UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10-K
(Mark One)
X ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended January 6, 2002
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission file number 0-21970
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ACTEL CORPORATION
(Exact name of Registrant as specified in its charter)
California 77-0097724
(State or other jurisdiction of (I.R.S. Employee
incorporation or organization) Identification No.)
955 East Arques Avenue
Sunnyvale, California 94086-4533
(Address of principal executive offices) (Zip Code)
(408) 739-1010
(Registrant's telephone number, including area code)
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Securities registered pursuant to Section 12 (b) of the Act:
None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $.001 par value
(Title of class)
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Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports) and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Annual Report on Form 10-K or any
amendment to this Annual Report on Form 10-K.
The aggregate market value of the voting stock held by non-affiliates of
the Registrant, based upon the closing price for shares of the Registrant's
Common Stock on April 3, 2002, as reported by the National Market System of the
National Association of Securities Dealers Automated Quotation System, was
approximately $368,000,000. In calculating such aggregate market value, shares
of Common Stock owned of record or beneficially by all officers, directors, and
persons known to the Registrant to own more than five percent of any class of
the Registrant's voting securities were excluded because such persons may be
deemed to be affiliates. The Registrant disclaims the existence of control or
any admission thereof for any purpose.
Number of shares of Common Stock outstanding as of April 3, 2002:
24,231,482.
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DOCUMENTS INCORPORATED BY REFERENCE
The following documents are incorporated by reference in Parts II, III, and
IV of this Annual Report on Form 10-K: (i) portions of Registrant's annual
report to security holders for the fiscal year ended January 6, 2002 (Parts II
and IV), and (ii) portions of Registrant's proxy statement for its annual
meeting of shareholders to be held on May 24, 2002 (Part III).
All information contained or incorporated by reference in this Annual
Report on Form 10-K should be read in conjunction with and in the context of the
Risk Factors set forth at the end of Part I. Unless otherwise indicated, the
statements contained in this Annual Report on Form 10-K are made as of April 4,
2002, and Actel undertakes no obligation to update such statements, including
forward-looking statements. The {bracketed statements} contained in this Annual
Report on Form 10-K are forward-looking statements made pursuant to the safe
harbor provisions of the Private Securities Litigation Reform Act of 1995.
Actual events and results may differ materially from those expressed or forecast
in forward-looking statements due to the Risk Factors or for other reasons.
PART I
ITEM 1. BUSINESS
Overview
Actel designs, develops, and markets field programmable gate arrays (FPGAs)
and associated development tools, intellectual property (IP) cores, and
services. FPGAs are used by designers of communications, computer, consumer,
industrial, military and aerospace, and other electronic systems to
differentiate their products and get them to market faster. Actel is the leading
supplier of FPGAs based on flash and antifuse technologies. Actel's strategy is
to add value for application specific integrated circuit (ASIC) users and serve
markets in which Actel's technologies have an advantage, including the ASIC
replacement, high reliability, and high-speed communications markets.
Actel shipped its first products in 1988 and thousands of its development
tools are in the hands of customers, including Alcatel; The Boeing Company
(Boeing); Cisco Systems, Inc. (Cisco); Compaq Computer Corporation (Compaq);
General Electric Company (GE); Honeywell International Inc. (Honeywell);
Lockheed Martin Corporation (Lockheed Martin); Marconi Corporation plc
(Marconi); Nortel Networks Corporation (Nortel); Samsung; Sanyo; and Siemens AG
(Siemens). Actel has foundry relationships with BAE Systems (BAE) in the United
States; Chartered Semiconductor Manufacturing Pte Ltd (Chartered) in Singapore;
Infineon Technologies AG (Infineon) in Germany; Matsushita Electronics Company
(MEC) in Japan; United Microelectronics Corporation (UMC) in Taiwan; and Winbond
Electronics Corp. (Winbond) in Taiwan.
Actel markets its products through a worldwide, multi-tiered sales and
distribution network. In 2001, sales made through distributors accounted for 68%
of Actel's net revenues. Two of Actel's distributors, Pioneer-Standard
Electronics, Inc. (Pioneer) and Unique Technologies, Inc. (Unique), accounted
for 20% and 19%, respectively, of Actel's net revenues in 2001. In addition to
the two distributors, the North American sales network includes 22 sales offices
and 20 sales representative firms. Actel's European, Pan-Asia, and International
sales networks include nine sales offices and 24 distributors and sales
representative firms. In 2001, sales to customers outside the United States
accounted for 38% of net revenues.
Actel was incorporated in California in 1985. Actel's principal facilities
and executive offices are located at 955 East Arques Avenue, Sunnyvale,
California 94086-4533, and its telephone number at that address is (408)
739-1010. Actel's World Wide Web address is http://www.actel.com. As used in
this Annual Report on Form 10-K, "Actel" means Actel Corporation and its
consolidated subsidiaries. The Actel name and logo and ProASIC are registered
trademarks of Actel. This Annual Report on Form 10-K also includes unregistered
trademarks of Actel and registered and unregistered trademarks of other
companies.
Industry Background
The three principal types of integrated circuits used in most digital
electronic systems are microprocessor, memory, and logic circuits.
Microprocessors are used for control and computing tasks; memory devices are
used to store program instructions and data; and logic devices are used to adapt
these processing and storage capabilities to a specific application. Logic
circuits are found in virtually every electronic system.
The logic design of competing electronic systems is often a principal area
of differentiation. Unlike the microprocessor and memory markets, which are
dominated by a relatively few standard designs, the logic market is highly
fragmented and includes, among many other segments, low-capacity standard
transistor-transistor logic circuits (TTLs) and custom-designed ASICs. TTLs are
standard logic circuits that can be purchased "off the shelf" and interconnected
on a printed circuit board (PCB), but they tend to limit system performance and
increase system size and cost compared with logic functions integrated at the
circuit (rather than the board) level. ASICs are customized circuits that offer
electronic system manufacturers the benefits of increased circuit integration:
improved system performance, reduced system size, and lower system cost.
ASICs include conventional gate arrays, standard cells, and programmable
logic devices (PLDs). Conventional gate arrays and standard cell circuits are
customized to perform desired logical functions at the time the device is
manufactured. Since they are "hard wired" at the wafer foundry, conventional
gate arrays and standard cells are subject to the time and expense risks
associated with any development cycle involving a foundry. Typically,
conventional gate arrays and standard cells are first delivered in production
volumes months after the successful production of acceptable prototypes. In
addition, conventional gate arrays and standard cells cannot be modified after
they are manufactured, which subjects them to the risk of inventory obsolescence
and constrains the system manufacturer's ability to change the logic design.
PLDs, on the other hand, are manufactured as standard devices and customized "in
the field" by electronic system manufacturers using computer-aided engineering
(CAE) design and programming systems. PLDs are being used by a growing number of
electronic system manufacturers as a solution to their increasing demands for
differentiation, rapid time to market, and manufacturing flexibility.
PLDs include simple PLDs, complex PLDs (CPLDs), and FPGA. The market for
CPLDs and FPGAs has grown rapidly because they generally offer greater capacity,
lower total cost per usable logic gate, and lower power consumption than TTLs
and simple PLDs, and faster time to market and lower development costs than
conventional gate arrays and standard cells. For many electronic system
manufacturers, the time-to-market and manufacturing-flexibility benefits of
CPLDs and FPGAs outweigh their price premium over conventional gate arrays or
standard cells of comparable capacity.
Before a CPLD or FPGA can be programmed, there are various steps that must
be accomplished by a designer using CAE design software. These steps include
defining the function of the circuit, verifying the design, and laying out the
circuit. Traditionally, logic functions were defined using schematic capture
software, which essentially permit the designer to construct a circuit diagram
on the computer. As CPLD and FPGA have increased in capacity, the time required
to create schematic diagrams using schematic capture tools has often become
prohibitive. To address this problem, designers are increasingly turning to
hardware description languages (HDLs), also known as high-level description
(HLD). VHDL and Verilog are the most common HDLs, which permit the designer to
describe the circuit functions at an abstract level and to verify the
performance of logic functions at that level. The HDL can then be fed into logic
synthesis software that automatically converts the abstract description to a
gate-level representation equivalent to that produced by schematic capture
tools. After a gate-level representation of the logic function has been created
and verified, it must be translated or "layed out" onto the generic logic
modules of the CPLD or FPGA. This is achieved by placing the logic gates and
routing their interconnections, a process referred to as "place and route."
After the layout of the device has been verified by timing simulation, the CPLD
or FPGA can be programmed.
Electronic system manufacturers program a CPLD or FPGA to perform the
desired logical functions by using a device programmer to change the state of
the device's programming elements (such as antifuses or memory cells) through
the application of an electrical signal. Most CPLDs are programmed with erasable
programmable read only memories or other "floating gate" technologies. Many
FPGAs are programmed with static random access memory (SRAM) technology. Actel's
FPGAs use flash and antifuse programming elements. After programming, the
functionality and performance of the programmed CPLD or FPGA in the electronic
system must be verified.
To a large extent, the characteristics of a CPLD or FPGA are dictated by
the technology used to make the device programmable. CPLDs and FPGAs based on
programming elements controlled by floating gates or SRAMs must be configured by
a separate boot device, such as the serial programmable read only memory
commonly used with SRAM FPGAs. The need to boot these devices makes them less
reliable and secure and means they are not functional immediately on power-up,
lose their circuit configurations in the absence of power, and often require a
separate boot device. In addition, SRAM FPGAs and CPLDs based on look-up tables
tend to consume more power. FPGAs based on flash and antifuse programming
elements do not need to be booted-up and are reliable, secure,
"live-at-power-up," nonvolatile, single-chip solutions that operate at low
power. These are all characteristics shared by conventional "hard-wired" ASICs.
The technology used to make a CPLD or FPGA programmable dictates whether
the device is reprogrammable as well whether it's volatile. CPLDs and FPGAs
based on programming elements controlled by floating gates or SRAMs are
reprogrammable but lose their circuit configuration in the absence of electrical
power. FPGAs based on antifuse programming elements are one-time programmable
(OTP) and retain their circuit configuration permanently, even in the absence of
power. FPGAs based on programming elements controlled by flash memory are
reprogrammable and retain their circuit configuration in the absence of power.
Actel Strategy
Actel's flash and antifuse technologies are differentiated from, and have
certain advantages over, the SRAM and other technologies used in competing PLDs.
Actel's strategy is to add value for ASIC users and serve markets in which
Actel's technologies have an advantage, including the ASIC replacement, high
reliability, and high-speed communications markets.
ASIC Replacement
The ASIC replacement market, which is driven primarily by cost, is
addressed by Actel's general purpose FPGAs. Like ASICs, Actel's flash and
antifuse FPGAs are nonvolatile, "live-at-power-up," low-power, single-chip
solutions. Like other programmable devices, Actel's FPGAs reduce design risk,
inventory investment, and time to market. In addition, logic designers can
choose to use either ASIC or FPGA software tools and design methodologies, and
the architectures of Actel's FPGAs enable the utilization of predefined IP
cores, which can be reused across multiple designs or product versions.
High Reliability
The high reliability market, which is driven primarily by nonvolatility,
security, and resistance to radiation effects, is addressed by Actel's military,
avionics, and space-grade FPGAs. Actel is the world's leading supplier of high
reliability PLDs. Actel's antifuse and flash FPGAs are nonvolatile, offer levels
of design security beyond SRAM-based FPGAs and even conventional ASICs, and are
not susceptible to configuration corruption caused by radiation. During 2001,
Actel began shipping RTSX-S FPGAs, the second family of PLDs developed
specifically to address radiation effects. Actel's RadHard family was the first.
High-Speed Communications
Much of the communications market is driven by speed, which has been the
strength of Actel's antifuse FPGAs. To leverage this strength, Actel launched a
"BridgeFPGA" initiative in 2001 to address the input-output (I/O) problems
created within the high-speed communications market by the proliferation of
interface standards. The adoption of these interface standards has created the
need for designers to implement interface bridging functions to connect
incompatible interface standards. {The first BridgeFPGA product will be a
high-speed antifuse FPGA with dedicated high-speed I/O circuits that can support
multiple interface standards. Subsequent BridgeFPGA products are expected to
include embedded high-speed interface protocol controllers.}
Products and Services
Actel's product line consists of FPGAs, including general purpose FPGAs,
high reliability FPGAs, and the recently-announced BridgeFPGA programmable
interface products. {Actel expects to introduce the initial BridgeFPGA product
in 2002.} In support of its FPGAs, Actel offers development tools, including
design software, device programmers, verification and debugging tools, and
prototyping sockets. In addition, Actel makes VariCore embedded programmable
gate array (EPGA) and other IP cores available for licensing and offers design
and programming services.
FPGAs
The capacity of FPGAs is measured in "gates," which traditionally meant
four transistors. As FPGAs grew larger and their architectures more complex,
counting gates became more challenging and no standard counting technique
emerged. The appearance of FPGAs with memory further complicated matters because
memory gates cannot be counted in the same way as logic gates. Unless otherwise
indicated, "gate" or "gates" means "maximum system equivalent gates" when used
in this Annual Report on Form 10-K to describe the capacity of FPGAs.
To meet the diverse customer requirements in the broad programmable logic
market, all Actel FPGAs (except the two RadHard devices) are offered in a
variety of speed grades, package types, and/or ambient temperature tolerances.
Commercial devices are guaranteed to operate at ambient temperatures ranging
from 0(degree)C to +70(0)C. Industrial devices are guaranteed to operate at
ambient temperatures ranging from -40(degree)C to +85(degree)C. Military devices
are guaranteed to operate at ambient temperatures ranging from -55(degree)C to
+125(0)C.
General Purpose FPGAs
Actel's general purpose FPGAs include the flash-based ProASIC Plus and
ProASIC families and the antifuse-based eX, SX-A, SX, MX, and legacy
families.
ProASIC Plus
On January 7, 2002, Actel announced the launch of ProASIC Plus,
the second-generation family of flash-based FPGAs. Based on a
0.22-micron process, the single-chip, nonvolatile, in-system
programmable (ISP) ProASIC Plus family consists of six devices ranging
in capacity from 150,000 to 1,000,000 gates. ProASIC Plus devices are
"live at power up," highly secure, and require no separate
configuration memory, all characteristics shared by ASICs. The first
members of the ProASIC Plus family are currently available as
engineering samples.
ProASIC
The ProASIC family of FPGAs, which was first shipped for revenue
in 1999, consists of four products: the 98,000-gate A500K050, the
287,000-gate A500K130, the 369,000-gate A500K180, and the 473,000-gate
A500K270. On April 10, 2001, Actel announced that it had begun
sampling the A500K180 and A500K270 devices. The family is currently
manufactured on a 0.25-micron embedded flash process at Infineon and
offered in three packages. Actel announced the shipment of A500K050
and A500K130 devices qualified to industrial specifications on April
10, 2001, and the shipment of A500K180 and A500K270 devices qualified
to industrial specifications on September 10, 2001.
The flash-based ProASIC family brings the advantages of ASICs and
the benefits of PLDs to designers of high-density logic. Like ASICs,
ProASIC devices are single-chip and live at power up, eliminating the
need for a separate boot device, and operate at low power. Like other
PLDs, ProASIC devices reduce time to market and minimize design risk
and investment, requiring no mask sets or silicon re-spins. Unlike
other PLDs available on the market today, which are either volatile or
non-reprogrammable, ProASIC devices are nonvolatile and
reprogrammable.
ProASIC devices also exhibit a high level of portability between
PLD and ASIC design flows. Actel's ProASIC solutions make it possible
to create high-density systems using existing ASIC or FPGA design
flows and tools, shortening time to production. Conversion to a
standard ASIC is also facilitated by ProASIC's ASIC-like design flow.
In addition, the design methodology enables designers to use IP cores
from proprietary and third-party sources, eliminating much of the
architecture-specific re-engineering required by other PLDs.
eX
The eX family of FPGAs, which was first shipped for revenue in
2001, consists of three devices: the 3,000-gate eX64, the 6,000-gate
eX128, and the 12,000-gate eX256. The family is currently manufactured
on a 0.25-micron antifuse process at UMC. The eX family can be ordered
in approximately 55 speed, package, and temperature variations.
The eX family was designed for the e-appliance market of
internet-related consumer electronics and includes a sleep mode to
conserve battery power. eX devices also provide a small form factor,
high design security, and an undemanding design process. The eX family
is currently positioned as a single-chip programmable replacement for
low-capacity ASICs.
SX-A and SX
The SX-A family of FPGAs, which was first shipped for revenue in
1999, consists of four products: the 12,000-gate A54SX08A, the
24,000-gate A54SX16A, the 48,000-gate A54SX32A, and the 108,000-gate
A54SX72A. The family is currently manufactured on a 0.22-micron
antifuse process at UMC and on a 0.25-micron antifuse process at MEC.
The SX-A family can be ordered in approximately 215 speed, package,
and temperature variations.
The SX family of FPGAs, which was first shipped for revenue in
1998, consists of four products: the 12,000-gate A54SX08, the
24,000-gate A54SX16 and A54SX16P, and the 48,000-gate A54SX32. The SX
family is currently manufactured on a 0.35-micron antifuse process at
Chartered. The SX family can be ordered in approximately 180 speed,
package, and temperature variations.
SX was the first family to be built on Actel's fine-grained, "sea
of modules" architecture, which delivers performance without the power
penalty common to SRAM-based FPGAs. The SX-A and SX families are
currently positioned as programmable devices with ASIC-like speed,
power consumption, and pricing in volume production. In addition, the
SX-A family offers I/O capabilities that provide full support for
"hot-swapping." Hot swapping allows system boards to be exchanged
while systems are running, a capability important to many portable,
consumer, networking, telecommunication, and fault-tolerant computing
applications.
MX
The MX family of FPGAs, which was first shipped for revenue in
1997, consists of six products: the 3,000-gate A40MX02, the 6,000-gate
A40MX04, the 14,000-gate A42MX09, the 24,000-gate A42MX16, the
36,000-gate A42MX24, and the 54,000-gate A42MX36. The family is
currently manufactured on 0.45-micron antifuse processes at Chartered
and Winbond. The MX family can be ordered in approximately 300 speed,
package, and temperature variations.
The MX family was Actel's first line of ASIC-alternative FPGAs
and ramped to volume the fastest of any product in Actel's history.
The largest MX devices include system logic integration functions. The
MX family is currently positioned as a line of low-cost, single-chip,
mixed-voltage programmable ASICs for 5.0-volt applications.
Legacy Products
The MX family includes the best features of Actel's legacy FPGAs
and over time ought to replace those earlier products in new 5.0-volt
commercial designs. Legacy products include the DX, XL, ACT 3, ACT 2,
and ACT 1 families.
DX and XL
The 3200DX family of FPGAs, which was first shipped for
revenue in 1995, consists of five products: the 12,000-gate
A3265DX, the 20,000-gate A32100DX, the 24,000-gate A32140DX, the
36,000-gate A32200DX, and the 52,000-gate A32300DX. The DX family
is currently manufactured on a 0.6-micron antifuse process at
Chartered and can be ordered in approximately 180 speed, package,
and temperature variations.
The 1200XL family of FPGAs, which was first shipped for
revenue in 1995, consists of three products: the 6,000-gate
A1225XL, the 9,000-gate A1240XL, and the 16,000-gate A1280XL. The
XL family is currently manufactured on a 0.6-micron antifuse
process at Chartered and can be ordered in approximately 125
speed, package, and temperature variations.
The DX and XL families were designed to integrate system
logic previously implemented in multiple programmable logic
circuits. The DX family also offers fast dual-port SRAM, which is
typically used for high-speed buffering.
ACT 3
The ACT 3 family of FPGAs, which was first shipped for
revenue in 1993, consists of five products: the 3,000-gate A1415,
the 6,000-gate A1425, the 9,000-gate A1440, the 11,000-gate
A1460, and the 20,000-gate A14100. The family is currently
manufactured on a 0.6-micron antifuse process at Chartered and a
0.8-micron antifuse process at Winbond. The ACT 3 family can be
ordered in approximately 215 speed, package, and temperature
variations. The family was designed for applications requiring
high speed and a high number of I/Os.
ACT 2
The ACT 2 family of FPGAs, which was first shipped for
revenue in 1991, consists of three products: the 6,000-gate
A1225, the 9,000-gate A1240, and the 16,000-gate A1280. The
family is currently manufactured on 1.0- and 0.9-micron antifuse
processes at MEC and can be ordered in approximately 80 speed,
package, and temperature variations. ACT 2 was Actel's
second-generation FPGA family and featured a two-module
architecture optimized for combinatorial and sequential logic
designs.
ACT 1
The ACT 1 family of FPGAs, which was first shipped for
revenue in 1988, consists of two products: the 2,000-gate A1010
and the 4,000-gate A1020. The family is currently manufactured on
1.0- and 0.9-micron antifuse processes at MEC and can be ordered
in approximately 115 speed, package, and temperature variations.
ACT 1 was the original family of antifuse FPGAs.
High Reliability FPGAs
Actel is the world's largest supplier of high reliability PLDs.
Actel's military, avionics, and space-grade FPGAs have advantages over
ASICs that are significant to complex, multi-national and cost-sensitive
military and aerospace programs, including increased flexibility to make
design changes after board layout is complete, shorter lead times, and
lower cost of ownership with fewer vendors to qualify and no up-front
engineering expenses. Since 1990, Actel FPGAs have been designed into
numerous military and aerospace applications, including command and data
handling, attitude reference and control, command and communications
processors, and scientific instrument interfaces. Actel space-qualified
FPGAs have been on board more than 100 launches and flight-unit
applications on more than 300 satellites.
All Actel antifuse FPGAs (except for the three eX devices) are offered
in plastic packages qualified to military temperature specifications. Actel
has received complete Qualified Manufacturers Listing (QML) certification
for the full line of plastic-packaged antifuse FPGAs, which can be
integrated into design applications that would otherwise require
higher-cost ceramic-packaged devices. The QML plastic certification also
permits customers to integrate commercial and military production without
compromising quality or reliability. Actel's MIL/Av, RadTolerant, and
RadHard families are offered in hermetic packages.
MIL/Av
The MIL/Av family of FPGAs consists of fifteen products: the
2,000-gate A1010B, the 4,000-gate A1020B, the 6,000-gate A1425A, the
11,000-gate A1460A, the 16,000-gate A1280A and A1280XL, the
20,000-gate A14100A and A32100DX, the 24,000-gate A32140DX and
A54SX16, the 36,000-gate A32200DX, the 48,000-gate A54SX32 and
A54SX32A, the 54,000-gate A42MX36, and the 108,000-gate A54SX72A.
MIL/Av FPGAs are shipped with Class B (MIL-STD-883) qualification.
RadTolerant
The RadTolerant family of FPGAs consists of nine products: the
4,000-gate RT1020, the 6,000-gate RT1425A, the 11,000-gate RT1460A,
the 16,000-gate RT1280A, the 20,000-gate RT14100A, the 24,000-gate
RT54SX16, the 48,000-gate RT54SX32 and RT54SX32S, and the 108,000-gate
RT54SX72S. RadTolerant FPGAs are offered with Class B through Class E
(extended flow/space) qualification, and total dose radiation test
reports are provided on each segregated lot of devices.
RadTolerant FPGAs are designed to meet the logic requirements for
all types of military, commercial, and civilian space applications,
including satellites, launch vehicles, and deep-space probes. They
provide cost-effective alternatives to radiation-hardened devices. In
addition, RadTolerant devices have design- and pin-compatible
commercial versions for prototyping.
On July 17, 2001, Actel announced the qualification and shipment
of RT54SX32S, the first member of the radiation-tolerant RTSX-S
family, which was specifically designed to address heavy ion-induced
single-event upsets (SEUs) in space. The RTSX-S family is the
industry's first qualified FPGA solution built using SEU-hardened
latches, eliminating the need for user-instantiated triple module
redundancy (TMR). To implement TMR in a traditional FPGA,
approximately two-thirds of the device's available logic (or capacity)
is consumed by redundancy and therefore unavailable for the user's
design. The largest member of the RTSX-S family, the 108,000-gate
RT54SX72S FPGA, more than quadrupled the amount of programmable logic
previously available for applications requiring high SEU resistance.
RadHard
The RadHard family of FPGAs, which was first shipped for revenue
in 1996, consists of two products: the 4,000-gate RH1020 and the
16,000-gate RH1280. The family is manufactured on a radiation-hardened
0.8-micron antifuse process by BAE at its QML facility in Manassas,
Virginia. RadHard devices are shipped with full QML Class V screening.
The RadHard family was designed to meet the demands of applications
requiring guaranteed levels of radiation survivability. Applications
for RadHard FPGAs include military and civilian satellites, deep space
probes, and planetary missions.
BridgeFPGAs
On May 14, 2001, Actel announced its BridgeFPGA initiative, a strategy
to address the interoperability problems created by the proliferation of
high-performance interface standards. Traditionally, interface and
interoperability issues have been solved by FPGAs that are custom designed
for each new system. This, in combination with a proliferation in interface
standards, has resulted in a growing bottleneck. To help alleviate the
bottleneck, Actel is creating a family of devices that bridge multiple
interface protocols.
Exploding system bandwidth requirements have left system designers
with the difficult problem of moving vast quantities of data quickly and
reliably within and between systems. A multitude of high-speed interface
standards have evolved to solve the problem. Each of these new interface
standards has its own features and benefits, addressing the issues of
reliability, bandwidth, cost, and operating distance in different ways to
suit different target applications. Consequently, the adoption of these
interface standards has created the need for designers to implement
interface bridging functions to connect incompatible interface standards.
Actel's BridgeFPGA initiative is aimed at giving designers cost-effective
and easy-to-use solutions to these interfacing problems.
As part of its BridgeFPGA initiative, Actel intends to partner with
key IP providers and application specific standard product (ASSP) vendors
to provide next-generation technology for interfaces. The first of these
partnerships was also announced on May 14, 2001. Tality, a leading provider
of IP, has teamed with Actel to develop FPGAs incorporating versatile,
high-performance physical layer (PHY) communication interfaces. In
addition, Actel has increased its participation in key interface standards
associations.
{BridgeFPGA products will provide designers with access to
high-performance communications interfaces capable of supporting many
standards due to the flexibility of the programmable logic. The initial
BridgeFPGA device, which Actel expects to introduce in 2002, will
incorporate Tality's 3.125 Gbps LVDS transceiver and a high-speed multimode
serializer/deserializer, capabilities critical for many communications
systems. Actel's BridgeFPGA programmable interface products are expected to
also include a handful of highly flexible user-programmable devices that
support multiple I/O capabilities (such as HSTL, LVPECL, and GTL+ in
addition to 3.125 Gbps LVDS) and various embedded interface protocols (such
as Ethernet, Fibre Channel, Infiniband, and RapidI/O)}.
Development Tools
The development tools offered by Actel include design software, device
programmers, verification and debugging tools, and prototyping sockets. These
tools are used in the Actel design flow, which includes design creation, design
implementation, device programming, and system verification. Design software is
used for design creation and implementation; programmers are used to program
devices; and verification and debugging tools and prototyping sockets may be
used for design and system verification.
Actel's Libero design environment integrates the design tools needed to
provide schematic, HDL, and mixed schematic-HDL design flows. Actel's Designer
tool is integrated with third-party schematic and HDL tools to implement and
simulate Actel devices. Programmers execute instructions included in files
obtained from Designer to program Actel FPGAs. Actel's Silicon Explorer II
debugging and verification tool permits real-time probing of a programmed FPGA
as it performs its functions at speed within a system, removing the guesswork
typically associated with the process of system verification. Sockets allow
designers to use antifuse FPGAs in prototype boards without the risk of damaging
the board when replacing a chip.
Design Software
Actel is committed to providing design software integrated with
existing electronic design automation (EDA) software and design flows.
Actel works closely with its EDA partners through the Actel Alliance
program to provide early technical information on new Actel releases so
that Alliance members can offer timely support. The Alliance includes
Aldec, Inc.; Cadence Design Systems, Inc. (Cadence); Innoveda, Inc.
(Innoveda); Mentor Graphics Corp. (Mentor Graphics); SynaptiCAD, Inc.
(SynaptiCAD); Synopsys, Inc. (Synopsys); and Synplicity, Inc. (Synplicity).
Libero
On June 18, 2001, Actel introduced Libero, its next-generation
integrated design environment for FPGA development and design. A
comprehensive design management environment, Libero integrates
industry-leading design tools through a robust, easy-to-navigate
graphical user interface; streamlines the design flow; manages all
design, run, and report files; and passes necessary design data
between tools. Actel's Libero design software includes Innoveda's
DxViewDraw schematic capture tool; SynaptiCAD's WaveFormer Lite test
bench generation system; Model Technology's ModelSim simulation and
design verification software; Synplicity's Synplify synthesis
software; and Actel's Designer place-and-route software.
The Libero tool suite supports all currently released Actel
devices and is available in three versions: Platinum, Gold, and
Silver. The Libero Platinum version is a complete tool suite with
unlimited design capacity and customer support. A Libero Platinum
evaluation version may be used for 45 days free of charge. It includes
all the integrated tools, functionality, and power of Platinum without
the programming capability. The Libero Gold version provides tool
support for users designing system-level devices of 50,000 gates or
less. The Libero Silver version offers tool support from entry to
programming for Actel devices of 10,000 gates or less. The Libero
Silver version does not include simulation, but designers may use
their own simulator without restrictions or compatibility problems.
Libero Silver is offered at no charge to qualified designers for one
year.
On October 31, 2001, Actel announced that Libero had been
enhanced to include support for mixed-mode design entry input, giving
designers the choice of mixing either high-level VHDL or Verilog HDL
language blocks with schematic modules within a design. This
mixed-mode capability has become important as programmable logic
design capacity increases and IP utilization and design reuse become
essential.
On February 25, 2002, Actel announced that Libero supports
Actel's ASIC-replacement ProASIC Plus flash-based FPGA family. Actel
also announced the availability for the first time of the Libero
Silver and Platinum evaluation versions as free downloads from the
Actel Web site.
Designer
Designer is an interactive design implementation tool that allows
designers to import a netlist generated from a third-party CAE tool,
place and route (layout) the design, perform static timing analysis,
extract timing information, and generate a programming file to program
an Actel FPGA. The Designer tool supports all the established EDA
standards and the industry's most popular synthesis, schematic, and
simulation tools. The Designer tool is available in the same Platinum,
Platinum evaluation, Gold, and Silver versions as Libero. Designer
software allows user registration and automatic software updates
through the Actel Web site.
After a design is imported by Designer and the device, package,
and other operating conditions are specified, the design is compiled
to check for design legality, optimize the netlist, and verify that
the design fits into the selected device. If necessary, the designer
can then optimize and customize the design with the User Tools before
running layout. The User Tools include PinEdit, ChipEdit, ProASIC
Layout Viewer, Timer, and Back-Annotate. PinEdit is a graphical
interface that allows designers to view pin locations; manually
assign, edit, and fix pin locations; and customize I/O attributes.
ChipEdit is a graphical interface that allows designers to view a
design's macro placement and edit the placement of both I/O and logic
modules. For the ProASIC family, the ProASIC Layout Viewer displays
the results of place-and-route. Timer is an interactive tool used for
timing verification and to enter timing constraints. Back Annotate is
used to extract timing delays from the post-layout data. These
extracted delays are put into a file to be used by a third-party
timing simulator.
Layout is the process of taking the netlist information and any
constraints and mapping this information into the selected Actel
device. Physical locations are assigned to unassigned I/O and logic
modules (placement), routing tracks are assigned to nets (routing),
and detailed delays are calculated for all paths (delay extraction).
Designer supports two modes of layout, standard and timing-driven.
Standard layout maximizes the average performance for all paths. With
timing-driven layout, the primary goal is to meet delay constraints
set in Timer or in a delay constraint file. Timing-driven layout is
more precise and typically results in higher performance. If layout
fails at any stage, Designer provides information that can be used to
determine and correct the problem. Following layout, Designer
generates the programming files.
Designer graphically displays the completed steps of the design
implementation process, keeps track of the information required to
begin each step, and prompts the designer through all of the necessary
steps of the flow. Designer's pin, timing, status, and other reports
provide frequently-used information in convenient formats. Designer
includes ACTgen, a graphical macro generation tool that creates
optimized logic elements that can be included in schematic and
synthesis designs. Architecture-specific rules control the generation
of the macros, so no logic verification is required. The Designer
software also allows designers to run scripts in Tcl (Tool Command
Language) for simple or complex tasks.
Device Programmers
All Actel FPGAs can be programmed by Silicon Sculptor programmers.
Actel's flash FPGAs can also be programmed by the Flash Pro Programmer. In
addition, Actel supports programmers offered by third parties, including BP
Microsystems Inc., Data I/O Corporation, and System General Corporation.
Flash Pro
On January 7, 2002, Actel announced the availability of the Flash
Pro programmer, which provides ISP for Actel's flash-based FPGA
families. Designers can configure Actel's ProASIC and ProASIC Plus
FPGAs using only the portable Flash Pro programmer and a cable
connected to either the parallel or USB port of a PC. The low-cost
Flash Pro programmer gives users access to the ISP capability of the
new ProASIC Plus devices for in-the-field upgrades to communications,
industrial, and avionics designs. The ISP feature uses the IEEE
standard 1149.1 Joint Test Action Group (JTAG) interface, which
permits devices to be programmed after they are mounted on a PCB,
simplifies the handling of high pin-count devices, eliminates sockets,
and allows higher board performance. Flash Pro also supports the JEDEC
Standard Test and Programming Language (STAPL), which makes the
programmer independent of any specific programming algorithms. The
Flash Pro programmer will support new devices immediately upon release
with a new STAPL file, eliminating the need to wait for programmer
algorithm upgrades.
Silicon Sculptor
Actel offers single- and six-site versions of the Silicon
Sculptor programmer. The compact size of the Silicon Sculptor permits
designers to program Actel FPGAs from their desktop PC rather than in
a lab. Up to 12 Actel devices can be concurrently programmed from a
single PC by daisy chaining two six-site Silicon Sculptors together
with an expansion cable. The six-site Silicon Sculptor, which is
designed to meet the demands of high-volume production environments,
programs devices independently to achieve the fastest possible
programming times. A single adapter module can be used to program all
Actel antifuse or flash devices within a package type, regardless of
pinout.
Verification and Debugging Tools
Actel's Silicon Explorer II diagnostic and verification tool kit
shortens the FPGA design verification process by rapidly isolating
functional and timing problems. Silicon Explorer II enables control of the
ActionProbe circuitry, a patented architectural feature built into all of
Actel's antifuse devices that allows access to any internal node from
selected external pins. Silicon Explorer II attaches to the standard COM
port of a PC and can be used by designers to view all of the observable
nets in a programmed FPGA, select specific nodes to probe, and observe
signal activity for both probe outputs and up to 16 additional signals on
the target system. Actel also offers Silicon Explorer II Lite, a less
expensive version of Silicon Explorer II for customers who have invested in
a logic analysis system. Silicon Explorer II Lite enables internal node
viewing and selection, but relies on an external scope or logic analyzer to
display signal activity.
Prototyping Sockets
Actel offers a range of surface-mount sockets, which make it easier
for designers to prototype their designs using Actel's antifuse FPGAs. By
using these sockets when prototyping designs, designers can avoid having to
desolder FPGAs from PCBs, which is time-consuming and can potentially
damage the PCBs. Sockets are available in prototype quantities from Actel
and in production quantities from Actel-qualified socket manufacturers.
VariCore EPGAs
On February 19, 2001, Actel introduced its new VariCore EPGA star IP cores
for system-on-a-chip (SoC) applications. The VariCore EPGA cores are the first
available commercial embeddable and reconfigurable "soft hardware" IP products
broadly offered to the ASIC and ASSP market. VariCore EPGA cores help reduce
design time and costs and increase SoC design flexibility, in part by enabling
version variants of the same product. VariCore EPGA logic is a versatile and
efficient embedded FPGA core architecture that provides scaleable
reprogrammability for ASICs and ASSPs. These EPGA blocks have been designed in
0.18-micron SRAM technology. VariCore programmable logic is proven in silicon
and three of the world's leading wafer foundries are supporting EPGA
reprogrammable cores: UMC and TSMC in Taiwan and Chartered in Singapore. Pricing
for VariCore EPGA cores will vary and follow the "star IP" sliding scale model
of license plus royalties.
On May 21, 2001, Actel announced a joint effort in the area of embedded IP
test with LogicVision, a leading provider of embedded test IP solutions. The
companies will work together to offer a complete embedded self-test solution to
users of Actel's VariCore EPGA IP cores. VariCore EPGA cores provide designers
with the ability to add reconfigurability to ASIC and ASSP SoC applications.
LogicVision's embedded test capability delivers testability throughout the
design, manufacturing, and system phases of the product application on both
conventional and low-cost testers.
On September 17, 2001, Actel announced that it had joined The Virtual
Component Exchange (VCX) and will use the VCX IP supply chain software solution
to market its VariCore EPGA cores. VCX TradeFloor tools link the engineering,
procurement, and legal functions of buyers and sellers by internet with a common
toolset and language. Alignment of data evaluation, access, and contracting
protocols between buyers and sellers accelerates the speed of semiconductor IP
transactions.
On December 3, 2001, Actel announced the creation of the VariCore Design
Alliance, a worldwide program to train, certify, and support independent ASIC
design services companies in the proficient use of Actel's VariCore EPGA IP
cores. The program's goal is to provide SoC designers with the background and
expertise necessary to integrate embedded FPGAs into complex system-level
designs. Tality, the world's largest independent SoC design services and IP
provider, signed on as the program's anchor member. On December 10, 2001, Actel
announced the addition of six new members to the VariCore Design Alliance.
I P Cores
Through third party strategic relationships and internally developed IP,
Actel offers cores targeted for the communications, consumer, industrial, and
aerospace markets. The IP cores currently offered to Actel customers includes
ten bus interface, fourteen communications, two peripheral component interface
(PCI), and six processor and peripheral cores, all of which are available in
either register transfer level (RTL) or netlist format. Currently, six cores are
available for evaluation or licensing from Actel, eleven cores are available
from Inicore AG (Inicore), and fifteen cores are available from Inventra, a
division of Mentor Graphics. IP developed by Inicore and Inventra are licensed
directly from them.
The architectures of Actel's flash- and antifuse-based FPGAs facilitate the
porting of high-level IP cores, enabling system level integration. The secure
nature of Actel's FPGAs means that IP can be safely integrated and guarded from
reverse engineering or piracy. ProASIC FPGAs are user programmed with a
multi-bit key that blocks external attempts to read or alter the configuration
settings. Decapping and stripping of the ProASIC device reveals only the
structure of the flash cell, not the contents. Antifuse FPGAs do not need a
start-up bitstream, eliminating the possibility of configuration data being
intercepted. The antifuses that form the interconnections within an Actel FPGA
do not leave an observable signature that can be electrically probed or visually
inspected. With these safeguards, Actel devices are almost impervious to copying
and reverse engineering.
Services
Actel offers design and volume programming services. With Actel's
acquisition of the Protocol Design Services Group from GateField in August 1998,
Actel became the first FPGA provider to offer system-level design expertise to
its customers. The Protocol Design Services organization operates out of a
secure facility located in Mt. Arlington, New Jersey, and is certified to handle
government, military, and proprietary designs. Actel also programs significant
volumes of FPGAs each month for its customers. This makes Actel devices "virtual
ASICs" from the customer's point of view.
Protocol Design Services
Actel's Protocol Design Services organization has a successful history
providing hardware and software design services for companies throughout
the world. It provides varying levels of design services to customers,
including FPGA, ASIC, and system design; software development and
implementation; and development of prototypes, first articles, and
production units. The Design Services team has participated in the
development of optical networks, routers, cellular phones, digital cameras,
embedded DSP systems, automotive electronics, navigation systems,
compilers, custom processors, and avionics systems.
Volume Programming
Actel offers high volume programming for all Actel device and package
types in its state-of-the-art-programming center, which is located at the
factory in Sunnyvale, California. Actel's facility is ISO-9002, PURE, QML,
and STACK certified (see "BUSINESS -- Manufacturing and Assembly"),
permitting Actel to meet customer requirements for high-quality programmed
devices. Complete documentation and tractability are provided throughout
the programming process, including first article approval. Volume
programming charges are based on the type of device and quantity per order.
Market and Applications
In 2001, FPGAs accounted for 97% of Actel's net revenues, virtually all of
which was derived from the sale of antifuse FPGAs. FPGAs can be used in a broad
range of applications across nearly all electronic system market segments. Most
customers use Actel's FPGAs in low to medium volumes in the final production
form of their products. Some high-volume electronic system manufacturers use
Actel FPGAs as a prototyping vehicle and convert production to lower-cost ASICs,
while others with time-to-market constraints use Actel FPGAs in the initial
production and then convert to lower-cost ASICs. As product life cycles continue
to shorten, foundry capacity becomes more expensive, and manufacturing
efficiencies for FPGAs increase, some high-volume electronic system
manufacturers are electing to retain FPGAs in volume production because
conversion to ASICs may not yield sufficiently attractive savings before the
electronic system reaches the end of its life.
In general, Actel's antifuse FPGAs are appropriate for high-speed
communications, military and space, computer, and consumer applications, and
Actel's flash FPGAs are better suited for general communications, avionics, and
industrial applications.
Communications
In 2001, communications accounted for an estimated 49% of Actel's net
revenues. Increasingly complex equipment must frequently be designed to fit in
the space occupied by previous product generations. In addition, the rapidly
changing communications environment rewards short development times and early
market entry. The high density, high performance, and low power consumption of
antifuse FPGAs make them appropriate for use in high-speed communications
equipment. The high capacity, low cost, low power consumption, and
reprogrammability of flash FPGAs make them suitable for use in other
communications applications. Representative customers of Actel in the
communications market include: Alcatel; Cisco; Marconi; and Nortel.
On August 27, 2001, Actel announced that Ipsil will implement its
IPMicro8932 chip within the eX family. Ipsil chose the eX family because of its
small packaging, flexibility, performance, reliability, and security. Ipsil's
IPMicro8932 chip also requires low power. IPMicro8932 is an enhanced
transmission-control protocol controller with a 10BaseT Ethernet interface.
Military and Aerospace
In 2001, military and aerospace accounted for an estimated 26% of Actel's
net revenues. Rigorous quality and reliability standards, stringent volume
requirements, and the need for design security are characteristics of the
military and aerospace market. Actel FPGAs have high quality and reliability and
are almost impervious to copying and reverse engineering, making them
appropriate for many military and aerospace applications. For these reasons,
Actel is the world's leading supplier of military and aerospace PLDs.
Representative customers of Actel in the military and aerospace market include:
BAE; Boeing; Fairchild Semiconductor Corporation; Honeywell; and Lockheed
Martin.
Actel's antifuse FPGAs are especially well suited for space applications,
due to the high radiation tolerance of the antifuse and the Actel FPGA
architecture. Actel's antifuse FPGAs were first designed into a space mission in
1991. Since then, thousands of Actel's programmable logic circuits have
performed flight-critical functions aboard manned space vehicles, earth
observation satellites, and deep-space probes. Actel's FPGAs often perform
mission-critical functions on important scientific missions in space. They have,
for example, been aboard numerous Mars exploration missions, were included in
the controlling electronics for the Mars Pathfinder Rover, and are performing
functions on the Hubbell Space Telescope. Actel participates in programs
administered by the National Aeronautics Space Administration's (NASA's)
Goddard, Johnson, and Marshall Space Flight Centers (including the Space Shuttle
and the International Space Station) as well as programs at California Institute
of Technology's Jet Propulsion Laboratory. However, Actel's success has not been
limited to the United States. Today, Actel's FPGAs can be found on board and in
spacecraft launched by virtually every civilian space agency around the world,
including the European Space Agency and the Japanese National Space Development
Agency.
On March 26, 2001, Actel announced that it had played a significant role in
the Near Earth Asteroid Rendezvous (NEAR) Shoemaker mission, providing
programmable logic that enabled mission managers to navigate the spacecraft to
the surface of asteroid Eros and collect scientific data from the asteroid
surface and surrounding environment. NASA's NEAR Shoemaker spacecraft was the
first spacecraft ever to land, or even attempt to land, on an asteroid. Actel
high-reliability FPGAs played an important role in the command, telemetry, and
scientific data collection aspects of the mission.
Industrial
In 2001, industrial control and instrumentation applications accounted for
an estimated 19% of Actel's net revenues. Industrial control and instrumentation
applications often require complex electronic functions tailored to specific
needs. FPGAs offer programmability and high density, making them attractive to
this segment of the electronic equipment market. Representative customers of
Actel in the industrial market include: Abbott Laboratories; Agilent
Technologies, Inc.; GE Medical Systems; Siemens; Varian Medical Systems, Inc;
and VISTA Controls.
On March 14, 2002, Actel announced that Silicon Recognition has chosen to
implement a version of its zero instruction set computing (ZISC) solution with
Actel's A500K050 and A500K130 ProASIC devices. Silicon Recognition's ZISC
solution, a proprietary ASIC, is designed to provide the ultra-fast pattern
recognition, information classification, and matching performance required for
next-generation, real-time smart devices, such as security cameras and
health-monitoring equipment.
Computer
In 2001, computer systems and peripherals accounted for an estimated 3% of
Actel's net revenues. The computer systems market is intensely competitive,
placing a premium on early market entry for new products. FPGAs reduce the time
to market and facilitate early completion of production models so that
development of hardware and software can occur in parallel. Representative
customers of Actel in the computer market include: Analogic Corporation; Compaq;
Dialogic Corporation; Matrox Graphics Inc.; Sensis Corporation; and Sky
Computer.
On May 21, 2001, Actel announced that MARGI Systems, Inc., a leading
provider of multimedia products for mobile computing, selected Actel's A54SX08A
FPGA for the hardware module in its new "Presenter-to-Go" product.
Presenter-to-Go enables business professionals to make PowerPoint presentations
from a Handspring Visor without the use of a personal computer. Actel's SX-A
family was selected for the Presenter-to-Go application due to the hot-swap
compliant I/Os and the low-power features of the architecture.
On March 4, 2002, Actel announced that NetVision, a supplier of giant
light-emitting diode (LED) screens, selected Actel's A54SX72A FPGA for
NetVision's new Magitron range of giant color outdoor LEDs. The screens utilize
SX-A FPGAs for display circuit control and color correction management. The
Magitron circuit design specifications required a logic integration device that
offered high performance, design security, and low power consumption.
Consumer
In 2001, consumer applications accounted for an estimated 3% of Actel's net
revenues. The high performance, low power consumption, and low cost of antifuse
FPGAs make them appropriate for use in products enabling the portability of the
internet, or "e-appliances," and other high-volume electronic systems targeted
for consumers. E-appliance applications include MP3 "music-off-the-internet"
players, digital cable set-top boxes, DSL and cable modems, digital cameras,
digital film, multimedia products, and smart-card readers. Like the computer
market, the market for consumer and e-appliance products places a premium on
early market entry for new products and is characterized by short product life
cycles. Representative customers of Actel in the consumer market include: Datel,
Inc.; Samsung; Sanyo; and Shinyoung Precision Co., Ltd.
On October 16, 2001, Actel announced a technology relationship with
e.Digital Corp. that will allow e.Digital's proprietary design to be produced
within Actel's eX FPGAs. e.Digital's new solution is designed to increase
reliability and reduce the board space required for implementation of advanced
digital voice and music recorder/player functionality in small portable devices,
such as portable internet music players and personal digital jukeboxes.
Sales and Distribution
Actel maintains a worldwide, multi-tiered selling organization that
includes a direct sales force, independent sales representatives, and
electronics distributors. Actel's North American sales force consists of 50
sales and administrative personnel and field application engineers (FAEs)
operating from 22 sales offices located in major metropolitan areas. Direct
sales personnel call on target accounts and support direct original equipment
manufacturers (OEMs). Besides overseeing the activities of direct sales
personnel, Actel's sales managers also oversee the activities of 20 sales
representative firms that operate from approximately 50 office locations. The
sales representatives concentrate on selling to major industrial companies in
North America. To service smaller, geographically dispersed accounts in North
America, Actel has distributor agreements with Pioneer and Unique. Pioneer and
Unique have approximately 39 and 28 offices in North America, respectively.
Actel generates a significant portion of its revenues from international
sales. Sales to customers outside the United States accounted for 38% of net
revenues in 2001. Sales to European customers accounted for 28% of net revenues
in 2001. Actel's European sales organization consists of 22 employees operating
from four sales offices and 11 distributors and sales representatives having
approximately 23 offices (including Unique, which has seven offices in Europe).
Sales to Japan and other international customers accounted for 10% of net
revenues in 2001. Actel's Pan-Asia sales organization consists of seven
employees operating from three sales offices and nine distributors and sales
representatives having approximately 20 offices (including Unique, which has
nine offices in Pan-Asia). Actel's International sales organization consists of
two employees operating from two sales offices and four distributors and sales
representatives (including Unique).
Actel's sales cycle for the initial sale of a design system is generally
lengthy and often requires the ongoing participation of sales, engineering, and
managerial personnel. After a sales representative or distributor evaluates a
customer's logic design requirements and determines if there is an application
suitable for Actel's FPGAs, the next step typically is a visit to the qualified
customer by a regional sales manager or the FAE from Actel or its distributor.
The sales manager or FAE may then determine that additional analysis is required
by engineers based at Actel's headquarters.
Sales made through distributors accounted for 68% of Actel's net revenues
in 2001. Pioneer and Unique accounted for 20% and 19%, respectively, of Actel's
net revenues in 2001. Actel consolidated its distribution channel during 2001 by
terminating Arrow Electronics, Inc. (Arrow), which accounted for 13% of Actel's
net revenues in 2001. As is common in the semiconductor industry, Actel
generally grants price protection to distributors. Under this policy,
distributors are granted a credit upon a price reduction for the difference
between their original purchase price for products in inventory and the reduced
price. From time to time, distributors are also granted credit on an individual
basis for an approved price reductions on specific transactions to meet
competition. Actel also generally grants distributors limited rights to return
products. To date, product returns under this policy have not been material.
Actel maintains reserves against which these credits and returns are charged.
Because of its price protection and return policies, Actel does not recognize
revenue on products sold to distributors until the products are resold to end
customers.
Backlog
At January 6, 2002, Actel's backlog was approximately $22.3 million,
compared with approximately $44.4 million at December 31, 2000. Actel includes
in its backlog all OEM orders scheduled for delivery over the next nine months
and all distributor orders scheduled for delivery over the next six months.
Actel sells standard products that may be shipped from inventory within a short
time after receipt of an order. Actel's business, and to a large extent that of
the entire semiconductor industry, is characterized by short-term order and
shipment schedules rather than volume purchase contracts. In accordance with
industry practice, Actel's backlog may be cancelled or rescheduled by the
customer on short notice without significant penalty. As a result, Actel's
backlog may not be indicative of actual sales and therefore should not be used
as a measure of future revenues.
Customer Service and Support
Actel believes that superior customer service and technical support are
essential for success in the FPGA market. Actel facilitates service and support
through service team meetings that address particular aspects of the overall
service strategy and support. The most significant areas of customer service and
technical support are regularly measured. Actel's customer service organization
emphasizes prompt, accurate responses to questions about product delivery and
order status.
Actel's FAEs located in Canada, England, France, Hong Kong, Italy, Japan,
and the United States provide technical support to customers worldwide. This
network of experts is augmented by FAEs working for Actel's sales
representatives and distributors throughout the world. Customers in any stage of
design can also obtain assistance from Actel's technical support hotline or the
online interactive automated technical support system. In addition, Actel offers
technical seminars on its products and comprehensive training classes on its
software.
Actel generally warrants that its FPGAs will be free from defects in
material and workmanship for one year, and that its software will conform to
Actel's published specifications for 90 days. To date, Actel has not experienced
significant warranty returns.
Manufacturing and Assembly
Actel's strategy is to utilize third-party manufacturers for its wafer
requirements, which permits Actel to allocate its resources to product design,
development, and marketing. Wafers used in Actel's FPGAs are manufactured by BAE
in Manassas, Virginia; by Chartered in Singapore; by Infineon in Germany; by MEC
in Japan; by UMC in Taiwan; and by Winbond in Taiwan. Actel's FPGAs in
production are manufactured by BAE using 0.8-micron design rules; by Chartered
using 0.6-, 0.45-, and 0.35-micron design rules; by Infineon using 0.25-micron
design rules; by MEC using 1.0-, 0.9-, 0.8-, and 0.25-micron design rules; by
UMC using 0.22-micron design rules; and by Winbond using 0.8- and 0.45-micron
design rules.
Wafers purchased by Actel from its suppliers are assembled, tested, marked,
and inspected by Actel and/or a subcontractor of Actel before shipment to
customers. Actel assembles most of its plastic commercial products in Hong Kong,
Korea, and Singapore. Hermetic package assembly, which is often required for
military applications, is performed at one or more subcontractor manufacturing
facilities, some of which are in the United States.
Actel is committed to continuous improvement in its products, processes,
and systems and to conforming its quality and reliability systems to
internationally recognized standards and requirements. Actel is ISO 9002, QML,
STACK, and PURE certified. ISO 9002 and QML certification are granted by the
Defense Supply Center, Columbus, Ohio (DSCC). ISO certification provides a
globally recognized benchmark that Actel's devices have been certified for
integrity in the manufacturing and test process. QML certification confirms that
Actel has an approved quality system and control of its processes and procedures
according to the standards set forth in the MIL-PRF-38535. In addition, many
suppliers of microelectronic components have implemented QML as their primary
worldwide business standard. STACK International members consist of a
distinguished worldwide group of major electronic equipment manufacturers
serving the high-reliability and communications markets. Certification as a
STACK International supplier confirms that Actel's standard qualification
procedure and product monitor program and manufacturing process meet or exceed
the required specification. PURE, which stands for PEDs (plastic encapsulated
devices) Used in Rugged Environments, is an association of European equipment
makers dedicated to quality and reliability. Actel's PURE certification is for
plastic quad flat pack packages.
On May 29, 2001, Actel announced the availability of new chip-scale (CS)
packages for the eX family of FPGAs. The eX products were already utilized in
portable designs due to the family's small packaging and low power features. The
new CS packages provided the smallest footprint in the industry for devices of
comparable density. On January 28, 2002, Actel announced the availability of
lead-free packaging options for the ProASIC, eX, and SX-A FPGA families. The new
lead-free packages offer environment-friendly alternatives to standard
lead-based packages at the same prices.
Strategic Relationships
Actel enjoys ongoing strategic relationships with its customers,
distributors and sales representatives, and foundries, assembly houses, and
other suppliers of goods and services, including the following:
Chartered
On August 28, 2001, Actel announced the availability of its SRAM-based
VariCore EPGA IP cores on the 0.18-micron process from Chartered. VariCore EPGA
IP cores are targeted for use in ASIC and ASSP SoC devices to help speed
products to market and increase the life of those products once in the market.
See "BUSINESS -- Products and Services -- VariCore EPGAs." VariCore EPGAs are
available for license by Actel directly to Chartered customers.
Faraday Technology Corporation (Faraday)
On September 10, 2001, Actel and Faraday announced a low-risk,
cost-effective conversion path from current and future generations of Actel's
single-chip, flash-based ProASIC FPGAs to standard cell ASICs using a standard
cell CMOS process. Compared with a masked-PLD (MPLD) or conventional gate array
migration process, standard cell ASICs offer higher densities and reduced costs.
The new conversion path allows companies to take products to market quickly and
then lower the system cost without taking the risks typically associated with
ASIC design conversions.
First Silicon Solutions (FS2)
On January 7, 2002, Actel and FS2 announced the availability of the Flash
Pro programmer, which provides ISP for Actel's flash-based ProASIC FPGA
families, including the new ProASIC Plus family. See "BUSINESS -- Products and
Services -- Development Tools -- Programmers -- Flash Pro." FS2, working closely
with Actel, delivered a complete programming solution that gives designers
access to an ISP ASIC-alternative when designing complex applications for the
industrial, communications, networking, and avionics markets.
Mentor Graphics and Model Technology
On July 2, 2001, Actel and Model Technology, a Mentor Graphics company,
announced an OEM agreement to provide Actel customers with ModelSim, a leading
language-neutral simulation tool. Actel integrates ModelSim into Libero,
allowing customers to easily access the simulation tool when developing and
designing Actel FPGAs. See "BUSINESS -- Products and Services -- Development
Tools -- Design Software -- Libero." On January 7, 2002, Actel and Mentor
Graphics announced that Mentor's LeonardoSpectrum synthesis tool supports
Actel's new ProASIC Plus family of flash-based FPGAs. LeonardoSpectrum offers
optimization and technology mapping of HDL designs to architecture-specific
resources in ProASIC Plus devices.
Synopsys
On May 30, 2001, Actel announced that Synopsys' Design Compiler synthesis
tool supports Actel's ProASIC 500K devices. The addition of Design Compiler
libraries to the ProASIC design kit enables ASIC designers to work within
Synopsys' ASIC synthesis environment while leveraging the benefits of Actel's
reprogrammable ProASIC devices, including shorter and more efficient design
cycles. On January 7, 2002, Actel announced that Synopsys' Design Compiler
synthesis tool supports Actel's new ProASIC Plus family of flash-based FPGAs.
Synplicity
On April 12, 2000, Actel and Synplicity announced the renewal of their
long-term strategic alliance by signing a multi-year OEM agreement. Under the
terms of the five-year agreement, Actel will bundle Synplicity's Synplify FPGA
synthesis software into its development tools. See "BUSINESS -- Products and
Services -- Development Tools -- Design Software -- Libero." As a result,
designers using Actel devices will continue to have access to the performance
and quality of results offered by Synplicity's FPGA synthesis software. On
January 7, 2002, Actel and Synplicity announced optimized support in
Synplicity's Synplify software products for Actel's new ProASIC Plus family.
Synplicity's Synplify product performs technology mapping of HDL-based designs
directly into ProASIC Plus devices.
Tality
On May 14, 2001, Actel and Tality, a subsidiary of Cadence, announced a
strategic technology partnership that will result in the development of
technology aimed at the high-speed communications market. Actel and Tality, the
largest provider of IP and engineering services, are leveraging Actel's FPGA
devices to develop products incorporating versatile PHY communication
interfaces. {This agreement supports Actel's BridgeFPGA corporate initiative,
under which Actel will deliver next-generation communications interface
solutions optimized to meet designers' increasing bridging requirements. See
"BUSINESS -- Products and Services -- FPGAs -- BridgeFPGAs."}
UMC
On February 19, 2001, Actel announced that it had joined UMC's Gold IPSM
program with Actel's VariCore EPGA star IP cores. See "BUSINESS -- Products and
Services -- VariCore EPGAs." Concurrently, Actel taped out a VariCore EPGA IP
test chip in UMC's 0.18-micron fab in Taiwan. VariCore IP is the first complete
(front end to back end), commercially available product of its kind in
0.18-micron technology. VariCore EPGAs are available for license by Actel
directly to UMC customers.
Research and Development
In 2001, Actel spent $38.2 million on research and development, which
represented 29% of net revenues. Actel's research and development expenditures
are divided among circuit design, software development, and process technology
activities, all of which are involved in the development of new products based
on existing or emerging technologies. In the areas of circuit design and process
technology, Actel's research and development activities also involve continuing
efforts to reduce the cost and improve the performance of current products,
including "shrinks" of the design rules under which such products are
manufactured. Actel's software research and development activities include
enhancing the functionality, usability, and availability of high-level CAE tools
and IP cores in a complete and automated desktop design environment on popular
PC and workstation platforms.
During 2001, Actel introduced embeddable reprogrammable EPGA logic cores
based on SRAM technology. See "BUSINESS -- Products and Services -- VariCore
EPGAs." Actel also announced its next-generation antifuse products. See
"BUSINESS -- Products and Services -- FPGAs -- BridgeFPGAs" and "BUSINESS --
Strategic Partners -- Tality." Actel publicly disclosed in 2001 that it was also
working on next-generation flash and high reliability products, but provided no
details regarding those research and development projects.
Competition
The FPGA market is highly competitive, and Actel expects that competition
will continue to increase as the market grows. Actel's competitors include
suppliers of standard TTLs and custom-designed ASICs, including conventional
gate arrays, standard cells, simple PLDs, CPLDs, and FPGAs. Of these, Actel
competes principally with suppliers of conventional gate arrays, standard cells,
CPLDs, and FPGAs.
The primary advantages of conventional gate arrays and standard cells are
high capacity, high density, high speed, and low cost in production volumes.
Actel competes with conventional gate array and standard cell suppliers by
offering lower design costs, shorter design cycles, and reduced inventory risks.
However, some customers elect to design and prototype with Actel's products and
then convert to conventional gate arrays or standard cells to achieve lower
costs for volume production. For this reason, Actel also faces competition from
companies that specialize in converting CPLDs and FPGAs, including Actel
products, into conventional gate arrays or standard cells.
Actel also competes with suppliers of CPLDs. Suppliers of these devices
include Altera Corporation (Altera) and Lattice-Vantis Semiconductor Corporation
(Lattice). The circuit architecture of CPLDs may give them a performance
advantage in certain lower capacity applications, although Actel believes that
its FPGAs compete favorably with CPLDs. However, Altera and Lattice are larger
than Actel, offer broader product lines to more extensive customer bases, and
have significantly greater financial, technical, sales, and other resources. In
addition, many newer CPLDs are reprogrammable, which permits customers to reuse
a circuit multiple times during the design process. While Actel's flash FPGAs
are reprogrammable, antifuse FPGAs are OTP, permanently retaining their
programmed configuration. No assurance can be given that Actel will be able to
overcome these competitive disadvantages.
Actel competes most directly with established FPGA suppliers, such as
Xilinx, Inc. (Xilinx), Altera, and Lattice (which purchased the FPGA business of
Agere Systems, Inc. in 2002). While Actel believes its products and technologies
are superior to those of Xilinx (as well as Altera and Lattice) in many
applications requiring greater speed, lower cost, nonvolatility, lower power,
and/or greater security, Xilinx is significantly larger than Actel, offers a
broader product line to a more extensive customer base, and has substantially
greater financial, technical, sales, and other resources. In addition, the FPGAs
of Xilinx, Altera, and Lattice are reprogrammable. No assurance can be given
that Actel will be able to overcome these competitive disadvantages.
Several companies have marketed antifuse-based FPGAs, including QuickLogic
Corporation (QuickLogic). In 1995, Actel acquired the antifuse FPGA business of
TI, which was the only second-source supplier of Actel products. Xilinx, which
is a licensee of certain Actel patents, introduced antifuse-based FPGAs in 1995
and abandoned its antifuse FPGA business in 1996. Cypress Semiconductor
Corporation, which was a licensed second source of QuickLogic, sold its antifuse
FPGA business to QuickLogic in 1997. Actel believes that it compete favorably
with QuickLogic, which is also a licensee of certain Actel patents. See
"BUSINESS -- Patents and Licenses."
Actel believes that important competitive factors in its market are price;
performance; capacity (total number of usable gates); density (concentration of
usable gates); ease of use and functionality of development tools; installed
base of development tools; reprogrammability; strength of sales organization and
channels; adaptability of products to specific applications and IP; ease, speed,
cost, and consistency of programming; length of research and development cycle
(including migration to finer process geometries); number of I/Os; reliability;
security; wafer fabrication and assembly capacity; availability of packages,
adapters, sockets, programmers, and IP; technical service and support; and
utilization of intellectual property laws. Failure of Actel to compete
successfully in any of these or other areas could have a materially adverse
effect on its business, financial condition, or results of operations.
Patents and Licenses
As of March 31, 2002, Actel had 192 United States patents and applications
pending for an additional 56 United States patents. Actel also had 50 foreign
patents and applications pending for 122 patents outside the United States.
Actel's patents cover, among other things, Actel's basic circuit architecture,
antifuse structure, and programming method. Actel expects to continue filing
patent applications as appropriate to protect its proprietary technologies.
Actel believes that patents, along with such factors as innovation,
technological expertise, and experienced personnel, will become increasingly
important.
On March 29, 2001, Unisys Corporation (Unisys) brought suit in the United
States District Court for the Northern District of California, San Jose Division
(Court), against Actel seeking monetary damages and injunctive relief. Actel and
Unisys orally agreed to settle the case on April 25, 2001, and executed a
definitive written settlement agreement on June 29, 2001. The Court dismissed
the case with prejudice on July 13, 2001. The settlement was immaterial to
Actel's business, financial condition, and operating results.
In connection with the settlement of patent litigation in 1993, Actel and
Xilinx entered into a Patent Cross License Agreement (Xilinx Agreement), under
which Xilinx was granted a license under certain Actel patents that permits
Xilinx to make and sell antifuse-based PLDs, and Actel was granted a license
under certain Xilinx patents to make and sell SRAM-based PLDs. In 1996, Xilinx
discontinued its antifuse-based FPGA product line.
In 1995, Actel and BTR, Inc. (BTR) entered into a License Agreement
pursuant to which BTR licensed its proprietary technology to Actel for
development and use in FPGAs and certain multichip modules. As partial
consideration for the grant of the license, Actel pays to BTR non-refundable
advance royalties. Actel has also employed the principals of BTR to assist Actel
in its development and implementation of the licensed technology.
In connection with the settlement of patent litigation in 1998, Actel and
QuickLogic entered into a Patent Cross License Agreement that protects the
products of both companies that were first offered for sale on or before
September 4, 2000, or that are future generations of such products reflecting
the evolution of such products in the ordinary course of business. In 1998,
Actel also entered into a patent litigation settlement agreement with the
Lemelson Medical, Education & Research Foundation.
As is typical in the semiconductor industry, Actel has been and expects to
be notified from time to time of claims that it may be infringing patents owned
by others. During 2001, Actel held discussions regarding potential patent
infringement issues with several third parties, some of which have significantly
greater financial and intellectual property resources than Actel. When probable
and reasonably estimable, Actel has made provision for the estimated settlement
costs of claims for alleged infringement. The provision is based on an estimated
royalty rate applied to shipments made in the periods and to or from the
geographic areas under dispute. In the absence of facts or circumstances unique
to a particular dispute, the royalty rate is estimated based on Actel's
understanding of royalty rates other technology companies typically agree to pay
in similar types of disputes. As it has in the past, Actel may obtain licenses
under patents that it is alleged to infringe. While Actel believes that
reasonable resolution will occur, there can be no assurance that these claims
will be resolved or that the resolution of these claims will not have a
materially adverse effect on Actel's business, financial condition, or results
of operations. In addition, Actel's evaluation of the impact of these pending
disputes could change based upon new information learned by Actel. {Subject to
the foregoing, Actel does not believe that any pending patent dispute is likely
to have a materially adverse effect on Actel's business, financial condition, or
results of operations.}
Employees
At the end of 2001, Actel had 521 regular employees, including 143 in
marketing, sales, and customer support; 167 in research and development; 157 in
operations; 17 in Protocol Design Services; and 37 in administration and
finance. Net revenues were approximately $279,000 per employee for 2001. Actel
has no employees represented by a labor union, has not experienced any work
stoppages, and believes that its employee relations are satisfactory.
On May 25, 2001, Actel announced that its Board of Directors had approved a
voluntary stock option exchange program. Under the program, eligible employees
were given the opportunity to cancel options outstanding on June 29, 2001, in
exchange for the grant of a new stock option six months and one day later.
Approximately 510,000 stock options were granted to employees under the stock
option exchange program at an exercise price of $19.91, the closing price of
Actel Common Stock on December 31, 2001. The weighted average exercise price of
the options cancelled in the exchange program was $35.23.
On August 7, 2001, Actel announced the promotion of Jon Anderson to Vice
President of Finance and Chief Financial Officer. Formerly the corporate
controller, Mr. Anderson joined Actel's executive management team and reports
directly to John East, Actel's President and CEO. Mr. Anderson replaced Hank
Perret, who accepted the CFO position with a private company located in Austin,
Texas. Mr. Perret has family in Austin and was employed there prior to joining
Actel in 1996.
Risk Factors
Shareholders of Actel and prospective investors should carefully consider,
along with the other information in this Annual Report on Form 10-K, the
following risk factors:
"Blank Check" Preferred Stock; Change in Control Arrangements
Actel's Articles of Incorporation authorize the issuance of up to 5,000,000
shares of "blank check" Preferred Stock (of which 4,000,000 shares remain
available for issuance) with such designations, rights, and preferences as may
be determined from time to time by the Board of Directors. Accordingly, the
Board is empowered, without approval by holders of Actel's Common Stock, to
issue Preferred Stock with dividend, liquidation, redemption, conversion,
voting, or other rights that could adversely affect the voting power or other
rights of the holders of the Common Stock. Issuance of Preferred Stock could be
used as a method of discouraging, delaying, or preventing a change in control of
Actel. In addition, such issuance could adversely affect the market price of the
Common Stock. Although Actel does not currently intend to issue any additional
shares of its Preferred Stock, there can be no assurance that it will not do so
in the future.
Actel has adopted an Employee Retention Plan that provides for payment of a
benefit to Actel's employees who hold unvested stock options in the event of a
change of control of Actel. Payment is contingent upon the employee remaining
with Actel or its successor for six months after the change of control (unless
the employee is terminated other than for cause during such six-month period).
Actel and each of its executive officers have also entered into a Management
Continuity Agreement, which provides for the acceleration of stock options
unvested at the time of a change of control in the event the executive officer's
employment is actually or constructively terminated other than for cause
following the change of control. While these arrangements are intended to make
executive officers and other employees neutral toward a potential change of
control, they could have the effect of biasing some or all executive officers or
employees in favor of a change of control.
Competition
The semiconductor industry is intensely competitive and is characterized by
rapid rates of technological change, product obsolescence, and price erosion.
Actel's existing competitors include suppliers of conventional gate arrays,
standard cells, CPLDs, and FPGAs. Actel's principal competitors are Xilinx, a
supplier of SRAM-based FPGAs; Altera, a supplier of CPLDs and SRAM-based FPGAs;
Lattice, a supplier of CPLDs and SRAM-based FPGAs; and QuickLogic, a supplier of
antifuse-based FPGAs. Actel also faces competition from companies that
specialize in converting FPGAs, including Actel's products, into conventional
gate arrays or standard cells. See "BUSINESS -- Competition."
All existing FPGAs not based on antifuse technology and certain CPLDs are
reprogrammable, a feature that makes them more attractive to designers. See
"BUSINESS -- Risk Factors -- One-Time Programmability (OTP)." In addition,
Actel's antifuse FPGAs and (to a lesser extent) flash FPGAs are manufactured
using customized steps that are added to the otherwise standard manufacturing
processes of independent wafer suppliers. As a result, Actel's products
typically have been fabricated using processes one or two generations behind the
processes used by competing products. As a consequence, Actel generally has not
fully realized the benefits of its technologies. Actel is attempting to
accelerate the rate at which its products are migrated to finer process
geometries and is working with its wafer suppliers to obtain earlier access to
advanced processes, but no assurance can be given that Actel will be able to
overcome these competitive disadvantages.
Actel also believes that companies with broader product lines, more
extensive customer bases, and greater financial and other resources may be in a
stronger competitive position than Actel. Many of Actel's current competitors
have broader product lines, more extensive customer bases, and significantly
greater financial, technical, manufacturing, and marketing resources than Actel.
Additional competition is possible from major domestic and international
semiconductor suppliers. All such companies are larger and have broader product
lines, more extensive customer bases, and substantially greater financial and
other resources than Actel, including the capability to manufacture their own
wafers. Additional competition could adversely affect Actel's business,
financial condition, or results of operations.
Actel may also face competition from suppliers of logic products based on
new or emerging technologies. While Actel seeks to monitor developments in
existing and emerging technologies, no assurance can be given that Actel will be
able to compete successfully with suppliers offering products based on new or
emerging technologies. In any event, given the intensity of the competition and
the research and development efforts being conducted, no assurance can be given
that Actel's technologies will remain competitive.
Customer Concentration
A small number of customers are responsible for a significant portion
Actel's net revenues. Actel has experienced periods in which sales to its major
customers fluctuated as a percentage of net revenues due to push-outs or
cancellations of orders, or delays or failures to place expected orders. Actel
believes that sales to a limited number of customers will continue to account
for a substantial portion of net revenues in future periods. The loss of a major
customer, or decreases or delays in shipments to major customers, could have a
materially adverse effect on Actel's business, financial condition, or results
of operations.
Dependence on Communications Customers
Actel estimates that sales of its products to customers in the
communications market accounted for 49% of net revenues for 2001, compared with
56% of net revenues for 2000. At various times, the communications market has
experienced economic downturns, which have been characterized by diminished
product demand, accelerated erosion of average selling prices, and production
overcapacity. Since the fourth quarter of 2000, the communications market has
endured perhaps its worst downturn ever. As a result, Actel has experienced, and
may again in the future experience, substantial period-to-period fluctuations in
operating results due to conditions in the communications market or the general
economy.
Dependence on Customized Manufacturing Processes
Actel's antifuse-based FPGAs and, to a lesser extent, flash-based ProASIC
FPGAs are manufactured using customized steps that are added to otherwise
standard manufacturing processes of independent wafer suppliers. There is
considerably less operating history for the customized process steps than for
the foundries' standard manufacturing processes. The dependence of Actel on
customized processing steps means that, in contrast with competitors using
standard manufacturing processes, Actel generally has more difficulty
establishing relationships with independent wafer manufacturers; takes longer to
qualify a new wafer manufacturer; takes longer to achieve satisfactory,
sustainable wafer yields on new processes; may experience a higher incidence of
production yield problems; must pay more for wafers; and generally will not
obtain early access to the most advanced processes. Any of the above factors
could be a material disadvantage against competitors using standard
manufacturing processes. As a result of these factors, Actel's products
typically have been fabricated using processes one or two generations behind the
processes used by competing products. As a consequence, Actel generally has not
fully realized the benefits of its technologies. Actel is attempting to
accelerate the rate at which its products are reduced to finer geometries and is
working with its wafer suppliers to obtain earlier access to advanced processes,
but no assurance can be given that such efforts will be successful or that Actel
will be able to overcome these competitive disadvantages.
Dependence on Design Wins
In order for Actel to sell an FPGA to a customer, the customer must
incorporate the FPGA into the customer's product in the design phase. Actel
therefore devotes substantial resources, which it may not recover through
product sales, in support of potential customer design efforts (including, among
other things, providing development tools) and to persuade potential customers
to incorporate Actel's FPGAs into new or updated products. These efforts usually
precede by many months (and often a year or more) the generation of FPGA sales,
if any, by Actel. The value of any design win, moreover, will depend in large
part upon the ultimate success of the customer's product. No assurance can be
given that Actel will win sufficient designs or that any design win will result
in significant revenues.
Dependence on Independent Assembly Subcontractors
Actel relies primarily on foreign subcontractors for the assembly and
packaging of its products and, to a lesser extent, for the testing of its
finished products. Actel generally relies on one or two subcontractors to
provide particular services and has from time to time experienced difficulties
with the timeliness and quality of product deliveries. Actel has no long-term
contracts with its subcontractors and certain of those subcontractors sometimes
operate at or near full capacity. There can be no assurance that these
subcontractors will continue to be able or willing to meet Actel's requirements
for components or services. Any significant disruption in supplies from, or
degradation in the quality of components or services supplied by, these
subcontractors could delay shipments and result in the loss of customers or
revenues or otherwise have a materially adverse effect on Actel's business,
financial condition, or results of operations.
Dependence on Independent Software and Hardware Developers
Actel is dependent on independent software and hardware developers for the
development, maintenance, and support of certain elements of its development
tools, IP cores, debugging and verification tools, device programmers, and
sockets. Actel's reliance on independent software and hardware developers
involves certain risks, including lack of control over development and delivery
schedules and the availability of customer support. No assurance can be given
that Actel's independent developers will be able to complete software and/or
hardware under development, or provide updates or customer support in a timely
manner, which could delay future software or FPGA releases and disrupt Actel's
ability to provide customer support services. Any significant delays in the
availability of Actel's software and/or hardware could be detrimental to the
capability of Actel's new families of products to win designs, delay shipments
and result in the loss of customers or revenues, or otherwise have a materially
adverse effect on Actel's business, financial condition, or results of
operations.
Dependence on Independent Wafer Manufacturers
Actel does not manufacture any of the wafers used in the production of its
FPGAs. Such wafers are manufactured by BAE in the United States, Chartered in
Singapore, MEC in Japan, UMC in Taiwan, and Winbond in Taiwan. Actel's reliance
on independent wafer manufacturers to fabricate its wafers involves significant
risks, including the risk of events limiting production and reducing yields,
such as technical difficulties or damage to production facilities; lack of
control over capacity allocation and delivery schedules; and lack of adequate
capacity.
Actel has from time to time experienced delays in obtaining wafers from its
foundries, and no assurance can be given that Actel will not experience similar
or more severe delays in the future. In addition, although Actel has supply
agreements with several of its wafer manufacturers, a shortage of raw materials
or production capacity could lead any of Actel's wafer suppliers to allocate
available capacity to customers other than Actel, or to internal uses, which
could interrupt Actel's capability to meet its product delivery obligations. Any
inability or unwillingness of Actel's wafer suppliers to provide adequate
quantities of finished wafers to satisfy Actel's needs in a timely manner would
delay production and product shipments and could have a materially adverse
effect on Actel's business, financial condition, or results of operations.
If Actel's current independent wafer manufacturers were unable or unwilling
to manufacture Actel's products as required, Actel would have to identify and
qualify additional foundries. The qualification process typically takes one year
or longer. No assurance can be given that any additional wafer foundries would
become available or be able to satisfy Actel's requirements on a timely basis or
that qualification would be successful. In addition, the semiconductor industry
has from time to time experienced shortages of manufacturing capacity. To secure
an adequate supply of wafers, Actel has considered, and continues to consider,
various possible transactions, including the use of substantial nonrefundable
deposits to secure commitments from foundries for specified levels of
manufacturing capacity over extended periods, equity investments in exchange for
guaranteed production, and the formation of joint ventures to own foundries. No
assurance can be given as to the effect of any such transaction on Actel's
business, financial condition, or results of operations.
Dependence on International Operations
Actel purchases almost all of its wafers from foreign foundries and has
almost all of its commercial products assembled, packaged, and tested by
subcontractors located outside the United States. These activities are subject
to the uncertainties associated with international business operations,
including trade barriers and other restrictions, changes in trade policies,
foreign governmental regulations, currency exchange fluctuations, reduced
protection for intellectual property, war and other military activities,
terrorism, changes in political or economic conditions, and other disruptions or
delays in production or shipments, any of which could have a materially adverse
effect on Actel's business, financial condition, or results of operations.
In order to expand international sales and service, Actel will need to
maintain and expand existing foreign operations or establish new foreign
operations. This entails hiring additional personnel and maintaining or
expanding existing relationships with international distributors and sales
representatives. This will require significant managerial attention and
financial resources and could adversely affect Actel's financial condition and
operating results. No assurance can be given that Actel will be successful in
its maintenance or expansion of existing foreign operations, in its
establishment of new foreign operations, or in its efforts to maintain or expand
its relationships with international distributors or sales representatives.
Dependence on Key Personnel
The success of Actel is dependent in large part on the continued service of
its key managerial, engineering, marketing, sales, and support employees.
Competition for qualified personnel is intense in the semiconductor industry,
and the loss of Actel's key employees, or the inability of Actel to attract
other qualified personnel, could have a materially adverse effect on Actel.
Dependence on Military and Aerospace Customers
Actel estimates that sales of its products to customers in the military and
aerospace industries, which carry higher overall gross margins than sales of
products to other customers, accounted for 26% of net revenues for 2001. In
general, Actel believes that the military and aerospace industries have
accounted for a significantly greater percentage of Actel's net revenues since
the introduction of RadHard FPGAs in 1996 and of RadTolerant FPGAs in 1998. No
assurance can be given that future sales to customers in the military and
aerospace industries will continue at current volume or margin levels.
In 1994, Secretary of Defense William Perry directed the Department of
Defense to avoid government-unique requirements when making purchases and rely
more on the commercial marketplace. Under the "Perry initiative," the Department
of Defense must strive to increase access to commercial state-of-the-art
technology and facilitate the adoption by its suppliers of business processes
characteristic of world-class suppliers. Integration of commercial and military
development and manufacturing facilitates the development of "dual-use"
processes and products and contributes to an expanded industrial base that is
capable of meeting defense needs at lower costs. To that end, many of the
cost-driving specifications that have been part of military procurements for
many years were cancelled in the interest of buying best-available commercial
products. If this trend toward the use of commercial off-the-shelf products
continues, it may erode the revenues and/or margins that Actel derives from
sales to customers in the military and aerospace industries, which could have a
materially adverse effect on Actel's business, financial condition, or results
of operations.
The Strom Thurmond National Defense Authorization Act for 1999 required,
among other things, that communications satellites and related items (including
components) be controlled on the U.S. Munitions List. The effect of the Act was
to transfer jurisdiction over commercial communications satellites from the
Department of Commerce to the Department of State and to expand the scope of
export licensing applicable to commercial satellites. The need to obtain
additional export licenses has caused significant delays in the shipment of some
of Actel's FPGAs. Actel does not believe that this will have a long-term adverse
effect on its business, although significant delays might cause some customers
to seek an alternative solution.
Orders from the military and aerospace customers tend to be large and
irregular, which creates operational challenges and contributes to fluctuations
in Actel's net revenues and gross margins. These sales are also subject to more
extensive governmental regulations, including greater import and export
restrictions. In addition, products for military and aerospace applications
require processing and testing that is more lengthy and stringent than for
commercial applications, which increases the complexity of scheduling and
forecasting as well as the risk of failure. It is often not possible to
determine before the end of processing and testing whether products intended for
military or aerospace applications will fail and, if they do fail, a significant
period of time is often required to process and test replacements. This makes it
difficult to accurately estimate quarterly revenues and can have a materially
adverse effect on Actel's business, financial condition, or results of
operations.
Dividend Policy
Actel has never declared or paid any cash dividends on its capital stock.
Actel intends to retain any earnings for use in its business and does not
anticipate paying any cash dividends in the future.
Fluctuations in Operating Results
Actel's quarterly and annual operating results are subject to fluctuations
resulting from general economic conditions and a variety of risks specific to
Actel or characteristic of the semiconductor industry, including booking and
shipment uncertainties, supply problems, and price erosion. Any of these factors
make it difficult to accurately project quarterly revenues and other operating
results and can have a materially adverse effect on Actel's business, financial
condition, or results of operations.
Booking and Shipment Uncertainties
Actel typically generates a large percentage of its quarterly revenues
from orders received during the quarter and shipped in the final weeks of
the quarter, making it difficult to accurately project quarterly revenues.
Actel's backlog (which may be cancelled or deferred by customers on short
notice without significant penalty) at the beginning of a quarter accounts
for only a fraction of Actel's revenues during the quarter. This means that
Actel generates the rest of its quarterly revenues from orders received
during the quarter and "turned" for shipment within the quarter, and that
any shortfall in "turns" orders will have an immediate and adverse impact
on quarterly revenues. There are many factors that can cause a shortfall in
"turns" orders, including but not limited to a decline in general economic
conditions or the businesses of end users, excess inventory in the channel,
conversion to conventional gate arrays, or the loss of business to other
competitors for price or other reasons.
Historically, Actel shipped a disproportionately large percentage of
its quarterly revenues in the final weeks of the quarter. While quarterly
shipments have been more linear in recent years, any failure by Actel to
effect scheduled shipments by the end of the quarter can have a materially
adverse effect on revenues for such quarter. It is often impossible to
determine before the end of processing and testing whether products
intended for military or aerospace applications can be shipped and, if not,
a significant period of time is often required to process and test
replacements. Since Actel does not recognize revenue on the sale of a
product to a distributor until the distributor resells the product, Actel's
quarterly revenues are also dependent on, and subject to fluctuations in,
shipments by Actel's distributors. When there is a shortfall in revenues,
operating results are likely to be adversely affected because most of
Actel's expenses do not vary with revenues.
Supply Problems
In a typical semiconductor manufacturing process, silicon wafers
produced by a foundry are sorted and cut into individual die, which are
then assembled into individual packages and tested. The manufacture,
assembly, and testing of semiconductor products is highly complex and
subject to a wide variety of risks, including defects in masks, impurities
in the materials used, contaminants in the environment, and performance
failures by personnel and equipment. Semiconductor products intended for
military and aerospace applications are particularly susceptible to these
risks.
As is common in the semiconductor industry, Actel's independent wafer
suppliers from time to time experience lower than anticipated yields of
usable die. To the extent yields of usable die decrease, the average cost
to Actel of each usable die increases, which reduces gross margin. Wafer
yields can decline without warning and may take substantial time to analyze
and correct, particularly for a company such as Actel that does not operate
its own manufacturing facility, but instead utilizes independent
facilities, almost all of which are offshore. Yield problems may also
increase the time to market for Actel's products and create inventory
shortages and dissatisfied customers. No assurance can be given that Actel
will not experience wafer supply problems in the future.
In addition, Actel typically experiences difficulties and delays in
achieving satisfactory, sustainable yields on new processes or at new
foundries, particularly when new technologies are involved. For example,
Actel and GateField struggled for years to achieve acceptable yields on the
flash process for ProASIC devices at Infineon. Although Actel has been able
to overcome these difficulties in the past, no assurance can be given that
it will be able to do so with respect to any new process or foundry.
Price Erosion
The semiconductor industry is characterized by intense competition.
Historically in the semiconductor industry, the average selling price of a
product declined significantly over the life of the product. To win
designs, Actel generally must price new products on the assumption that
manufacturing cost reductions will be achieved, which often does not occur
as soon as expected. While Actel expects to reduce the average selling
prices of its products over time as it achieves manufacturing cost
reductions, Actel is sometimes required by competitive pressures to reduce
the prices of its new products more quickly than such cost reductions can
be achieved. In addition, Actel sometimes approves price reductions on
specific sales to meet competition. Declines in the average selling prices
of Actel's products reduce net revenues unless offset by greater unit sales
or a shift in the mix of products sold toward higher-priced products. In
addition, declines in the average selling prices of Actel's products reduce
gross margins unless offset by reductions in manufacturing costs or by a
shift in the mix of products sold toward higher-margin products.
Force Majeure
The performance of Actel and each of its foundries, suppliers,
subcontractors, distributors, agents, and customers is subject to events or
conditions beyond such party's control, including labor disputes, acts of public
enemies or terrorists, war or other military conflicts, blockades,
insurrections, riots, epidemics, quarantine restrictions, landslides, lightning,
earthquakes, fires, storms, floods, washouts, arrests, civil disturbances,
restraints by or actions of governmental bodies acting in a sovereign capacity
(including export or security restrictions on information, material, personnel,
equipment, or otherwise), breakdowns of plant or machinery, inability to obtain
transport or supplies, and the like. Actel's foundry partners in Japan and
Taiwan and its operations in California are located in areas that have been
seismically active in the recent past. In addition, the countries outside of the
United States in which Actel's foundry partners and assembly and other
subcontractors are located have unpredictable and potentially volatile economic,
social, or political conditions, including the risks of conflict between Taiwan
and the People's Republic of China or between North Korea and South Korea. The
occurrence of any of these circumstances could disrupt Actel's operations and
may have a materially adverse effect on Actel's business, financial condition,
or results of operations.
Actel's corporate offices are located in California, which was subject to
power outages and shortages during 2001. More extensive power shortages in the
state could disrupt Actel's operations and interrupt its research and
development activities.
Forward-Looking Statements
All {bracketed statements} contained in this Annual Report on Form 10-K,
including all {bracketed statements} contained in any document incorporated
herein by reference, are made pursuant to the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995. All forward-looking statements
are made by Actel's management in the exercise of its best judgment based on the
information currently known by management, but they are not guarantees of future
performance. Thus, actual events and results may differ materially from those
expressed or forecast in the forward-looking statements due to the Risk Factors
identified herein or for other reasons. Actel undertakes no obligation to update
any forward-looking statement contained or incorporated by reference in this
Annual Report on Form 10-K.
Future Capital Needs
Actel must continue to make significant investments in research and
development as well as capital equipment and expansion of facilities. Actel's
future capital requirements will depend on many factors, including (among
others) product development, investments in working capital, and acquisitions of
complementary businesses, products, or technologies. Wafer manufacturers are
increasingly demanding financial support from customers in the form of equity
investments and advance purchase price deposits, which in some cases are
substantial. Should Actel require additional capacity, it may be required to
incur significant expenditures to secure such capacity.
To the extent that existing resources and future earnings are insufficient
to fund Actel's operations, Actel may need to raise additional funds through
public or private debt or equity financings. If additional funds are raised
through the issuance of equity securities, the percentage ownership of current
shareholders will be reduced and such equity securities may have rights,
preferences, or privileges senior to those of the holders of Actel's Common
Stock. No assurance can be given that additional financing will be available or
that, if available, it can be obtained on terms favorable to Actel and its
shareholders. If adequate funds are not available, Actel may be required to
delay, limit, or eliminate some or all of its proposed operations.
Gross Margin
Actel's gross margin is the difference between the revenues it receives
from the sale of its products and the cost of those products. The price Actel
can charge for a product is constrained principally by its competitors. While
competition has always been intense, Actel believes price competition has become
more acute. This may be due in part to the transition toward high-level design
methodologies, which permit designers to wait until later in the design process
before selecting a programmable or masked silicon device and make it easier to
convert between PLDs or between a programmable and a masked silicon device.
These competitive pressures may cause Actel to reduce the prices of its products
more quickly than it can achieve cost reductions, which would reduce Actel's
gross margin and may have a materially adverse effect on its operating results.
One of the most important variables affecting the cost of Actel's products
is manufacturing yields. With its customized antifuse and flash manufacturing
process requirements, Actel almost invariably experiences difficulties and
delays in achieving satisfactory, sustainable yields on new processes or at new
foundries. Until satisfactory yields are achieved, gross margins on news
products will generally be lower than on mature products. Depending upon the
rate at which sales of these new products ramp and the extent to which they
displace mature products, the lower gross margins could have a materially
adverse effect on Actel's operating results.
Management of Growth
Actel has in the past experienced and expects to again experience growth in
the number of its employees and the scope of its operations, resulting in
increased responsibilities for management personnel. To manage future growth
effectively, Actel will need to continue to hire, train, motivate, and manage a
growing number of employees. The future success of Actel will also depend on its
ability to attract and retain qualified technical, marketing, and management
personnel. In particular, the availability of qualified silicon design, software
design, process, and test engineers is limited, and competition among companies
for skilled and experienced engineering personnel is often strong. Especially
during strong business cycles, Actel expects to experience difficulty in filling
its needs for qualified engineers and other personnel. No assurance can be given
that Actel will be able to achieve or manage effectively any such growth, and
failure to do so could delay product development and introductions or otherwise
have a materially adverse effect on Actel's business, financial condition, or
results of operations.
Manufacturing Yields
Actel depends upon its independent wafer suppliers to produce wafers with
acceptable yields and to deliver them to Actel in a timely manner. Currently,
substantially all of Actel's revenues are derived from products based on Actel's
proprietary antifuse process technologies. Successful implementation of antifuse
process technology requires a high degree of coordination between Actel and its
foundry. Therefore, significant lead-time is required to reach volume production
on new processes and at new foundries. Accordingly, no assurance can be given
that volume production on Actel's new or next-generation families will be
achieved in the near term or at all.
Actel introduced the ProASIC family of devices in 1999 and the ProASIC Plus
family in 2002. While ProASIC products are based on a flash process technology
that is less customized than an antifuse process, it is also a technology less
familiar to Actel. In addition, it is generally more difficult to bring up an
advanced flash process than it is to bring up an advanced antifuse process.
Actel has always experienced difficulty achieving satisfactory, sustainable
yields on new process technologies at new foundries, and the flash process at
Infineon was no different. Although Actel believes that it has been able to
overcome these difficulties in the past, no assurance can be given that it will
be able to do so with respect to new flash products. In any event, until
satisfactory, sustainable yields are achieved on ProASIC Plus devices, they
generally will be sold at lower gross margins than Actel's mature product
families, which could have a materially adverse effect on operating results.
The fabrication of antifuse and flash wafers is a complex process that
requires a high degree of technical skill, state-of-the-art equipment, and
effective cooperation between Actel and the foundry to produce acceptable
yields. Minute impurities, errors in any step of the fabrication process,
defects in the masks used to print circuits on a wafer, and other factors can
cause a substantial percentage of wafers to be rejected or numerous die on each
wafer to be non-functional. As is common in the semiconductor industry, Actel
has experienced from time to time in the past, and expects to experience in the
future, production yield problems and delivery delays. Any prolonged inability
to obtain adequate yields or deliveries could have a materially adverse effect
on Actel's business, financial condition, or results of operations.
One-Time Programmability (OTP)
The nonvolatility of Actel's antifuse FPGAs is necessary or desirable in
some applications, but all other things being equal, logic designers generally
would prefer to prototype with a reprogrammable logic device. This is because
the designer can reuse the device if an error is made. The visibility associated
with discarding an OTP device often causes designers to select a reprogrammable
device even when the alternative OTP device offers significant advantages. This
bias in favor of designing with reprogrammable logic devices appears to increase
as the size of the design increases, and is a major reason Actel decided to
offer reprogrammable ProASIC devices. No assurance can be given that Actel will
be able to overcome this competitive disadvantage.
Patent Infringement
As is typical in the semiconductor industry, Actel has been and expects to
be notified from time to time of claims that it may be infringing patents owned
by others. During 2001, Actel held discussions regarding potential patent
infringement issues with several third parties, some of which significantly
greater financial and intellectual property resources than Actel. As it has in
the past, Actel may obtain licenses under patents that it is alleged to
infringe. Although patent holders commonly offer licenses to alleged infringers,
no assurance can be given that licenses will be offered or that the terms of any
offered licenses will be acceptable to Actel. Failure to obtain a license for
technology allegedly used by Actel could result in litigation. All litigation,
whether or not determined in favor of Actel, can result in significant expense
to Actel and can divert the efforts of Actel's technical and management
personnel from productive tasks. While Actel believes that reasonable resolution
will occur, there can be no assurance that these claims will be resolved or that
the resolution of these claims will not have a materially adverse effect on
Actel's business, financial condition, or results of operations. In addition,
Actel's evaluation of the impact of these pending disputes could change based on
new information learned by Actel.
In February 2001, Actel introduced SRAM-based VariCore EPGA IP cores. Since
Actel did not receive any sublicensing rights under the Xilinx Agreement, the
licensing of VariCore EPGAs by Actel would not be protected by the cross-license
contained in the Xilinx Agreement.
Actel has obtained patents covering aspects of its FPGA architecture and
logic modules and certain techniques for manufacturing its antifuse and flash
FPGAs, but no assurance can be given that Actel's patents will be determined to
be valid or that any assertions of infringement or invalidity by other parties
will not be successful. In addition, Actel has agreed to defend and indemnify
customers from and against claims that Actel products infringe the patent or
other intellectual rights of third parties. In the event of an adverse ruling in
any litigation involving intellectual property, Actel could suffer significant
(and possibly treble) monetary damages, which could have a materially adverse
effect on Actel's business, financial condition, or results of operations. Actel
may also be required to discontinue the use of infringing processes; cease the
manufacture, use, and sale or licensing of infringing products; expend
significant resources to develop non-infringing technology; or obtain licenses
under patents that it is infringing. In the event of a successful claim against
Actel, Actel's failure to develop or license a substitute technology on
commercially reasonable terms could also have a materially adverse effect on
Actel's business, financial condition, and results of operations.
Potential Acquisitions
In pursuing its business strategy, Actel may acquire products,
technologies, or businesses from third parties. Identifying and negotiating
these acquisitions may divert substantial management time away from Actel's
operations. An acquisition could absorb substantial cash resources, require
Actel to incur or assume debt obligations, and/or involve the issuance of
additional Actel equity securities. The issuance of additional equity securities
may dilute, and could represent an interest senior to the rights of, the holders
of Actel's Common Stock. An acquisition could involve significant write-offs
(possibility resulting in a loss for the fiscal year(s) in which taken) and
would require the amortization of any identifiable intangibles over a number of
years, which would adversely affect earnings in those years. Any acquisition
would require attention from Actel's management to integrate the acquired entity
into Actel's operations, may require Actel to develop expertise outside its
existing business, and could result in departures of management from either
Actel or the acquired entity. An acquired entity may have unknown liabilities,
and its business may not achieve the results anticipated at the time it is
acquired by Actel. The occurrence of any of these circumstances could disrupt
Actel's operations and may have a materially adverse effect on Actel's business,
financial condition, or results of operations.
Protection of Intellectual Property
Actel has historically devoted significant resources to research and
development and believes that the intellectual property derived from such
research and development is a valuable asset that has been and will continue to
be important to the success of Actel's business. Actel relies primarily on a
combination of nondisclosure agreements, other contractual provisions, and
patent and copyright laws to protect its proprietary rights. No assurance can be
given that the steps taken by Actel will be adequate to protect its proprietary
rights. In addition, the laws of certain territories in which Actel's products
are or may be developed, manufactured, or sold, including Asia and Europe, may
not protect Actel products and intellectual property rights to the same extent
as the laws of the United States. Failure of Actel to enforce its patents or
copyrights or to protect its trade secrets could have a materially adverse
effect on Actel's business, financial condition, or results of operations.
Reliance on Distributors
In 2001, sales made through distributors accounted for 68% of Actel's net
revenues. Two of Actel's distributors, Pioneer and Unique, accounted for 20% and
19%, respectively, of Actel's net revenues in 2001. No assurance can be given
that future sales by these or other distributors will continue at current levels
or that Actel will be able to retain its current distributors on terms that are
acceptable to Actel. During 2001, Actel consolidated its distribution channel by
terminating Arrow, which accounted for 13% of Actel's net revenues in 2001.
Actel's distributors generally offer products of several different
companies, including products that are competitive with Actel's products.
Accordingly, there is a risk that these distributors may give higher priority to
products of other suppliers, thus reducing their efforts to sell Actel's
products. In addition, Actel's agreements with its distributors are generally
terminable at the distributor's option. A reduction in sales efforts by one or
more of Actel's current distributors or a termination of any distributor's
relationship with Actel could have a materially adverse effect on Actel's
business, financial condition, or results of operations.
Actel defers recognition of revenue on shipments to distributors until the
product is resold by the distributor to the end user. Actel's distributors have
occasionally built inventories in anticipation of substantial growth in sales
and, when such growth did not occur as rapidly as anticipated, substantially
reduced the amount of product ordered from Actel in subsequent quarters. Such a
slowdown in orders would generally reduce Actel's profit margins on future sales
of higher cost products because Actel would be unable to take advantage of any
manufacturing cost reductions while the distributor depleted its inventory at
lower average selling prices. In addition, while Actel believes that its major
distributors are currently adequately capitalized, no assurance can be given
that one or more of Actel's distributors will not experience financial
difficulties. The failure of one or more of Actel's distributors to pay for
products ordered from Actel or to continue operations because of financial
difficulties or for other reasons could have a materially adverse effect on
Actel's business, financial condition, or results of operations.
Reliance on International Sales
Sales to customers outside the United States accounted for 38% of net
revenues in 2001. The largest portion of export sales is made to European
customers, which accounted for 28% of net revenues in 2001. Actel expects that
revenues derived from international sales will continue to represent a
significant portion of its total revenues. International sales are subject to a
variety of risks, including longer payment cycles, greater difficulty in
accounts receivable collection, currency exchange risks, currency restrictions,
tariffs, trade barriers, taxes, export license requirements, and the impact of
recessionary environments in economies outside the United States. All of Actel's
foreign sales are denominated in U.S. Dollars, so Actel's products become less
price competitive in countries with currencies that are declining in value
against the dollar. In addition, since a majority of Actel's foreign sales are
made through distributors, such sales are subject to the risks described above
in "Reliance on Distributors."
Semiconductor Industry Risks
The semiconductor industry has historically been cyclical and periodically
subject to significant economic downturns, which are characterized by diminished
product demand, accelerated price erosion, and overcapacity. Beginning in the
fourth quarter of 2000, Actel and the semiconductor industry in general
experienced reduced bookings and backlog cancellations due to excess inventories
at communications, computer, and consumer equipment manufacturers and a general
softening in the overall economy. The downturn, which has been severe and could
be prolonged, resulted in lower revenues, which in turn had a disproportionate
effect on profitability, including Actel's. Actel may in the future experience
substantial period-to-period fluctuations in business and results of operations
due to general semiconductor industry conditions, overall economic conditions,
or other factors, including legislation and regulations governing the import or
export of semiconductor products.
Strategic Investments
Actel occasionally makes equity investments in public or private companies
for the promotion of strategic objectives. The value of these equity investments
may experience significant volatility, and Actel monitors its equity investments
for impairment on a periodic basis. In the event that the carrying value of an
equity investment were to exceed its fair value, and the decline in value were
determined to be other than temporary, the carrying value would be reduced to
its current fair value, which would have an adverse effect on Actel's operating
results that might be material.
Technological Change and Dependence on New Product Development
The market for Actel's products is characterized by rapidly changing
technology, frequent new product introductions, and declining average selling
prices over product life cycles, each of which makes the timely introduction of
new products a critical objective of Actel. Actel's future success is highly
dependent upon the timely completion and introduction of new products at
competitive price and performance levels. In evaluating new product decisions,
Actel must anticipate well in advance both the future demand and the technology
that will be available to supply such demand. Failure to anticipate customer
demand, delays in developing new products with anticipated technological
advances, or failure to coordinate the design and development of silicon and
associated software products could have a materially adverse effect on Actel's
business, financial condition, or results of operation.
No assurance can be given that Actel's design and introduction schedules
for new products or the supporting software or hardware will be met, that any
new products will gain market acceptance, or that Actel will respond effectively
to new technological changes or new product announcements by others. Any failure
of Actel to successfully define, develop, market, manufacture, assemble, test,
or program competitive new products could have a materially adverse effect on
its business, financial condition, or results of operations.
In addition, there are greater technological and operational risks
associated with new products. The inability of Actel's wafer suppliers to
produce advanced products; delays in commencing or maintaining volume shipments
of new products; the discovery of product, process, software, or programming
failures; and any related product returns could each have a materially adverse
effect on Actel's business, financial condition, or results of operation.
Actel must also continue to make significant investments in research and
development to develop new products and achieve market acceptance for such
products. Actel conducts most of its research and development activities at
facilities operated by its foundries. Although Actel to date has not experienced
any significant difficulty in obtaining access to such facilities, no assurance
can be given that access will not be limited or that such facilities will be
adequate to meet Actel's needs in the future.
Use of Estimates
The preparation of the financial statements in conformity with accounting
principals generally accepted in the United States requires management to make
estimates and judgments that affect the reported amounts of assets, liabilities,
revenues, and expenses and the related disclosure of contingent assets and
liabilities. Actel bases its estimates on historical experience and on various
other assumptions that are believed to be reasonable under the circumstances,
the results of which form the basis for making judgments about the carrying
values of assets and liabilities that are not readily apparent from other
sources. Actual results invariably differ from these estimates, and such
differences could be material. In addition, if these estimates or their related
assumptions change in the future, it could have a materially adverse effect on
Actel's operating results.
Volatility of Stock
The price of Actel's Common Stock can fluctuate substantially on the basis
of such factors as announcements of new products by Actel or its competitors,
quarterly fluctuations in Actel's financial results or the financial results of
other semiconductor companies, or general conditions in the semiconductor
industry, financial markets, or economy. In addition, stock markets have
experienced extreme price and volume volatility in recent years. This volatility
has had a substantial effect on the market prices of the securities issued by
technology companies, at times for reasons unrelated to the operating
performance of the specific companies.
Executive Officers of the Registrant
The following table identifies each executive officer of Actel as of March
31, 2002:
Name Age Position
- ---------------------- ----- ------------------------------------------------
John C. East.......... 57 President and Chief Executive Officer
Esmat Z. Hamdy........ 52 Senior Vice President of Technology & Operations
Jon A. Anderson....... 43 Vice President of Finance and Chief Financial
Officer
Anthony Farinaro...... 39 Vice President & General Manager of Design
Services
Paul V. Indaco........ 51 Vice President of Worldwide Sales
Dennis G. Kish........ 38 Vice President of Marketing
Barbara L. McArthur... 51 Vice President of Human Resources
Fares N. Mubarak...... 40 Vice President of Engineering
David L. Van De Hey... 46 Vice President & General Counsel and Secretary
Mr. East has served as President and Chief Executive Officer of Actel since
December 1988. From April 1979 until joining Actel, Mr. East served in various
positions with Advanced Micro Devices, a semiconductor manufacturer, including
Senior Vice President of Logic Products from November 1986 to November 1988.
From December 1976 to March 1979, he served as Operations Manager for Raytheon
Semiconductor. From September 1968 to December 1976, Mr. East served in various
marketing, manufacturing, and engineering positions for Fairchild Camera and
Instrument Corporation, a semiconductor manufacturer.
Dr. Hamdy is a founder of Actel, was Vice President of Technology from
August 1991 to March 1996 and Senior Vice President of Technology from March
1996 to September 1996, and has been Senior Vice President of Technology and
Operations since September 1996. From November 1985 to July 1991, he held a
number of management positions with Actel's technology and development group.
From January 1981 to November 1985, Dr. Hamdy held various positions at Intel
Corporation, a semiconductor manufacturer, lastly as project manager.
Mr. Anderson joined Actel in March 1998 as Controller and has been Vice
President of Finance and Chief Financial Officer since August 2001. From 1987
until joining Actel, he held various financial positions at National
Semiconductor, a semiconductor company, with the most recent position of
Director of Finance, Local Area Networks Division. From 1982 to 1986, he was an
auditor with Touche Ross & Co., a public accounting firm.
Mr. Farinaro joined Actel in August 1998 as Vice President & General
Manager of Design Services. From February 1990 until joining Actel, he held
various engineering and management positions with GateField (formally Zycad
Corporation until 1997), a semiconductor company, with the most recent position
of Vice President of Application & Design Services. From 1985 to 1990, Mr.
Farinaro held various engineering and management positions at Singer Kearfott,
an aerospace electronics company, and its spin-off, Plessey Electronic Systems
Corporation.
Mr. Indaco joined Actel in March 1999 as Vice President of Worldwide Sales.
From January 1996 until joining Actel, he served as Vice President of Sales for
Chip Express, a semiconductor manufacturer. From January September 1994 to
January 1996, Mr. Indaco was Vice President of Sales for Redwood Microsystems, a
semiconductor manufacturer. From February 1984 to September 1994, he held senior
sales management positions with LSI Logic, a semiconductor manufacturer. From
June 1978 to February 1984, Mr. Indaco held various field engineering sales and
marketing positions with Intel Corporation, a semiconductor manufacturer. From
June 1976 to June 1978, he held various marketing positions with Texas
Instruments, a semiconductor manufacturer.
Mr. Kish joined Actel in December 1999 as Vice President of Strategic
Product Marketing and became Vice President of Marketing in July 2000. Prior to
joining Actel, he held senior management positions at Synopsys, an EDA company,
and Atmel, a semiconductor manufacturer. Before that, Mr. Kish held sales and
engineering positions with Texas Instruments, a semiconductor manufacturer.
Ms. McArthur joined Actel in July of 2000 as Vice President of Human
Resources. From 1997 until joining Actel, she was Vice President of Human
Resources at Talus Solutions. Before that, Ms. McArthur held senior human
resource positions at Applied Materials from 1993 to 1997, 3Com Corporation from
1987 to 1993, and at Saga Corporation from 1978 to 1986.
Mr. Mubarak joined Actel in November 1992, was Director of Product and Test
Engineering until October 1997, and has been Vice President of Engineering since
October 1997. From 1989 until joining Actel, he held various engineering and
engineering management positions with Samsung Semiconductor Inc., a
semiconductor manufacturer, and its spin-off, IC Works, Inc. From 1984 to 1989,
Mr. Mubarak held various engineering, product planning, and engineering
management positions with Advanced Micro Devices, a semiconductor manufacturer.
Mr. Van De Hey joined Actel in July 1993 as Corporate Counsel, became
Secretary in May 1994, and has been Vice President & General Counsel since
August 1995. From November 1988 to September 1993, he was an associate with
Wilson, Sonsini, Goodrich & Rosati, Professional Corporation, a law firm in Palo
Alto, California, and Actel's outside legal counsel. From August 1985 until
October 1988, he was an associate with the Cleveland office of Jones, Day,
Reavis & Pogue, a law firm.
Subject to their rights under any contract of employment or other
agreement, executive officers serve at the discretion of the Board of Directors.
ITEM 2. PROPERTIES
Actel's principal administrative, marketing, sales, customer support,
design, research and development, and testing facilities are located in
Sunnyvale, California, in three buildings that comprise approximately 138,000
square feet. These buildings are leased through June 2003, and Actel has a
renewal option for an additional five-year term. Actel also leases sales offices
in the metropolitan areas of Atlanta, Boston, Chicago, Dallas, Denver, Hong
Kong, Houston, London, Los Angeles, Milan, Minneapolis/St. Paul, Munich, New
York, Orlando, Paris, Ottawa (Ontario), Philadelphia, Raleigh, Seattle, Tokyo,
and Washington D.C., as well as the facilities of the Design Services Group in
Mt. Arlington, New Jersey, and the facility formerly occupied by GateField in
Fremont, California. {Actel believes its facilities will be adequate for its
needs in 2002.}
ITEM 3. LEGAL PROCEEDINGS
There are no pending legal proceedings of a material nature to which Actel
is a party or of which any of its property is the subject. There are no such
legal proceedings known by Actel to be contemplated by any governmental
authority.
On March 29, 2001, Unisys Corporation (Unisys) brought suit in the United
States District Court for the Northern District of California, San Jose Division
(Court), against Actel seeking monetary damages and injunctive relief. Actel and
Unisys orally agreed to settle the case on April 25, 2001, and executed a
definitive written settlement agreement on June 29, 2001. The Court dismissed
the case with prejudice on July 13, 2001. The settlement was immaterial to
Actel's business, financial condition, and operating results.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of security holders during the fourth
quarter of the fiscal year covered by this report.
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED SHAREHOLDER MATTERS
Actel's Common Stock has been traded on the Nasdaq National Market under
the symbol "ACTL" since its initial public offering on August 2, 1993. On March
25, 2001, there were 212 shareholders of record. Since many shareholders have
their shares held of record in the name of their brokerage firm, the actual
number of shareholders is estimated by Actel to be about 8,300. The following
table set forth for the periods indicated the high and low sales prices per
share of Actel Common Stock as reported on the Nasdaq National Market.
2001 2000
High Low High Low
First Quarter............................................. $ 31.81 $ 17.38 $ 36.50 $ 21.63
Second Quarter............................................ 26.90 16.69 46.88 22.00
Third Quarter............................................. 25.00 15.27 55.38 29.63
Fourth Quarter............................................ 22.14 15.54 39.00 20.00
On April 3, 2002, the reported last sale of Actel Common Stock on the Nasdaq
National Market was $20.30.
Recent Sales of Unregistered Securities
On December 21, 1999, Actel acquired AutoGate Logic, Inc. (AGL) by merger.
The purchase price of $7.2 million included the issuance of 285,943 shares of
Actel Common Stock and the assumption of options to purchase 89,057 shares of
Actel Common Stock. The shares issued and delivered to AGL shareholders were
exempt from registration pursuant to Section 4(2) of the Securities Act and/or
Regulation D promulgated thereunder because such shares were sold to investors
who were "accredited" and had access to financial and other relevant data
concerning Actel or were represented by a qualified "purchaser representative"
under Regulation D.
On June 2, 2000, Actel acquired Prosys by merger. The purchase price of
$24.5 million included the issuance of 220,518 shares of Actel Common Stock and
the assumption of options to purchase 294,000 shares of Actel Common Stock.
During 2001, an additional 54,290 shares of Actel Common Stock was issued to
Prosys security holders upon the achievement of certain technological milestones
specified in the June 2000 purchase agreement. The shares issued and delivered
to Prosys shareholders were exempt from registration pursuant to Section 4(2) of
the Securities Act because such shares were sold to accredited investors who had
access to financial and other relevant data concerning Actel.
ITEM 6. SELECTED FINANCIAL DATA
The information appearing under the caption "Selected Consolidated
Financial Data" in the 2001 Annual Report is incorporated herein by this
reference.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The information appearing under the caption "Management's Discussion and
Analysis of Financial Conditions and Results of Operations" of the 2001 Annual
Report is incorporated herein by this reference.
ITEM 7A.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The information appearing under the caption "Market Risk" under the main
caption "Management's Discussion and Analysis of Financial Conditions and
Results of Operations" in the 2001 Annual Report is incorporated herein by this
reference.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The information appearing under the captions "Consolidated Balance Sheets,"
"Consolidated Statements of Income," "Consolidated Statements of Shareholders'
Equity," "Consolidated Statements of Cash Flows," "Notes to Consolidated
Financial Statements," and "Report of Ernst & Young LLP, Independent Auditors"
in the 2001 Annual Report is incorporated herein by this reference.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
PART III
Except for the information specifically incorporated by reference from
Actel's definitive Proxy Statement for the Annual Meeting of Shareholders to be
held on May 24, 2002, as filed on or about April 8, 2002, with the Securities
and Exchange Commission (2002 Proxy Statement) in Part III of this Annual Report
on Form 10-K, the 2002 Proxy Statement shall not be deemed to be filed as part
of this Report. Without limiting the foregoing, the information under the
captions "Compensation Committee Report," "Audit Committee Report," and "Company
Stock Performance" under the main caption "OTHER INFORMATION" in the 2002 Proxy
Statement are not incorporated by reference in this Annual Report on Form 10-K.
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The information regarding the identification and business experience of
Actel's directors under the caption "Nominees" under the main caption "PROPOSAL
NO. 1 -- ELECTION OF DIRECTORS" in the 2002 Proxy Statement and the information
under the main caption "COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE
ACT OF 1934" in the 2002 Proxy Statement are incorporated herein by this
reference. For information regarding the identification and business experience
of Actel's executive officers, see "Executive Officers of the Registrant" at the
end of Item 1 in Part I of this Annual Report on Form 10-K.
ITEM 11. EXECUTIVE COMPENSATION
The information under the caption "Director Compensation" under the main
caption "PROPOSAL NO. 1 -- ELECTION OF DIRECTORS" in the 2002 Proxy Statement
and the information under the caption "Executive Compensation" under the main
caption "OTHER INFORMATION" in the 2002 Proxy Statement are incorporated herein
by this reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The information under the caption "Share Ownership" under the main caption
"INFORMATION CONCERNING SOLICITATION AND VOTING" in the 2002 Proxy Statement and
the information under the caption "Security Ownership of Management" under the
main caption "OTHER INFORMATION" in the 2002 Proxy Statement are incorporated
herein by this reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information under the caption "Certain Transactions" under the main
caption "OTHER INFORMATION" in the 2002 Proxy Statement is incorporated herein
by this reference.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULE AND REPORTS ON FORM 8-K
(a) The following documents are filed as part of this Annual Report on Form
10-K:
(1) Financial Statements. The following consolidated financial
statements of Actel Corporation included in the 2001 Annual Report are
incorporated by reference in Item 8 of this Annual Report on Form 10-K:
Consolidated balance sheets at December 31, 2001 and 2000
Consolidated statements of operations for each of the three years
in the period ended December 31, 2001
Consolidated statements of shareholders' equity and other
comprehensive income/(loss) for each of the three years in the
period ended December 31, 2001
Consolidated statements of cash flows for each of the three years
in the period ended December 31, 2001
Notes to consolidated financial statements
(2) Financial Statement Schedule. The financial statement schedule
listed under 14(d) hereof is filed with this Annual Report on Form 10-K.
(3) Exhibits. The exhibits listed under Item 14(c) hereof are filed
with, or incorporated by reference into, this Annual Report on Form 10-K.
(b) Reports on Form 8-K. None.
(c) Exhibits. The following exhibits are filed as part of, or incorporated
by reference into, this Report on Form 10-K:
Exhibit Number Description
--------------- ------------------------------------------------------------
3.1 Restated Articles of Incorporation (filed as Exhibit 3.2 to
the Registrant's Registration Statement on Form S-1 (File
No. 33-64704), declared effective on August 2, 1993).
3.2 Restated Bylaws of the Registrant (filed as Exhibit 3.3 to
the Registrant's Registration Statement on Form S-1 (File
No. 33-64704), declared effective on August 2, 1993).
10.1 (2) Form of Indemnification Agreement for directors and officers
(filed as Exhibit 10.1 to the Registrant's Registration
Statement on Form S-1 (File No. 33-64704), declared
effective on August 2, 1993).
Exhibit Number Description
---------------- ------------------------------------------------------------
10.2 (2) 1986 Incentive Stock Option Plan, as amended and restated
(filed as Exhibit 10.2 to the Registrant's Annual Report on
Form 10-K (File No. 0-21970) for the fiscal year ended
January 2, 2000).
10.3 (2) 1993 Directors' Stock Option Plan, as amended and restated
(filed as Exhibit 10.3 to the Registrant's Annual Report on
Form 10-K (File No. 0-21970) for the fiscal year ended
December 28, 1997).
10.4 (2) 1993 Employee Stock Purchase Plan, as amended and restated
(filed as Exhibit 10.4 to the Registrant's Annual Report on
Form 10-K (File No. 0-21970) for the fiscal year ended
December 28, 1997).
10.5 (2) 1995 Employee and Consultant Stock Plan, as amended and
restated (filed as Exhibit 10.5 to the Registrant's Annual
Report on Form 10-K (File No. 0-21970) for the fiscal year
ended December 29, 1996).
10.6 (2) Employee Retention Plan, as amended and restated.
10.7 (2) Deferred Compensation Plan, as amended and restated (filed
as Exhibit 10.7 to the Registrant's Annual Report on Form
10-K (File No. 0-21970) for the fiscal year ended December
31, 2000).
10.8 Form of Distribution Agreement (filed as Exhibit 10.13 to
the Registrant's Registration Statement on Form S-1 (File
No. 33-64704), declared effective on August 2, 1993).
10.9 (1) Patent Cross License Agreement dated April 22, 1993 between
the Registrant and Xilinx, Inc. (filed as Exhibit 10.14 to
the Registrant's Registration Statement on Form S-1 (File
No. 33-64704), declared effective on August 2, 1993).
10.10 Manufacturing Agreement dated February 3, 1994 between the
Registrant and Chartered Semiconductor Manufacturing Pte Ltd
(filed as Exhibit 10.17 to the Registrant's Annual Report on
Form 10-K (File No. 0-21970) for the fiscal year ended
January 2, 1994).
10.11 (1) Product Development and Marketing Agreement dated August
1, 1994, between the Registrant and Loral Federal Systems
Company (filed as Exhibit 10.19 to the Registrant's
Quarterly Report on Form 10-Q (File No. 0-21970) for the
quarterly period ended October 2, 1994).
10.12 (1) Foundry Agreement dated as of June 29, 1995, between the
Registrant and Matsushita Electric Industrial Co., Ltd and
Matsushita Electronics Corporation (filed as Exhibit 10.25
to the Registrant's Quarterly Report on Form 10-Q (File No.
0-21970) for the quarterly period ended July 2, 1995).
Exhibit Number Description
-------------- ------------------------------------------------------------
10.13 Lease Agreement for the Registrant's offices in Sunnyvale,
California, dated May 10, 1995 (filed as Exhibit 10.19 to
the Registrant's Annual Report on Form 10-K (File No.
0-21970) for the fiscal year ended December 31, 1995).
10.14 (1) License Agreement dated as of March 6, 1995, between the
Registrant and BTR, Inc. (filed as Exhibit 10.20 to the
Registrant's Annual Report on Form 10-K (File No. 0-21970)
for the fiscal year ended December 29, 1996).
10.15 Asset Purchase Agreement dated August 14, 1998, between
GateField Corporation and Actel Corporation (filed as
Exhibit 2.1 to GateField Corporation's Current Report on
Form 8-K (File No. 0-13244) on August 14, 1998, and
incorporated herein by this reference).
10.16 (1) Patent Cross License Agreement dated August 25, 1998,
between Actel Corporation and QuickLogic Corporation. (filed
as Exhibit 10.19 to the Registrant's Annual Report on Form
10-K (File No. 0-21970) for the fiscal year ended January 3,
1999).
10.17 Amended And Restated Agreement and Plan of Merger by and
among Actel Corporation, GateField Acquisition Corporation,
and GateField Corporation dated as of May 31, 2000 (filed as
Annex I to GateField Corporation's Definitive Proxy
Statement on Schedule 14A (File No. 0-13244) on June 9,
2000, and incorporated herein by this reference).
10.18 Agreement and Plan of Reorganization by and between Actel
Corporation and Prosys Technology, Inc., Jung-Cheun "Frank"
Lien, Sheng "Jason" Feng, Chung Sun, Eddy Huang, and Nan
Horng Yeh dated as of June 2, 2000 (filed as Exhibit 10.1 to
the Registrant's Current Report on Form 8-K (File No.
0-21970) on June 16, 2000, and incorporated herein by this
reference).
13 Portions of Registrant's Annual Report to Shareholders for
the fiscal year ended January 6, 2002, incorporated by
reference into this Report on Form 10-K.
21 Subsidiaries of Registrant (see page 53)
23 Consent of Ernst & Young LLP, Independent Auditors (see page
51)
24 Power of Attorney (see page 50)
- ------------------------
(1) Confidential treatment requested as to a portion of this
Exhibit.
(2) This Exhibit is a management contract or compensatory plan
or arrangement.
(d) Financial Statement Schedule. The following financial statement
schedule of Actel Corporation is filed as part of this Report on Form 10-K and
should be read in conjunction with the Consolidated Financial Statements of
Actel Corporation, including the notes thereto, and the Report of Independent
Auditors with respect thereto:
Schedule Description Page
-------- ------------------------------------------ ------
II Valuation and qualifying accounts 52
All other schedules for which provision is made in the applicable
accounting regulations of the Securities and Exchange Commission are not
required under the related instructions or are inapplicable and therefore have
been omitted.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
ACTEL CORPORATION
April 4, 2002 By: /s/ John C. East
--------------------
John C. East
President and Chief Executive Officer
EXHIBIT 24
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby constitutes and appoints John C. East, Jon A. Anderson, and
David L. Van De Hey, and each of them acting individually, as his
attorney-in-fact, each with full power of substitution, for him in any and all
capacities, to sign any and all amendments to this Annual Report on Form 10-K
and to file the same, with exhibits thereto and other documents in connection
therewith, with the Securities and Exchange Commission, hereby ratifying and
confirming all that each of said attorneys-in-fact, or his substitute or
substitutes, may do or cause to be done by virtue thereof.
Pursuant to the requirements of the Securities Exchange Act of 1934, this
Annual Report on Form 10-K has been signed below by the following persons on
behalf of the Registrant and in the capacities and on the dates indicated.
Signature Title Date
/s/ John C. East President and Chief Executive Officer
-------------------- (Principal Executive Officer)and
(John C. East) Director April 4, 2002
/s/ Jon A. Anderson Vice President of Finance and Chief
-------------------- Financial Officer (Principal Financial
(Jon A. Anderson) and Accounting Officer) April 4, 2002
/s/ James R. Fiebiger
---------------------
(James R. Fiebiger) Director April 4, 2002
/s/ Jos C. Henkens
------------------
(Jos C. Henkens) Director April 4, 2002
/s/ Jacob S. Jacobsson
----------------------
(Jacob S. Jacobsson) Director April 4, 2002
/s/ Frederic N. Schwettmann
- ---------------------------
(Frederic N. Schwettmann) Director April 4, 2002
/s/ Robert G. Spencer
---------------------
(Robert G. Spencer) Director April 4, 2002
EXHIBIT 23
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the incorporation by reference in this Annual Report (Form
10-K) of Actel Corporation of our report dated January 21, 2002, included in the
2001 Annual Report to Shareholders of Actel Corporation.
Our audits also included the financial statement schedule of Actel
Corporation listed in Item 14(a). This schedule is the responsibility of Actel's
management. Our responsibility is to express an opinion based on our audits. In
our opinion, the financial statement schedule referred to above, when considered
in relation to the basic financial statements as a whole, presents fairly in all
material respects the information set forth therein.
We also consent to the incorporation by reference in the Registration
Statements (Form S-8 Nos. 33-74492, 333-3398, 333-71627, 333-36222, 333-43274,
333-54652, and 333-81926) of our report dated January 21, 2002, with respect to
the consolidated financial statements of Actel Corporation incorporated by
reference in its Annual Report (Form 10-K) for the year ended December 31, 2001,
and our report included in the preceding paragraph with respect to the financial
statement schedule included in this Annual Report (Form 10-K) of Actel
Corporation.
/S/ ERNST & YOUNG LLP
San Jose, California
April 5, 2002
SCHEDULE II
ACTEL CORPORATION
--------------------------------------
Valuation and Qualifying Accounts
(in thousands)
Balance at Balance at
beginning end of
of period Provisions Write-Offs period
---------- ---------- ---------- ----------
Allowance for doubtful accounts:
Year ended December 31, 1999.............................. $ 1,554 $ -- $ 475 $ 1,079
Year ended December 31, 2000.............................. 1,079 91 100 1,070
Year ended December 31, 2001.............................. $ 1,070 $ 572 $ 314 $ 1,328
EXHIBIT 21
ACTEL CORPORATION
--------------------------------------
Subsidiaries
Actel Europe, Ltd., a U.K. corporation
Actel Europe SARL, a French corporation
Actel GmbH, a German corporation
Actel Pan-Asia Corporation, a Nevada corporation
Actel Pan-Asia, Hong Kong Ltd., a Hong Kong corporation
Actel Japan, KK, a Japanese corporation