patents to adequately protect our technology might make it easier for our competitors to offer similar products or technologies. Our foreign patent protection is generally not as comprehensive as our U.S. patent protection and may not protect our intellectual property in some countries where our products are sold or may be sold in the future. Many U.S.-based companies have encountered substantial intellectual property infringement in foreign countries, including countries where we sell products. Even if foreign patents are granted, effective enforcement in foreign countries may not be available.

The legal standards relating to the validity, enforceability and scope of protection of intellectual property rights are uncertain and evolving. We cannot assure you that others will not develop or patent similar or superior technologies, products or services, or that our patents, trademarks and other intellectual property will not be challenged, invalidated or circumvented by others.

Unauthorized copying or other misappropriation of our proprietary technologies could enable third parties to benefit from our technologies without paying us for doing so, which could harm our business. Monitoring

unauthorized use of our intellectual property is difficult and costly. Although we are not aware of any unauthorized use of our intellectual property in the past, it is possible that unauthorized use of our intellectual property may have occurred or may occur without our knowledge. We cannot assure you that the steps we have taken will prevent unauthorized use of our intellectual property. Our failure to effectively protect our intellectual property could reduce the value of our technology in licensing arrangements or in cross-licensing negotiations. We may in the future need to initiate infringement claims or litigation. Litigation, whether we are a plaintiff or a defendant, can be expensive, time-consuming and may divert the efforts of our technical staff and managerial personnel, which could harm our business, whether or not such litigation results in a determination favorable to us. If we are unable to protect our proprietary rights or if third parties independently develop or gain access to our or similar technologies, our business, revenue, reputation and competitive position could be harmed.

Our failure to comply with obligations under open source licenses could require us to release our source code to the public or cease distribution of our products, which could harm our business, financial condition and results of operations.

Some of the software used with our products, as well as that of some of our customers, may be derived from so-called “open source” software that is generally made available to the public by its authors and/or other third parties. Such open source software is often made available to us under licenses, such as the GNU General Public License, which impose certain obligations on us in the event we were to make available derivative works of the open source software. These obligations may require us to make source code for the derivative works available to the public, and/or license such derivative works under a particular type of license, rather than the forms of license customarily used to protect our intellectual property. In addition, there is little or no legal precedent for interpreting the terms of certain of these open source licenses, including the determination of which works are subject to the terms of such licenses. While we believe we have complied with our obligations under the various applicable licenses for open source software, in the event the copyright holder of any open source software were to successfully establish in court that we had not complied with the terms of a license for a particular work, we could be required to release the source code of that work to the public and/or stop distribution of that work.

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

In addition, we intend to rely on certain 2G/3G signal processing technologies to provide backwards-compatibility functionalities in our future products. Any significant impairment of our intellectual property rights from any litigation we face could harm our business and our ability to compete.

Our customers could also become the target of litigation relating to the patent and other intellectual property rights of others. This could trigger technical support and indemnification obligations in some of our licenses or customer agreements. These obligations could result in substantial expenses, including the payment by us of costs and damages relating to claims of intellectual property infringement. In addition to the time and expense required for us to provide support or indemnification to our customers, any such litigation could disrupt the businesses of our customers, which in turn could hurt our relationships with our customers and cause the sale of our products to decrease. We cannot assure you that claims for indemnification will not be made or that if made, such claims would not have a material adverse effect on our business, operating results or financial conditions.

Any potential dispute involving our patents or other intellectual property could also include our industry partners and 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 licensees could also become the target of litigation, and certain customers have received notices of written offers from our competitors and others claiming to have patent rights in certain technology and inviting our customers to license this technology. Because we indemnify our customers for intellectual property claims made against them for products incorporating our technology, any litigation could trigger technical support and indemnification obligations in some of our license agreements, which could result in substantial expenses. In addition to the time and expense required for us to supply support or indemnification to our customers, any such litigation could severely disrupt or shut down the business of our customers, which in turn could hurt our relations with our customers and cause the sale of our proprietary technologies and products to decrease.

Some of our operations and a significant portion of our customers and contract manufacturers are located outside of the United States, which subjects us to additional risks, including increased complexity and costs of managing international operations and geopolitical instability.

We have research and development facilities and sales offices and we expect to continue to conduct business with companies that are located outside the United States, particularly in Asia and Europe. Even customers of ours that are based in the United States often use contract manufacturers based in Asia to manufacture their systems, and it is the contract manufacturers that purchase products directly from us. As a result of our international focus, we face numerous challenges, including:

Our third-party contractors are concentrated primarily in Taiwan, an area subject to earthquake and other risks. Any disruption to the operations of these contractors could cause significant delays in the production or shipment of our products.

Substantially all of our products are manufactured by third-party contractors located in Taiwan. The risk of an earthquake or tsunami in Taiwan and elsewhere in the Pacific Rim region is significant due to the proximity of major earthquake fault lines to the facilities of our foundry vendor and assembly and test subcontractors. For example, in December 2006 and June 2003, major earthquakes occurred in Taiwan. Although our third-party contractors did not suffer any significant damage as a result of these most recent earthquakes, the occurrence of additional earthquakes or other natural disasters could result in the disruption of our foundry vendor or assembly and test capacity. Any disruption resulting from such events could cause significant delays in the production or shipment of our products until we are able to shift our manufacturing, assembling or testing from the affected contractor to another third-party vendor. We may not be able to obtain alternate capacity on favorable terms, if at all.

If our operations are interrupted as a result of service downtime or interruptions, our business and reputation could suffer.

Our operations and those of our manufacturers are vulnerable to interruption by technical breakdowns, computer hardware and software malfunctions, software viruses, infrastructure failures, fire, earthquake, power loss, telecommunications failure, terrorist attacks, wars, Internet failures and other events beyond our control. Any disruption in our services or operations could harm our ability to perform our services effectively which in turn could result in a reduction in revenue or a claim for substantial damages against us, regardless of whether we are responsible for that failure. We rely on our computer equipment, database storage facilities and other office equipment, which are located primarily in the seismically active San Francisco Bay Area and Bangalore, India. If we suffer a significant database or network facility outage, our business could experience disruption until we fully implement our back-up systems.

We will be subject to additional regulatory compliance requirements, including section 404 of the Sarbanes-Oxley Act of 2002, as a result of becoming a public company, and our management has limited experience managing a public company.

We have never operated as a public company and will incur significant legal, accounting and other expenses that we did not incur as a private company. The individuals who constitute our management team have limited experience managing a publicly traded company, and limited experience complying with the increasingly complex and changing laws pertaining to public companies. Our management team and other personnel will need to devote a substantial amount of time to new compliance initiatives, and we may not successfully or efficiently manage our transition into a public company. We expect rules and regulations such as the Sarbanes-Oxley Act of 2002 to increase our legal and finance compliance costs and to make some activities more time-consuming and costly. We will need to hire a number of additional employees with public accounting and disclosure experience in order to meet our ongoing obligations as a public company. For example, Section 404 of the Sarbanes-Oxley Act of 2002 requires that our management report on, and our independent auditors attest to, the effectiveness of our internal control structure and procedures for financial reporting in our annual report on Form 10-K for the fiscal year ending December 31, 2011. Section 404 compliance may divert internal resources and will take a significant amount of time and effort to complete. We may not be able to successfully complete the procedures

and certification and attestation requirements of Section 404 by the time we will be required to do so. If we fail to do so, or if in the future our Chief Executive Officer, Chief Financial Officer or independent registered public accounting firm determines that our internal controls over financial reporting are not effective as defined under Section 404, we could be subject to sanctions or investigations by The NASDAQ Stock Market, the Securities and Exchange Commission, or the SEC, or other regulatory authorities. Furthermore, investor perceptions of our company may suffer, and this could cause a decline in the market price of our stock. Irrespective of compliance with Section 404, any failure of our internal controls could have a material adverse effect on our stated results of operations and harm our reputation. If we are unable to implement these changes effectively or efficiently, it could harm our operations, financial reporting or financial results and could result in an adverse opinion on internal controls from our independent auditors.

If we fail to maintain an effective system of internal controls, we may not be able to accurately report our financial results or prevent fraud.

Effective internal controls are necessary for us to provide reliable financial reports and effectively prevent fraud. Any inability to provide reliable financial reports or prevent fraud could harm our business. The Sarbanes-Oxley Act of 2002 requires management and our auditors to evaluate and assess the effectiveness of our internal control over financial reporting. We will be required to adhere to these requirements by the end of the year after the one in which we become a public company. These Sarbanes-Oxley Act requirements may be modified, supplemented or amended from time to time. Implementing these changes may take a significant amount of time and may require specific compliance training of our personnel. In the future, we may discover areas of our internal controls that need improvement. If our auditors or we discover a material weakness or significant deficiency, the disclosure of that fact, even if quickly remedied, could reduce the market’s confidence in our financial statements and harm our stock price. We may not be able to effectively and timely implement necessary control changes and employee training to ensure continued compliance with the Sarbanes-Oxley Act and other regulatory and reporting requirements. Our growth rate in 2009 presents challenges to maintain the internal control and disclosure control standards applicable to public companies. If we fail to maintain effective internal controls, we could be subject to regulatory scrutiny and sanctions and investors could lose confidence in the accuracy and completeness of our financial reports. We cannot assure you that we will be able to fully comply with the requirements of the Sarbanes-Oxley Act or that management or our auditors will conclude that our internal controls are effective in future periods.

If we fail to hire additional finance personnel or strengthen our financial reporting systems and infrastructure, we may not be able to timely and accurately report our financial results or comply with the requirements of being a public company, including compliance with the Sarbanes-Oxley Act, which in turn would significantly harm our reputation and our business.

We intend to hire additional accounting and finance personnel with technical accounting and financial reporting experience. In the interim, we continue to rely on consultants within our finance organization. Our Chief Financial Officer joined us in January 2010. Any inability to recruit and retain the finance personnel we require would have an adverse impact on our ability to accurately and timely prepare our financial statements. We may be unable to locate and hire qualified finance professionals with requisite technical and public company experience when and as needed. In addition, new employees will require time and training to learn our business and operating processes and procedures. If our finance and accounting organization is unable for any reason to respond adequately to the increased demands that will result from being a public company, the quality and timeliness of our financial reporting may suffer, which could result in the identification of material weaknesses in our internal control. Any consequences resulting from inaccuracies or delays in our reported financial statements could cause the trading price of our common stock to decline and could harm our business, operating results and financial condition.

If we fail to strengthen our financial reporting systems, infrastructure and internal control over financial reporting to meet the demands that will be placed upon us as a public company, including the requirements of the

Sarbanes-Oxley Act, we may be unable to report our financial results timely and accurately and prevent fraud. We expect to incur significant expense and devote substantial management effort toward ensuring compliance with Section 404.

Changes to financial accounting standards may affect our results of operations and could cause us to change our business practices.

We prepare our consolidated financial statements to conform to generally accepted accounting principles, or GAAP, in the United States. These accounting principles are subject to interpretation by the American Institute of Certified Public Accountants, the SEC and various bodies formed to interpret and create appropriate accounting rules and regulations. Changes in those accounting rules can have a significant effect on our financial results and may affect our reporting of transactions completed before a change is announced. Changes to those rules or the questioning of current practices may adversely affect our reported financial results or the way we conduct our business.

We cannot predict our future capital needs and we may not be able to obtain additional financing to fund our operations.

We may need to raise additional funds in the future. Any required additional financing may not be available on terms acceptable to us, or at all. If we raise additional funds by issuing equity securities or convertible debt, investors may experience significant dilution of their ownership interest, and the newly-issued securities may have rights senior to those of the holders of our common stock. If we raise additional funds by obtaining loans from third parties, the terms of those financing arrangements may include negative covenants or other restrictions on our business that could impair our operational flexibility, and would also require us to incur interest expense. If additional financing is not available when required or is not available on acceptable terms, we may have to scale back our operations or limit our production activities, and we may not be able to expand our business, develop or enhance our products, take advantage of business opportunities or respond to competitive pressures, which could result in lower revenue and reduce the competitiveness of our products.

The semiconductor and communications industries have historically experienced significant fluctuations with prolonged downturns, which could impact our operating results, financial condition and cash flows.

The semiconductor industry has historically exhibited cyclical behavior, which at various times has included significant downturns in customer demand. Because a significant portion of our expenses is fixed in the near term or is incurred in advance of anticipated sales, we may not be able to decrease our expenses rapidly enough to offset any unanticipated shortfall in revenue. If this situation were to occur, it could adversely affect our operating results, cash flow and financial condition. Furthermore, the semiconductor industry has periodically experienced periods of increased demand and production constraints. If this happens in the future, we may not be able to produce sufficient quantities of our products to meet the increased demand. We may also have difficulty in obtaining sufficient wafer, assembly and test resources from our subcontract manufacturers. Any factor adversely affecting the semiconductor industry in general, or the particular segments of the industry that our products target, may adversely affect our ability to generate revenue and could negatively impact our operating results.

The communications industry has, in the past, experienced pronounced downturns, and these cycles may continue in the future. A future decline in global economic conditions could have adverse, wide-ranging effects on demand for our products and for the products of our customers, particularly wireless communications equipment manufacturers or other members of the wireless industry, such as wireless network operators. Inflation, deflation and economic recessions that adversely affect the global economy and capital markets also adversely affect our customers and our end consumers. For example, our customers’ ability to purchase or pay

for our products and services, obtain financing and upgrade wireless networks could be adversely affected, which may lead to many networking equipment providers slowing their research and development activities, canceling or delaying new product development, reducing their inventories and taking a cautious approach to acquiring our products, which would have a significant negative impact on our business. If this situation were to occur, it could adversely affect our operating results, cash flow and financial condition. In the future, any of these trends may also cause our operating results to fluctuate significantly from year to year, which may increase the volatility of the price of our stock.

Changes in current laws or regulations or the imposition of new laws or regulations could impede the sale of our products or otherwise harm our business.

Wireless networks can only operate in the frequency bands, or spectrum, allowed by regulators and in accordance with rules governing how the spectrum can be used. The Federal Communications Commission, or the FCC, in the United States, as well as regulators in foreign countries, have broad jurisdiction over the allocation of frequency bands for wireless networks. We therefore rely on the FCC and international regulators to provide sufficient spectrum and usage rules. For example, countries such as China, India, Japan or Korea heavily regulate all aspects of their wireless communication industries, and may restrict spectrum allocation or usage. If further restrictions were to be imposed over the frequency range where our semiconductor solutions are designed to operate, we may have difficulty in selling our products in those regions. In addition, our semiconductor solutions operate in the 2 and 3 gigahertz, or GHz, band, which in some countries is also used by government and commercial services such as military and commercial aviation. The FCC and European regulators have traditionally protected government uses of the 2 and 3 GHz bands by setting power limits and indoor and outdoor designation and requiring that wireless local area networking devices not interfere with other users of the band such as government and civilian satellite services. Changes in current laws or regulations or the imposition of new laws and regulations in the United States or elsewhere regarding the allocation and usage of the 2 and 3 GHz band on us, our customers or the industries in which we operate may materially and adversely impact the sale of our products and our business, financial condition and results of operations.

The large amount of capital required to obtain radio frequency licenses, deploy and expand wireless networks and obtain new subscribers could slow the growth of the wireless communications industry and adversely affect our business.

Our growth is dependent upon the increased use of wireless communications services that utilize our technology. In order to provide wireless communications services, wireless operators must obtain rights to use specific radio frequencies. The allocation of frequencies is regulated in the United States and other countries throughout the world, and limited spectrum space is allocated to wireless communications services. Industry growth may be affected by the amount of capital required to obtain licenses to use new frequencies, deploy wireless networks to offer voice and data services, expand wireless networks to grow voice and data services; and obtain new subscribers. The significant cost of licenses, wireless networks and subscriber additions may slow the growth of the industry if wireless operators are unable to obtain or service the additional capital necessary to implement or expand 4G wireless networks. Our growth could be adversely affected if this occurs.

If our customers or the industries using wireless technology prefer to integrate wireless capability into other chips, we may not be able to compete effectively, we will lose customers, our revenue will decline and our business will be harmed.

We have adopted the strategy of maintaining wireless technology in our semiconductor solutions which is separate from functionality contained on other chips within a product. Our customers or the industries using wireless technology may prefer to integrate wireless capability into other products such as DSL modems, or determine that an integrated chip with multiple functionality results in products that perform better or are less expensive or more efficient to manufacture. If wireless functionality becomes commonly integrated with other functionality, the market for our semiconductor solutions may decline. Consequently, we may miss product

cycles in order to redesign our semiconductor solutions, and we may not be able to forge strategic relationships necessary to design and arrange for the production of semiconductor solutions that include multiple functionalities. If we miss product cycles or are unable to integrate multiple functionalities in our products, we will lose customers, our revenue will decline and our business will be harmed.

We may experience a decrease in market demand due to uncertain economic conditions in the United States and in international markets, which has been further exacerbated by the concerns of terrorism, war and social and political instability.

Economic growth in the United States and international markets has slowed significantly and the United States economy has recently been in a recession. The timing of a full economic recovery is uncertain. In addition, the terrorist attacks in the United States and turmoil in the Middle East have increased the uncertainty in the United States economy and may contribute to a decline in economic conditions, both domestically and internationally. Terrorist acts and similar events, or war in general, could contribute further to a slowdown of the market demand for goods and services, including demand for our products. If the economy declines as a result of the recent economic, political and social turmoil, or if there are further terrorist attacks in the United States or elsewhere, we may experience decreases in the demand for our products and services, which may harm our operating results.

If wireless devices pose safety risks, we may be subject to new regulations, and demand for our products and those of our licensees and customers may decrease.

Concerns over the effects of radio frequency emissions, even if unfounded, may have the effect of discouraging the use of wireless devices, which may decrease demand for our products and those of our licensees and customers. In recent years, the FCC and foreign regulatory agencies have updated the guidelines and methods they use for evaluating radio frequency emissions from radio equipment, including wireless phones and other wireless devices. In addition, interest groups have requested that the FCC investigate claims that wireless communications technologies pose health concerns and cause interference with airbags, hearing aids and medical devices. Concerns have also been expressed over the possibility of safety risks due to a lack of attention associated with the use of wireless devices while driving. Any legislation that may be adopted in response to these expressions of concern could reduce demand for our products and those of our licensees and customers in the United States as well as foreign countries.

There has been no prior trading market for our common stock, and an active trading market may not develop or be sustained following this offering.

Prior to this offering, there has been no public market for our common stock, and we cannot assure you that an active trading market will develop or be sustained after this offering. The initial public offering price will be negotiated between us and representatives of the underwriters and may not be indicative of the market price of our common stock after this offering.

The market price of our common stock may be volatile, which could cause the value of your investment to decline.

Prior to this offering, our common stock has not been traded in a public market. We cannot predict the extent to which a trading market will develop or how liquid that market might become. The initial public offering price may not be indicative of prices that will prevail in the trading market. The trading price of our common stock following this offering is therefore likely to be highly volatile and could be subject to wide fluctuations in price in response to various factors, some of which are beyond our control. These factors include:

In addition, the stock market in general, and the market for semiconductor and other technology companies in particular, have experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of those companies. These fluctuations may be even more pronounced in the trading market shortly following this offering. These broad market and industry factors may cause the market price of our common stock to decrease, regardless of our actual operating performance. These trading price fluctuations may also make it more difficult for us to use our common stock as a means to make acquisitions or to use options to purchase our common stock to attract and retain employees. If the market price of shares of our common stock after this offering does not exceed the initial public offering price, you may not realize any return on your investment in us and may lose some or all of your investment. In addition, in the past, following periods of volatility in the overall market and the market price of a company’s securities, securities class action litigation has often been instituted against these companies. This litigation, if instituted against us, could result in substantial costs and a diversion of our management’s attention and resources.

If securities analysts or industry analysts downgrade our stock, publish negative research or reports, or do not publish reports about our business, our stock price and trading volume could decline.

The trading market for our common stock will be influenced by the research and reports that industry or securities analysts publish about us, our business and our market. If one or more analysts adversely changes their recommendation regarding our stock or our competitors’ stock, our stock price would likely decline. If one or more analysts cease coverage of us or fail to regularly publish reports on us, we could lose visibility in the financial markets, which in turn could cause our stock price or trading volume to decline.

Purchasers in this offering will immediately experience substantial dilution in net tangible book value.

The initial public offering price of our common stock is substantially higher than the prices paid for our common stock in the past and higher than the book value of the shares we are offering. This is referred to as dilution. Accordingly, if you purchase common stock in the offering, you will incur immediate dilution of approximately $ per share in the net tangible book value per share from the price you pay for our common stock based on the assumed initial public offering price of $ per share. If the holders of outstanding stock options and warrants exercise those securities, you will incur additional dilution. In addition, we may raise additional capital through public or private equity or debt offerings, subject to market conditions. To the extent

that additional capital is raised through the sale of equity or convertible debt securities, the issuance could result in further dilution to our stockholders. For a further description of the dilution that you will experience immediately after this offering, see the section of this prospectus entitled “Dilution.”

The price of our stock could decrease as a result of shares being sold in the market after this offering.

Additional sales of our common stock in the public market after this offering, or the perception that these sales could occur, could cause the market price of our shares to decline. Upon the completion of this offering, we will have approximately shares of common stock outstanding, assuming no exercise of the underwriters’ option to purchase additional shares in this offering. All of the shares sold in this offering will be freely transferable without restriction or additional registration under the Securities Act of 1933, as amended. Our directors, officers and other existing security holders will be subject to lock-up agreements described under the caption “Shares Eligible for Future Sale.” Subject to the restrictions under Rule 144 under the Securities Act, these securities will be available for sale following the expiration of these lock-up agreements. These lock-up agreements expire 180 days after the date of this prospectus or in certain circumstances up to 214 days after the date of this prospectus. Approximately shares of our common stock will be eligible for resale under Rule 144 immediately upon the expiration of the applicable lock-up period. In addition, J.P. Morgan Securities Inc. and Barclays Capital Inc., as representatives of the underwriters, may also release shares subject to the lock-up prior to the expiration of the lock-up period at their discretion.

In addition, after this offering, the holders of approximately shares of common stock, including shares of common stock issuable upon conversion of our mandatorily redeemable preferred stock upon the completion of this offering, will be entitled to rights to cause us to register the sale of those shares under the Securities Act. Registration of these shares under the Securities Act would result in these shares becoming freely tradable without restriction under the Securities Act immediately upon the effectiveness of the registration.

We intend to file a registration statement under the Securities Act covering shares of common stock reserved for issuance under our stock plans. This registration statement is expected to be filed after the date of this prospectus and will automatically become effective upon filing. Accordingly, shares registered under this registration statement will be available for sale in the open market unless those shares are subject to vesting restrictions with us or the contractual restrictions described above.

A limited number of stockholders will have the ability to influence the outcome of director elections and other matters requiring stockholder approval.

After this offering, our directors and executive officers and their affiliates will beneficially own, in the aggregate, approximately % of our outstanding common stock, assuming no exercise of the underwriters’ option to purchase additional shares in this offering. These stockholders, if they acted together, could exert substantial influence over matters requiring approval by our stockholders, including electing directors, adopting new compensation plans and approving mergers, acquisitions or other business combination transactions. This concentration of ownership may discourage, delay or prevent a change of control of our company, which could deprive our stockholders of an opportunity to receive a premium for their stock as part of a sale of our company and might reduce our stock price. These actions may be taken even if they are opposed by our other stockholders, including those who purchase shares in this offering.

Management will have broad discretion over the use of proceeds from this offering.

The net proceeds from this offering will be used for working capital and other general corporate purposes. In addition, we may use a portion of the net proceeds to acquire or invest in complementary businesses or products or to obtain the right to use complementary technologies. We have not reserved or allocated specific amounts for these purposes, and we cannot specify with certainty how we will use the net proceeds. Accordingly,

our management will have considerable discretion in the application of the net proceeds, and you will not have the opportunity, as part of your investment decision, to assess whether the proceeds are being used appropriately. The net proceeds may be used for corporate purposes that do not increase our operating results or market value. Until the net proceeds are used, they may be placed in investments that do not produce income or that lose value.

Delaware law and our amended and restated certificate of incorporation and bylaws contain provisions that could delay or discourage takeover attempts that stockholders may consider favorable.

Provisions in our amended and restated certificate of incorporation and bylaws, as they will be in effect upon the completion of this offering, may have the effect of delaying or preventing a change of control or changes in our management. These provisions include the following:

In addition, because we are incorporated in Delaware, we are governed by the provisions of Section 203 of the Delaware General Corporation Law. These provisions may prohibit large stockholders, particularly those owning 15% or more of our outstanding voting stock, from merging or combining with us. These provisions in our amended and restated certificate of incorporation and bylaws and under Delaware law could discourage potential takeover attempts and could reduce the price that investors might be willing to pay for shares of our common stock in the future and could result in our market price being lower than if it would without these provisions.

We do not intend to pay dividends on our common stock and, consequently, your ability to achieve a return on your investment will depend on appreciation in the price of our common stock.

We do not intend to declare and pay dividends on our capital stock for the foreseeable future. We currently intend to invest our future earnings, if any, to fund our growth. Additionally, the terms of our credit facility restrict our ability to pay dividends. Therefore, you are not likely to receive any dividends on your common stock for the foreseeable future and the success of an investment in shares of our common stock will depend upon any future appreciation in their value. There is no guarantee that shares of our common stock will appreciate in value or even maintain the price at which our stockholders have purchased their shares.

This prospectus, particularly the sections entitled “Prospectus Summary,” “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Business,” contains forward-looking statements. All statements other than present and historical facts and conditions contained in this prospectus, including statements regarding our future results of operations and financial positions, business strategy, plans and our objectives for future operations, are forward looking statements. When used in this prospectus the words “anticipate,” “objective,” “may,” “might,” “should,” “could,” “can,” “intend,” “expect,” “believe,” “estimate,” “predict,” “potential,” “plan,” “is designed to” or the negative of these and similar expressions identify forward-looking statements. Forward-looking statements include, but are not limited to, statements about:

These statements reflect our current views with respect to future events and are based on assumptions and subject to risk and uncertainties. We operate in a very competitive and rapidly changing environment. New risks emerge from time to time. Given these risks and uncertainties, you should not place undue reliance on these forward-looking statements. While we believe our plans, intentions and expectations reflected in those forward-looking statements are reasonable, we cannot assure you that these plans, intentions or expectations will be achieved. Our actual results, performance or achievements could differ materially from those contemplated, expressed or implied by the forward-looking statements contained in this prospectus, including those under the heading “Risk Factors.”

All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the cautionary statements set forth in this prospectus. Other than as required by applicable securities laws, we are under no obligation to update any forward-looking statement, whether as result of new information, future events or otherwise.

We estimate that our net proceeds from the sale of the common stock that we are offering will be $ million, assuming an initial public offering price of $ per share (the mid-point of the initial public offering price range listed on the cover page of this prospectus), after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us. If the underwriters’ option to purchase additional shares from us is exercised in full, we estimate that our net proceeds would be approximately $ million after deducting estimated underwriting discounts and commission. A $1.00 increase (decrease) in the assumed initial public offering price of $ per share would increase (decrease) the net proceeds to us from this offering by $ million, assuming the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same. We may also increase or decrease the number of shares we are offering. Each increase (decrease) of 1,000,000 shares in the number of shares offered by us would increase (decrease) the net proceeds to us from this offering by approximately $ million, assuming that the assumed initial public offering price remains the same, and after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us. We do not expect that a change in the offering price or the number of shares by these amounts would have a material effect on our uses of the net proceeds from this offering, although it may impact when we may need to seek additional capital.

While we have not designated the use of the net proceeds to us from this offering for any specific purpose, we expect that we will use these proceeds for working capital and other general corporate purposes, which may include sales and marketing expenditures, general and administrative expenditures, funding capital expenditures and research and development of new products. We may also use a portion of the net proceeds of this offering to expand our current business through acquisitions of, or investments in, other complementary businesses, products or technologies. However, we have no agreements or commitments with respect to any acquisitions at this time.

The expected use of net proceeds of this offering represents our current intentions based upon our present plans and business conditions. The amounts we actually expend in these areas will depend upon a number of factors, including future sales growth, success of our engineering efforts, cash generated from future operations, if any, and actual expenses to operate our business. As of the date of this prospectus, we cannot specify with certainty all of the particular uses for the net proceeds to be received upon the completion of this offering. Accordingly, our management will have broad discretion in the application of the net proceeds, and investors will be relying on the judgment of our management regarding the application of the net proceeds of this offering.

The amount and timing of our expenditures will depend on several factors, including the amount and timing of our spending on sales and marketing activities and research and development activities, as well as our use of cash for other corporate activities. Pending the uses described above, we intend to invest the net proceeds in a variety of capital preservation instruments, including short-term, interest-bearing, investment grade instruments, certificates of deposit or direct or guaranteed obligations of the U.S. government.

We have never declared or paid cash dividends on our capital stock. Under our loan and security agreement, we may not pay dividends without the prior written consent of Silicon Valley Bank. We currently intend to retain all available funds and any future earnings to support our operations and finance the growth and development of our business. We do not intend to pay cash dividends on our common stock for the foreseeable future. Any future determination related to our dividend policy will be made at the discretion of our board of directors.

You should read this table together with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our audited and unaudited consolidated financial statements and the related notes appearing elsewhere in this prospectus.

Each $1.00 increase (decrease) in the assumed public offering price of $ per share, the mid-point of the initial public offering price range reflected on the cover page of this prospectus, would increase (decrease) each of cash and cash equivalents, additional paid-in capital, total stockholders’ equity and total capitalization by

approximately $ , assuming that the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same, and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us. We may also increase or decrease the number of shares we are offering. Each increase (decrease) of 1,000,000 shares in the number of shares offered by us would increase (decrease) each of cash and cash equivalents, additional paid-in capital, total stockholders’ equity and total capitalization by approximately $ , assuming that the assumed initial public offering price remains the same, and after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us. The as adjusted information discussed above is illustrative only and will adjust based on the actual initial public offering price and other terms of this offering determined at pricing.

If you invest in our common stock in this offering, your interest will be diluted to the extent of the difference between the initial public offering price per share of our common stock and the pro forma as adjusted net tangible book value per share of our common stock after this offering. As of June 30, 2010, our pro forma net tangible book value was $ million, or $ per share of common stock. Our pro forma net tangible book value per share represents the amount of our total tangible assets reduced by the amount of our total liabilities and divided by the total number of shares of our common stock outstanding as of June 30, 2010, after giving effect to the conversion of our mandatorily redeemable preferred stock into 75,636,792 shares of common stock and the conversion of 1,098,618 shares of mandatorily redeemable common stock into ordinary common stock.

After giving effect to our sale in this offering of shares of our common stock at the assumed initial public offering price of $ per share, the mid-point of the initial public offering price range reflected on the cover page of this prospectus, and after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us, our pro forma net tangible book value as of June 30, 2010 would have been $ million, or $ per share of our common stock. This represents an immediate increase of net tangible book value of $ per share to our existing stockholders and an immediate dilution of $ per share to investors purchasing common shares in this offering. The following table illustrates this per share dilution:

Each $1.00 increase (decrease) in the assumed initial public offering price of $ per share would increase (decrease) our pro forma as adjusted net tangible book value by $ , or $ per share, and the pro forma as adjusted dilution per share to investors in this offering by $ per share, assuming that the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same, and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us. We may also increase or decrease the number of shares we are offering. An increase of 1,000,000 shares in the number of shares offered by us would increase our pro forma as adjusted net tangible book value by approximately $ , or $ per share, and the pro forma as adjusted dilution per share to investors in this offering would be $ per share, assuming that the assumed initial public offering price remains the same, and after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us. Similarly, a decrease of 1,000,000 shares in the number of shares offered by us would decrease our pro forma as adjusted net tangible book value by approximately $ , or $ per share, and the pro forma as adjusted dilution per share to investors in this offering would be $ per share, assuming that the assumed initial public offering price remains the same, and after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us. The pro forma as adjusted information discussed above is illustrative only and will adjust based on the actual initial public offering price and other terms of this offering determined at pricing.

If the underwriters exercise their option to purchase additional shares of our common stock in full in this offering, the pro forma as adjusted net tangible book value will increase to $ per share, representing an immediate increase to existing stockholders of $ per share and an immediate dilution of $ per share to new investors purchasing shares in this offering. If any shares are issued upon the exercise of outstanding stock options or warrants you will experience further dilution.

The following table summarizes, on a pro forma basis as of June 30, 2010, the differences between the number of shares of common stock purchased from us, after giving effect to the conversion of all outstanding shares of our mandatorily redeemable preferred stock into 75,636,792 shares of common stock, exclusion of the gain on exchange of mandatorily redeemable preferred stock in connection with the recapitalization and the conversion of 1,098,618 shares of mandatorily redeemable common stock into ordinary common stock, and by our new investors purchasing common stock in this offering at the assumed initial public offering price of $ per share, before deducting the underwriting discounts and commissions and estimated offering expenses payable by us:

If the underwriters exercise their option to purchase additional shares of our common stock in full, our existing stockholders would own % and our new investors would own % of the total number of shares of our common stock outstanding upon completion of this offering. The total consideration paid by our existing stockholders would be approximately $ million, or %, and the total consideration paid by our new investors would be $ million, or %.

The above discussion and tables also assume no exercise of any outstanding stock options or warrants except as set forth above. As of June 30, 2010, there were:

If all of these stock options and warrants were exercised, then our existing stockholders, including the holders of these options and warrants, would own % and our new investors would own % of the total number of shares of our common stock outstanding upon completion of this offering. The total consideration paid by our existing stockholders, including the holders of these stock options and warrants, would be approximately $150,441,373, or %, and the total consideration paid by our new investors would be $ million, or %. The average price per share paid by our existing stockholders would be $1.32 and the average price per share paid by our new investors would be $ .

The following selected consolidated financial data should be read together with our consolidated financial statements, the related notes thereto and the section “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in this prospectus.

We derived the consolidated statements of operations data for the years ended December 31, 2007, 2008 and 2009 and the consolidated balance sheet data as of December 31, 2008 and 2009 from our audited consolidated financial statements included elsewhere in this prospectus. The consolidated statements of operations data for the six months ended June 30, 2009 and 2010, and the consolidated balance sheet data as of June 30, 2010, are derived from our unaudited consolidated financial statements, which are included in this prospectus. The consolidated statements of operations data for the years ended December 31, 2005 and 2006, and the consolidated balance sheet data as of December 31, 2005, 2006 and 2007 are derived from our audited consolidated financial statements, which are not included in this prospectus. Our historical results are not necessarily indicative of our future results.

Stock-based compensation expense included in the above line items was as follows:

The following discussion and analysis of our financial condition and results of operations should be read together with the “Selected Consolidated Financial Data” and our consolidated financial statements and related notes thereto included in this prospectus. In addition to historical information, this discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of certain factors. We discuss factors that we believe could cause or contribute to these differences below and elsewhere in this prospectus, including those set forth under the sections “Risk Factors” and “Special Note Regarding Forward-Looking Statements.”

We are a fabless semiconductor company that offers baseband and radio frequency, or RF, integrated circuits, complete reference designs and software solutions to enable our customers to quickly and easily integrate our 4G solutions into a wide variety of end user devices, including universal serial bus, or USB, dongles, mobile computers, modems, gateways, mobile routers, smartphones and other wireless mobile devices, which we refer to as end user devices. Our semiconductor solutions are also used in a variety of industrial devices for machine-to-machine communication, smart grid meters and video surveillance devices.

We intend to use our technical expertise to provide a range of products for the 4G-WiMAX market. According to the In-Stat WiMAX chipset market forecast as of January 2010, the 4G-WiMAX semiconductor market is expected to grow from approximately 10 million units in 2010 to approximately 40 million units in 2013. In addition, we are planning to address the emerging 4G-LTE market opportunity, which we believe may provide additional growth opportunities in the future. For example, we recently announced plans to develop our BCS500 platform, and currently expect to sample products based on the platform in early 2011. Products based on our BCS500 platform are being designed to support both 4G-WiMAX, including support for the IEEE 802.16m standard for mobile devices, and 4G-LTE protocols. We expect that these products will allow users to seamlessly access different 4G wireless networks and allow global roaming between 4G-WiMAX and 4G-LTE networks. In addition, we expect existing 3G operators that deploy 4G-LTE, to require backwards-compatibility to ensure that devices work seamlessly across existing 2G and 3G networks and emerging 4G-LTE networks. In the first quarter of 2010, we licensed intellectual property in order to integrate 3G-HSPA and 2G-EDGE functionalities into our products. We intend to combine this intellectual property with our anticipated dual-mode 4G-WiMAX and 4G-LTE platform to enable us to pursue additional market opportunities that require backwards-compatibility. If we fail to accurately predict market requirements or market demand for multi-protocol and backwards-compatible devices, or if our semiconductor solutions are not successfully developed or competitive in the industry, our business and operating results would suffer.

Our sales and marketing strategy is to achieve design wins with and sell to leading OEMs and ODMs and achieve mass deployment of our solutions with operators worldwide. This requires an understanding of the entire wireless communications value chain which consists of standards bodies, operators, telecom equipment manufacturers, or TEMs, value-added resellers, or VARs, system integrators, or SIs, OEMs, ODMs and semiconductor solutions providers. We sell our semiconductor solutions directly to OEMs, who include our semiconductor solutions in their products, and to ODMs, who include our semiconductor solutions in the products they supply to OEMs. Some of our OEM customers also use contract manufacturers for volume production. Our OEM and ODM customers include our semiconductor solutions in mobile devices sold to major operators. Some operators also source mobile devices from VARs or SIs, who provide localization and support capabilities to the product. TEMs sell wireless base stations and broadband infrastructure equipment to operators, and devices must be compatible with their base stations to access their networks. We believe our established collaborative relationships allow our customers to achieve faster time-to-market with their products, which accelerates the proliferation of our solutions.

We currently have more than 30 customers worldwide. During the quarter ended December 31, 2009, we shipped on average more than 75,000 units per week. Our customers include manufacturers who sell mobile- and fixed-WiMAX wireless broadband products for use primarily with global telecommunications carriers’ new 4G networks. During the year ended December 31, 2009, we generated total revenue of $43.7 million as compared to total revenue of $13.9 million in the year ended December 31, 2008. During the six months ended June 30, 2010, we generated total revenue of $45.5 million as compared to total revenue of $10.7 million for the same period in 2009.

Our sales cycles typically take 12 to 18 months to complete, and often require significant expenditures on the development of a new semiconductor solution before realization of revenue from product sales, if at all. Our long sales cycles mean that our service providers’ and ODM and OEM customers’ product selections, once made, are normally difficult to change. Our semiconductor solutions are generally incorporated into our customers’ products at the design stage. Once our semiconductor is designed into an OEM customer’s product offering, it becomes more difficult for a competitor to sell its semiconductor solutions to that customer because changing suppliers involves significant cost, time, effort and risk for the customer.

We derive a significant portion of our revenue from a small number of customers, and we anticipate that we will continue to do so for the foreseeable future. In 2009, Motorola and Uniquest each accounted for over 10% of our total revenue, respectively. In 2008, Motorola, NEC AT, ZTE and Accton each accounted for over 10% of our total revenue, respectively. In 2007, NEC AT, Motorola and Samsung each accounted for over 10% of our total revenue, respectively. We expect that these customers may continue to be significant customers in future periods. Our customers based in the United States often use contract manufacturers based in Asia to manufacture their products and these contract manufacturers purchase semiconductor solutions directly from us. As of December 31, 2009, over 50% of our total revenue was derived from one end customer based in the United States. In 2007 and 2008, 27% and 29%, respectively, of our total revenue was derived from one end customer in the United States. Looking forward, from 2009 levels, we expect that the percentage of revenue derived from this one end customer will decrease as a percentage of total sales. Our customers sell mobile devices incorporating our semiconductor solutions globally. Substantially all of our sales are made on a purchase order basis. For a geographical breakdown of revenue based on the billing location of our customers, see Note 11 to our consolidated financial statements included elsewhere in this prospectus.

Substantially all of our products are manufactured by third-party contractors located in Asia. We rely on TSMC to manufacture all of our semiconductor wafers. We also rely on other third-party assembly and test subcontractors to assemble, package and test our products and on JSI Logistics for logistics and storage. We do not have long-term agreements with our manufacturing suppliers. A significant disruption in the operations of these contractors may impact the production of our products for a substantial period of time, which could have a material adverse effect on our business, financial condition and results of operations. In addition, a significant portion of our research and development activities are conducted in India.

We derive substantially all of our product revenue from the sale of semiconductor solutions for wireless and mobile applications and we currently expect to do so for the foreseeable future. Product revenue is achieved through sales both directly to our end customers and indirectly through distributors. Our end customers consist primarily of mobile and fixed wireless broadband hardware manufacturers. We provide volume-based rebates to certain end customers and record reductions to revenue for such rebates at the time the related revenue is recognized. Such rebates totaled $0.6 million for the year ended December 31, 2009, and $2.2 million for the six months ended June 30, 2010. There were no rebates for the years ended December 31, 2007 and 2008, and for the six months ended June 30, 2009.

Services and other revenue consists of revenue from interoperability testing services, or IOT, nonrecurring engineering, or NRE, services, and the sale of software licenses and the associated customer support. IOT is testing of the compatibility of our products with our customers’ hardware and software. NRE services typically involve our engineers performing testing in our labs and traveling to the sites of our customers to collaborate on solutions. We also license software that provides programming accessibility to our semiconductors to customize their use with our customers’ products. As our products become more pervasive in the market, our customers will be more likely to develop their own software tools; therefore we expect that our services and other revenue will decline in future periods as a percentage of our total revenue. To date, all of our revenue has been denominated in U.S. dollars.

A significant portion of our cost of product revenue consists of the cost of purchased wafers and assembly and test services. Cost of product revenue is impacted by manufacturing variances such as cost and yield for assembly and test operations, test time, package type and package cost. To a lesser extent, cost of product revenue includes expenses relating to the cost of shipping and logistics, royalties, personnel costs, including stock-based compensation costs, inventory valuation provisions for excess inventory and warranty costs. We typically experience lower yields and higher associated costs in the earlier periods of the lives of our products. Our historical experience has been that over the life cycle of a particular product, the cost of product revenue as a percentage of total revenue has typically declined as a result of decreases in wafer costs. The decrease in cost generally results from increase in the volume of wafers purchased, as well as yield improvements and assembly and test enhancements.

We use third-party foundry, assembly and test subcontractors, which are primarily located in Asia, to manufacture, assemble and test our semiconductor products, respectively. We purchase processed wafers on a per wafer basis from our fabrication supplier, currently TSMC. We also outsource the sorting, assembly, packaging and other processing of our product to third-party contractors, primarily ASE, STATS ChipPAC and UTAC. Our obligations with third-party contractors related to wafer fabrication are generally negotiated on a purchase order basis and obligations related to our other third-party contractors are generally on a bi-monthly basis.

Cost of services and other revenue consists primarily of personnel and travel costs of employees and subcontractors related to IOT, NRE and customer support services.

Our gross profit has been and will continue to be affected by a variety of factors, including changes in the average selling prices of our products, changes in volume of purchased wafers, changes in our purchase price of

fabricated wafers and assembly and test service costs, provision for inventory valuation charges, timing and changes in assembly and test yields. Overall product margin is impacted by product mix. We expect our gross profit will fluctuate over time depending upon the level of competitive pricing pressures, the timing with which we are able to introduce new products and our ability to benefit from reductions in manufacturing costs of existing products.

Services and other gross profit can vary widely based on the mix and types of services that we provide to our customers. In the past, we have provided NRE services at a loss as the services would allow our customers to initiate or expand their purchase of our products. Going forward, we expect services and other gross profit to become a smaller component of overall gross profit as we focus on increasing product sales.

Research and development expense consists primarily of personnel costs for our engineers engaged in design and development of our products and technologies, including stock-based compensation. These expenses include licensing costs of intellectual property acquired from others for use in our products, product development costs which include engineering services, development software and hardware tools, cost of fabrication of mask sets for prototype products, depreciation and facilities expenses.

We expect research and development expense to increase in absolute dollars as we enhance and expand our product features and offerings. For example, in March 2010, we entered into a technology licensing agreement with a third party to purchase $9.5 million in software licenses and intellectual property related to the integration of 3G-HSPA and 2G-EDGE functionalities into our products. Other than the increase in the first quarter of 2010 as the result of this license, we expect research and development expense in 2010 to increase over time due to our customers’ needs.

Sales, general and administrative expense consists primarily of personnel costs and stock-based compensation for our sales, marketing, finance, human resources, information technology and administrative personnel, professional services costs related to accounting, tax and legal services, depreciation and facilities expenses. We expect to increase the size of our sales and marketing organization to support the growth of our business. We expect sales, general and administrative expense to increase in absolute dollars and as a percentage of revenue in the short-term as we develop the infrastructure necessary to operate as a public company, including increased audit and legal fees, costs to comply with the Sarbanes-Oxley Act of 2002 and the rules and regulations applicable to companies listed on The NASDAQ Global Market, as well as investor relations expense and higher insurance premiums.

Interest income, net consists of interest earned on cash and cash equivalent balances. We have historically invested our cash primarily in standard bank accounts and money market funds. Interest income is offset by interest expense from the line of credit that was paid off in June 2009.

The warrants to purchase shares of our mandatorily redeemable preferred stock and warrants to purchase our mandatorily redeemable common stock are classified as liabilities and we adjust the value of these warrants to their fair value at the end of each reporting period with the resulting gain or loss being recorded within “warrant revaluation income (expense)” in the consolidated statements of operations. We recorded expense of $0.2

million, income of $0.8 million and expense of $3.6 million in our consolidated statements of operations for the years ended December 31, 2007, 2008 and 2009, respectively, to reflect the increase and decrease in the estimated fair value of the warrants. We recorded a negligible revaluation expense for the six months ended June 30, 2009 and warrant revaluation income of $0.4 million for the six months ended June 30, 2010, to reflect the exercise of the vested portion of the warrant and the expiration of the unvested portion of the warrant.

Other income (expense), net consists primarily of gains and losses from foreign currency transactions and remeasurement of foreign currency balances.

We are subject to income taxes in the United States and numerous foreign jurisdictions. During the ordinary course of business, there are many transactions and calculations for which the ultimate tax determination is uncertain. As a result, we recognize tax liabilities based on estimates of whether additional taxes and interest will be due. These tax liabilities are recognized when we believe that certain positions may not be fully sustained upon review by tax authorities, notwithstanding our belief that our tax return positions are supportable. Our effective tax rates differ from the statutory rate primarily due to any valuation allowance, the tax impact of state taxes, foreign operations, research and development tax credits, tax audit settlements, non-deductible compensation, and transfer pricing adjustments.

Effective January 1, 2007, we adopted new authoritative accounting guidance regarding uncertain tax provisions. This guidance contains a two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate each uncertain tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount that is more than 50% likely of being realized upon ultimate settlement.

As a result of the implementation of the new authoritative accounting guidance, we increased the liability for net unrecognized tax benefits by $0.1 million, and accounted for the increase as a cumulative effect of a change in accounting principle that resulted in a decrease to retained earnings of $0.1 million. The unrecognized tax benefits would affect the effective tax rate, if realized.

The total amount of gross unrecognized tax benefits as of the date of adoption was $1.7 million.

We included interest and penalties related to unrecognized tax benefits within the “provision (benefit) for income taxes” on the consolidated statement of operations.

Our India subsidiary income tax returns for fiscal years 2005 and 2007 have been under audit by the India tax authority. The India tax authority has issued an assessment for fiscal year 2005, and we have filed a formal protest with the appeals office of the India tax authority. We believe we have provided adequate reserve for the issues raised by the India tax authority. In May 2007, the Government of India adopted the Indian Finance Act 2007, effective April 1, 2007, that imposed a minimum alternative tax, or MAT, currently 10%, on Indian companies that have book profits but no tax profit which could be for various reasons, including tax holidays, tax deductions or significant depreciation. Any MAT paid will be used as a credit against corporate income taxes payable after expiration of the tax holiday and can be carried forward for a maximum period of 10 years.

Significant judgment is also required in determining any valuation allowance recorded against deferred tax assets. In assessing the need for any valuation allowance, we consider all available evidence, including past operating results, estimates of future taxable income, and the feasibility of tax planning strategies. In the event that we change our determination as to the amount of deferred tax assets that is more likely than not to be realized, we will adjust our valuation allowance with a corresponding impact to the provision (benefit) for income taxes in the period in which such determination is made.

The discussion and analysis of our financial condition and results of operations is based on our consolidated financial statements, which have been prepared in accordance with generally accepted accounting principles in the United States, or GAAP. The preparation of our consolidated financial statements requires us to make estimates, judgments and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses and related disclosures. Our critical accounting estimates include revenue recognition, allowance for doubtful accounts, inventory valuation, product warranty, stock-based compensation, fair value of our warrants to purchase mandatorily redeemable preferred stock and mandatorily redeemable common stock, and income taxes. We believe that the accounting policies discussed below are critical to understanding our historical and future performance, as these policies related to the more significant areas involving management’s judgement and estimates. These estimates and assumptions are based on historical experience and on various other factors that we believe to be reasonable under the circumstances. Our actual results could differ from these estimates under different assumptions or conditions. Our significant accounting policies are summarized in Note 1 to our consolidated financial statements included elsewhere in this prospectus.

We derive our revenue primarily from the sales of semiconductor products, which we sell directly to end customers and indirectly through distributors. We recognize product revenue from the direct channel when persuasive evidence of an arrangement exists, delivery has occurred, the price is deemed fixed or determinable and collection is reasonably assured. These criteria are usually met when products are shipped to customers. Sales returns from end customers have not been material to date and, therefore, we currently do not record any reserves for future sales returns. We provide volume-based rebates to certain end customers and record reductions to revenue for such rebates at the time the related revenue is recognized. We accrue 100% of potential rebates at the time of sale and do not apply a breakage factor. We reverse the accrual of unclaimed rebate amounts as specific rebate programs contractually end or when we believe unclaimed rebates are no longer subject to payment and will not be paid. Thus the reversal of unclaimed rebates may have a positive impact on our revenue and net income in subsequent periods. Such rebates totaled $0.6 million for the year ended December 31, 2009, and $2.2 million for the six months ended June 30, 2010. There were no rebates for the years ended December 31, 2007 and 2008, and for the six months ended June 30, 2009. Shipping and handling costs billed to customers are recorded as revenue with a corresponding expense to cost of product revenue recorded in the consolidated statement of operations.

The portion of our total product revenue that resulted from products sold to distributors was $0.1 million, $1.0 million and $5.7 million for the years ended December 31, 2007, 2008 and 2009, respectively, and $0.7 million and $10.3 million for the six months ended June 30, 2009 and 2010, respectively. For products sold to distributors, our indirect channel, at our discretion we provide distributors price protection privileges on unsold products in their inventory when we reduce our listed prices to distributors, and by means of limited allowances for stock rotation. Price protection provides each distributor the right to a credit for each unit of a product in the distributor’s inventory in the event of a decline in the listed price at which we sell additional units of the same product to that distributor. Stock rotation rights allow distributors to return up to between 5% and 10% of inventory every six months, based on the percentage of net cost in inventory or of inventory purchased over the previous six months. Price concessions are provided to distributors subsequent to delivery of product to the distributors based on who they sell our products to and the price. These concessions are based on a variety of factors, including customer, product, quantity, geography and competitive differentiation. Distributors do not have a general right to return products. We defer revenue on shipments to distributors as the price is not fixed or determinable until delivery has been made by the distributor to our end customer and the final sales price has been established. We rely upon point of sale reports from our distributors to record revenue. Point of sale reports provide the date of delivery by distributors to our end customers which establishes the net sales price to distributors. At the time of shipment to distributors, we record a trade receivable for the selling price as there is a

legally enforceable obligation of the distributor to pay for the product delivered, reduce inventory for the carrying value of goods shipped, and record the net of these amounts as “deferred revenue, net of costs” on the consolidated balance sheets. This amount represents the gross profit on the initial sale to the distributor; however, the amount of gross profit recognized in future consolidated statements of operations may be less than the originally recorded amount as a result of price protection credits and price concessions, which are not estimable at the time of shipment due to the variability of the final sales price. We do not reduce “deferred revenue, net of costs” by estimated price protection and price concessions; instead such amounts are recorded when incurred, which is at the time of a price decline or at the time the distributor sells the product to the end customer. The recognition of revenue from “deferred revenue, net of costs” is ultimately contingent upon delivery of product to the end customer, at which point persuasive evidence of an arrangement exists, delivery has occurred, the price is fixed or determinable, and collectability is reasonably assured.

We recognize services and other revenue from interoperability testing services, NRE services and the sale of software licenses and the associated customer support. We consider amounts to be earned once evidence of an arrangement has been obtained, services are delivered, fees are fixed or determinable, and collectability is reasonably assured. The post-contract customer support period is typically one year.

A summary of services and other revenue for the years ended December 31, 2007, 2008 and 2009, and the six months ended June 30, 2009 and 2010 is as follows:

NRE services generally require that we develop customized software and license it to customers or perform other engineering services for customers. Since we do not have vendor specific evidence, or VSOE, of fair value of post-contract customer support services, the total amount of the NRE fees are deferred until development of the software is complete and we start to provide post-contract support. The deferred NRE fees are recognized as revenue on a straight-line basis over the period of post-contract support.

Revenue from interoperability testing services is based on engineering time and materials and is recognized as the services are performed and amounts are earned.

Revenue from the sale of software licenses and the associated customer support is recognized on a straight-line basis over the customer support service period, as VSOE does not exist.

The allowance for doubtful accounts is maintained for estimated losses resulting from the inability of customers to make required payments. We continuously monitor cash collections from our distributors and end customers. We perform credit evaluations of our distributors and end customers and adjust credit limits as applicable. Our policy is to record an allowance for doubtful accounts based on any specific collection issues we have identified, the aging of the underlying receivables and our historical experience of uncollectible balances. Based on our historical experience, we estimate collectability of our accounts receivable balances and determine the adequacy of our allowance for doubtful accounts. To date, we have not experienced any material bad debt and, therefore, have not recorded an allowance for doubtful accounts. However, our prior experience may not be indicative of future losses and if the financial condition of our customers were to deteriorate, resulting in an

impairment of their ability to make payments, allowances may be required and our estimates may be inadequate. Our accounts receivable are concentrated among relatively few customers. Therefore, a negative change in liquidity or financial position of any one of these customers could make it difficult for us to collect our accounts receivable and require us to increase our allowance for doubtful accounts. We expect our allowance for doubtful accounts will increase in the future as our revenue increases.

Inventory consists primarily of the cost of semiconductors purchased from subcontractors, including wafer fabrication, assembly, testing and packaging, manufacturing support and shipping costs. We value our inventories at the lower of cost (determined using the first-in, first-out method) or market value (estimated net realizable value). We write down the carrying value of our inventory for estimated amounts related to lower of cost or market, obsolescence or unmarketable inventory equal to the difference between the cost of inventory and the estimated market value. The estimated market value of the inventory is based on historical usage and assumptions about future demand, future product purchase commitments, estimated manufacturing yield levels and market conditions on a product-by-product basis. To date, our provision for inventory reserves have not been material. Once established, inventory reserves are not reversed until the related inventory has been sold or scrapped. Actual demand may differ from forecasted demand and these differences may have a material effect on recorded inventory values and cost of revenue.

Our products are subject to warranties, generally for a period of one year. We accrue for estimated warranty costs at the time revenue is recognized. Warranty cost is estimated based on anticipated warranty claims. Our historical experience with respect to warranty claims has not been significant. If actual warranty costs differ significantly from these estimates, adjustments may be required in the future.

The fair value of the employee stock options is determined on the grant date and recognized to expense over the employee’s requisite service period, generally the vesting period, which we have elected to amortize on a straight-line basis. We estimate the grant date fair value of employee stock-based awards using the Black-Scholes stock option pricing model.

Under the modified prospective transition method, stock-based compensation expense recognized beginning in fiscal 2007 includes compensation expense for all stock-based awards granted prior to, but not yet vested as of December 31, 2006, based on the grant-date fair value estimated in accordance with the previous accounting guidance, and compensation expense for all stock-based awards granted or modified after December 31, 2006, based on the grant-date fair value estimated in accordance with the new authoritative guidance. These amounts have been reduced by our estimated forfeitures on all unvested awards. In addition, our consolidated statements of operations for prior periods have not been restated to reflect the impact of the new accounting guidance.

Stock-based compensation expense is calculated using our best estimates, which involve inherent uncertainties and the application of management’s judgment. Significant estimates include fair value of the underlying shares, expected term and expected volatility.

The fair value of each stock option grant is estimated on the date of grant using the Black-Scholes stock option pricing model with the following assumptions:

We based expected volatility on the historical volatility of a peer group of publicly traded entities in our industry over a period equal to the expected terms of the stock options as we did not have a sufficient trading history to use the volatility of our own common stock. The expected term represents the period that our stock options are expected to be outstanding. Given the limited history to estimate the expected terms of stock options granted to the various employee groups, we used the “simplified” method as provided by the Securities and Exchange Commission. The “simplified” method is calculated as the average of the time-to-vesting and the contractual life of the stock options. The risk-free interest rate for the expected term of the stock option is based on the U.S. Treasury Constant Maturity rate as of the date of grant. The expected dividend yield is zero as we have not historically paid cash dividends and we do not anticipate paying any cash dividends in the foreseeable future.

We recognize compensation expense only for the portion of stock options that are expected to vest. Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates.

There are significant differences among stock option valuation models, and this may result in a lack of comparability with other companies that use different models, methods and assumptions. If factors change and we employ different assumptions in future periods, or if we decide to use a different valuation model, such as a lattice model, the stock-based compensation expense that we record in the future may differ significantly from what we have recorded using the Black-Scholes stock option pricing model and could materially affect our operating results.

For the years ended December 31, 2007, 2008 and 2009, we recorded employee stock-based compensation expense of $3.4 million, $3.4 million and $3.5 million, respectively, and $2.2 million and $1.8 million for the six months ended June 30, 2009 and 2010, respectively. Stock-based compensation expense related to non-employees was immaterial for the years ended December 31, 2007, 2008 and 2009 and for the six months ended June 30, 2009 and 2010.

The accounting guidance for stock-based compensation prohibits the recognition of a deferred tax asset for an excess tax benefit that has not yet been realized. As a result, we only recognize a benefit from stock-based compensation in paid-in capital if an incremental tax benefit is realized or realizable after all other tax attributes currently available to us have been utilized. In addition, we have elected to account for the indirect benefits of stock-based compensation on the U.S. federal and California state research tax credits through the consolidated statements of operations rather than through paid-in capital.

The fair value of our common stock underlying our stock option grants was determined by our board of directors with input from management at each grant date upon review of a variety of factors, including contemporaneous valuation reports. We have regularly conducted contemporaneous valuations to assist us in the determination of the fair value of our common stock. Our board of directors ensured that the relevant objective and subjective factors deemed important by our board of directors were accounted for in each valuation. Our board of directors also ensured that the assumptions and inputs used in connection with such valuations reflected our board of director’s best estimate of our business condition, prospects and operating performance at each valuation date.

Historically, our board of directors reviewed and discussed a variety of factors when exercising its judgment in determining the fair value of our common stock. These factors generally include the following:

The contemporaneous common stock valuation as of January 31, 2010 primarily utilized the income approach to estimate the aggregate enterprise value of the Company at such valuation date. Under the income approach, the fair value of a business is estimated based on the cash flows that the business can be expected to generate over its remaining life. In applying the income approach, our estimated cash flows were converted to their present value equivalent using a rate of return appropriate for the risk of achieving our projected cash flows. The present value of the estimated cash flows was then added to the present value equivalent of the residual value of the business at the end of projection period to arrive at an estimate of the fair value of the business. Once the enterprise value was estimated pursuant to the foregoing analyses, the value was allocated among the Company’s debt and its various classes of equity based on the characteristics of each such class and its claim on the Company’s assets. Stock characteristics that were factored into the analyses included liquidation preferences, participation features, convertibility features and value sharing between classes of stock. Factors considered in allocating the value of each class of equity utilized in the stock option pricing theory include estimated volatility, an estimated time to liquidation and a risk-free rate of return.

Since we recently completed a preferred stock financing in April 2009, our contemporaneous common stock valuations as of June 5, 2009 and June 23, 2009 utilized the prior sale of company stock method as the primary method in estimating our enterprise value, as the AICPA Practice Aid indicates a third-party transaction between a willing buyer and a willing seller is the best indication of the fair value of an enterprise. The primary sale of company stock method focuses on prior arm’s-length sales of equity interests in determining fair value. Considerations that were factored into the prior sale of company stock method included: (1) the size and amount of equity interests sold, (2) the relationship of the parties involved in the sale transaction, (3) the timing of the sale compared to the valuation date and (4) the financial condition and structure of the company at the time of the sale.

The income approach was then used to evaluate the reasonableness of the results arrived under the prior sale of company stock method. Under the income approach, the fair value of a business is estimated based on the cash flows that the business can be expected to generate over its remaining life. In applying the income approach, our estimated cash flows for the current year and the three succeeding years were converted to their present value equivalent using a rate of return appropriate for the risk of achieving our projected cash flows. The present value of the estimated cash flows was then added to the present value equivalent of the residual value of the business at

the end of projection period to arrive at an estimate of the fair value of the business. Once the enterprise value was estimated pursuant to the foregoing analyses, the value was allocated among the Company’s debt and its various classes of equity based on the characteristics of each such class and its claim on the company’s assets. Stock characteristics that were factored into the analyses included liquidation preferences, participation features, convertibility features and value sharing between classes of stock.

Since we were in the process of pursuing an initial public offering and had filed our initial registration statement as well as an amendment thereto, the contemporaneous stock valuation as of May 14, 2010 primarily utilized the market comparable method to estimate the fair value of the business enterprise of the Company based on a comparison of the Company to comparable publicly traded companies in similar lines of business. The conditions and prospects of companies in similar lines of business depend on common factors such as overall demand for their products and services. An analysis of the market multiples of companies engaged in similar businesses yielded insight into investor perceptions and, therefore, the value of the Company. After identifying and selecting comparable publicly traded companies, their business and financial profiles were analyzed for relative similarity. Considerations for factors such as industry similarity, financial risk, company size, geographic diversification, profitability, adequate financial data, and actively traded stock price were also analyzed. Once these differences and similarities were determined and proper adjustments were made, price or market value of invested capital multiples of the publicly traded companies were calculated. These multiples were then applied to the Company’s operating results to arrive at an estimate of value.

Between December 31, 2009 and February 23, 2010, the U.S. economy and financial and stock markets continued to recover and the capital and debt markets continued to improve. For example, during the last six months of 2009, the Dow Jones Industrial Average increased 24% and the U.S. economy and U.S. Gross Domestic Product was forecasted to have continued to improve. Our revenue in the fourth quarter of 2009 increased 73% over our revenue in the third quarter of 2009 and 229% over our revenue in the second quarter of 2009. In addition, we had profit from operations in the fourth quarter of 2009 for the first time in our history. We shipped over one million semiconductor solutions in the second half of 2009 and anticipated increased orders for our 4G semiconductor solutions for the first quarter of fiscal 2010 as a leading operator continued to deploy 4G networks in major U.S. markets. Also in the fourth quarter of 2009, we launched “4G Turbo” which is a number of uplink performance improvements to our 4G-WiMAX semiconductor solutions. On January 31, 2010, the compensation committee of our board of directors determined the fair market value of our common stock was $1.86 per share based on a number of factors, including a contemporaneous valuation analysis and the other factors noted above. The compensation committee granted 1,453,531 options at an exercise price of $1.86 per share on January 31, 2010. The compensation committee also issued 13,440 restricted stock awards at a price of $1.86 per share on February 4, 2010.

From February 24, 2010 to March 24, 2010, the U.S. economy and financial and stock markets continued to recover. Our prospects and expectations of growth continued to improve and our outlook regarding the fair market value of our common stock under various initial public offering and sale scenarios improved. In addition, in February 2010, we held our organizational meeting for our initial public offering attended by the underwriters, underwriters’ counsel, our counsel and our auditors. All of these actions signaled that an initial public offering was becoming more likely, which would result in liquidity for the common stock and elimination of the superior rights and preferences of the convertible preferred stock. This positively affected assumptions of the expected type, timing and likelihood of possible liquidity scenarios. On March 24, 2010, the compensation committee of our board of directors determined the fair market value of our common stock had increased to $2.48 per share based on a number of factors, including a contemporaneous valuation analysis, the other factors noted above and further progress towards an initial public offering. The compensation committee granted 4,148,019 options at an exercise price of $2.48 per share and 10,627 restricted stock awards at a price of $2.48 per share on March 24, 2010.

From March 2010 to June 22, 2010, the U.S. economy and financial and stock markets continued to recover. Our revenue in the first quarter of 2010 decreased 6% from our revenue in the fourth quarter of 2009. In addition we had net loss from operations in the first quarter of 2010. On June 22, 2010, the compensation committee of our board of directors determined the fair market value of our common stock had decreased to $2.26 per share based on a number of factors, including a contemporaneous valuation analysis. The compensation committee granted 377,310 options at an exercise price of $2.26 per share on June 22, 2010.

Based upon an assumed initial public offering price of $ per share, the mid-point of the range reflected on the cover page of this prospectus, the aggregate intrinsic value of outstanding stock options vested and expected to vest as of June 30, 2010 was $ million, of which $ million related to vested stock options and $ million related to stock options expected to vest.

Fair Value of Warrants to Purchase Mandatorily Redeemable Preferred Stock and Mandatorily Redeemable Common Stock

In accordance with authoritative guidance, we classify outstanding warrants to purchase shares of our mandatorily redeemable preferred stock and warrants to purchase shares of our mandatorily redeemable common stock as current liabilities and adjust their carrying values to fair value at the end of each reporting period. We recorded income of $0.8 million and expense of $3.6 million in “warrant revaluation income (expense)” for the years ended December 31, 2008 and 2009, respectively, to reflect changes in the fair value of these warrants. We recorded a negligible revaluation expense for the six months ended June 30, 2009 and warrant revaluation income of $0.4 million for the six months ended June 30, 2010, to reflect the exercise of the vested portion of the warrant and the expiration of the unvested portion of the warrant. See Note 1 to our consolidated financial statements included elsewhere in this prospectus for a discussion of mandatorily redeemable common stock and warrants to purchase mandatorily redeemable common stock.

The value of each warrant is determined using the Black-Scholes valuation model which has a number of variables including risk-free interest rates, volatility, remaining contractual warrant term and the fair value of our common stock. Our board of directors estimates the fair value of the underlying common stock by evaluating and considering a number of objective and subjective factors. The valuation analysis is based upon a number of assumptions and estimates, including the selection of the most relevant valuation approach and the approach for the allocation of the total enterprise value to the various classes of stock; selection of market multiples; estimation of future cash flows; selection of the appropriate weighted average cost of capital; and estimation of marketability discount and assessment of probabilities for different business scenarios used in the valuation model.

There is inherent uncertainty in these estimates and the valuation of each warrant is sensitive to movements in the underlying value of our stock. If we had made different assumptions and estimates, the fair value amounts recorded for our warrants could have been materially different.

We account for income taxes under the balance sheet approach, whereby we estimate the income taxes in each jurisdiction in which we operate. Under this method, deferred tax assets and liabilities are determined based on the difference between the financial statement carrying values and the tax bases of assets and liabilities using enacted tax rates in effect in the years in which the differences are expected to reverse. Income tax expense is the tax payable for the period and the change during the period in deferred tax assets and liabilities.

Significant judgment is required in determining any valuation allowance recorded against deferred tax assets. In assessing the need for a valuation allowance, we consider all available evidence, including past operating results, estimates of future taxable income, and the feasibility of tax planning strategies. In the event that we change our determination as to the amount of deferred tax assets that is more likely than not to be realized, we will adjust our valuation allowance with a corresponding impact to the provision (benefit) for income taxes in the period in which such determination is made.

Effective January 1, 2007, we adopted new authoritative guidance regarding uncertain tax positions. This guidance requires that realization of an uncertain income tax position must be more likely than not (i.e., greater than 50% likelihood of receiving a benefit) before it can be recognized in the consolidated financial statements. The guidance further prescribes the benefit to be realized assuming a review by tax authorities having all relevant information and applying current conventions. The interpretation also clarifies the consolidated financial statements classification of tax related penalties and interest and set forth new disclosures regarding unrecognized tax benefits. We recognize potential accrued interest and penalties related to unrecognized tax benefits as income tax expense.

Product revenue increased 412% from $8.8 million for the six months ended June 30, 2009 to $45.0 million for the six months ended June 30, 2010. This increase was primarily due to an increase of over 400% in the number of units sold. The increase in the number of units sold was driven by the initial deployment by global telecommunications carriers of new, commercial services based upon 4G-WiMAX wireless broadband technology. Our rate of product revenue growth is expected to slow in future quarters as large competitors enter into the 4G wireless market and the continued rate of 4G-WiMAX adoption by customers is uncertain.

Services and other revenue decreased 73% from $1.9 million for the six months ended June 30, 2009 to $0.5 million for the six months ended June 30, 2010 due to an increased focus on increasing product revenue relative to interoperability testing, or IOT, and software revenue. Within services and other revenue, software revenue decreased by 69.7%, or $0.5 million, and IOT revenue decreased by $0.2 million, or 82.4%. The balance of the decrease was primarily attributable to decreased NRE revenue associated with the design of customer base station products from the first half of fiscal 2009 to the first half of fiscal 2010.

Cost of product revenue increased 335%, from $5.7 million for the six months ended June 30, 2009 to $25.0 million for the six months ended June 30, 2010 due to higher product and manufacturing costs associated with the increased number of units purchased by customers. Cost of services and other revenue declined from $0.4 million for the six months ended June 30, 2009 to negligible for the six months ended June 30, 2010. This decrease was consistent with the decline in IOT and software and other revenue due to lower services revenue levels.

Gross profit increased 349%, from $4.6 million for the six months ended June 30, 2009 to $20.5 million for the six months ended June 30, 2010. Product gross profit percentage increased from 35% for the six months ended June 30, 2009 to 44% for the six months ended June 30, 2010 primarily due to higher volumes of products sold and the fixed nature of some manufacturing related costs, as compared to 2009. Services and other revenue gross profit percentage increased from 81% for the six months ended June 30, 2009 to 100% for the six months ended June 30, 2010 due to the continued decline of IOT revenue during 2009 and 2010 which has a higher cost of revenue due to labor expenses. Gross profit percentage will vary in future quarters because average selling prices of our 4G-WiMAX products are expected to decline. We expect that we will also be able to reduce the cost of manufacturing our 4G-WiMAX products to offset some of these expected ASP declines.

Research and development expense increased 92%, from $13.3 million for the six months ended June 30, 2009 to $25.5 million for the six months ended June 30, 2010 primarily due to a technology licensing agreement with a third party to purchase $9.5 million in software licenses and intellectual property expensed in March 2010. This technology license agreement was entered into in March 2010 and is being used in research and development of a future product. This intellectual property is being used on one specific research and development project and does not have future alternative use or any future economic benefit, and thus the Company expensed the total $9.5 million in the six months ended June 30, 2010, in accordance with our policy and authoritative guidance. Research and development expense is expected to increase in future quarters as we focus upon bringing our 4G-LTE products to market.

Sales, general and administrative expense increased 47%, from $3.5 million for the six months ended June 30, 2009 to $5.1 million for the six months ended June 30, 2010 primarily due to an increase in finance and accounting expenses due to an increase in reporting requirements.

Interest income (expense) was negligible for the six months ended June 30, 2009 and 2010.

We recorded negligible warrant revaluation expense for the six months ended June 30, 2009, and warrant revaluation income of $0.4 million for the six months ended June 30, 2010, to reflect the change in the estimated fair value of warrants. The increase in warrant revaluation income was primarily due to the issuance of warrants

to purchase mandatorily redeemable common stock in April 2009 which expired on July 31, 2010. See Note 1 to our consolidated financial statements included elsewhere in this prospectus for a discussion of mandatorily redeemable common stock and warrants to purchase mandatorily redeemable common stock.

Other income (expense), net primarily represents exchange gains or losses on our exposures to foreign currency denominated transactions, primarily associated with the changes in exchange rates between the U.S. Dollar and the Indian Rupee.

Provision for income taxes was negligible for the six months ended June 30, 2009 and 2010.

Product revenue increased 441% from $7.6 million in 2008, to $41.0 million in 2009. This increase was primarily due to an increase of over 400% in the number of units sold. The increase in the number of units sold was driven by the initial deployment by global telecommunications carriers of new, commercial services based upon 4G-WiMAX wireless broadband technology. We benefited from increases in market penetration of our products and the impact of growing customer volume purchases of our BCS5200 semiconductors that were introduced in late 2008. In addition, 33% of our product revenue was due to sales of our BCSM250 semiconductors introduced in 2009 that were sold at a higher average selling price than our BCS200 semiconductors. Historically, changes in average selling prices have not had a significant impact on our product revenue. In the future, as product volume shipments in our markets increase and larger competitors enter the markets in which we compete, we may experience large decreases in average selling prices, which would have a significant impact on our product revenue.

Services and other revenue decreased 57%, from $6.3 million in 2008 to $2.7 million in 2009 due to an increased focus on increasing product revenue relative to IOT and software. Within services and other revenue, software revenue decreased by 52%, or $1.1 million, and IOT revenue decreased by $1.7 million, or 80%. The balance of the decrease was primarily attributable to decreased NRE revenue associated with the design of customer base station products from 2008 to 2009.

Cost of product revenue increased 398%, from $4.4 million in 2008 to $21.8 million in 2009 due to higher product and manufacturing costs associated with the increased number of units purchased by customers. Services and other cost of revenue declined 81% from $2.6 million in 2008 to $0.5 million in 2009. This decrease was consistent with the decline in IOT and software and other revenue due to lower services revenue levels.

Gross profit increased 207%, from $6.9 million in 2008 to $21.4 million in 2009. Product gross profit percentage increased from 42% in 2008 to 47% in 2009 primarily due to higher volumes of products sold, the fixed nature of some manufacturing related costs and decreased levels of obsolescence reserves recorded when compared to 2008. Services and other revenue gross profit percentage increased from 60% in 2008 to 82% in 2009 due to the continued decline of IOT revenue during 2009 which has a higher cost of revenue due to labor expenses.

Research and development expense decreased 12%, from $32.8 million in 2008 to $28.8 million in 2009 primarily due to a decrease in research and development headcount and salaries in December 2008. This headcount reduction resulted in a decrease in personnel costs and stock-based compensation expense of $3.8 million and a decrease in spending on software and hardware tools of $0.4 million. The total number of research and development personnel decreased from 201 at the beginning of 2008 to 157 as of December 31, 2008 and 2009. The reductions considered that the initial research into product technology and feasibility was substantially complete, that productization of our technology was a primary focus and that initial customer adoption of our products required additional time. As a result of our actions, our research and development activities were more closely aligned with the customers’ needs. The effect of the 2008 reductions is fully reflected in the 2009 results.

Sales, general and administrative expense decreased 17%, from $7.6 million in 2008 to $6.3 million in 2009 primarily due to a decrease in headcount and a resulting decrease in salaries and stock-based compensation expense for the sales, marketing, finance, human resources, information technology and administrative personnel. The total number of sales, general and administrative personnel decreased from 26 at the beginning of 2008 to 23 as of December 31, 2008 and further decreased to 20 as of December 31, 2009. The effect of the 2008 reductions is fully reflected in the 2009 results in addition to the 2009 reductions that took effect in early 2009. The reductions in headcount and related expenses were undertaken to be more closely aligned with business and customer needs.

Interest income net decreased 70%, from $0.4 million in 2008 to $0.1 million in 2009. The change was primarily due to a decrease in the interest rates earned on our cash and money market funds and lower overall balances. Additionally, interest expense decreased primarily due to lower outstanding debt balance in 2009 compared to 2008.

We recorded warrant revaluation income of $0.8 million and expense of $3.6 million in 2008 and 2009, respectively, to reflect the decrease and increase in the estimated fair value of warrants. The increase in warrant revaluation expense was primarily due to the issuance of warrants to purchase mandatorily redeemable common stock in April 2009 which increased in value between the issuance date and December 31, 2009. The increase in the fair value of the warrants was due to an increase in the estimated fair value of our common stock. See Note 1 to our consolidated financial statements included elsewhere in this prospectus for a discussion of mandatorily redeemable common stock and warrants to purchase mandatorily redeemable common stock.

We recorded an income tax provision of $0.1 million and an income tax benefit of $0.1 million for December 31, 2008 and 2009, respectively. The decrease of the income tax provision from 2008 to 2009 is due primarily to an increase in foreign deferred tax assets.

Product revenue increased 27%, from $6.0 million in 2007 to $7.6 million in 2008. This increase was primarily due to an increase in the number of units sold. The increase in the number of units sold was driven by the initial deployment by telecommunications carriers of new, commercial services based upon 4G-WiMAX wireless broadband technology and an increase in market penetration of our products.

Services and other revenue decreased 21%, from $7.9 million in 2007 to $6.3 million in 2008. The decrease was primarily due to a decrease in NRE services revenue of $3.6 million, which was partially offset by an increase in software and other revenue of $1.7 million and an increase of $0.2 million in revenue from interoperability testing services.

Cost of product revenue increased 41%, from $3.1 million in 2007 to $4.4 million in 2008. This increase was primarily due to higher product and manufacturing costs associated with the increased number of units purchased by customers. Services and other cost of revenue decreased 63% from $6.9 million in 2007 to $2.6 million in 2008. This decrease was consistent with the decline in services and other revenue.

Gross profit increased 78%, from $3.9 million in 2007 to $6.9 million in 2008. Our gross profit percentage decreased from 48% in 2007 to 42% in 2008. This decrease was primarily attributable to inventory related obsolescence reserves recorded in 2008. In 2008 our services gross profit percentage increased from 13% in 2007 to 60% in 2008 due to the decline of IOT revenue during 2009 which has a higher cost of revenue due to labor expenses.

Research and development expense decreased 9%, from $35.9 million in 2007 to $32.8 million in 2008, primarily due to a decrease in headcount, resulting in a decrease in personnel costs and stock-based compensation expense of approximately $1.4 million and a decrease in spending on software and hardware tools relating to the development of our products of approximately $1.3 million and in travel expenses of approximately $0.3 million.

Sales, general and administrative expense increased 9%, from $7.0 million in 2007 to $7.6 million in 2008, primarily due to an increase in sales expense associated with increased headcount, which in turn resulted in an increase in personnel costs and stock-based compensation expense of approximately $1.0 million and an increase in travel expenses of approximately $0.2 million. This increase in sales expense was offset partially by a decrease in general and administrative expense primarily due to a decrease in personnel costs of approximately $0.2 million due to reduced headcount and a decrease of approximately $0.2 million in professional fees for outside legal services.

Interest income, net decreased 81%, from $2.1 million in 2007 to $0.4 million in 2008, primarily due to a significant decrease in our average cash balance in 2007 compared to 2008. We maintained a higher average cash balance in 2009 following our Series D preferred financing in 2008.

We recorded warrant revaluation expense of $0.2 million and income of $0.8 million in 2007 and 2008, respectively, to reflect the increase and decrease in the estimated fair values of the warrants. The increase in warrant revaluation income was due to a decrease in the fair market value of the respective warrants at December 31, 2008 compared to December 31, 2007, which was a result of a decrease in the estimated fair market value of our mandatorily redeemable preferred stock.

We recorded an income tax provision of $0.2 million and $0.1 million for the years ended December 31, 2007 and 2008, respectively. The decrease in the income tax provision is due primarily to a decrease in foreign withholding taxes.

The following table presents our unaudited quarterly results of operations for 2009 and 2010. This unaudited quarterly information has been prepared on the same basis as our audited consolidated financial statements and includes all adjustments, consisting of only normal recurring adjustments, necessary for the fair presentation of the information for the quarters presented. You should read this table together with our consolidated financial statements and the related notes thereto included in this prospectus. Our quarterly results of operations are likely to vary in the future. The results of operations for any quarter are not necessarily indicative of results for the entire year and are not necessarily indicative of any future results.

Our product revenue generally increased sequentially in each of the quarters presented primarily due to the initial deployment by global telecommunications carriers of new, commercial service based upon 4G-WiMAX wireless broadband technology. Services and other revenue decreased in the third quarter of 2009 as compared to the second quarter of 2009 and increased in the fourth quarter of 2009 primarily due to the timing of customer-related services work completed and software licenses and associated customer support provided during each quarter. Cost of services and other revenue correspondingly decreased in the third quarter of 2009 as compared to

the second quarter of 2009 and increased in the fourth quarter of 2009 primarily due to the level of services and other revenue recorded each quarter. The product gross profit margin for the three months ended June 30, 2010 was 43% compared to 48% for the three months ended March 31, 2010. The decrease was due to product mix and an increase in royalty expense associated with ongoing licensing arrangements. Research and development expense increased in the third quarter of 2009 as compared to the second quarter of 2009 primarily due to the timing of purchase of product-related tooling in the third quarter and then decreased in the fourth quarter of 2009 as product-related tooling was not purchased in that quarter. Research and development expense decreased 42%, from $16.2 million for the three months ended March 31, 2010 to $9.4 million for the three months ended June 30, 2010 primarily due to a technology licensing agreement with a third party to purchase $9.5 million in software licenses and intellectual property expensed in March 2010. This technology license agreement was entered into in March 2010 and is being used in research and development of a future product. This intellectual property is being used on one specific research and development project and does not have future alternative use or any future economic benefit, and thus we expensed the total $9.5 million in the three months ended March 31, 2010, in accordance with our policy and authoritative guidance. Sales, general and administrative expense decreased in the third quarter of 2009 as compared to the second quarter of 2009 primarily due to costs associated with an executive who terminated employment in the second quarter of 2009. We recorded warrant revaluation expense of $0.8 million and $2.4 million for the three months ended December 31, 2009 and March 31, 2010, respectively, to reflect the increase in the estimated fair value of warrants. The increase in warrant revaluation expense was primarily due to the issuance of warrants to purchase mandatorily redeemable common stock in April 2009 which increased in value between periods. The increase in the fair value of the warrants was due to an increase in the estimated fair value of our common stock. We recorded a warrant revaluation income of $2.9 million for the three months ended June 30, 2010 to reflect the expiration of the unvested warrants. See Note 1 to our consolidated financial statements included elsewhere in this prospectus for a discussion of mandatorily redeemable common stock and warrants to purchase mandatorily redeemable common stock.

We believe that our available cash, cash equivalents and restricted cash will be sufficient to fund operations and capital expenditures for the next 12 months. Since inception, we have financed our operating activities and capital expenditures primarily through proceeds from the issuances of our mandatorily redeemable preferred stock. Additionally, we have a senior secured credit facility of $7.5 million with a bank executed in December 2009. As of December 31, 2009 and June 30, 2010, there were no amounts outstanding related to our credit facility. Our credit facility requires that we satisfy certain financial ratios and covenants that can otherwise impact our liquidity through limiting dispositions, acquisitions, the ability to incur indebtedness and the maintenance of collateral accounts.

Net cash used in operating activities in 2009 primarily reflected a net loss of $16.9 million, and increases in accounts receivable of $7.2 million, inventories of $11.9 million and deferred revenue, net of costs, of $1.5 million, offset by depreciation and amortization of $7.0 million, stock-based compensation of $3.5 million accounts payable of $5.9 million, revaluation of warrants to fair value of $3.6 million and accrued expenses and other current liabilities of $1.8 million.

Net cash used in operating activities in 2008 primarily reflected a net loss of $32.3 million, and increases in accounts receivable of $1.0 million, inventories of $1.5 million, accrued expenses and other current liabilities of $0.7 million and deferred revenue, net of costs, of $1.2 million, offset by depreciation and amortization of $8.0 million and stock-based compensation of $3.4 million.

Net cash used in operating activities in 2007 primarily reflected a net loss of $37.5 million, and increases in accounts receivable of $0.5 million, inventories of $0.5 million and accounts payable of $0.6 million, offset by depreciation and amortization of $6.9 million, stock-based compensation of $3.4 million, prepaid expenses and other current assets of $1.0 million, accrued expenses and other current liabilities of $1.3 million and deferred revenue, net of costs of $3.4 million.

During the six months ended June 30, 2010, net cash used in operating activities was $4.0 million. During the six months ended June 30, 2010, we recognized a net loss of $10.2 million. However, this net loss incorporated non-cash charges, including depreciation and amortization of $1.4 million, stock-based compensation expenses of $1.8 million and non-cash income related to our warrant revaluation of $0.4 million. In addition, we spent an additional $1.7 million to increase our inventories and signed a technology license agreement of $9.5 million for software license and intellectual property for research and development. However, not all of the purchases were paid for during the six months ended June 30, 2010, as evidenced by our net increase in accounts payable and accrued liabilities of $5.9 million during the period.

Net cash used in investing activities in 2009 consisted of purchases of property and equipment of $0.1 million and our restricted cash balance of $1.0 million. Cash used in investing activities in 2008 consisted of purchases of property and equipment of $0.6 million. Cash used in investing activities in 2007 consisted of purchases of property and equipment of $1.5 million and $1.9 million used in connection with the acquisition of the assets of Aspendos Communications in 2007.

During the six months ended June 30, 2010, net cash provided by investing activities was $0.7 million. The $0.7 million was a result of an expiration of a restriction on cash from a letter of credit in February 2010 for $1.0 million, offset by the purchase of fixed assets of $0.3 million.

Cash flows from financing activities reflect our common and preferred stock transactions and any bank or capital lease financing. Net cash provided by financing activities in 2009 consisted primarily of $19.9 million in net proceeds from the sale of mandatorily redeemable preferred stock in April 2009 and $0.5 million in proceeds from stock option exercises, early exercise of common stock options and exercises of warrants.

Net cash used in financing activities was $1.2 million in 2008 and consisted primarily of payments on our capital lease and line of credit. Net cash provided by financing activities in 2007 of $16.9 million consisted of $23.0 million from the proceeds of the sale of mandatorily redeemable preferred stock in 2007, $1.0 million and $5.8 million of repayments of debt associated with capital leases and line of credit borrowings, respectively, and proceeds from stock option exercises and early exercises of common stock of $0.7 million in 2007.

During the six months ended June 30, 2010, net cash used in financing activities was $0.5 million. We paid $0.6 million against our technology license obligation under capital lease.

We expect our operating and capital expenditures to increase in absolute dollars in the foreseeable future as we increase headcount, expand our business activities, grow our end customer base and implement and enhance our information technology and enterprise resource planning systems. We also expect to increase credit limits and terms we offer to distributors and customers that purchase products directly from us. We expect our accounts receivable and inventory balances to increase, partially offset by increases in accounts payable, which will result in higher needs for working capital. If our available cash balances and net proceeds from this offering are insufficient to satisfy our liquidity requirements, we may seek to sell equity or convertible debt securities or enter into a credit facility which may contain operating covenants. The sale of equity and convertible debt securities may result in dilution to our stockholders and those securities may have rights senior to those of our common stock. If we raise additional funds through the issuance of convertible debt securities, these securities could contain covenants that would restrict our operations. Within the 4G wireless related markets that we serve, substantially all of the available reserve is derived from sales of our semiconductor solutions for the 4G-WiMAX market. If the 4G-WiMAX and 4G-LTE markets do not grow or grow less quickly than expected, it may have a negative impact on our liquidity. Additionally, given our current reliance on revenue derived from the 4G-WiMAX market, as customers transition to 4G-LTE or require both 4G-WiMAX and 4G-LTE, if customers do not adopt our planned products that address those potential customer needs, it may also have a negative impact on our liquidity. We may require additional capital beyond our currently anticipated amounts. Additional capital may not be available on reasonable terms, or at all.

Our estimates of the period of time through which our financial resources will be adequate to support our operations and the costs to support research and development and our sales and marketing activities are forward-looking statements and involve risks and uncertainties, and actual results could vary materially and negatively as a result of a number of factors, including the factors discussed in the section “Risk Factors” of this prospectus. We have based our estimates on assumptions that may prove to be wrong, and we could utilize our available capital resources sooner than we currently expect.

Our short and long-term capital requirements will depend on many factors, including the following:

The following table summarizes our outstanding contractual obligations as of December 31, 2009 and the effect those obligations are expected to have on our liquidity and cash flows in future periods:

Since our inception, we have not engaged in any off-balance sheet arrangements, including the use of structured finance, special purpose entities or variable interest entities.

We had cash, cash equivalents and restricted cash totaling $13.3 million and $16.8 million as of December 31, 2008 and 2009, respectively, and $12.0 million as of June 30, 2010. Our cash, cash equivalents and restricted cash consist of cash in standard bank accounts and investments in money market funds. The primary objectives of our investment activities are to preserve principal, and provide liquidity without significantly increasing risk. Our cash and cash equivalents are held for working capital purposes. We do not enter into investments for trading or speculative purposes.

Our exposure to interest rate risk primarily relates to the interest income generated by excess cash invested in money market funds. Due to the short-term and highly liquid nature of our portfolio, a movement in interest rates of 100 basis points during the year ended December 31, 2009 would not have a material effect on interest income.

The functional currency of our one foreign subsidiary located in India is the U.S. dollar. All of our sales are denominated in U.S. dollars. We therefore have no foreign currency risk associated with our revenue. The payment terms of all of the significant supply chain vendors with whom we outsource the manufacturing of our products are also denominated in U.S. dollars. Our operations outside of the United States incur operating expenses and hold assets and liabilities denominated in foreign currencies, principally the Indian rupee, the Taiwan dollar, the Japanese yen and the Korean won. As a result, our results of operations and cash flows are subject to fluctuations due to changes in foreign currency exchange rates. However, we believe that the exposure to foreign currency fluctuation is immaterial at this time as the related costs do not constitute a significant portion of our total expenses. As we grow our operations, our exposure to foreign currency risk could become more significant. To date, we have not entered into any foreign currency hedging contracts, and currently do not expect to enter into foreign currency exchange contracts for trading or speculative purposes.

In September 2006, authoritative guidance was issued which defines fair value, establishes a framework for measuring fair value and requires additional disclosures about fair value measurements. In February 2008, the effective date of the standard was delayed until the first quarter of 2009 for all non-financial assets and non-financial liabilities, except for items that are recognized or disclosed at fair value in the consolidated financial statements on a recurring basis. The standard does not require any new fair value measurements but rather eliminates inconsistencies in guidance found in various prior accounting pronouncements. In April 2009, further guidance was issued for estimating fair value when the level of market activity for an asset or liability has significantly decreased, which is effective for interim and annual periods ending after June 15, 2009. The adoption of the accounting standard did not have a material impact on our consolidated financial statements.

In June 2008, new authoritative guidance was issued for determining whether instruments granted in stock-based payment transactions are considered participating securities for the purposes of calculating earnings per share. The standard clarified that all outstanding unvested stock-based payment awards that contain rights to nonforfeitable dividends participate in undistributed earnings with common stockholders, and therefore, are considered participating securities. The two-class method of computing basic and diluted earnings per share would have to be applied. This standard is effective for fiscal years beginning after December 31, 2008. The adoption of the accounting standard did not have a material impact on our consolidated financial statements.

Effective January 1, 2009, we adopted new authoritative guidance related to business combinations. The updated guidance establishes principles and requirements for how the acquirer of a business recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, and any non-controlling interest in the acquiree. The updated standard also provides guidance for recognizing and measuring the goodwill acquired in the business combination and determines what information to disclose to enable users of the financial statements to evaluate the nature and financial effects of the business combination. The updated standard also provides guidance for recognizing changes in an acquirer’s existing income tax valuation allowances and tax uncertainty accruals that result from a business combination transaction as adjustments to income tax expense. The adoption of this updated guidance related to business combinations did not have an impact on our consolidated financial statements.

In April 2009, authoritative guidance was updated related to business combinations to address application issues regarding initial recognition and measurement, subsequent measurement and accounting and disclosure of assets and liabilities arising from contingencies in a business combination. In circumstances where the acquisition-date fair value for a contingency cannot be determined during the measurement period and it is concluded that it is probable that an asset or liability exists as of the acquisition date and the amount can be reasonably estimated, a contingency is recognized as of the acquisition date based on the estimated amount. This updated guidance is effective for assets or liabilities arising from contingencies in business combinations completed by us on or after January 1, 2009. The adoption of this updated guidance did not have an impact on our consolidated financial statements.

In May 2009, new authoritative guidance was issued which establishes the general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued or are available to be issued. The standard, which includes a new requirement to disclose the date through which an entity has evaluated subsequent events, is effective for interim or annual periods ending after June 15, 2009. The adoption of the accounting standard did not have a material impact on our consolidated financial statements.

In June 2009, the authoritative guidance was revised for variable interest entities, which changes how a reporting entity determines when an entity that is insufficiently capitalized or is not controlled through voting (or similar rights) should be consolidated. The determination of whether a reporting entity is required to consolidate another entity is based on, among other things, the other entity’s purpose and design and the reporting entity’s ability to direct the activities of the other entity that most significantly impact the other entity’s economic performance. The new accounting guidance will require a reporting entity to provide additional disclosures about its involvement with variable interest entities and any significant changes in risk exposure due to that involvement. A reporting entity will be required to disclose how its involvement with a variable interest entity affects the reporting entity’s financial statements. The new accounting guidance is effective for fiscal years beginning after November 15, 2009, and interim periods within those fiscal years. The adoption of the accounting standard did not have a material impact on our consolidated financial statements.

In October 2009, authoritative guidance was updated to require companies to allocate revenue in multiple-element arrangements based on an element’s estimated selling price if vendor-specific or other third-party evidence of value is not available. The guidance is effective beginning January 1, 2011 with early application permitted. We are currently evaluating both the timing and the impact of this standard on our consolidated financial statements.

In January 2010, the authoritative guidance for fair value measurements and disclosures was revised by adding new disclosure requirements with respect to transfers in and out of Levels 1 and 2 fair value measurements, as well as by requiring gross basis disclosures for purchases, sales, issuances, and settlements included in the reconciliation of Level 3 fair value measurements. This Update also amends the authoritative guidance by providing clarifications to existing disclosure requirements. The new disclosures and clarifications of existing disclosures are effective for interim and annual reporting periods beginning after December 15, 2009, except for the disclosures about purchases, sales, issuances, and settlements in the roll forward of activity in Level 3 fair value measurements which are effective for fiscal years beginning after December 15, 2010 and for interim periods within those fiscal years. Early adoption is permitted. We adopted this new guidance, including the guidance related to the disclosures about purchases, sales, issuances, and settlements in the roll forwards of activity in Level 3 fair value measurements, beginning first quarter of our 2010 fiscal year. The adoption of this guidance did not have a material impact on our financial position or results of operations.

We are a leading designer, developer and supplier of high-performance, highly-integrated and cost-effective 4G wireless semiconductor solutions for mobile broadband communications devices. We leverage our advanced wireless technology and system-level design expertise to enable OEMs and ODMs to provide highly differentiated 4G wireless solutions for mobile and fixed applications. Our semiconductor solutions incorporate proprietary signal processing techniques, algorithms and software to deliver industry-leading performance as measured by network throughput, signal reach and power consumption. Currently, WiMAX, or worldwide interoperability for microwave access, and LTE, or long term evolution, are commonly accepted as the 4G technologies. We refer to WiMAX as 4G-WiMAX and LTE as 4G-LTE. Since the first commercial shipments of our semiconductor solutions in 2005, we have shipped over 4 million 4G-WiMAX semiconductor solutions. In 2009, we shipped more than 2.5 million 4G-WiMAX semiconductor solutions, which solutions include our baseband chipset, and represented approximately 65% of the total WiMAX baseband chipset shipments in 2009 according to TSR. Based on volumes shipped and our market share in 2009, we believe that we are the leading supplier of 4G-WiMAX solutions. We are leveraging our experience with 4G-WiMAX by currently developing 4G-LTE semiconductor solutions, as we believe that market will provide additional growth opportunities.

We are a fabless semiconductor company that offers baseband and RF integrated circuits, complete reference designs and software solutions to enable our customers to quickly and easily integrate our 4G solutions into a wide variety of end user devices, including USB dongles for mobile computers, modems, gateways, mobile routers, smartphones and other wireless mobile devices. Our semiconductor solutions are also used in a variety of industrial devices for machine-to-machine communication, smart grid meters and video surveillance devices.

We are a pioneer of the key technologies that enable the high-speed wireless transmission of data, voice and video over next-generation mobile broadband networks known as 4G networks. A 4G network is the fourth generation of wireless communication currently being researched and constructed by the mobile phone industry and other technology developers. A primary goal of those deploying 4G networks is to achieve much faster data throughput speeds than with previous generations of networks. Today, these 4G mobile broadband networks are based on two industry standard protocols - 4G-WiMAX or 4G-LTE, or long-term evolution, both of which utilize OFDMA for advanced digital modulation, and MIMO for enhanced antenna functionalities. These wireless technologies allow increased data throughput and efficiency of wireless data transmission when compared to CDMA technology used in 3G networks. We believe our extensive expertise in OFDMA and MIMO technologies and the industry-leading performance of our products have enabled us to deliver the most widely adopted 4G semiconductor solutions to the market based on volume shipped to date.

Currently, our products are utilized in 4G-WiMAX networks globally, including in Brazil, India, Japan, Korea, Malaysia, Mexico, Russia and the United States. According to the WiMAX Forum, as of June 2010, more than 590 4G-WiMAX networks had been deployed globally. In addition to the 4G-WiMAX networks deployed today, we expect 4G-LTE networks to be deployed globally as existing 3G networks are upgraded, although to date there has been limited commercial deployment. Our recently announced BCS500 4G multi-protocol semiconductor solution is designed to support both 4G-WiMAX and 4G-LTE and enable seamless global roaming across different 4G networks, and we believe that our ability to support both 4G-WiMAX and 4G-LTE in the same product will be a key differentiator for us as 4G-LTE networks develop and become more prevalent. We currently expect that our initial multi-protocol semiconductor solution product will be available for customer evaluation in early 2011, and expect that customers may order commercial quantities of our initial product for their production needs in late 2011.

built by OEM customers such as Motorola, NEC AT, Novatel, Sierra Wireless, Ubee and ZTE, and ODMs such as Accton, C-motech, Gemtek and Quanta, to help ensure that our product roadmap meets the needs of our key customers and the operators. Our total revenue increased from $13.9 million in 2007 to $43.7 million in 2009, and we became profitable in the fourth quarter of 2009, with total revenue of $20.9 million. During the same periods, our annual net loss decreased from $37.5 million in 2007 to $16.9 million in 2009. For the six months ended June 30, 2010 our quarterly net loss increased as a result of the technology licensing agreement with a third party to purchase $9.5 million in software licenses and intellectual property expensed in March 2010 and an increase in sales, general and administrative expense primarily due to an increase in reporting requirements.

Two key trends are expected to drive growth in the global communications industry: the emergence of the mobile Internet which allows high-speed wireless access to rich media content now available on the Internet and the continued penetration of broadband access to the Internet in areas around the world where the existing infrastructure has not been able to provide cost-effective access.

Over the past decade, wireless networks have evolved from solely providing voice telephony to now supporting both voice and data communications. The current 3G wireless networks were designed to be overlaid

onto existing 2G networks to enhance data communication speeds while minimizing capital expenditures. This resulted in 3G networks being constrained by old circuit-switched telephony paradigms. Service providers trying to use 3G networks to provide mobile broadband services are facing significant technology challenges due to limited data speeds and inefficient utilization of frequency spectrum, which often render them unable to address the fast growing demand for mobile broadband services in a cost-effective manner.

As a result of the need for a faster, more spectrally efficient and more cost-effective mobile access technology, OFDMA and MIMO have emerged to differentiate the next generation of mobile broadband communications standards, and are fundamental technologies used in 4G networks. OFDMA is a type of digital modulation scheme that achieves significantly higher bandwidth within a given frequency range than those used in current 3G wireless networks. MIMO is a smart antenna technology that enables higher data throughput and signal range without requiring additional bandwidth or transmit power. The throughput and range extension capabilities of these OFDMA-based 4G technologies allow base stations to cover a larger service area and provide increased network capacity, thereby reducing capital expenditures for operators. Two major and commonly accepted 4G solutions exist today: 4G-WiMAX and 4G-LTE.

4G is a term used in the wireless telecommunications industry to refer to the next generation of mobile communications standards. Currently, WiMAX and LTE are commonly accepted as 4G technologies, and are standardized as IEEE 802.16e and 3GPP-Release 8, respectively. Both solutions utilize OFDMA and MIMO technology, and they share very similar core technologies in radio design, coding schemes and signal processing algorithms. Operators who have deployed 4G-WiMAX often include new market entrants or greenfield operators who are looking for competitive differentiation from the incumbent operators, while operators who choose to deploy 4G-LTE networks will typically be incumbents that are looking to upgrade their existing networks to 4G networks.

The WiMAX Forum is an industry alliance founded to promote the global adoption of WiMAX as the broadband wireless Internet technology of choice. Members of the WiMAX Forum include leading technology and communications infrastructure companies, such as Alcatel-Lucent, Intel, Motorola, Nokia, Samsung and ZTE. Operators who have adopted 4G-WiMAX technology in their networks include BSNL, Clearwire, Comcast, KDDI, KT Corp, Sprint Nextel and UQ Communications. According to the WiMAX Forum, there are more than 590 4G-WiMAX networks in 149 countries around the world. 4G-WiMAX was designed to compete with existing cellular network solutions. In developing countries, 4G-WiMAX addresses the need for broadband access. In countries or regions where the wireline infrastructure is too limited and often insufficient to support broadband access, the market opportunity for 4G-WiMAX lies in providing broadband connectivity to the home or enterprise. India, for example, has over 191 million households and less than 50 million wireline connections, and BSNL, the government-owned telecommunications operator, launched its first commercial 4G-WiMAX network in the fourth quarter of 2009 to address this need. The U.S. government has included approximately $7.0 billion to expand broadband Internet access into underserved and rural areas as part of the 2009 economic stimulus program. We believe that the market opportunity to supply 4G-WiMAX solutions in the wireless broadband access area should continue to grow as operators extend their networks.

In developed countries, 4G-WiMAX services address the increasing demand for mobile broadband access to the Internet that existing 3G networks have been unable to address. Clearwire, the leading 4G-WiMAX operator in the United States, has reported that it had over 650,000 subscribers at the end of 2009, just one year after launching its first 4G-WiMAX service in Portland in January 2009, and it expects its number of subscribers to more than quadruple to 3 million by the end of 2010. Additionally, Comcast and Sprint Nextel expect to add

significant numbers of subscribers during 2010. Operators who deploy 4G-WiMAX networks often expect to gain an immediate competitive advantage over 2G and 3G networks by delivering high data throughput at competitive prices using their existing or newly allocated frequency spectrum. As technologies supporting multi-protocol platforms become commercially available, we expect 4G-WiMAX to be adopted by ODMs and OEMs along with 4G-LTE in the next-generation wireless broadband environment.

4G-LTE is designed as the next-generation technology for operators with existing 3G networks to significantly increase bandwidth and capacity. However, upgrading existing networks to 4G-LTE requires significant capital investment and time. As of March 1, 2010, there was only one commercial deployment of 4G-LTE, launched by TeliaSonera in Sweden in December 2009. Many of the world’s largest mobile service providers have committed to deploy 4G-LTE network overlays to their existing 3G networks, led by NTT DoCoMo in Japan and Verizon Wireless in the United States. In the near term, adoption of 4G-LTE is expected to be driven by major 3G operators in developed countries. Over time, these network upgrades are expected to drive demand for 4G-LTE mobile devices, accelerating the growth of 4G-LTE.

In order to promote subscriber adoption, various 4G-enabled devices are being deployed. Based on customer designs currently in process, we expect 4G-WiMAX-enabled USB dongles that can be attached to laptops to enable mobile broadband to represent a significant share of device shipments in 2010. Another major market segment for 4G-WiMAX is wireless broadband modems for broadband access deployments in emerging markets. Given accelerating deployments of 4G-WiMAX, we expect continued growth of these market segments. As 4G-LTE networks are deployed, we initially expect USB dongles to represent the majority of 4G-LTE products, and over time we expect mobile phones with integrated 4G-LTE capabilities to grow in volume.

According to the In-Stat WiMAX chipset market forecast as of January 2010, the 4G-WiMAX semiconductor market is expected to grow from approximately 10 million units in 2010 to approximately 40 million units in 2013, including embedded laptop solutions. According to the In-Stat LTE chipset market forecast as of February 2010, the 4G-LTE semiconductor market is expected to grow from approximately 0.5 million units in 2010 to approximately 35 million units as of 2013, including 4G-LTE-enabled phones.

Wireless functionalities in mobile devices are provided primarily by semiconductor solutions. Traditionally, wireless semiconductor solutions supported individual functionalities, such as communications protocols, application processing and digital signal processing. More advanced process technologies, higher levels of integration and sophisticated design techniques allow for more of these functions to be integrated into fewer chips, thereby reducing component costs, overall power consumption and footprint. With the large number of wireless standards deployed around the world, the ability of a single semiconductor solution to handle multiple wireless networks and protocols has become a key differentiator as customers seek to reduce complexity and cost. However this process is inherently complex and in order to achieve long term success, wireless semiconductor providers must meet the following challenges:

Complexity of implementing 4G technologies. Implementing core 4G technologies such as OFDMA and MIMO technology in silicon requires cross-functional engineering expertise and intellectual property in signal processing, RF design, system architecture, algorithm design and software development.

Complexity of semiconductor solution integration. Semiconductor functional integration is complex and requires the development of innovative semiconductor architectures. In addition, systems and software expertise is increasingly becoming a requirement for silicon vendors as customers expect them to deliver complete solutions integrating semiconductor chipsets, reference designs, software and drivers. Cost pressures, form factor requirements and power constraints drive the demand for increased integration.

Field proven technologies and performance. Operators demand rigorous test and validation prior to accepting a device in their networks. Field validation of performance, reliability and interoperability is a critical final proof of the design and a result of successful collaboration with many parties along the development process. Success over multiple generations of chip design is a key factor in vendor selection.

Comprehensive understanding of carrier expectations and wireless broadband system requirements. The standards that carriers set for integrating products into their networks are high and difficult to meet, even by incumbent product providers. Carriers demand high levels of performance and reliability as well as the ability to interoperate with existing network infrastructures. Comprehensive understanding of carrier system architectures and wireless broadband system requirements is also critical to success.

We design, develop, sell and support highly differentiated mobile and wireless broadband communications solutions for 4G wireless communications devices. Our semiconductor solutions incorporate proprietary signal processing techniques, algorithms and software to enable our customers to provide highly differentiated 4G wireless solutions for mobile and fixed applications. We believe our highly-integrated and cost-effective semiconductor solutions offer industry leading performance in throughput, connectivity, signal reach and power consumption. Our current wireless broadband solutions are used in a variety of applications including fixed and mobile 4G-WiMAX end point devices. Our next generation products are designed to seamlessly support multiple wireless broadband communication protocols and are designed to be applicable for a broad range of 4G-enabled devices.

We believe our track record in successfully developing these products is evidence of our expertise in silicon mapping and solution development.

We are shipping production volumes of our fifth generation of semiconductors, hardware designs and software for 4G wireless broadband applications. We provide our customers with design guidelines known as reference designs that they typically use as a blueprint to integrate 4G semiconductor solutions into their products and devices.

We provide 4G semiconductor solution designs that specify the functionalities and components needed to send IP packets from a host processor, such as a CPU inside of a laptop, to the antenna of the device. We provide highly-integrated single-chip solutions that perform the digital baseband signal processing and analog RF signal processing to interface with the host of the device on one side and with the radio front-end on the other side, as shown in the picture of a 4G-WiMAX USB dongle below. We work with third parties that provide Front End Modules, or FEMs, that are optimized to work with our single chip 4G solutions. Our reference designs make the integration of the 4G semiconductor solution into any device simple, effective and affordable.

The following image illustrates our 4G-WiMAX reference design based on our BCSM350:

The following table shows the functional semiconductor integrated circuits that we currently sell. Our customers can use a variety of combinations of our semiconductor solutions to create differentiated products to meet the needs of the specific market segment that they address. Our products include the 4G-WiMAX functionality and often integrate additional capabilities such as power management or routing and security solutions to provide cost-effective solutions for a specific market segments.

We have been an early participant in the WiMAX Forum’s effort to specify, certify and promote broadband wireless products based upon the IEEE 802.16 standard. Different technologies within the WiMAX standard use varying 802.16 specifications that are applicable to various uses of WiMAX technology. The two versions of IEEE 802.16 applicable to our products and markets are 802.16e and 802.16m. 802.16e, commonly referred to as “Mobile WiMAX,” was adopted to certify and promote broadband wireless products. 802.16m was subsequently adopted for a similar purpose and to facilitate development of next generations of mobile wireless services, such as fast data access and broadband based multimedia applications. We believe our early involvement with in-field trials for interoperability testing allows us to design the industry-leading implementations of WiMAX silicon solutions.

Our products not only meet the appropriate IEEE 802.16e Mobile WiMAX standards for which they are designed, but also offer advanced wireless capabilities to benefit users with improved performance and functionality. Some of our key differentiating capabilities are:

We believe that many of our advanced technologies are equally applicable to 4G-LTE solutions and we intend to continue to provide advanced, high-performance solutions in the wireless broadband market.

We engage in substantial research and development efforts to develop new products and integrate additional capabilities into our core wireless designs. Our key areas of expertise include RF circuit design, baseband semiconductor solutions, including signal processing algorithms and application-specific integrated circuits, or ASIC, design, software development, printed circuit board design and systems integration, which enable us to build complex broadband wireless solutions. Our research and development organization includes operations in India and the United States. As of June 30, 2010, we had 100 engineers in India and 41 engineers in the United States. Approximately 73% of our United States employees hold advanced degrees as of June 2010. Our research and development expense was $35.9 million in 2007, $32.8 million in 2008, $28.8 million in 2009 and $25.5 million for the six months ended June 30, 2010.

The wireless semiconductor business is very competitive given the large market opportunity. We believe that our leadership position in 4G-WiMAX will enable us to compete favorably based on the following factors:

Our ability to compete effectively may be negatively affected if the 4G-WiMAX market declines, does not continue to grow or does not grow as expected, or if end users choose to continue using 3G technologies. In addition to the impact of factors unique to the 4G-WiMAX market and the impact of global economic factors, the 4G-WiMAX market and our competitive position could also be adversely impacted if the 4G-LTE market matures more rapidly than expected. If 4G-LTE deployments are able to provide the same coverage as 4G-WiMAX networks in the near future, customers may prefer to adopt 4G-LTE services and products, which in turn could cause the 4G-WiMAX market to grow at a slower pace than expected.

In the 4G-WiMAX market, we compete with large semiconductor manufacturers such as Intel, MediaTek and Samsung Semiconductor, Inc. who offer 4G-WiMAX solutions as one of many products they sell. In addition, we may also compete with start-ups focused on the 4G-WiMAX market.

In the 4G-LTE market, the field of potential semiconductors suppliers can be grouped into existing 3G semiconductor providers, most notably Broadcom, Icera, Infineon, Marvell, Qualcomm and ST-Ericsson, existing 4G-WiMAX semiconductor vendors, and start-ups focused on 4G-LTE.

Our large competitors generally have longer operating histories, significantly greater resources and name recognition, and a larger base of existing customers. In addition, some of our larger competitors may be able to provide incentives to customers or offer bundled solutions with complementary products, which could be attractive to some customers, or adopt more aggressive pricing policies to offset what we believe are the performance advantages of our solutions.

Our sales and marketing strategy is to achieve design wins with, and sell to, leading OEMs and ODMs and achieve mass deployment of our solutions with operators worldwide. This requires an understanding of the entire wireless communications value chain, which consists of semiconductor solutions providers, ODMs, OEMs, VARs, SIs, operators, TEMs and standards bodies. Each member of the value chain is critical to the successful adoption of new wireless technologies. The graph below illustrates the interdependencies between each member of the value chain.

Semiconductor solution providers such as Beceem sell to OEMs such as Motorola and Sierra Wireless, and ODMs, such as Gemtek and Quanta, who include the semiconductor solutions in mobile devices sold to major operators such as Clearwire and Sprint Nextel. Some operators source mobile devices from VARs or SIs, such as Franklin Wireless. TEMs sell wireless base stations and broadband infrastructure equipment to operators, and devices must be compatible with their base stations to access their networks. Standards bodies such as IEEE, and industry alliances such as the WiMAX Forum, help ensure interoperability by establishing a common feature set and limitations that must be supported by base stations and devices. We believe that we are one of the earliest participants in the 4G-WiMAX ecosystem. We work with ecosystem participants in lab and field trials to help ensure that our products are WiMAX Forum-certified and interoperable with the 4G-WiMAX networks from base station vendors. We believe our established collaborative relationships allow our customers to achieve faster time to market with their products, which accelerates the proliferation of our solutions.

Our sales cycles typically take a significant amount of time to complete and require a substantial expenditure of resources before we receive revenue from product sales, if at all. Such long sales cycles mean that service providers’ and ODM and OEM customers’ product selections, once made, are normally difficult to change.

To enable our customers to easily design our wireless semiconductor solutions into their devices, we supply complete reference designs that specify the components needed to build 4G wireless devices, and the guidelines

for implementing and testing the solution. In addition to providing comprehensive reference designs, we also have an FAE team that supports our customers locally during their design and production bring-up, to help ensure the successful implementation of our wireless semiconductor solutions.

We have a direct sales team that serves our OEM and ODM customers in China, India, Japan, Korea, Taiwan and the United States. We have strategically located this organization near our major customers, through our offices in Japan, Korea, Taiwan and the United States. Each salesperson has specific local market expertise and experience selling our semiconductor solutions. We supplement our direct sales team with experienced distributors in China, Japan, Korea and Taiwan. We have chosen our distributors based on their ability to provide effective field sales, marketing communications and technical support for our products.

Our marketing team is responsible for our product strategy, product development road maps and competitive analysis, and works closely with leading operators to help ensure that our OEM and ODM customer products meet the operators’ needs. We also work with the operators to influence their product requirements to ensure that their networks continue to offer high throughput and capacity when using our devices.

We sell our products pursuant to purchase orders directly to OEMs, who include our semiconductor solutions in their products. Some of our OEM customers subsequently use contract manufacturers for volume production. We also sell to ODMs, who build devices that they supply to OEMs or local SIs that add localization and support capabilities to the product. OEMs sometimes use an ODM as an intermediary in order to fill a gap in their product line, or add complementary, small volume products to their portfolio. However, we maintain close relationships with the target OEM and the initial technology design win is generally awarded by the OEM.

We maintain ongoing contact with our customers and with many of the larger operators for forecasting and technology update purposes. Currently, our target markets include USB dongles, 4G and 3G dual-mode devices, mobile routers, CPE, home gateways with VoIP support, mobile computing devices and consumer electronics markets as well as machine-to-machine modules and smart grid meters.

The following lists our top customers in alphabetical order based on total revenue during the year ended December 31, 2009:

We currently rely, and expect to continue to rely, on a limited number of customers for a significant portion of our revenue. In the six months ended June 30, 2010, Motorola, Uniquest and Ubee accounted for 18%, 19% and 13% of our total revenue, respectively. In 2009, Motorola and Uniquest Corporation accounted for 51% and 12% of our total revenue, respectively. In 2008, Motorola, NEC AT, ZTE and Accton accounted for 29%, 17%, 15% and 10% of our total revenue, respectively. In 2007, NEC AT, Motorola and Samsung Corporation accounted for 41%, 26% and 13% of our total revenue, respectively.

We design and develop our proprietary technology at our headquarters and at our research and development facilities in Bangalore, India. We provide our designs to third-party contract manufacturers, ODMs, assembly and test companies for high volume manufacturing.

Our foundry vendor is TSMC. We currently use 130-nanometer and 65-nanometer standard RF, mixed-signal and digital CMOS production processes. The use of these commercially available standard processes enables us to produce cost effective products. We utilize the services of ASE, STATS ChipPAC and UTAC for

assembly and testing. All of our major suppliers and subcontractors are required to have quality manufacturing systems certified to ISO 9000 levels by the International Organization for Standardization, or ISO, and appropriate environmental control programs.

We rely on extensive simulation, practical application and standardized test bed studies to validate and verify our products. We develop and control all product, test and quality programs used by our subcontractors. This includes semiconductor and system-level hardware fixtures and programs located at our facilities and at our contract manufacturers’ locations. We also develop and provide test and manufacturing quality control firmware and software for our contract manufacturers. We closely monitor the production cycle from wafer to finished goods by reviewing electrical parameters and manufacturing process and yield data. We also maintain test facilities at our headquarters and research and development facilities in Bangalore, India. This enables us to operate certain test processes on demand to reduce the time-to-market for our products and to help ensure the quality and reliability of our products.

Sales of our products are generally made pursuant to purchase orders. We typically include in backlog only those customer orders for which we have accepted purchase orders and which we expect to ship within the next 12 months. Since orders constituting our current backlog are subject to changes in delivery schedules or cancellation with limited or no penalties, we believe that the amount of our backlog is not necessarily an accurate indication of our future revenue.

We rely on a combination of intellectual property rights, including patents, trade secrets, copyrights and trademarks, and contractual protections, to protect our core technology and intellectual property. We have 27 issued and allowed patents in the United States, 56 pending and 10 provisional patent applications in the United States, and 26 pending foreign patent applications. The 27 issued and allowed patents in the United States expire in the years beginning in 2024 through 2028. Many of our issued patents and pending patent applications relate to methods for implementing the WiMAX and LTE standards as well as OFDMA. We focus our patent efforts in the United States, and, when justified by cost and strategic importance, we file corresponding foreign patent applications in strategic jurisdictions such as China, Europe, India, Japan and Korea.

We may not receive competitive advantages from any rights granted under our patents, and our patent applications may not result in the issuance of any patents. In addition, any future patent may be opposed, contested, circumvented, designed around by a third party, or found to be unenforceable or invalidated. Others may develop technologies that are similar or superior to our proprietary technologies, duplicate our proprietary technologies or design around patents owned or licensed by us.

In addition to our own intellectual property, we also rely on third-party licensors for certain technologies embedded in our semiconductor, hardware and software designs. These are typically non-exclusive contracts provided under royalty-accruing or paid-up licenses. These licenses are generally perpetual or automatically renewed for so long as we continue to pay any royalty that may be due. We have entered into a number of licensing arrangements pursuant to which we license third-party technologies. We do not believe our business is dependent to any significant degree on any individual third-party license.

In March 2010, we entered into a license agreement with InterDigital Communications, LLC, under which we were granted non-exclusive, worldwide licenses to certain 2G and 3G signal processing technologies to develop, implement and use these technologies in our products. We will pay an initial license fee of $9.5 million as well as potential royalty payments if and when our products with these technologies start to ship. The agreement does not expire provided we continue to comply with our obligations thereunder. Should the agreement be terminated, the licenses permit us to continue selling in perpetuity products developed during the effective term of the agreement.

We generally control access to and use of our proprietary software and other confidential information through the use of internal and external controls, including contractual protections with employees, contractors, customers and strategic partners. We rely in part on United States and international copyright laws to protect our software. All employees and consultants are required to execute confidentiality agreements in connection with their employment and consulting relationships with us. We also require them to agree to disclose and assign to us all inventions conceived or made in connection with the employment or consulting relationship.

Despite our efforts to protect our intellectual property, unauthorized parties may still copy or otherwise obtain and use our software, technology or other information that we regard as proprietary intellectual property. In addition, we intend to expand our international operations, and effective patent, copyright, trademark and trade secret protection may not be available or may be limited in foreign countries.

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. We have in the past received and, particularly as a public company, we expect that in the future we may receive, communications from various industry participants alleging our infringement of their patents, trade secrets or other intellectual property rights, including suits challenging the WiMAX standard. Any lawsuits could subject us to significant liability for damages, invalidate our proprietary rights and harm our business and our ability to compete. Any litigation, regardless of success or merit, could cause us to incur substantial expenses, reduce our sales, and divert the efforts of our technical and management personnel. In the event we receive an adverse result in any litigation, we could be required to pay substantial damages, seek licenses from third parties, which may not be available on reasonable terms or at all, cease sale of products, expend significant resources to develop alternative technology or discontinue the use of processes requiring the relevant technology.

As of June 30, 2010, we had 202 full-time employees located in Asia, India and the United States, including 28 in operations, 141 in engineering, research and development, and 33 in sales, marketing and administration. None of our employees is represented by a labor organization nor under any collective bargaining arrangements, and we consider current employee relations to be good.

Our principal executive offices are located in Santa Clara, California, consisting of approximately 21,666 square feet under a lease that expires in August 2011. This facility accommodates our principal sales, marketing, operations and finance and administrative activities. We also occupy space in Irvine, California, consisting of approximately 2,614 square feet under a lease that expires in February 2011, which accommodates one of our research teams. We also lease a facility in Bangalore, India, which accommodates one of our research teams. The India facility consists of approximately 8,580 square feet of office space under a lease that expires in June 2012 and 10,962 square feet of office space under a lease that expires in January 2015. We also have small offices in Seoul, Taipei and Tokyo. We do not own any real property. We believe that our leased facilities are adequate to meet our current needs and that additional facilities will be available on suitable, commercially reasonable terms to accommodate future needs.

From time to time, we may become involved in legal proceedings arising in the ordinary course of our business. We are not currently a party to any material legal proceedings, the outcome of which, if determined adversely to us, would individually or in the aggregate have a material adverse effect on our business, operating results, financial condition or cash flows.

The following table sets forth certain information about our executive officers and directors and their respective ages as of August 1, 2010:

Surendra Babu Mandava has served as our President since he co-founded Beceem in October 2003. Mr. Mandava has been a member of our board of directors since April 2009 and has served as our Chief Executive Officer since May 2008. He served as our Chief Financial Officer from May 2008 to January 2010. Mr. Mandava has more than 22 years of experience in the semiconductor industry. From 2003 to present, Mr. Mandava has served as Technology Strategist and member of the board of directors of BroVis Wireless Networks, a wireless technology company. Mr. Mandava also co-founded Centillium Communications, Inc., a semiconductor company, and played a key role in product design from 1997 to 2003. Mr. Mandava holds an M.S. in Electrical Engineering from the Indian Institute of Technology in Kanpur, India, and a B.S. in Electronics & Communications from the Regional Engineering College in Trichy, India. Mr. Mandava’s experience in a prior semiconductor company as well as his experience as a co-founder of Beceem and his tenure with Beceem brings industry experience, historic company knowledge as well as continuity to the board of directors.

Alan F. Krock has served as our Chief Financial Officer since January 2010. From March 2007 to March 2008, Mr. Krock served as Vice President of Corporate Affairs for PMC-Sierra, Inc., a semiconductor company, having served as Vice President and Chief Financial Officer for that company from 2002 to March 2007. From 1998 to 2002, he served as the Vice President and Chief Financial Officer of Integrated Device Technology, Inc., a semiconductor company. Mr. Krock serves on the board of directors of Netlogic Microsystems, Inc., a semiconductor company. Mr. Krock received a B.S. in Business Administration from the University of California, Berkeley.

Arogyaswami Paulraj has served as a member of our board of directors since he co-founded Beceem in 2003, and has served as our Chief Technology Officer since 2003. Dr. Paulraj is a professor emeritus at Stanford University. Dr. Paulraj serves on the boards of directors of BPL Telecom Ltd. and ICOMM Tele Ltd. Dr. Paulraj also serves on several company advisory boards, university councils, and government committees in the United States and India. Dr. Paulraj holds a B.E. in Electrical Engineering from the Naval College of Engineering in Lonavala, and a Ph.D. in Electrical Engineering from the Indian Institute of Technology in New Delhi, India. Dr. Paulraj’s extensive experience in the semiconductor and telecommunications industries as well as his experience as a co-founder of Beceem and his tenure with Beceem as Chief Technology Officer bring industry experience, historic company knowledge and continuity to the board of directors.

David W. Carroll has served as our Vice President of Worldwide Sales since July 2006. Mr. Carroll has 19 years experience in the communication semiconductor industry. From April 2001 to June 2003, Mr. Carroll served as Vice President Worldwide Sales, and from June 2003 to July 2006, he served as Senior Vice President of Worldwide Sales for Mindspeed Technologies, a semiconductor company, where he was responsible for managing the direct worldwide sales force as well as its sales channel partner network around the world. He holds a B.S. in Mechanical Engineering from San Diego State University, and an M.B.A. from the University of Southern California Marshall School of Business.

Lars E. Johnsson has served as our Vice President of Marketing and Business Development since March 2009. From August 2005 to February 2009, Mr. Johnsson served as our Vice President of Business Development. In 2000, Mr. Johnsson co-founded Flarion Technologies, a broadband technology company, where he was responsible for technology marketing until 2005. Mr. Johnsson holds a B.S. in Mechanical Engineering from the University of Hannover, Germany, a M.S. in Chemical Engineering from the University of Karlsruhe, Germany, and an M.B.A. in Technology Management from Rensselaer Polytechnic Institute.

Rajat Gupta has served as our General Manager of India Operations and Managing Director of Beceem Communications Private Ltd., our subsidiary in India, since March 2004. Mr. Gupta served as Managing Director with Cypress Semiconductor Private Limited, a wholly owned India subsidiary of Cypress Semiconductor Corporation from June 1999 to December 2003. He served as Vice President of Technology Development with Arcus Technology Private Limited from November 1992 to June 1999. Mr. Gupta holds a B.E. from Calcutta University and Masters in Technology in Integrated Electronics and Circuits from the Indian Institute of Technology in New Delhi, India.

Kamran Elahian has served as a member of our board of directors since December 2003. In 1999, Mr. Elahian co-founded Global Catalyst Partners, a venture capital fund, and has served as its Chairman since then. Mr. Elahian has also co-founded more than 10 high-tech companies and two nonprofit organizations including Actelis Networks, Cirrus Logic, Planetweb, Greenfield Networks, NeoMagic Corporation, Global Catalyst Foundation, and Schools Online. Mr. Elahian has served as a member of the board of directors for each of these and various other private companies. Mr. Elahian also co-founded Centillium Communications, and served as Chairman of the board of directors from 1997 to 2008. Mr. Elahian holds a B.S. in Computer Science, a B.S. in Mathematics, and an M.E. in Computer Graphics from the University of Utah. Mr. Elahian’s years of venture capital investing and his experience co-founding and managing semiconductor companies brings significant industry expertise and appropriate perspective to the board of directors.

Sam Srinivasan has served as a member of our board of directors since November 2009. Since October 2008, Mr. Srinivasan has served on the board of directors of TranSwitch Corporation, a semiconductor company. From 2008 to December 2009, he served on the board of directors of Leadis Technology, Inc., a semiconductor company. From 2004 to June 2009, Mr. Srinivasan served on the board of directors of SiRF Technology Holdings, Inc., a semiconductor company. From 2006 to 2008, he served on the board of Centillium Communications. From 2000 to 2002, Mr. Srinivasan served as Founder and Chairman of Health Language, Inc. From 1988 to 1996, he served as Senior Vice President, Finance and Chief Financial Officer of Cirrus Logic, Inc. From 1984 to 1988, Mr. Srinivasan served as director of internal audits and subsequently as Corporate Controller of Intel Corporation. Mr. Srinivasan holds an M.B.A. from Case Western Reserve University and is a member of the American Institute of Certified Public Accountants. Mr. Srinivasan’s experience serving on the board of directors of multiple semiconductor companies as well as his accounting background bring industry experience and financial expertise to the board of directors.

Lip-Bu Tan has served as a member of our board of directors since December 2003. In 1987, Mr. Tan founded Walden International, a venture capital firm, and since that time has served as its Chairman. Since January 2009, Mr. Tan has served as President and Chief Executive Officer of Cadence Design Systems, Inc., an electronic design automation software and engineering services company, and has been a member of Cadence’s board of directors since 2004. Mr. Tan serves on the boards of Flextronics International Ltd., an electronics

manufacturing services provider, Semiconductor Manufacturing International Corporation, a semiconductor foundry, SINA Corporation, an online media company, and several private companies. Mr. Tan also served on the boards of Centillium Communications and Integrated Silicon Solution Inc. until 2007, and of Leadis Technology until 2006. Mr. Tan holds a B.S. in Physics from Nanyang University in Singapore, an M.S. in Nuclear Engineering from Massachusetts Institute of Technology, and an M.B.A. from the University of San Francisco. Mr. Tan’s years of venture capital investing, experience as a director of various public companies and tenure on our board of directors bring significant industry experience and appropriate perspective to the board of directors.

Upon the completion of this offering, our board of directors will consist of five members. In March 2010, our board of directors undertook a review of the independence of each director and considered whether any director has a material relationship with us that could compromise his ability to exercise independent judgment in carrying out his responsibilities. As a result of this review, our board of directors determined that all of our directors, other than Mr. Mandava and Dr. Paulraj, qualify as “independent” directors in accordance with the listing requirements and rules and regulations of The NASDAQ Global Market, constituting a majority of independent directors of our board of directors. In evaluating Mr. Tan’s independence, the board of directors considered Mr. Tan’s position as President and Chief Executive Officer of Cadence Design Systems, Inc., with whom we have several agreements. However, the board of directors noted that Mr. Tan did not derive any direct or indirect material benefit from such agreements, Mr. Tan did not participate in the negotiation of these agreements and our board of directors believes that such agreements are in our best interest and on terms no less favorable than could be obtained from other third parties. In addition, the board of directors noted that the dollar amounts of payments to Cadence pursuant to these agreements will not constitute a material percentage of the revenue of Cadence, or of our revenue or total operating expenses. Mr. Mandava and Dr. Paulraj are not considered independent because they are employees of Beceem.

Immediately after this offering, our board of directors will be divided into three classes with staggered three-year terms. At each annual meeting of stockholders, the successors to directors whose terms then expire will be elected to serve from the time of election and qualification until the third annual meeting following election. Our directors will be divided among the three classes as follows:

The authorized number of directors may be changed only by resolution of the board of directors. This classification of the board of directors into three classes with staggered three-year terms may have the effect of delaying or preventing changes in our control or management.

Our board of directors is currently chaired by our President and Chief Executive Officer, Mr. Mandava. The board of directors has also appointed Mr. Srinivasan as lead independent director.

We believe that combining the positions of Chief Executive Officer and chairman of the board of directors helps to ensure that the board of directors and management act with a common purpose. In our view, separating

the positions of Chief Executive Officer and chairman of the board of directors has the potential to give rise to divided leadership, which could interfere with good decision-making or weaken our ability to develop and implement strategy. Instead, we believe that combining the positions of Chief Executive Officer and chairman of the board of directors provides a single, clear chain of command to execute the Company’s strategic initiatives and business plans. In addition, we believe that a combined Chief Executive Officer/chairman of the board of directors is better positioned to act as a bridge between management and the board of directors, facilitating the regular flow of information. We also believe that it is advantageous to have a chairman of the board of directors with an extensive history with and knowledge of the Company (as is the case with our Chief Executive Officer) as compared to a relatively less informed independent chairman of the board of directors.

The board of directors appointed Mr. Srinivasan as the lead independent director to help reinforce the independence of the board of directors as a whole. The position of lead independent director has been structured to serve as an effective balance to a combined Chief Executive Officer/chairman of the board of directors: the lead independent director is empowered to, among other duties and responsibilities, establish with the chairman agendas for regular meetings of the board of directors, preside over meetings of the board of directors in the absence of the chairman, preside over and establish the agendas for meetings of the independent directors, coordinate with committee chairs regarding meetings agendas, and preside over any portions of meetings of the board of directors at which the evaluation or compensation of the Chief Executive Officer is presented or discussed. In addition, it is the responsibility of the lead independent director to coordinate between the board of directors and management with regard to the determination and implementation of responses to any problematic risk management issues. As a result, we believe that the lead independent director can help ensure the effective independent functioning of the board of directors in its oversight responsibilities. In addition, we believe that the lead independent director is better positioned to build a consensus among directors and to serve as a conduit between the other independent directors and the chairman of the board of directors, for example, by facilitating the inclusion on meeting agendas of matters of concern to the independent directors. In light of the Chief Executive Officer’s extensive history with and knowledge of the Company, and because the board of directors’ lead independent director is empowered to play a significant role in the board of directors’ leadership and in reinforcing the independence of the board of directors, we believe that it is advantageous for us to combine the positions of Chief Executive Officer and chairman of the board of directors.

One of the key functions of our board of directors is informed oversight of our risk management process. The board of directors does not have a standing risk management committee, but rather administers this oversight function directly through the board of directors as a whole, as well as through various board of directors standing committees that address risks inherent in their respective areas of oversight. In particular, our board of directors is responsible for monitoring and assessing strategic risk exposure, our audit committee has the responsibility to consider and discuss our major financial risk exposures and the steps our management has taken to monitor and control these exposures, including guidelines and policies to govern the process by which risk assessment and management is undertaken. The audit committee also monitors compliance with legal and regulatory requirements, in addition to oversight of the performance of our internal audit function. Our nominating and corporate governance committee monitors the effectiveness of our corporate governance guidelines, including whether they are successful in preventing illegal or improper liability-creating conduct. Our compensation committee assesses and monitors whether any of our compensation policies and programs has the potential to encourage excessive risk-taking.

Our board of directors has established an audit committee, a compensation committee and a nominating and corporate governance committee. Our board of directors may establish other committees to facilitate the management of our business. The composition and functions of each committee are described below.

Our audit committee currently consists of Messrs. Elahian, Srinivasan and Tan, each of whom our board of directors has determined to be independent under the NASDAQ listing standards. The chair of our audit committee is Mr. Srinivasan, whom our board of directors has determined is an “audit committee financial expert” within the meaning of the Securities and Exchange Commission, or SEC, regulations. Mr. Srinivasan satisfies the independence requirements under the NASDAQ listing standards and Rule 10A-3(b)(1) of the Securities Exchange Act of 1934, or the Exchange Act. Each member of our audit committee can read and understand fundamental financial statements in accordance with audit committee requirements. In arriving at this determination, the board has examined each audit committee member’s scope of experience and the nature of their employment in the corporate finance sector. The functions of this committee include:

Our compensation committee consists of Messrs. Srinivasan and Tan, each of whom our board of directors has determined to be independent under the NASDAQ listing standards, to be a “non-employee director” as defined in Rule 16b-3 promulgated under the Exchange Act and to be an “outside director” as that term is defined in Section 162(m) of the Internal Revenue Code of 1986, as amended, or Section 162(m). The chair of our compensation committee is Mr. Tan. The functions of this committee include:

Our nominating and corporate governance committee consists of Messrs. Elahian and Tan, each of whom our board of directors has determined is independent under the NASDAQ listing standards. The chair of our nominating and corporate governance committee is Mr. Elahian. The functions of this committee include:

Our board of directors has adopted a Code of Business Conduct and Ethics. The Code of Business Conduct and Ethics will apply to all of our employees, officers (including our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions), agents and representatives, including directors and consultants. Upon the effectiveness of the registration statement of which this prospectus forms a part, the full text of our Code of Business Conduct and Ethics will be posted on our website at www.beceem.com. We intend to disclose future amendments to certain provisions of our Code of Business Conduct and Ethics, or waivers of such provisions, applicable to any principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions or our directors on our website identified above. The inclusion of our website address in this prospectus does not include or incorporate by reference the information on our website into this prospectus.

None of the members of the compensation committee is currently or has been at any time one of our officers or employees. None of our executive officers currently serves, or has served during the last completed fiscal year, as a member of the board of directors or compensation committee of any entity that has one or more executive officers serving as a member of our board of directors or compensation committee.

In February 2010, our board of directors approved cash compensation to be paid to each of Messrs. Elahian, Srinivasan and Tan. Prior to that date, none of our directors had received any cash compensation for their services as members of our board of directors or any committee of our board of directors. Commencing in February 2010, each of Messrs. Elahian, Srinivasan and Tan, our non-employee directors, will receive compensation for their services as follows:

We have reimbursed and will continue to reimburse our non-employee directors for their travel, lodging and other reasonable expenses incurred in attending meetings of our board of directors and committees of the board of directors. In the fiscal year ended December 31, 2009, our directors did not receive any compensation for their services as board members.

The following table provides information regarding the compensation earned during the fiscal year ended December 31, 2009 by our directors who did not serve as executive officers:

The following discussion and analysis of compensation arrangements of our named executive officers for 2009 should be read together with the compensation tables and related disclosures set forth below. This discussion contains forward-looking statements that are based on our current plans, considerations, expectations and determinations regarding future compensation programs. Actual compensation programs that we adopt may differ materially from currently planned programs as summarized in this discussion.

This section discusses the policies and decisions with respect to the compensation of our executive officers who are named in the “Fiscal Year 2009 Summary Compensation Table” and the most important factors relevant to an analysis of these policies and decisions. These “named executive officers” for fiscal year 2009 are:

We recognize that our success is in large part dependent on our ability to attract and retain talented employees. We endeavor to create and maintain compensation programs based on performance, teamwork and rapid progress and to align the interests of our executive officers and stockholders. The principles and objectives of our compensation and benefits programs for our employees generally, and for our executive officers specifically, are to:

The compensation of our executive officers consists of the following principal components:

Each component has a role in meeting the above objectives. In addition to base salaries, we believe that equity incentive awards are a critical compensation component. We believe that stock options provide long-term incentives that align the interests of employees and executive officers alike with the long-term interests of stockholders.

We strive to achieve an appropriate mix between cash compensation and equity incentive awards to meet our objectives. We do not apply any formal or informal policies or guidelines for allocating compensation between current and long-term compensation, or between cash and equity compensation. As a result, the allocation between cash and equity varies between executive officers. The mix of compensation components is designed to reward short-term results and motivate long-term performance through equity awards. We believe the most important indicator of whether our compensation objectives are being met is our ability to motivate our executive officers to deliver superior performance and retain them to continue their careers with us on a cost-effective basis.

The compensation levels of the executive officers reflect the varying roles and responsibilities of such executive officers, as well as the length of time those executive officers have been with us.

In the past our board of directors determined the appropriate level for overall executive officer compensation and the separate components based on the experience level, internal equity, length of service, skill level and other factors the board deemed appropriate. Our board of directors has not adopted a formulaic or benchmark approach to determining compensation.

Our compensation-setting process and each of the principal components of our executive compensation program is discussed in more detail below.

Historically, the compensation of our executive officers was largely determined on an individual basis, as the result of arm’s-length negotiations between the company and an individual upon joining us and has been based on a variety of factors including, in addition to the factors described above (each as of the time of the applicable compensation decision):


Large accelerated filer ¨		Accelerated filer ¨		Non-accelerated filer x		Smaller reporting company ¨


	Per Share	Total
Initial public offering price
Underwriting discounts
Proceeds to us (before expenses)


		Page
PROSPECTUS SUMMARY		1
RISK FACTORS		9
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS		29
USE OF PROCEEDS		30
DIVIDEND POLICY		31
CAPITALIZATION		32
DILUTION		34
SELECTED CONSOLIDATED FINANCIAL DATA		36
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS		38
BUSINESS		65
MANAGEMENT		78
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS		103
PRINCIPAL STOCKHOLDERS		107
DESCRIPTION OF CAPITAL STOCK		109
SHARES ELIGIBLE FOR FUTURE SALE		114
MATERIAL U.S. FEDERAL TAX CONSIDERATIONS FOR NON-U.S. HOLDERS		116
UNDERWRITING		119
LEGAL MATTERS		126
EXPERTS		126
WHERE YOU CAN FIND ADDITIONAL INFORMATION		126
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS		F-1


	As of June 30, 2010
	Actual			Pro Forma			Pro Forma As Adjusted
	(In thousands, except share data)
	(unaudited)
Capital lease obligations, net of current portion		1,649			1,649
Mandatorily redeemable preferred stock, $0.001 par value: 101,549,753 shares (unaudited) authorized, 75,636,792 shares (unaudited) issued and outstanding (aggregate liquidation value of $80,509 (unaudited)) actual; no shares (unaudited) issued or outstanding pro forma and pro forma as adjusted		26,076			—
Mandatorily redeemable common stock, $0.001 par value, 1,098,618 shares (unaudited) issued and outstanding actual; no shares issued or outstanding pro forma and pro forma as adjusted		3,195			—

Stockholders’ equity:
Preferred stock, $0.001 par value; no shares authorized, issued or outstanding actual; 10,000,000 shares authorized, no shares (unaudited) issued or outstanding pro forma and pro forma as adjusted
Common stock and additional paid-in capital, $0.001 par value; 146,592,517 shares (unaudited) authorized, 14,050,280 shares (unaudited) issued and outstanding, net of mandatorily redeemable common stock actual; 200,000,000 shares authorized, 91,885,139 shares (unaudited) issued and outstanding pro forma and shares issued and outstanding, pro forma and pro forma as adjusted		76,174			162,879
Accumulated deficit		(83,185	)		(140,619	)

Total stockholders’ equity (deficit)		(7,011	)		22,260

Total capitalization	$	23,909		$	23,909


Assumed initial public offering price per share		$
Pro forma net tangible book value per share as of June 30, 2010	$
Increase in pro forma net tangible book value per share attributable to sales of shares of our common stock in this offering

Pro forma as adjusted net tangible book value per share after giving effect to this offering

Dilution per share to investors in this offering


	Year Ended December 31,										Six Months Ended June 30, (Unaudited)
	2005		2006		2007		2008		2009		2009		2010
	(In thousands, except share and per share data)
Consolidated Statement of Operations Data:
Revenue:
Product revenue	$	—	$	2,539	$	5,958	$	7,577	$	40,955	$	8,793	$	45,013
Services and other revenue		—		352		7,942		6,308		2,698		1,884		500

Total revenue		—	$	2,891		13,900		13,885		43,653		10,677		45,513

Cost of revenue:
Cost of product revenue		—		1,764		3,116		4,383		21,821		5,749		25,009
Cost of services and other revenue		—		141		6,879		2,554		475		363		28

Total cost of revenue		—		1,905		9,995		6,937		22,296		6,112		25,037

Gross profit		—		986		3,905		6,948		21,357		4,565		20,476
Operating expenses:
Research and development		13,416		18,526		35,919		32,769		28,765		13,311		25,515
Sales, general and administrative		1,637		5,274		6,965		7,602		6,338		3,457		5,075

Total operating expenses		15,053		23,800		42,884		40,371		35,103		16,768		30,590

Loss from operations		(15,053)		(22,814)		(38,979)		(33,423)		(13,746)		(12,203)		(10,114)
Interest income (expense), net		6		332		2,087		398		118		81		(86)
Warrant revaluation income (expense)		—		(146)		(242)		808		(3,598)		(50)		432
Other income (expense), net		—		—		(204)		3		186		(45)		(348)

Total other interest and income (expense), net		6		186		1,641		1,209		(3,294)		(14)		(2)

Loss before income taxes		(15,047)		(22,628)		(37,338)		(32,214)		(17,040)		(12,217)		(10,116)
Provision (benefit) for income taxes		—		—		154		51		(119)		(6)		117

Net loss		(15,047)		(22,628)		(37,492)		(32,265)		(16,921)		(12,211)		(10,233)
Gain on exchange of mandatorily redeemable preferred stock in connection with recapitalization		—		—		—		—		57,434		57,434		—

Net income (loss) available to common and preferred stockholders	$	(15,047)	$	(22,628)	$	(37,492)	$	(32,265)	$	40,513	$	45,223	$	(10,233)

Net income (loss) per share attributable to common stock:
Basic (1)	$	(5.92)	$	(5.99)	$	(7.75)	$	(6.39)	$	0.59	$	0.97	$	(0.74)
Diluted (1)	$	(5.92)	$	(5.99)	$	(7.75)	$	(6.39)	$	0.52	$	0.97	$	(0.74)

Weighted-average number of shares used in computing net income (loss) per share attributable to common stockholders:
Basic (1)		2,540,489		3,778,189		4,836,139		5,045,811		7,847,304		7,894,816		13,778,488
Diluted (1)		2,540,489		3,778,189		4,836,139		5,045,811		16,057,962		8,218,427		13,778,488

Pro forma net loss per share attributable to common stockholders (unaudited):
Basic (1)									$	(0.20)			$	(0.11)
Diluted (1)									$	(0.20)			$	(0.11)

Pro forma weighted–average shares of common stock outstanding (unaudited):
Basic (1)										84,506,024				89,415,280
Diluted (1)										84,506,024				89,415,280



	As of December 31,														As of June 30, (Unaudited)
	2005			2006			2007			2008			2009		2010
	(In thousands)
Consolidated Balance Sheet Data:
Cash, cash equivalents and restricted cash	$	24,307		$	50,006		$	41,178		$	13,256		$	16,793	$	11,974
Working capital		21,117			45,928			34,616			12,358			24,600		21,919
Total assets		28,598			63,990			60,703			27,599			46,550		43,289
Technology license obligations under capital lease		—			—			1,442			801			3,108		2,591
Warrants on mandatorily redeemable preferred stock and on mandatorily redeemable common stock		—			549			800			15			3,612		—
Total liabilities		7,506			17,356			11,310			6,793			19,139		21,029
Mandatorily redeemable preferred stock		41,989			88,490			124,895			124,895			26,076		26,076
Mandatorily redeemable common stock		—			—			—			—			5		3,195
Total stockholders’ equity (deficit)		(20,897	)		(41,856	)		(75,502	)		(104,089	)		1,330		(7,011	)


	Year Ended December 31,						Six Months Ended June 30, (Unaudited)
	2007		2008		2009		2009		2010
	(In thousands)
NRE services	$	5,647	$	2,067	$	1,256	$	907	$	238
Interoperability testing services		1,867		2,096		403		272		48
Software and other revenue		428		2,145		1,039		705		214

Total services and other revenue	$	7,942	$	6,308	$	2,698	$	1,884	$	500


	June 30, 2010	Weighted Average Exercise Price		IPO Price	Excess of IPO Price	Aggregate Intrinsic Value
Vested	4,824,290	$	0.07	$	$	$
Expected to vest	13,870,538		0.89

Total vested or expected-to-vest stock options	18,694,828	$	0.68			$


	Six Months Ended June 30, (Unaudited)						Change
	2009			2010			$			%
	(In thousands)
Operations Data:
Revenue:
Product revenue	$	8,793		$	45,013		$	36,220		412	%
Services and other revenue		1,884			500			(1,384	)	(73	)

Total revenue		10,677			45,513			34,836		326

Cost of revenue:
Cost of product revenue		5,749			25,009			19,260		335
Cost of services and other revenue		363			28			(335	)	(92	)

Total cost of revenue		6,112			25,037			18,925		310

Gross profit		4,565			20,476			15,911		349

Operating expenses:
Research and development		13,311			25,515			12,204		92
Sales, general and administrative		3,457			5,075			1,618		47

Total operating expenses		16,768			30,590			13,822		82

Loss from operations		(12,203	)		(10,114	)		2,089		(17	)
Interest income (expense), net		81			(86	)		(167	)	*
Warrant revaluation income (expense)		(50	)		432			482		*
Other expense, net		(45	)		(348	)		(303	)	*

Total interest and other expense, net		(14	)		(2	)		12		*

Loss before income taxes		(12,217	)		(10,116	)		2,101		(17	)
Provision (benefit) for income taxes		(6	)		117			123		*

Net loss	$	(12,211	)	$	(10,233	)	$	1,978		(16	)
Gain on exchange of mandatorily redeemable preferred stock in connection with recapitalization		57,434			—			(57,434	)	*

Net income (loss) available to common and preferred stockholders		45,223			(10,233	)		(55,456	)	123	%


	Year Ended December 31,						Change
	2008			2009			$			%
	(In thousands)
Operations Data:
Revenue:
Product revenue	$	7,577		$	40,955		$	33,378		441	%
Services and other revenue		6,308			2,698			(3,610	)	(57	)

Total revenue		13,885			43,653			29,768		214

Cost of revenue:
Cost of product revenue		4,383			21,821			17,438		398
Cost of services and other revenue		2,554			475			(2,079	)	(81	)

Total cost of revenue		6,937			22,296			15,359		221

Gross profit		6,948			21,357			14,409		207

Operating expenses:
Research and development		32,769			28,765			(4,004	)	(12	)
Sales, general and administrative		7,602			6,338			(1,264	)	(17	)

Total operating expenses		40,371			35,103			(5,268	)	(13	)

Loss from operations		(33,423	)		(13,746	)		19,677		(59	)
Interest income, net		398			118			(280	)	(70	)
Warrant revaluation income (expense)		808			(3,598	)		(4,406	)	*
Other income, net		3			186			183		*

Total interest and other income (expense), net		1,209			(3,294	)		(4,503	)	*

Loss before income taxes		(32,214	)		(17,040	)		15,174		(47	)
Provision (benefit) for income taxes		51			(119	)		(170	)	*

Net loss		(32,265	)		(16,921	)		15,344		(48	)
Gain on exchange of mandatorily redeemable preferred stock in connection with recapitalization		—			57,434			57,434		*

Net income (loss) available to common and preferred stockholders	$	(32,265	)	$	40,513		$	72,778		*


	For the Three Months Ended
	March 31, 2009			June 30, 2009			September 30, 2009			December 31, 2009			March 31, 2010 (Unaudited)			June 30, 2010 (unaudited)
	(In thousands)
Operations Data:
Revenue:
Product revenue	$	2,861		$	5,932		$	11,814		$	20,348		$	19,456		$	25,557
Services and other revenue		1,455			429			252			562			164			336

Total revenue		4,316			6,361			12,066			20,910			19,620			25,893

Cost of revenue:
Cost of product revenue		1,891			3,858			6,658			9,414			10,202			14,807
Cost of services and other revenue		290			73			49			63			—			28

Total cost of revenue		2,181			3,931			6,707			9,477			10,202			14,835

Gross profit		2,135			2,430			5,359			11,433			9,418			11,058
Operating expenses:
Research and development		6,401			6,910			8,389			7,065			16,150			9,365
Sales, general and administrative		1,555			1,902			1,449			1,432			2,705			2,370

Total operating expenses		7,956			8,812			9,838			8,497			18,855			11,735

Income (loss) from operations		(5,821	)		(6,382	)		(4,479	)		2,936			(9,437	)		(677	)
Interest income, net		39			42			20			17			(35	)		(51	)
Warrant revaluation income (expense)		15			(65	)		(2,718	)		(830	)		(2,430	)		2,862
Other income (expense), net		(136	)		91			58			173			(195	)		(153	)

Total interest and other income (expense), net		(82	)		68			(2,640	)		(640	)		(2,660	)		2,658

Income (loss) before taxes		(5,903	)		(6,314	)		(7,119	)		2,296			(12,097	)		1,981
Provision (benefit) for income taxes		5			(11	)		(11	)		(102	)		32			85

Net income (loss)		(5,908	)		(6,303	)		(7,108	)		2,398			(12,129	)		1,896
Gain on exchange of mandatorily redeemable preferred stock in connection with recapitalization		—			57,434			—			—			—			—

Net income (loss) available to common and preferred stockholders	$	(5,908	)	$	51,131		$	(7,108	)	$	2,398		$	(12,129	)	$	1,896


	Year Ended December 31,									Six Months Ended June 30, (Unaudited) 2010
	2007			2008			2009			Six Months Ended June 30, (Unaudited) 2010
	(In thousands)
Net cash used in operating activities	$	(22,279	)	$	(26,149	)	$	(16,023	)	$	(3,973	)
Net cash provided by (used in) investing activities		(3,426	)		(570	)		(1,136	)		690
Net cash provided by (used in) financing activities		16,877			(1,203	)		19,696			(536	)

Net increase (decrease) in cash and cash equivalents	$	(8,828	)	$	(27,922	)	$	2,537		$	(3,819	)


	Payment Due by Period as of December 31, 2009
	(In thousands)
	Total		Less than 1 Year		1-3 Years		3-5 Years		More than 5 Years		All Other
Contractual Obligations (1)
Facilities under operating leases (2)	$	1,753	$	653	$	725	$	375	$	—	$	—
Technology license obligations under capital lease (3)		3,666		1,160		2,228		278		—		—
Noncancelable purchase obligations (4)		5,098		4,585		456		57		—		—

Total	$	10,517	$	6,398	$	3,409	$	710	$	—	$	—


Product	Application	Features
BCS200	USB modem and CPEs	Data

BCS220	CPEs, smart meters and machine-to-machine modules	Data, power management unit

BCSM250	USB modems and mobile routers	PMU, USB physical layer CD less install

BCS5200	CPE with integrated voice over Internet protocol, or VoIP support	Data + Voice + WiFi

BCSM350	USB modems, mobile routers, handhelds and modules	USB physical layer multimode handoff support

BCS5350	High-performance CPE with VoIP and WiFi support	Data + Voice +WiFi


Name	Age	Position
Executive Officers:
Surendra Babu Mandava	52	President, Chief Executive Officer and Director
Alan F. Krock	49	Chief Financial Officer
Arogyaswami Paulraj	66	Chief Technology Officer and Director
David W. Carroll	49	Vice President, Worldwide Sales
Lars E. Johnsson	45	Vice President, Marketing and Business Development
Rajat Gupta	51	General Manager of India Operations

Other Directors:
Kamran Elahian (1)(3)	56	Director
Sam Srinivasan (1)(2)	66	Director
Lip-Bu Tan (1)(2)(3)	50	Director


Name (1)	Stock Option Awards ($) (2)		All Other Compensation ($)			Total ($)
Kamran Elahian		—		—			—
Shahin Hedayat (3)	$	13,500	$	17,657	(4)	$	31,157
Sam Srinivasan		—		—			—
Lip-Bu Tan		—		—			—