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Document and Entity Information Document - USD ($)	12 Months Ended
Document and Entity Information Document - USD ($)	Dec. 31, 2011	Feb. 13, 2012	Jun. 24, 2011
Document Information [Line Items]
Entity Registrant Name	FORMFACTOR INC
Entity Central Index Key	0001039399
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Document Type	10-K
Document Period End Date	Dec. 31, 2011
Document Fiscal Year Focus	2011
Document Fiscal Period Focus	FY
Amendment Flag	false
Entity Common Stock, Shares Outstanding		49,574,715
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Public Float			$ 308,084,750

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Dec. 31, 2011	Dec. 25, 2010
Current assets:
Cash and cash equivalents	$ 139,049	$ 121,207
Marketable securities	157,642	226,028
Restricted cash	0	383
Accounts receivable, net	12,662	28,598
Inventories	18,092	25,003
Deferred tax assets	1,162	329
Refundable income taxes	910	0
Prepaid expenses and other current assets	7,458	14,743
Total current assets	336,975	416,291
Restricted cash	317	297
Property, plant and equipment, net	35,132	37,311
Deferred tax assets	5,954	5,445
Other assets	4,693	6,710
Total assets	383,071	466,054
Current liabilities:
Accounts payable	9,731	14,948
Accrued liabilities	13,966	24,045
Income taxes payable	100	1,894
Deferred revenue	4,798	4,637
Total current liabilities	28,595	45,524
Long-term income taxes payable	4,112	4,248
Deferred rent and other liabilities	3,712	5,081
Total liabilities	36,419	54,853
Commitments and contingencies (Note 9)
Stockholders' equity:
Preferred stock, $0.001 par value: 10,000,000 shares authorized; no shares issued and outstanding at December 31, 2011 and December 25, 2010, respectively	0	0
Common stock, $0.001 par value: 250,000,000 shares authorized; 49,268,479 and 50,587,917 shares issued and outstanding at December 31, 2011 and December 25, 2010, respectively	50	52
Additional paid-in capital	652,024	651,263
Accumulated other comprehensive income	2,700	2,027
Retained earnings (accumulated deficit)	(308,122)	(242,141)
Total stockholders' equity	346,652	411,201
Total liabilities and stockholders' equity	$ 383,071	$ 466,054

Consolidated Balance Sheets (Parenthetical) - $ / shares	Dec. 31, 2011	Dec. 25, 2010
Stockholders' Equity:
Preferred stock, par value	$ 0.001	$ 0.001
Preferred stock, shares authorized	10,000,000	10,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	250,000,000	250,000,000
Common stock, shares issued	49,268,479	50,587,917
Common stock, shares outstanding	49,268,479	50,587,917

CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2011	Dec. 25, 2010	Dec. 26, 2009
Revenues	$ 169,325	$ 188,565	$ 135,335
Cost of revenues	148,367	190,837	134,516
Gross profit (loss)	20,958	(2,272)	819
Operating expenses:
Research and development	43,544	55,389	57,509
Selling, general and administrative	46,705	67,208	78,428
Restructuring charges, net	522	15,908	8,780
Impairment of long-lived assets	549	56,401	1,288
Total operating expenses	91,320	194,906	146,005
Operating loss	(70,362)	(197,178)	(145,186)
Interest income, net	1,404	2,546	3,282
Other income (expense), net	1,076	4,426	(535)
Loss before income taxes	(67,882)	(190,206)	(142,439)
Provision for (benefit from) income taxes	(1,901)	(1,920)	13,214
Net loss	$ (65,981)	$ (188,286)	$ (155,653)
Net loss per share:
Basic and Diluted	$ (1.31)	$ (3.75)	$ (3.15)
Weighted-average number of shares used in per share calculations:
Basic and Diluted	50,521	50,246	49,483

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands	Total	Common Stock	Additional Paid-in Capital	Accumulated Other Comprehensive Income (Loss)	Income (Loss) Earnings (Accumulated Deficit)
Balances at Dec. 27, 2008	$ 706,064	$ 49	$ 602,295	$ 1,922	$ 101,798
Balances (Shares) at Dec. 27, 2008		49,062,308
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock pursuant to exercise of options for cash	4,272	$ 1	4,271	0	0
Issuance of common stock pursuant to exercise of options for cash (Shares)		319,386
Issuance of common stock pursuant to vesting of restricted stock units, net of stock withheld	(743)	$ 0	(743)	0	0
Issuance of common stock pursuant to vesting of restricted stock units, net of stock withheld (Shares)		111,158
Issuance of common stock under the Employee Stock Purchase Plan	3,601	$ 0	3,601	0	0
Issuance of common stock under the Employee Stock Purchase Plan (Shares)		269,156
Tax benefit from exercise of common stock options	10		10
Stock-based Compensation	20,899	$ 0	20,899	0	0
Components of other comprehensive income (loss):
Change in unrealized gain (loss) on marketable securities, net of tax	(981)	0	0	(981)	0
Currency translation adjustments	312	0	0	312	0
Net loss	(155,653)	0	0	0	(155,653)
Comprehensive loss	(156,322)
Balances at Dec. 26, 2009	577,781	$ 50	630,333	1,253	(53,855)
Balances (Shares) at Dec. 26, 2009		49,762,008
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock pursuant to exercise of options for cash	698	$ 0	698	0	0
Issuance of common stock pursuant to exercise of options for cash (Shares)		115,597
Issuance of common stock pursuant to vesting of restricted stock units, net of stock withheld	(762)	$ 0	(762)	0	0
Issuance of common stock pursuant to vesting of restricted stock units, net of stock withheld (Shares)		414,441
Issuance of common stock under the Employee Stock Purchase Plan	3,788	$ 2	3,786	0	0
Issuance of common stock under the Employee Stock Purchase Plan (Shares)		365,871
Purchase and retirement of common stock	(626)	$ 0	(626)	0	0
Purchase and retirement of common stock (Shares)		(70,000)
Stock-based Compensation	17,834	$ 0	17,834	0	0
Components of other comprehensive income (loss):
Change in unrealized gain (loss) on marketable securities, net of tax	(235)	0	0	(235)	0
Currency translation adjustments	1,009	0	0	1,009	0
Net loss	(188,286)	0	0	0	(188,286)
Comprehensive loss	(187,512)
Balances at Dec. 25, 2010	$ 411,201	$ 52	651,263	2,027	(242,141)
Balances (Shares) at Dec. 25, 2010	50,587,917	50,587,917
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock pursuant to exercise of options for cash	$ 914	$ 0	914	0	0
Issuance of common stock pursuant to exercise of options for cash (Shares)		141,280
Issuance of common stock pursuant to vesting of restricted stock units, net of stock withheld	(219)	$ 0	(219)	0	0
Issuance of common stock pursuant to vesting of restricted stock units, net of stock withheld (Shares)		485,204
Issuance of common stock under the Employee Stock Purchase Plan	2,813	$ 0	2,813	0	0
Issuance of common stock under the Employee Stock Purchase Plan (Shares)		386,818
Purchase and retirement of common stock	(16,411)	$ (2)	(16,409)	0	0
Purchase and retirement of common stock (Shares)		(2,332,740)
Stock-based Compensation	13,662	$ 0	13,662	0	0
Components of other comprehensive income (loss):
Change in unrealized gain (loss) on marketable securities, net of tax	13	0	0	13	0
Currency translation adjustments	660	0	0	660	0
Net loss	(65,981)	0	0	0	(65,981)
Comprehensive loss	(65,308)
Balances at Dec. 31, 2011	$ 346,652	$ 50	$ 652,024	$ 2,700	$ (308,122)
Balances (Shares) at Dec. 31, 2011	49,268,479	49,268,479

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2011	Dec. 25, 2010	Dec. 26, 2009
Cash flows from operating activities:
Net loss	$ (65,981)	$ (188,286)	$ (155,653)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	10,838	28,155	32,706
Amortization of investments	469	469	204
Stock-based compensation expense	13,849	17,613	20,776
Deferred income tax provision (benefit)	(1,988)	(2,105)	39,131
Excess tax benefits from equity based compensation plans	0	0	(841)
Provision for (recovery of) doubtful accounts receivable	(276)	(1,071)	5,040
Provision for excess and obsolete inventories	7,897	11,389	7,032
Loss on disposal and write-off of long-lived assets	5	431	430
Non-cash restructuring	(1,582)	8,974	366
Impairment of long-lived assets	549	56,401	1,288
Gain on release of secured borrowing	0	(3,481)	0
Foreign currency transaction (gains) losses	328	(291)	(613)
Changes in assets and liabilities:
Accounts receivable	16,803	3,225	610
Inventories	(1,152)	(16,887)	(9,384)
Prepaids and other current assets	5,621	3,700	390
Refundable income taxes	(862)	25,843	2,701
Other assets	1,907	66	6,402
Accounts payable	(5,065)	(13,006)	(322)
Accrued liabilities	(9,643)	4,634	(5,573)
Income taxes payable	(1,263)	(732)	(3,030)
Deferred rent and other liabilities	43	(1,920)	(231)
Deferred revenues	160	(6,217)	5,904
Net cash used in operating activities	(29,343)	(73,096)	(52,667)
Cash flows from investing activities:
Acquisition of property, plant and equipment	(7,700)	(30,914)	(19,173)
Proceeds from sales of property, plant and equipment	33	293	201
Purchases of marketable securities	(246,665)	(341,292)	(587,797)
Proceeds from maturities of marketable securities	308,681	432,549	399,023
Proceeds from sales of marketable securities	6,000	9,205	45,364
Payments made in connection with acquisition of assets	0	0	(12,026)
Change in restricted cash	363	0	0
Net cash provided by (used in) investing activities	60,712	69,841	(174,408)
Cash flows from financing activities:
Proceeds from issuances of common stock, net of issuance costs	3,509	3,724	7,129
Excess tax benefits from equity based compensation plans	0	0	841
Purchase and retirement of common stock	(16,411)	(626)	0
Proceeds from secured borrowing	0	0	3,480
Net cash (used in) provided by financing activities	(12,902)	3,098	11,450
Effect of exchange rate changes on cash and cash equivalents	(625)	(679)	(258)
Net increase (decrease) in cash and cash equivalents	17,842	(836)	(215,883)
Cash and cash equivalents, beginning of year	121,207	122,043	337,926
Cash and cash equivalents, end of year	139,049	121,207	122,043
Non-cash investing activities:
Changes in accounts payable and accrued liabilities related to property, plant and equipment purchases	(66)	1,997	4,430
Supplemental disclosure of cash flow information:
Income taxes paid (refunded), net	$ 1,410	$ (24,882)	$ (25,787)

Formation and Business of the Company	12 Months Ended
Formation and Business of the Company	Dec. 31, 2011
Formation and Business of the Company [Abstract]
Formation and Business of the Company	Formation and Business of the Company FormFactor, Inc. (the "Company") was incorporated in Delaware on April 15, 1993 and designs, develops, manufactures, sells and supports precision, high performance advanced semiconductor wafer probe cards. We are based in Livermore, California, home to our corporate offices, research and development, and manufacturing locations. We have facilities in the United States, Singapore, Japan, Taiwan, South Korea and the People's Republic of China. Fiscal Year Our fiscal year ends on the last Saturday in December. The fiscal year ended on December 31, 2011, consisted of 53 weeks and the fiscal years ended on December 25, 2010, and December 26, 2009, respectively, consisted of 52 weeks. Reclassifications Certain reclassifications have been made to the prior year's Consolidated Balance Sheets, Consolidated Statements of Cash Flows and Consolidated Statements of Operations to conform to the current year presentation. Out of Period Adjustment In the third quarter of fiscal 2010, we recorded a $4.1 million adjustment to cost of revenues net of $0.5 million income tax benefit, which resulted from an error in the calculation of capitalized manufacturing variances starting in the first quarter of fiscal 2009 through the second quarter of fiscal 2010. The error caused the understatement of cost of revenues and the overstatement of the overhead capitalized in inventory for most quarters. The income tax benefit resulted from higher net losses in 2009 due to higher cost of revenue expenses. We are able to carry back the increase in the 2009 loss to recover more prior year tax payments. Out of the total adjustment, a $2.9 million adjustment to cost of revenues net of $0.5 million income tax benefit was related to fiscal 2009. Management and the Audit Committee believe that such amounts are not material to current and previously reported financial statements.

Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2011

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Basis of Consolidation and Foreign Currency Translation

The consolidated financial statements include our accounts and those of our wholly owned subsidiaries. All material intercompany balances and transactions have been eliminated.

Translation gains and losses resulting from the process of re-measuring into the United States of America dollar, the foreign currency financial statements of our wholly owned subsidiaries, for which the United States of America dollar is the functional currency, are included in operations. We translate assets and liabilities of foreign subsidiaries, whose functional currency is their local currency, at exchange rates in effect at the balance sheet date. We translate revenue and expenses at the monthly average exchange rates. We include accumulated net translation adjustments in stockholders' equity as a component of accumulated other comprehensive income.

Use of Estimates

The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America ("GAAP") requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Estimates may change as new information is obtained. Significant items that are subject to such estimates include the value of revenue elements, fair value of marketable securities, allowance for doubtful accounts, reserves for product warranty, valuation of obsolete and slow moving inventory, the assessment of recoverability of long-lived assets, valuation and recognition of stock-based compensation, provision for income taxes and related deferred tax assets, valuation and tax liabilities and accruals for other liabilities. Actual results could differ from those estimates.

Cash, Cash Equivalents and Marketable Securities

Cash and cash equivalents consist of deposits and financial instruments which are readily convertible into cash and have original maturities of 90 days or less at the time of acquisition. Marketable securities consist primarily of highly liquid investments with maturities of greater than 90 days when purchased. We generally classify our marketable securities at the date of acquisition as available-for-sale. These securities are reported at fair value with the related unrealized gains and losses included in "Accumulated other comprehensive income (loss)", a component of stockholder's equity, net of tax. Any unrealized losses which are considered to be other-than-temporary impairments are recorded in "Other income (expense), net" in the Consolidated Statements of Operations. Realized gains (losses) on the sale of marketable securities are determined using the specific-identification method and recorded in "Other income (expense), net" in the Consolidated Statements of Operations. We measure our cash equivalents and marketable securities at fair value. Whenever possible, the fair values of our financial assets and liabilities are determined using quoted market prices of identical assets or quoted market prices of similar assets from active markets. Level 1 valuations are obtained from real-time quotes for transactions in active exchange markets involving identical assets. Level 2 valuations are obtained from quoted market prices in active markets involving similar assets. Level 3 valuations are based on unobservable inputs to the valuation methodology and include our own data about assumptions market participants would use in pricing the asset or liability based on the best information available under the circumstances. Each level of input has different levels of subjectivity and difficulty involved in determining fair value.

All of our available-for-sale investments are subject to a periodic impairment review. We record a charge to earnings when a decline in fair value is significantly below cost basis and judged to be other-than-temporary, or have other indicators of impairments. If the fair value of an available-for-sale investment is less than its amortized cost basis, an other-than-temporary impairment is triggered in circumstances where (1) we intend to sell the instrument, (2) it is more likely than not that we will be required to sell the instrument before recovery of its amortized cost basis or (3) a credit loss exists where we do not expect to recover the entire amortized cost basis of the instrument. If we intend to sell or it is more likely than not that we will be required to sell the available-for-sale investment before recovery of its amortized cost basis, we recognize an other-than- temporary impairment in earnings equal to the entire difference between the investment's amortized cost basis and its fair value.

Fair Value of Financial Instruments

The carrying amounts of certain of our financial instruments, including cash and cash equivalents, accounts receivable, accounts payable, accrued compensation and other accrued liabilities, approximate fair value because of their short maturities. Estimates of fair value of fixed-income securities are based on quoted market prices from active markets or third party, market-based pricing sources which we believe to be reliable. These estimates represent the third parties' good faith opinion as to what a buyer in the marketplace would pay for a security in a current sale.

Foreign Exchange Management

We transact business in various foreign currencies, primarily the Japanese Yen. We enter into forward foreign exchange contracts in an effort to mitigate the risks associated with currency fluctuations on certain foreign currency balance sheet exposures. Gains and losses resulting from the impact of currency exchange rate movements on forward foreign exchange contracts designated to offset certain foreign currency balance sheet exposures are recognized as "Other income (expense), net" in the Consolidated Statements of Operations in the period in which the exchange rates change. These gains and losses are intended to partially offset the foreign currency exchange gains and losses on the underlying exposures being hedged. We record the fair value of these contracts as of the end of our reporting period in the Consolidated Balance Sheet. We do not use derivative financial instruments for trading or speculative purposes.

Restricted Cash

Under the terms of one of our facility leases, we provide security to the landlord in the form of letters of credit. As of December 31, 2011 and December 25, 2010 restricted cash included $0.3 million and $0.7 million, respectively, of letters of credit secured by a certificate of deposit.

Inventories

Inventories are stated at the lower of cost (principally standard cost which approximates actual cost on a first-in, first-out basis) or market value. The provision for potentially excess and obsolete inventory is made based on management's analysis of inventory levels and forecasted future sales. Once the value is adjusted, the original cost of our inventory less the related inventory write-down represents the new cost basis of such products. Reversal of these write downs is recognized only when the related inventory has been scrapped or sold. Shipping and handling costs are classified as a component of "Cost of revenues" in the Consolidated Statements of Operations.

We design, manufacture and sell a fully custom product into a market that has been subject to cyclicality and significant demand fluctuations. Probe cards are complex products, custom to a specific chip design and have to be delivered on short lead-times. Probe cards are manufactured in low volumes, but for certain materials, the material purchases are often subject to minimum purchase order quantities in excess of the actual underlying probe card demand. It is not uncommon for us to acquire production materials and commence production activities based on estimated production yields and forecasted demand prior to or in excess of actual demand for our wafer probe cards. These factors result in normal recurring inventory valuation adjustments to cost of revenue. Aggregate inventory write downs were $7.9 million, $11.4 million and $7.0 million for the fiscal years ended December 31, 2011, December 25, 2010 and December 26, 2009, respectively. We retain a portion of the excess inventory until the customer's design is discontinued. The inventory may be used to satisfy customer warranty demand.

When our products have been delivered, but the revenue associated with that product is deferred because the related revenue recognition criteria have not been met, we defer the related inventory costs. The deferred inventory costs do not exceed the deferred revenue amounts. The deferred inventory costs are classified as a component of "Prepaid expenses and other current assets" in the Consolidated Balance Sheet.

Property and Equipment

Property and equipment is stated at cost less accumulated depreciation and amortization. Depreciation is provided on a straight-line method over the following estimated useful lives of the assets: 5 years for machinery and equipment, 3 to 5 years for computer equipment and software and 5 years for furniture and fixtures. Leasehold improvements are amortized over the shorter of the lease term or the estimated useful life of the related asset. Construction-in-progress assets are not depreciated until the assets are placed in service. Upon sale or retirement of assets, the cost and related accumulated depreciation or amortization, are removed from the balance sheet and the resulting gain or loss is reflected in operations.

Intangible Assets

Intellectual property assets represent asset acquisition-related developed technology rights and are amortized on a straight-line basis over the periods of benefit, ranging from 3 to 5 years. We classify all identified intangible assets within "Other assets" in the Consolidated Balance Sheets. For further discussion of identified intangible assets, see Note 3—Balance Sheet Components of the Notes to the Consolidated Financial Statements. We perform a quarterly review of intangible assets to determine if facts and circumstances indicate that the useful life is shorter than originally estimated or that the carrying amount of assets may not be recoverable. If such facts and circumstances exist, we assess the recoverability of identified intangible assets by comparing the projected undiscounted net cash flows associated with the related asset or group of assets over their remaining lives against their respective carrying amounts. Impairments, if any, are based on the excess of the carrying amount over the fair value of those assets.

Impairment of Long-Lived Assets

We test long-lived assets or asset groups for recoverability when events or changes in circumstances indicate that their carrying amounts may not be recoverable. Circumstances which could trigger a review include, but are not limited to: significant decreases in the market price of the asset; significant adverse changes in the business climate or legal factors; accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of the asset; current period cash flow or operating losses combined with a history of losses or a forecast of continuing losses associated with the use of the asset; and current expectation that the asset will more likely than not be sold or disposed of before the end of its estimated useful life.

Recoverability is assessed based on the carrying amounts of the asset and its fair value which is generally determined as the sum of the undiscounted cash flows expected to result from the use and the eventual disposal of the asset, as well as specific appraisals in certain instances. An impairment loss is recognized when the carrying amount is not recoverable and exceeds fair value.

Long-lived Assets Held For Sale

We classify long-lived assets as held for sale when certain criteria are met, including: management's commitment to a plan to sell the assets; the availability of the assets for immediate sale in their present condition; whether an active program to locate buyers and other actions to sell the assets has been initiated; whether the sale of the assets is probable and their transfer is expected to qualify for recognition as a completed sale within one year; whether the assets are being marketed at reasonable prices in relation to their fair value; and whether it is unlikely that significant changes will be made to the plan to sell the assets. Long-lived assets held for sale are classified within "Prepaid expenses and other current assets" in the Consolidated Balance Sheets.

We measure long-lived assets to be disposed of by sale at the lower of the carrying amount or fair value less cost to sell. Fair value is determined using quoted market prices or the anticipated cash flows discounted at a rate commensurate with the risk involved. Changes to our estimated fair values of such assets are recorded in the periods in which such changes are identified.

Concentration of Credit Risk and Other Risks and Uncertainties

Financial instruments that potentially subject us to concentrations of credit risk consist primarily of cash equivalents, marketable securities and trade receivables. Our cash equivalents and marketable securities are held in safekeeping by large, creditworthy financial institutions. We invest our excess cash primarily in U.S. banks, government and agency bonds, money market funds and corporate obligations. We have established guidelines relative to credit ratings, diversification and maturities that seek to maintain safety and liquidity. Deposits in these banks may exceed the amounts of insurance provided on such deposits. To date, we have not experienced any losses on our deposits of cash and cash equivalents.

We market and sell our products to a narrow base of customers and generally do not require collateral. In fiscal 2011, four customers accounted for 18%, 16%, 11% and 10% of revenues. In fiscal 2010, three customers accounted for 21%, 13% and 12% of revenues. In fiscal 2009, one customer accounted for 49% of revenues.

At December 31, 2011, two customers accounted for approximately 18% and 10% of accounts receivable. At December 25, 2010, three customers accounted for approximately 21%, 19% and 11% of accounts receivable. We operate in the intensely competitive semiconductor industry, including the DRAM and Flash markets, which have been characterized by price erosion, rapid technological change, short product life, cyclical market patterns and heightened foreign and domestic competition. Significant technological changes in the industry could affect operating results adversely.

Certain components that meet our requirements are available only from a limited number of suppliers. The rapid rate of technological change and the necessity of developing and manufacturing products with short lifecycles may intensify these risks. The inability to obtain components as required, or to develop alternative sources, if and as required in the future, could result in delays or reductions in product shipments, which in turn could have a material adverse effect on our business, financial condition, results of operations or cash flows.

Revenue Recognition

We recognize revenue when persuasive evidence of a sales arrangement exists, title and risk of loss has transferred to the customer, the selling price is fixed or determinable and collection of the related receivable is reasonably assured. In instances where final acceptance of the deliverable is specified by the customer, revenue is deferred until all acceptance criteria have been met.

In October 2009, the Financial Accounting Standards Board issued Accounting Standards Update No. 2009-13, “Multiple-Deliverable Revenue Arrangements”. The guidance eliminates the residual method of revenue recognition and allows the use of management's best estimate of selling price (“BESP”) for individual elements of an arrangement when vendor-specific objective evidence (“VSOE”) or third-party evidence (“TPE”) is unavailable. We have adopted this guidance effective with the first quarter of fiscal 2011 and it has been applied on a prospective basis for revenue arrangements entered into or materially modified after December 25, 2010.

This guidance does not generally change the units of accounting for our revenue transactions. We do not have a significant number of product offerings with multiple elements. Our multiple-element arrangements generally include probe cards and product maintenance and repair services. We allocate revenue to the deliverables based upon their relative selling price. Revenue allocated to each unit of accounting is then recognized when persuasive evidence of an arrangement exists, delivery has occurred or services are rendered, the sales price or fee is fixed or determinable and collectability is reasonably assured. Product maintenance and repair services are deferred and recognized ratably over the period during which the services are performed, generally one year, and costs are recorded as incurred.

When applying the relative selling price method, we determine the selling price for each deliverable using VSOE, TPE or BESP. For the vast majority of our arrangements involving multiple deliverables, such as sales of products with services, the entire fee from the arrangement was allocated to each respective element based on its relative selling price, using VSOE. For those deliverables for which we cannot establish VSOE, we have determined our best estimate of selling price, as the Company has determined it is unable to establish TPE of selling price for the deliverables. The objective of BESP is to determine the price at which we would transact a sale if the deliverable were sold on a stand-alone basis. We determine BESP for a deliverable by considering multiple factors including, but not limited to, market conditions, competitive landscape, internal costs, gross margin objectives and pricing practices. The determination of BESP is made through consultation with and formal approval by our management, taking into consideration the go-to-market strategy.

The adoption of the new revenue recognition accounting standards did not have a material impact on our consolidated financial position, results of operations, or cash flows for the year ended December 31, 2011. The new accounting standards for revenue recognition if applied in the same manner to the year ended December 25, 2010 would not have had a material impact on total net revenues for that fiscal year.

Revenues from the licensing of our design and manufacturing technology, which have not been material to date, are recognized over the term of the license agreement or when the significant contractual obligations have been fulfilled.

Warranty Obligations

We offer warranties on certain products and record a liability for the estimated future costs associated with warranty claims, which is based upon historical experience and our estimate of the level of future costs. We provide for the estimated cost of product warranties at the time revenue is recognized. Warranty costs are reflected in the Statement of Operations as a cost of revenues. A reconciliation of the changes in our warranty liability is as follows (in thousands):



	Fiscal Years Ended
	December 31, 2011			December 25, 2010
Warranty accrual beginning balance	$	433		$	732
Accrual (release) of warranties during the year	666			428
Settlements made during the year	(769		)	(727		)
Warranty accrual ending balance	$	330		$	433

Research and Development

Research and development expenses include expenses related to product development, engineering and material costs. All research and development costs are expensed as incurred.

Allowance for Doubtful Accounts

A majority of our trade receivables are derived from sales to large multinational semiconductor manufacturers throughout the world. In order to monitor potential credit losses, we perform ongoing credit evaluations of our customers' financial condition. An allowance for doubtful accounts is maintained based upon our assessment of the expected collectability of all accounts receivable. The allowance for doubtful accounts is reviewed and assessed for adequacy on a quarterly basis. We take into consideration (1) any circumstances of which we are aware of a customer's inability to meet its financial obligations and (2) our judgments as to prevailing economic conditions in the industry and their impact on our customers. If circumstances change, and the financial condition of our customers are adversely affected and they are unable to meet their financial obligations to us, we may need to take additional allowances, which would result in an increase in our net loss.

We recorded a provision for doubtful accounts of $5.0 million in fiscal 2009 primarily due to the heightened risk of non-payment of accounts receivable by certain customers that filed bankruptcy or those that were facing financial difficulty. In fiscal 2010, we recorded additional allowance for doubtful accounts in the amount of $0.3 million for accounts determined to be uncollectible and we released $8.7 million of allowance for doubtful accounts primarily due to a reduction of $6.7 million related to the dismissal of a complaint against a customer resulting in the write-off of previously reserved accounts receivable, a write-off of $0.5 million uncollectible debts that was previously reserved and receipt of payments totaling approximately $1.4 million for accounts receivable that was previously reserved. In fiscal 2011, we recorded a reduction in the provision of $0.6 million primarily due to the receipt of payments totaling $0.3 million for accounts receivable previously reserved and the write-off of previously reserved accounts receivable in the amount of $0.3 million. We did not record any significant new allowances in fiscal 2011. The allowance for doubtful accounts consisted of the following activity for fiscal years ended December 31, 2011, December 25, 2010 and December 26, 2009 (in thousands):



	Balance at Beginning of Year		Additions		Reductions			Balance at End of Year
Allowance for doubtful accounts receivable
Fiscal year ended December 26, 2009	$	4,220	$	5,040	$	—		$	9,260
Fiscal year ended December 25, 2010	9,260		315		(8,728		)	847
Fiscal year ended December 31, 2011	847		29		(638		)	238

Restructuring Charges

Restructuring charges include costs related to employee termination benefits, cost of long-lived assets abandoned or impaired, as well as contract termination costs. The determination of when we accrue for employee termination benefits and which standard applies depends on whether the termination benefits are provided under a one-time benefit arrangement or under an on-going benefit arrangement. For restructuring charges recorded as an on-going benefit arrangement, a liability for post-employment benefits is recorded when payment is probable, the amount is reasonably estimable, and the obligation relates to rights that have vested or accumulated. For restructuring charges recorded as a one-time benefit arrangement, we recognize a liability for employee termination benefits when a plan of termination, approved by management and establishing the terms of the benefit arrangement, has been communicated to employees. The timing of the recognition of one-time employee termination benefits is dependent upon the period of time the employees are required to render service after communication. If employees are not required to render service in order to receive the termination benefits or if employees will not be retained to render service beyond the minimum legal notification period, a liability for the termination benefits is recognized at the communication date. In instances where employees will be retained to render service beyond the minimum legal notification period, the liability for employee termination benefits is measured initially at the communication date based on the fair value of the liability as of the termination date and is recognized ratably over the future service period. We continually evaluate the adequacy of the remaining liabilities under our restructuring initiatives.

We record charges related to long-lived assets to be abandoned when the assets cease to be used. When we cease using a building or other asset with remaining non-cancelable lease payments continuing beyond our use period, we record a liability for remaining payments under lease arrangements, as well as for contract termination costs, that will continue to be incurred under a contract for its remaining term without economic benefit to us at the cease-use date.

Income Taxes

We utilize the asset and liability method of accounting for income taxes, under which deferred taxes are determined based on the temporary differences between the financial statement and tax basis of assets and liabilities using tax rates expected to be in effect during the years in which the basis differences reverse and for operating losses and tax credit carryforwards. We estimate our provision for income taxes and amounts ultimately payable or recoverable in numerous tax jurisdictions around the world. Estimates involve interpretations of regulations and are inherently complex. Resolution of income tax treatments in individual jurisdictions may not be known for many years after completion of any fiscal year. We are required to evaluate the realizability of our deferred tax assets on an ongoing basis to determine whether there is a need for a valuation allowance with respect to such deferred tax assets. A valuation allowance is recorded when it is more likely than not that some of the deferred tax assets will not be realized. Significant management judgment is required in determining any valuation allowance recorded against deferred tax assets. In evaluating the ability to recover deferred tax assets, we consider all available positive and negative evidence giving greater weight to our recent cumulative losses and our ability to carryback losses against prior taxable income and, commensurate with objective verifiability, the forecast of future taxable income including the reversal of temporary differences and the implementation of feasible and prudent tax planning strategies.

We recognize and measure uncertain tax positions taken or expected to be taken in a tax return if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the consolidated financial statements from such positions are then measured based on the largest benefit that has a greater than 50 percent likelihood of being realized upon ultimate settlement. We report a liability for unrecognized tax benefits resulting from uncertain tax positions taken or expected to be taken in a tax return. We adjust these reserves in light of changing facts and circumstances, such as the closing of a tax audit or the refinement of an estimate. To the extent that the final tax outcome of these matters is different than the amounts recorded, such differences will impact the provision for income taxes in the period in which such determination is made. The provision for income taxes includes the impact of reserve provisions and changes to reserves that are considered appropriate, as well as the related net interest. We recognize interest and penalties related to unrecognized tax benefits within the income tax provision. Accrued interest and penalties are included within the related tax liability line in the consolidated balance sheet.

We file annual income tax returns in multiple taxing jurisdictions around the world. A number of years may elapse before an uncertain tax position is audited and finally resolved. While it is often difficult to predict the final outcome or the timing of resolution of any particular uncertain tax position, we believe that our reserves for income taxes reflect the most likely outcome. We adjust these reserves, as well as the related interest, in light of changing facts and circumstances. Settlement of any particular position could require the use of cash.

Stock-based Compensation

We recognize compensation expense for all stock-based awards based on the grant-date estimated fair values, net of an estimated forfeiture rate. The value of the portion of the award that is ultimately expected to vest is recognized as expense ratably over the requisite service periods in our Consolidated Statement of Operations. The fair value of stock options is measured using the Black-Scholes option pricing model while the fair value for restricted stock awards and restricted stock units is measured based on the closing market price of our common stock on the date of grant.

Net Loss Per Share

Basic net loss per share is computed by dividing net loss by the weighted-average number of common shares outstanding for the period. Diluted net loss per share is computed giving effect to all potential dilutive common stock, including stock options, restricted stock units and common stock subject to repurchase. Diluted loss per share was based only on the weighted-average number of shares outstanding during that period as the inclusion of any common stock equivalents would have been anti-dilutive.

A reconciliation of the numerator and denominator used in the calculation of basic and diluted net loss per share is as follows (in thousands):



	Fiscal Years Ended
	December 31, 2011			December 25, 2010			December 26, 2009
Numerator:
Net loss used in computing basic and diluted net loss per share	$	(65,981	)	$	(188,286	)	$	(155,653	)
Denominator:
Weighted-average shares used in computing basic net loss per share	50,521			50,246			49,483
Add potentially dilutive securities	—			—			—
Weighted-average shares used in computing diluted net loss per share	50,521			50,246			49,483

The following table sets forth the weighted-average potentially dilutive securities excluded from the computation in the table above because their effect would have been anti-dilutive (in thousands):



	Fiscal Years Ended
	December 31, 2011	December 25, 2010	December 26, 2009
Stock options	4,893	5,021	5,258
Restricted stock units	1,150	869	27
Employee stock purchase plan	135	65	123
Total potentially dilutive securities	6,178	5,955	5,408

Comprehensive Loss

Comprehensive loss includes net loss, foreign currency translation adjustments and unrealized gains (losses) on available-for-sale securities, the impact of which has been excluded from net loss and reflected as components of stockholders' equity.

Components of accumulated other comprehensive income was as follows (in thousands):



	December 31, 2011			December 25, 2010
Unrealized gain (loss) on marketable securities, net of tax of $384 and $299 in fiscal 2011 and fiscal 2010, respectively	$	(123	)	$	(136	)
Cumulative translation adjustments	2,823			2,163
Accumulated other comprehensive income	$	2,700		$	2,027

Recent Accounting Pronouncements

Fair Value

Effective December 26, 2010, as required, we adopted the guidance to amend the disclosure requirements related to recurring and nonrecurring fair value measurements. Specifically, we have adopted the guidance requiring the disclosure of the roll forward of activities on purchases, sales, issuances and settlements of the assets and liabilities measured using significant unobservable inputs (Level 3 fair value measurements). Other than requiring additional disclosures, adoption of this new guidance in the first quarter of fiscal 2011 did not have a material impact on our consolidated financial statements.

Additionally, in May 2011 updated authoritative guidance to amend existing requirements for fair value measurements and disclosures was issued. The guidance expands the disclosure requirements around fair value measurements categorized in Level 3 of the fair value hierarchy and requires disclosure of the level in the fair value hierarchy of items that are not measured at fair value but whose fair value must be disclosed. It also clarifies and expands upon existing requirements for fair value measurements of financial assets and liabilities as well as instruments classified in shareholders' equity. The guidance will be effective for fiscal years, and interim periods within those years, beginning after December 15, 2011, and are to be applied prospectively. This new guidance impacts how we report on fair value measurements only, and will have no effect on our results of operations, financial position or liquidity upon its required adoption by us on January 1, 2012.

Comprehensive Income

In June 2011 authoritative guidance that addresses the presentation of comprehensive income in interim and annual reporting of financial statements was issued. The guidance is intended to improve the comparability, consistency, and transparency of financial reporting and to increase the prominence of items reported in other comprehensive income by eliminating the option to present components of other comprehensive income as part of the statement of changes in stockholders’ equity. Such changes in stockholders’ equity will be required to be disclosed in either a single continuous statement of comprehensive income or in two separate but consecutive statements. The guidance will be effective for fiscal years, and interim periods within those years, beginning after December 15, 2011, and should be applied retrospectively for all periods presented. Early adoption is permitted. This new guidance impacts how we report comprehensive income only, and will have no effect on our results of operations, financial position or liquidity upon its required adoption by us on January 1, 2012.

Balance Sheet Components

12 Months Ended

Dec. 31, 2011

Balance Sheet Components [Abstract]

Balance Sheet Components

Marketable Securities

Marketable securities at December 31, 2011 consisted of the following (in thousands):



	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
U.S. Treasury	$	76,462	$	205	$	(4	)	$	76,663
Agency securities	78,921		102		(42		)	78,981
Commercial paper	1,998		—		—			1,998
	$	157,381	$	307	$	(46	)	$	157,642

Marketable securities at December 25, 2010 consisted of the following (in thousands):



	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
U.S. Treasury	$	105,513	$	372	$	(20	)	$	105,865
Agency securities	108,361		36		(224		)	108,173
Commercial paper	11,988		2		—			11,990
	$	225,862	$	410	$	(244	)	$	226,028

We typically invest in highly-rated securities with low probabilities of default. Our investment policy requires investments to be rated single-A or better, limits the types of acceptable investments, concentration as to security holder and duration of the investment. The net unrealized losses on the Company's investments in fiscal 2011 and 2010, respectively, were caused primarily by changes in interest rates. We believe that the unrealized losses are not other-than-temporary. We do not have a foreseeable need to liquidate the portfolio and anticipate recovering the full cost of the securities either as market conditions improve, or as the securities mature.

The following table summarizes the gross unrealized losses and fair value of those investments with unrealized losses, aggregated by investment category and the length of time that individual securities has been in a continuous unrealized loss position as of December 31, 2011 (in thousands):



	In Loss Position for Less than 12 Months					In Loss Position for 12 Months or Greater				Total
	Fair Value		Gross Unrealized Loss			Fair Value		Gross Unrealized Loss		Fair Value		Gross Unrealized Loss
U.S. Treasury	$	26,997	$	(4	)	$	—	$	—	$	26,997	$	(4	)
Agency securities	43,459		(42		)	—		—		43,459		(42		)
	$	70,456	$	(46	)	$	—	$	—	$	70,456	$	(46	)



	In Loss Position for Less than 12 Months					In Loss Position for 12 Months or Greater				Total
	Fair Value		Gross Unrealized Loss			Fair Value		Gross Unrealized Loss		Fair Value		Gross Unrealized Loss
U.S. Treasury	$	34,943	$	(20	)	$	—	$	—	$	34,943	$	(20	)
Agency securities	65,989		(224		)	—		—		65,989		(224		)
	$	100,932	$	(244	)	$	—	$	—	$	100,932	$	(244	)

The contractual maturities of marketable securities as of December 31, 2011 and December 25, 2010 were as follows (in thousands):



	December 31, 2011				December 25, 2010
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Due in one year or less	$	52,524	$	52,586	$	110,847	$	111,020
Due in one year to five years	104,857		105,056		115,015		115,008
	$	157,381	$	157,642	$	225,862	$	226,028

When evaluating the investments for other-than-temporary impairment, we review factors such as the length of time and extent to which fair value has been below the amortized cost basis, review of current market liquidity, interest rate risk, the financial condition of the issuer, as well as credit rating downgrades. We believe that the unrealized losses are not other-than-temporary. We do not have a foreseeable need to liquidate the portfolio and anticipate recovering the full cost of the securities either as market conditions improve, or as the securities mature.

Realized gains on sales or maturities of marketable securities were $32,000, $0.1 million and $18,000 for fiscal 2011, fiscal 2010 and fiscal 2009, respectively.

Asset Retirement Obligations

We account for the fair value of a liability for an asset retirement obligation to be recognized in the period in which it is incurred if a reasonable estimate of fair value can be made. The fair value of the liability is added to the carrying amount of the associated asset and this additional carrying amount is amortized over the life of the asset. Our retirement obligation is associated with our commitment to return property subject to operating leases in Taiwan, South Korea, Singapore and Japan to their original condition upon lease termination. We have estimated that as of December 31, 2011, gross expected future cash flows of approximately $1.6 million would be required to fulfill these obligations.

The carrying amount of the leasehold improvements resulting from asset retirement obligations is being amortized over the term of the related lease. During the fiscal years ended December 31, 2011, December 25, 2010 and December 26, 2009, approximately $0, $24,000 and $0.4 million of the leasehold improvements were amortized to expense, respectively. Furthermore, during fiscal 2011 we updated our estimate for our asset retirement obligation in conjunction with the renewal of leases in certain locations. As a result, we recorded a benefit of $0.3 million due to the reduction in the estimated future required cash flows related to our obligations at these locations.

In connection with our Q3 2010 Restructuring Plan, we recorded impairment charges of $1.1 million to write down the carrying amount of leasehold improvements associated with asset retirement obligations in our Singapore manufacturing facility. This impairment charge was included within "Restructuring charges, net" in the Consolidated Statements of Operations. Subsequently, in the second quarter of fiscal 2011 we executed an amendment to the existing lease arrangement for our facility in Singapore which released us from our obligations related to the floor previously utilized for manufacturing in this facility. As a result, our Consolidated Statement of Operations for the fiscal year ending December 31, 2011 includes a benefit of $1.1 million recorded to "Restructuring charges, net".

The following is a reconciliation of the aggregate retirement liability associated with our commitment to return property to its original condition upon lease termination included in non-current "Deferred rent and other liabilities" in the Consolidated Balance Sheets (in thousands):



	Fiscal Years Ended
	December 31, 2011			December 25, 2010
Asset retirement obligation beginning balance	$	3,105		$	2,350
Initial amount recorded for new asset retirement obligation	—			265
Liabilities settled	(1,121		)	(453		)
Increase (decrease) based on revised estimates of asset retirement obligations	(529		)	702
Accretion expense	126			241
Asset retirement obligation ending balance	$	1,581		$	3,105

Inventories

Inventories consisted of the following (in thousands):



	Fiscal Years Ended
	December 31, 2011		December 25, 2010
Raw materials	$	5,732	$	2,736
Work-in-progress	5,938		16,807
Finished goods	6,422		5,460
	$	18,092	$	25,003

Property, Plant and Equipment

Property, plant and equipment consisted of the following (in thousands):



	Fiscal Years Ended
	December 31, 2011			December 25, 2010
Buildings	$	790		$	—
Machinery and equipment	127,309			115,847
Computer equipment and software	36,323			35,493
Furniture and fixtures	6,073			6,180
Leasehold improvements	70,097			69,934
	240,592			227,454
Less: Accumulated depreciation, amortization and enterprise-wide impairment	(217,963		)	(207,992		)
	22,629			19,462
Construction-in-progress	12,503			17,849
	$	35,132		$	37,311

In fiscal 2011 and fiscal 2010, we wrote off fully depreciated assets with an acquired cost of $0.6 million and $6.8 million, respectively.

During the fiscal quarter ended March 26, 2011 we placed a building previously identified as held for sale back into service at its carrying value of $0.8 million. This amount represents the lesser of its carrying amount before the building was classified as held for sale, adjusted for any depreciation that would have been recognized had the building been continuously classified as held and used, or the fair value at the date of the subsequent decision not to sell. The building is being depreciated over its estimated remaining useful life of ten years.

As discussed in Note 6—Impairment of Long-lived Assets of the Notes to the Consolidated Financial Statements, in fiscal 2011 we recorded aggregated impairment charges of $0.5 million in our long lived assets. In fiscal 2010, we recorded aggregated impairment charges of $65.2 million, including $64.1 million and $1.1 million to write down the carrying values of certain property and equipment and intangible assets, respectively. In fiscal 2009, we recorded impairment charges totaling $1.7 million.

Depreciation and amortization of property, plant and equipment, excluding the impairments discussed above, for the fiscal years ended December 31, 2011, December 25, 2010 and December 26, 2009 was approximately $10.8 million, $26.4 million and $32.2 million, respectively.

Accrued Liabilities

Accrued liabilities consisted of the following (in thousands):



	Fiscal Years Ended
	December 31, 2011		December 25, 2010
Accrued compensation and benefits	$	6,986	$	14,724
Accrued indirect and other taxes	2,916		1,808
Accrued commissions	438		563
Accrued warranty	330		433
Deferred rent	133		200
Accrued restructuring	200		1,833
Other accrued expenses	2,963		4,484
	$	13,966	$	24,045

In November 2009, we sold all rights, title and interest in a customer's bankruptcy claim to a third party in exchange for net proceeds of less than full value of the asserted claim. The proceeds were accounted for as a secured borrowing and included within "Accrued liabilities" in the Consolidated Balance Sheet at December 26, 2009. On October 8, 2010, we voluntarily dismissed our complaint against this customer. As a result, we released the amounts previously recorded as a secured borrowing and recorded a gain of $3.5 million in "Other income (expense), net" in the Consolidated Statements of Operations in the third quarter of fiscal 2010.

In the fourth quarter of fiscal 2010, we ceased the utilization of one facility in Livermore and our facility in Singapore that was expected to be utilized for our manufacturing operations. In connection with these decisions, we accrued liabilities totaling $0.7 million composed of $0.3 million and $0.4 million for the remaining lease obligations that will continue to be incurred under operating lease contracts of the Livermore and Singapore facilities, respectively. The $0.4 million charge relating to our Singapore facility was recorded as additional restructuring charges in connection with our Q3 2010 Restructuring Plan, as discussed in Note 4—Restructuring Charges of the Notes to the Consolidated Financial Statements. Subsequently, in the second quarter of fiscal 2011 we executed an amendment to the existing lease arrangement for our facility in Singapore which released us from our obligations related to the floor previously utilized for manufacturing in this facility. As a result, our Condensed Consolidated Statement of Operations for the fiscal year ending December 31, 2011 includes a benefit of $0.4 million recorded to "Restructuring charges, net", which represents the remaining liability as of the date of the newly executed arrangement.

Restructuring Charges

12 Months Ended

Dec. 31, 2011

Restructuring and Related Activities [Abstract]

Restructuring Charges

We have undertaken several restructuring actions during fiscal 2011 and fiscal 2010, the purpose of which were to improve operating efficiency, streamline and simplify our operations and reduce our operating costs. These actions are discussed below:

2010 Restructuring Activities

We recorded $3.4 million in restructuring charges during the first quarter of fiscal 2010 as part of our then-current regionalization strategy (the “Q1 2010 Restructuring Plan”). These charges consisted of termination benefits related to reductions in work force of 106 full-time positions, which were all related to severance and related benefits. The activities related to this action were completed during fiscal 2011. Subsequently, in the second quarter of fiscal 2010 we undertook a plan to rescind the previously issued severance arrangements for certain employees impacted by this plan, resulting in the reversal of $3.3 million of the accrual for severance costs booked in conjunction with the Q1 2010 Restructuring Plan, including the accrued retention bonus to date. We completed this rescission plan in fiscal 2010.

In the second quarter of fiscal 2010, we announced a series of corporate initiatives, including a reduction in workforce, which represented a renewed focus on streamlining and simplifying our operations as well as reducing our quarterly operating costs (the “Q2 2010 Restructuring Plan”). These actions included a reduction in workforce impacting 67 employees spread across all functions of the organization, as well as a reduction in the scope of the previously contemplated manufacturing operations in Korea, resulting in a reduction of workforce of 16 employees related to the assembly and test function. We recorded $4.8 million in charges for the Q2 2010 Restructuring Plan during fiscal 2010, primarily for severance and related benefits. Additionally, in conjunction with the Q2 2010 Restructuring Plan we identified certain equipment and software assets related to our assembly and test operations in Korea that would no longer be utilized. As a result, we recorded impairment charges of approximately $1.0 million in the fiscal 2010, representing the net book value of these assets.

In the third quarter of fiscal 2010, we announced a restructuring plan (the “Q3 2010 Restructuring Plan”) to cease the transition of manufacturing operations to Singapore. This decision resulted in a reduction in force of 58 employees at our Singapore facility. The manufacturing activities that were scheduled to be transitioned to Singapore remained in Livermore, and Livermore continued as the primary manufacturing operating location for the Company. In conjunction with the Q3 2010 Restructuring Plan, we also undertook a reduction in force that involved two additional individuals in our Livermore operations.

We recorded charges of $1.0 million for severance and related benefits and impairment charges of $7.8 million for certain equipment and leasehold improvements, including assets related to asset retirement obligations, in Singapore that would no longer be utilized as a result of the Q3 2010 Restructuring Plan. In addition, due to the combined effect of the significant change in our business strategy in connection with the Q3 2010 Restructuring Plan, recurring operating losses and the sustained decline in the Company's stock price, we reviewed the recoverability of our long-lived assets in the third quarter of fiscal 2010, as discussed in Note 6—Impairment of Long-lived Assets of the Notes to the Consolidated Financial Statements.

In the fourth quarter of fiscal 2010, we implemented a restructuring plan (the "Q4 2010 Restructuring Plan") including reducing our global workforce by 10 employees across the organization. We recorded $0.6 million in charges for severance and related benefits in fiscal 2010.

The ending restructuring accrual of $1.8 million as of December 25, 2010 reflects the unpaid amounts related to these actions as of that date. Unless otherwise noted, the activities comprising the above reductions in force were completed by the end of fiscal 2011.

2011 Restructuring Activities

In the first quarter of fiscal 2011, we implemented a restructuring plan (the “Q1 2011 Restructuring Plan”) which resulted in the reduction of our global workforce by 13 full-time employees across the organization. We recorded $1.1 million in charges for severance and related benefits during related to this plan. The activities comprising this reduction in workforce were substantially completed by the end of the second quarter of fiscal 2011.

In the second quarter of fiscal 2011, we implemented a restructuring plan (the “Q2 2011 Restructuring Plan”) which resulted in the reduction of our global workforce by 13 full-time employees across the organization. We recorded $0.6 million in charges for severance and related benefits related to this plan. The activities comprising this reduction in workforce were substantially completed by the end of the third quarter of fiscal 2011.

Additionally, in the second quarter of fiscal 2011 we executed an amendment to the existing lease arrangement for our facility in Singapore which released us from our obligations related to the floor previously utilized for manufacturing in this facility. We were also granted a rent reduction for the remaining occupied facilities in this building. We had previously recorded certain asset retirement obligations and accruals related to our ceasing use of these facilities in connection with a prior restructuring action. As a result, our Consolidated Statement of Operations for the for the year ended December 31, 2011 includes a benefit of $1.5 million recorded to 'Restructuring charges, net'.

In the third quarter of fiscal 2011, we implemented a restructuring plan (the “Q3 2011 Restructuring Plan”) which resulted in the reduction of our global workforce by four full-time employees primarily in our procurement and logistics organizations. We recorded $0.3 million in charges for severance and related benefits related to this plan. The activities comprising this reduction in workforce were completed during the fourth quarter of fiscal 2011.

In the fourth quarter of fiscal 2011, we implemented a restructuring plan (the “Q4 2011 Restructuring Plan”) which resulted in the reduction of our global workforce by eight full-time employees primarily in our finance and procurement and logistics organizations. We recorded $0.3 million in charges for severance and related benefits related to this plan. The activities comprising this reduction in workforce are expected to be completed by the end of the first fiscal quarter of fiscal year 2012.

The following table summarizes the activities related to the restructuring actions of fiscal 2011 (in thousands):



	Employee Severance and Benefits			Property and Equipment Impairment			Contract Termination and Other			Total
Accrual at December 27, 2008	$	77		$	—		$	71		$	148
Restructuring charges	8,419			366			(5		)	8,780
Cash payments	(7,306		)	—			10			(7,296		)
Non-cash settlements	(217		)	(366		)	—			(583		)
Accrual at December 26, 2009	973			—			76			1,049
Restructuring charges	10,057			8,787			411			19,255
Reversal of charges for Q1 2010 Restructuring Plan	(3,282		)	—			—			(3,282		)
Adjustments to restructuring charges	—			—			(76		)	(76		)
Cash payments	(6,184		)	—			—			(6,184		)
Non-cash settlements	(182		)	(8,787		)	40			(8,929		)
Accrual at December 25, 2010	1,382			—			451			1,833
Restructuring charges	2,300			—			—			2,300
Adjustments to restructuring charges	—			—			(374		)	(374		)
Cash payments	(3,039		)	—			(77		)	(3,116		)
Non-cash settlements	(443		)	—			—			(443		)
Accrual at December 31, 2011	$	200		$	—		$	—		$	200

The liabilities we have accrued represent our best estimate of the obligations we expect to incur and could be subject to adjustment as market conditions change. The remaining cash payments associated with our various reductions in workforce are expected to be completed by the end of the first fiscal quarter of fiscal 2012.

- Definition

The entire disclosure for restructuring and related activities. Description of restructuring activities such as exit and disposal activities, include facts and circumstances leading to the plan, the expected plan completion date, the major types of costs associated with the plan activities, total expected costs, the accrual balance at the end of the period, and the periods over which the remaining accrual will be settled.

+ References + Details

Derivative Financial Instruments

12 Months Ended

Dec. 31, 2011

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Financial Instruments

We operate and sell our products in various global markets. As a result, we are exposed to changes in foreign currency exchange rates. We utilize foreign currency forward contracts to hedge against future movements in foreign exchange rates that affect certain existing foreign currency denominated assets and liabilities. Under this program, our strategy is to have increases or decreases in our foreign currency exposures offset by gains or losses on the foreign currency forward contracts to mitigate the risks and volatility associated with foreign currency transaction gains or losses. We do not use derivative financial instruments for speculative or trading purposes. Our derivative instruments, which are generally settled in the same quarter, are not designated as hedging instruments. We record the fair value of these contracts as of the end of our reporting period to our Consolidated Balance Sheet with changes in fair value recorded within "Other income (expense), net" in our Consolidated Statement of Operations for both realized and unrealized gains and losses.

As of December 31, 2011, there were three outstanding foreign exchange forward contracts to sell Japanese Yen, Korean Won and to buy Taiwan Dollars. The following tables provide information about our foreign currency forward contracts outstanding as of December 31, 2011 and December 25, 2010:



December 31, 2011		Contract Position	Contract Amount (Local Currency)		Contract Amount (U.S. Dollar)
			(In thousands)
Japanese Yen		Sell	440,354		$	5,661
Taiwan Dollar		Buy	(69,959	)	(2,315		)
Korean Won		Buy	(703,506	)	(609		)
	Total USD notional amount of outstanding foreign exchange contracts				$	2,737



December 25, 2010		Contract Position	Contract Amount (Local Currency)		Contract Amount (U.S. Dollar)
			(In thousands)
Japanese Yen		Sell	508,148		$	6,116
Taiwan Dollar		Buy	(31,356	)	(1,061		)
Korean Won		Sell	3,754,684		3,249
	Total USD notional amount of outstanding foreign exchange contracts				$	8,304

The contracts outstanding at December 31, 2011 were entered into on December 30, 2011 and matured on January 3, 2012 for Taiwan Dollar and Korean Won contracts and January 4, 2012 for the Japanese Yen contract. Our foreign currency contracts are classified within Level 2 of the fair value hierarchy as they are valued using pricing models that utilize observable market inputs. There was no change in the value of these contracts as of December 31, 2011. Additionally, no gains or losses relating to the outstanding derivative contracts as of December 31, 2011 and December 25, 2010 were recorded during the respective fiscal periods.

The location and amount of losses related to non-designated derivative instruments that matured in the years ended December 31, 2011 and December 25, 2010 in the Consolidated Statement of Operations are as follows (in thousands):



		Losses Recognized on Derivatives
Derivatives Not Designated as Hedging Instruments	Location of Loss Recognized on Derivatives	FY2011			FY2010
Foreign exchange forward contracts	Other Income (expense), net	$	(579	)	$	(2,043	)

- Definition

The entire disclosure for the entity's entire derivative instruments and hedging activities. Describes an entity's risk management strategies, derivatives in hedging activities and non-hedging derivative instruments, the assets, obligations, liabilities, revenues and expenses arising therefrom, and the amounts of and methodologies and assumptions used in determining the amounts of such items.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 133
-Paragraph 45
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

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+ Details

Impairment of Long-lived Assets

12 Months Ended

Dec. 31, 2011

Property, Plant and Equipment Impairment or Disposal [Abstract]

Impairment of Long-Lived Assets

Impairment of Long-lived Assets

The following table summarizes the components of the impairments that we recorded in fiscal 2011, 2010 and 2009 (in thousands):



	Fiscal Years Ended
	December 31, 2011		December 25, 2010		December 26, 2009
Impairment of long-lived assets:
Restructuring	$	—	$	8,787	$	366
Assets held for sale	—		342		1,000
Assets to be disposed of other than sale	549		2,956		288
Intangible assets	—		1,082		—
Enterprise-wide impairment	—		52,021		—
Total	$	549	$	65,188	$	1,654

Restructuring

We did not record any impairment charges related to our restructuring activities during fiscal 2011.

In conjunction with the Q2 2010 Restructuring Plan we recorded an impairment charge of approximately $1.0 million in fiscal 2010 to write off certain equipment and software assets related to our assembly and test operations in Korea that would no longer be utilized. In addition, in conjunction with the Q3 2010 Restructuring Plan, we recorded an impairment charge of $7.8 million for certain assets related to our Singapore manufacturing operations. This impairment was composed primarily of $5.8 million for leasehold improvements, $0.6 million for manufacturing equipment and $0.6 million for software and system assets related to the manufacturing operations that will be taken out of service or abandoned, as well as $0.8 million to adjust the carrying amount of certain equipment determined to be held for sale. In conjunction with the restructuring actions that we implemented in fiscal 2009, we recorded impairment charges of $0.4 million in the first quarter of fiscal 2009 related to certain assets that were taken out of service.

All of these charges were included within "Restructuring charges, net" in the Consolidated Statements of Operations in their respective periods.

Assets held for sale

We did not record impairment charges related to our assets held for sale during fiscal 2011.

In the third quarter of fiscal 2010, we recorded aggregated impairment charges of $0.3 million in conjunction with the write down of a building held for sale to its estimated fair value and certain furniture and fixtures at our Livermore facility that were determined to be held for sale. These impairments were included within "Impairment of long-lived assets" in the Consolidated Statements of Operations for fiscal 2010.

In fiscal 2009, we recorded impairment charges of $1.0 million related to certain equipment that was determined to be held for sale. The impairment charges were originally recorded through "Cost of revenues" in the Consolidated Statement of Operations in our Form 10-K filed for fiscal 2009. However this amount has been reclassified to "Impairment of long-lived assets" in the Consolidated Statement of Operations for fiscal 2009 in this Annual Report on Form 10-K to conform with the current period presentation of asset impairments.

Assets to be disposed of other than sale

During fiscal 2011, we recorded impairment charges totaling $0.5 million related to certain assets to be disposed of other than by sale, all of which related to the termination of certain on-going projects that had been recorded in construction in progress, including aspects of certain software development for internal use.

During fiscal 2010, we recorded impairment charges totaling $3.0 million related to certain assets to be disposed of other than by sale. These charges were composed of $2.7 million related to the termination of on-going construction-in progress projects, including those related to certain projects for the development and build of manufacturing equipment, as well as additional equipment that was in-service and identified as excess capacity. Additionally, these charges included $0.3 million related to certain leasehold improvements that were abandoned as a result of the consolidation of office space in Livermore.

In fiscal 2009, we recorded an impairment of $0.3 million related to the termination of certain on-going projects that were in construction-in-progress. This impairment charge was originally recorded through "Cost of revenues" in the Consolidated Statement of Operations in the Form 10-K filed for fiscal 2009. However, this amount has been reclassified to "Impairment of long-lived assets" in the Consolidated Statement of Operations for fiscal 2009 in this Annual Report on Form 10-K to conform with the current period presentation of asset impairments.

All of these charges are included in "Impairment of long-lived assets" in the Consolidated Statements of Operations for their respective periods.

Intangible assets

We did not record impairment charges related to our intangible assets during fiscal 2011 and 2009.

During fiscal 2010, the combination of various factors, including our renewed focus on simplifying and refocusing our operations on our core competencies, resulted in our decision to reduce efforts geared at licensing and marketing the software underlying certain of our intangible assets related to precision motion control automation that were acquired in conjunction with our acquisition of certain assets from Electroglas, Inc. in 2009 through a bankruptcy proceeding. As a result, we performed an impairment analysis of these purchased intangible assets during the third quarter of fiscal 2010 and recorded an impairment charge of $1.1 million for the carrying amount of the impaired assets. The impairment charge was included in "Impairment of long-lived assets" in the Consolidated Statements of Operations.

Enterprise-wide impairment

At the end of the third quarter of fiscal 2010, in addition to the specific impairments discussed above, we determined that an enterprise-wide impairment analysis of our long-lived assets was required due to the combined effect of a sustained decline in the Company's stock price, a significant change in our business strategy in connection with the Q3 2010 Restructuring Plan, and recurring operating losses and net cash outflows from operations. Accordingly, management reviewed the recoverability of its long-lived assets in the third quarter of fiscal 2010.

We determined our long-lived asset group to be our consolidated long-lived assets as we had determined that we operate as one reporting unit and segment. This asset group included property and equipment, as well as purchased intangible assets. The recoverability of assets to be held and used was measured by comparing the carrying amount of these assets, after adjustment for the various specific impairments discussed above, to the estimated undiscounted future cash flows expected to be generated by the assets. If the carrying amount of the asset exceeds its estimated undiscounted future net cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the asset.

As a result, we concluded that our business was not able to fully recover the carrying amount of our assets. Accordingly, we reviewed the carrying amounts at September 25, 2010 of all of our long-lived assets for impairment. The review involved estimating the fair value in an exchange transaction of our asset group, comparing such fair value to the carrying amount of the asset group, after adjustment for the various specific impairments discussed above, and recording impairment charges to reduce the pre-impairment carrying amount of the asset group to its estimated fair value.

Determining the fair value of an asset group unit is judgmental in nature and requires the use of significant estimates and assumptions, including current replacement costs, revenue growth rates and operating margins, and discount rates, among others. Accordingly, we were required to make various estimates in determining the fair values of our asset group at September 25, 2010. Where appropriate, we utilized a market approach to estimate the fair value of our property and equipment. This approach included the identification of market prices in actual transactions for similar assets based on asking prices for assets currently available for sale, as well as obtaining and reviewing certain direct market values based quoted prices with manufacturers and secondary market participants for similar equipment. However, due to the highly customized nature of our manufacturing equipment we primarily utilized the cost approach to estimate the fair value of our property and equipment. To determine the estimated fair value of our property and equipment at September 25, 2010, adjustment factors, including cost trend factors, were applied to each individual asset's original cost in order to estimate current replacement cost. The current replacement cost was then adjusted for estimated deductions to recognize the effects of deterioration and obsolescence from all causes, as well as indirect costs such as installation.

The estimated fair value of the purchased intangible assets was determined based on a combination of two income-based approaches, as this combination was deemed to be the most indicative of the Company's fair value in an orderly transaction between market participants. Under these two income approaches we determined fair value based on both the estimated future cash flows resulting from the licensing of the technology underlying the intangible asset, as well as the estimated future cash savings achieved due to the avoidance of costs resulting from the internal use of the underlying technology. The estimated cash flows in each approach were discounted by an estimated weighted-average cost of capital which reflects the overall level of inherent risk of the enterprise and the rate of return an outside investor would expect to earn.

For each asset, we then compared the estimated fair value to the individual asset's carrying amount to determine the amount of the impairment charge. Based on this analysis, we recorded an impairment charge of approximately $52.0 million in the third quarter of fiscal 2010. This charge, which was included in "Impairment of long-lived assets" in the Consolidated Statements of Operations, comprised $27.7 million for leasehold improvements, $11.2 million for manufacturing equipment, $8.5 million for computer equipment and software, $4.4 million for construction-in-progress and $0.2 million for purchased intangible assets.

Fair Value

12 Months Ended

Dec. 31, 2011

Fair Value Disclosures [Abstract]

Fair Value

We use fair value measurements to record fair value adjustments to certain financial and non-financial assets and to determine fair value disclosures. Our marketable securities are financial assets recorded at fair value on a recurring basis. We also have certain manufacturing equipment held for sale, which are measured at fair value on a non-recurring basis and included within "Prepaid expenses and other current assets" in the accompanying Consolidated Balance Sheets.

The accounting standards define fair value, establish a framework for measuring fair value in generally accepted accounting principles, and require disclosures about fair value measurements. Fair value is defined as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required to be recorded at fair value, we consider the principal or most advantageous market in which we would transact and consider assumptions that market participants would use when pricing the asset or liability, such as inherent risk, transfer restrictions, and risk of nonperformance. The accounting standard for fair value establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument's categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The standard describes a fair value hierarchy based on three levels of inputs, the first two of which are considered observable and the last unobservable, that may be used to measure fair value:


•	Level 1—Quoted prices in active markets for identical assets or liabilities.


•	Level 2—Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly.


•	Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

We adopted the accounting standard for fair value as of the beginning of our fiscal 2008 year for our financial assets and financial liabilities, and as of the beginning of our 2009 fiscal year as it related to non-recurring fair value measurement requirements for non-financial assets and liabilities.

Assets Measured at Fair Value on a Recurring Basis

We measure and report certain assets and liabilities at fair value on a recurring basis, including money market funds, U.S. government securities, agency securities, commercial papers and foreign currency derivatives. The following tables represent the fair value hierarchy for our financial assets (cash equivalents and marketable securities):

Fair value measured on a recurring basis as of December 31, 2011 (in thousands):



	Level 1		Level 2		Total
	(In thousands)
Cash equivalents
Money market funds	$	106,147	$	—	$	106,147
Commercial paper	—		8,999		8,999
Marketable securities
U. S. treasury	—		76,663		76,663
Agency securities	—		78,981		78,981
Commercial paper	—		1,998		1,998
	$	106,147	$	166,641	$	272,788

Fair value measured on a recurring basis as of December 25, 2010 (in thousands):



	Level 1		Level 2		Total
	(In thousands)
Cash equivalents
Money market funds	$	82,996	$	—	$	82,996
Commercial paper	—		16,991		16,991
Marketable securities
U. S. treasury	—		105,865		105,865
Agency securities	—		108,173		108,173
Commercial paper	—		11,990		11,990
	$	82,996	$	243,019	$	326,015

The Level 1 assets consist of our money market fund deposits. The Level 2 assets consist of our available-for-sale investment portfolio, which are valued utilizing a market approach. Our investments are priced by pricing vendors who provided observable inputs for their pricing without applying significant judgments. Broker's pricing is used mainly when a quoted price is not available, the investment is not priced by our pricing vendors or when a broker price is more reflective of fair values in the market in which the investment trades. Our broker-priced investments are labeled as Level 2 investments because fair values of these investments are based on similar assets without applying significant judgments. In addition, all of our investments have a sufficient level of trading volume to demonstrate that the fair values used are appropriate for these investments.

Assets Measured at Fair Value on a Nonrecurring Basis

The following table represents the fair value hierarchy for our long-lived assets measured at fair value on a nonrecurring basis at their respective measurement dates (in thousands) at December 31, 2011:



	Level 3		Total Losses Fiscal 2011
Long-lived assets held for sale	$	389	$	—
Total	$	389	$	—

At the end of fiscal 2010, we had a building held for sale in Livermore, California, which was classified as Level 2 because the estimated fair value of the building was determined using inputs that reflected the assumptions market participants would use in pricing the building developed based on market data obtained from sources independent of us. During the fiscal quarter ended March 26, 2011 we placed this building back into service at its carrying value of $0.8 million, resulting in a reclassification of the balance from 'Prepaid expenses and other current assets' to 'Property, plant and equipment, net' in the Condensed Consolidated Balance Sheet. See Note 3 - Balance Sheets Components of the Notes to the Consolidated Financial Statements for more information.

We also have certain manufacturing equipment held for sale in Livermore, California which is classified as Level 3 as we used unobservable inputs in their valuation reflecting our assumptions that market participants would use in pricing this asset due to the absence of recent comparable market transactions and inherent lack of liquidity. As of both December 31, 2011 and December 25, 2010, our held for sale assets in Livermore were valued at $0.4 million and continued to be classified as Level 3 based on the fact that we used unobservable inputs in their valuation reflecting our assumptions that market participants would use in pricing this asset due to the absence of recent comparable market transactions.

Other than the building previously held for sale that was put into service during the three months ended March 26, 2011, we did not have any assets that were transferred to or from Level 3 during the year ended December 31, 2011.

The following table represents the fair value hierarchy for our long-lived assets measured at fair value on a non-recurring basis at their respective measurement dates (in thousands) at December 25, 2010:



	Level 2		Level 3		Total		Total Losses Fiscal 2010
Long-lived assets held and used	$	38,042	$	—	$	38,042	$	(52,021	)
Long-lived assets held for sale	790		389		1,179		(1,229		)
Total	$	38,832	$	389	$	39,221	$	(53,250	)

In conjunction with our enterprise-wide asset impairment analysis performed in the third quarter of fiscal 2010, long-lived assets held and used with a carrying amount of $90.0 million were written down to their estimated fair value of $38.0 million at September 25, 2010, in accordance with the provisions for the impairment or disposal of long-lived assets. The total impairment charge of $52.0 million was included in “Impairment of long-lived assets” in the Consolidated Statement of Operations during the third quarter of fiscal 2010. The amounts in the table above reflect the results of the non-recurring fair value measurement as of the third quarter of 2010. As of December 25, 2010, there were no additional non-recurring fair value measurements associated with these assets, and the carrying amount of these assets have been reduced for depreciation on the new carrying values in the fourth quarter of fiscal 2010, which is discussed in Note 3 - Balance Sheet Components of the Notes to the Consolidated Financial Statements.

At the end of fiscal 2009, the aforementioned building held for sale in Livermore, California, was classified as Level 3 as we used unobservable inputs in its valuation reflecting our assumptions that market participants would use in pricing this asset due to the absence of recent comparable market transactions and inherent lack of liquidity. During fiscal 2010, we determined that the carrying amount of the building that was held for sale exceeded its estimated fair value. In accordance with the provisions for the impairment or disposal of long-lived assets, this building held for sale was written down to its estimated fair value, less estimated costs to sell, of $0.8 million, resulting in a loss of $0.1 million, which was included in “Impairment of long-lived assets” in the Consolidated Statement of Operations for fiscal 2010. As of December 25, 2010, this building held for sale was carried at $0.8 million. Because the updated estimated fair value of the building was determined using inputs that reflected the assumptions market participants would use in pricing the building developed based on market data obtained from sources independent of us, we transferred this building from Level 3 to Level 2 in fiscal 2010.

Our fair value processes include controls that are designed to ensure appropriate fair values are recorded. Such controls include model validation, review of key model inputs, and analysis of period-over-period fluctuations and independent recalculation of prices.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 133
-Paragraph 44A, 44B
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
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-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 107
-Paragraph 15A
-Subparagraph a-d
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 4: http://www.xbrl.org/2003/role/presentationRef
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Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
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-Paragraph 3, 10, 14, 15
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Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 157
-Paragraph 32, 33, 34
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 7: http://www.xbrl.org/2003/role/presentationRef
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-Name Statement of Financial Accounting Standard (FAS)
-Number 159
-Paragraph 17-22, 27, 28
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 8: http://www.xbrl.org/2003/role/presentationRef
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+ Details

Intangible Assets

12 Months Ended

Dec. 31, 2011

Goodwill and Intangible Assets Disclosure [Abstract]

Intangible Assets

In October 2009, we completed the acquisition of certain assets from Electroglas, Inc. ("Electroglas"), a company under Chapter 11 bankruptcy protection in Delaware. The assets acquired consisted of manufacturing and testing equipment, spare parts and components related to the purchased equipment and intellectual property assets representing developed technology rights related to precision motion control automation and all of the intellectual property rights of Electroglas, with the exception of certain trademark rights. The purchase price for the assets, including transaction costs, of approximately $11.8 million was capitalized in the fourth quarter of fiscal 2009.

Of the total purchase price, $3.6 million was allocated to property and equipment, $7.8 million was allocated to intellectual property assets, and $0.4 million was allocated to other current assets.

As discussed in Note 6—Impairment of Long-lived Assets, we wrote off $1.1 million carrying amount of certain purchased intellectually property in the third quarter quarter of fiscal 2010 and recorded $0.2 million of impairment charge to the remaining intangible assets as part of the enterprise-wide impairment analysis. As of December 31, 2011, the carrying amount of our intangible assets was $3.2 million, with $5.9 million as the gross amount and $2.7 million as the accumulated amortization. We recorded $1.2 million amortization expense for our intangible assets in fiscal 2011, all of which was charged to cost of revenues. The purchased intellectual property assets had a weighted average remaining amortization period of 2.7 years at December 31, 2011. The intangible assets are included in "Other assets" in the Consolidated Balance Sheets.

Based on the carrying value of the intangible assets recorded as of December 31, 2011, and assuming no subsequent additions to or impairment of the underlying assets, the remaining estimated annual amortization expense is expected to be as follows (in thousands):



Fiscal Year	Amount
2012	$	1,179
2013	1,179
2014	883
Total	$	3,241

As of December 25, 2010, the carrying amount of our intangible assets was $4.4 million, with $5.9 million as the gross amount and $1.5 million as the accumulated amortization. The amortization of the purchased intellectual property assets was $1.7 million for fiscal 2010, of which $1.3 million was charged to cost of revenues and $0.4 million was charged to selling, general and administrative expense.

Commitments and Contingencies

12 Months Ended

Dec. 31, 2011

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Environmental Matters

We are subject to U.S. Federal, state and local, and foreign governmental laws and regulations relating to the protection of the environment, including those governing the discharge of pollutants into the air and water, the management and disposal of hazardous substances and wastes, the clean-up of contaminated sites and the maintenance of a safe workplace. We believe that we comply in all material respects with the environmental laws and regulations that apply to us, including those of the California Department of Toxic Substances Control, the Bay Area Air Quality Management District, the City of Livermore Water Resources Division and the California Division of Occupational Safety and Health. We did not receive any notices of violations of environmental laws and regulations in fiscal 2011 or fiscal 2010. In fiscal 2009 we received one notice of violation from the City of Livermore regarding a violation of certain applicable waste water discharge limits. For the notice received, we promptly investigated the violation, took what we believed to be appropriate steps to address the cause of the violation, and implemented corrective measures to prevent a recurrence. No provision has been made for loss from environmental remediation liabilities associated with our facilities because we believe that it is not probable that a liability has been incurred as of December 31, 2011.

While we believe that we are in compliance in all material respects with the environmental laws and regulations that apply to us, in the future, we may receive additional environmental violation notices, and if received, final resolution of the violations identified by these notices could harm our operations, which may adversely impact our operating results and cash flows. New laws and regulations, stricter enforcement of existing laws and regulations, the discovery of previously unknown contamination at our or others' sites or the imposition of new cleanup requirements could also harm our operations, thereby adversely impacting our operating results and cash flows.

Contractual Obligations

The following table sets forth our commitments to settle contractual obligations in cash as of December 31, 2011:



	Payments Due In Fiscal Years
	2012		2013-2014		2015-2016		After 2016		Total
	(In thousands)
Operating leases	$	3,833	$	6,500	$	4,834	$	12,535	$	27,702
Other purchase obligations	3,389		420		350		—		$	4,159
Total	$	7,222	$	6,920	$	5,184	$	12,535	$	31,861

We lease facilities under non-cancellable operating leases with various expiration dates through 2021. The facilities generally require us to pay property taxes, insurance and maintenance costs. Further, several lease agreements contain rent escalation clauses or rent holidays. For purposes of recognizing minimum rental expenses on a straight-line basis over the terms of the leases, we use the date of initial possession to begin amortization. We have the option to extend or renew most of our leases which may increase the future minimum lease commitments.

Rent expense for the fiscal years ended December 31, 2011, December 25, 2010, and December 26, 2009, was approximately $4.8 million, $5.4 million and $5.7 million, respectively.

Other purchase obligations are primarily for purchases of inventory and manufacturing related service contracts. For the purposes of this table, other purchase obligations are defined as agreements that are enforceable and legally binding and that specify all significant terms, including: fixed or minimum quantities to be purchased; fixed, minimum or variable price provisions; and the approximate timing of the transaction. The expected timing of payment of the obligations discussed above is estimated based on information available to us as of December 31, 2011. Timing of payments and actual amounts paid may be different depending on the time of receipt of goods or services or changes to agreed-upon amounts for some obligations.

The table above excludes our gross liability for unrecognized tax benefits, which totaled approximately $17.8 million as of December 31, 2011 and are classified in deferred taxes and other long-term tax liabilities on our consolidated balance sheet. The timing of any payments which could result from these unrecognized tax benefits will depend upon a number of factors. Accordingly, the timing of payment cannot be estimated and has been excluded from the table above. As of December 31, 2011, the changes to our uncertain tax positions in the next 12 months, that are reasonable possible, are not expected to have a significant impact on our financial position or results of operations.

Indemnification Arrangements

We may, from time to time in the ordinary course of our business enter into contractual arrangements with third parties that include indemnification obligations. Under these contractual arrangements, we have agreed to defend, indemnify and/or hold the third party harmless from and against certain liabilities. These arrangements include indemnities in favor of customers in the event that our wafer probe cards infringe a third party's intellectual property and indemnities in favor of our lessors in connection with facility leasehold liabilities that we may cause. In addition, we have entered into indemnification agreements with our directors and certain of our officers, and our bylaws contain indemnification obligations in favor of our directors, officers and agents. These indemnity arrangements may limit the type of the claim, the total amount that we can be required to be paid in connection with the indemnification obligation and the time within which an indemnification claim can be made. The duration of the indemnification obligation may vary, and for most arrangements, survives the agreement term and is indefinite. We believe that substantially all of our indemnity arrangements provide either for limitations on the maximum potential future payments we could be obligated to make, or for limitations on the types of claims and damages we could be obligated to indemnify, or both. However, it is not possible to determine or reasonably estimate the maximum potential amount of future payments under these indemnification obligations due to the varying terms of such obligations, a lack of history of prior indemnification claims, the unique facts and circumstances involved in each particular contractual arrangement and in each potential future claim for indemnification, and the contingency of any potential liabilities upon the occurrence of events that are not reasonably determinable. We have not had any requests for indemnification under these arrangements. Our management believes that any liability for these indemnity arrangements would not be material to our accompanying consolidated financial statements. We have not recorded any liabilities for these indemnification arrangements on our consolidated balance sheet as of December 31, 2011.

Legal Matters

From time to time, we may be subject to legal proceedings and claims in the ordinary course of business. As of the filing of this Annual Report on Form 10-K, we were not involved in any material legal proceedings, other than the proceedings summarized below. In the future we may become a party to additional legal proceedings that may require us to spend significant resources, including proceedings designed to protect our intellectual property rights and to collect past due accounts receivable from our customers.

Customs and Trade Matters

From time to time, we receive communications from certain jurisdictions regarding customs and indirect tax matters such as customs duties and value added taxes. In fiscal 2011, we received inquiries from a foreign jurisdiction tax authority regarding certain indirect tax matters. We are cooperating with these inquiries, which relate to our prior shipping process for new product qualifications and for products for certain of our repair center activities. To date, we have accrued $1.0 million for potential exposure related to this matter, but it is possible that the inquiries could result in additional material liabilities and that we could incur material expenses in responding to the inquiry.

Patent Litigation

In 2005, we filed a patent infringement lawsuit in the United States District Court for the District of Oregon against Phicom Corporation, a Korea corporation, and its U.S. subsidiary, both collectively “Phicom”, charging that it is willfully infringing four U.S. patents that cover key aspects of our wafer probe cards-U.S. Patent Nos. 5,974,662, 6,246,247, 6,624,648, and 5,994,152. In 2006, we also filed an amended complaint in the same Oregon district court adding two additional patents to the litigation-U.S. Patent Nos. 7,073,254 and 6,615,485. The district court action proceeded in parallel with legal action we brought against Phicom in Korea Courts. The district court action was stayed pending resolution of the complaint that we filed with the United States International Trade Commission, or Commission, on or about November 13, 2007, seeking institution of a formal investigation into the activities of Phicom and of Micronics Japan Co., Ltd. An investigation was initiated and, in November 2009, in response to a request for review of prior decisions by the assigned Administrative Law Judge, the Commission issued a decision, which is termed a “final determination,” finding certain of FormFactor's asserted patent claims valid, but not infringed, and other asserted patent claims invalid. The Commission did not find a violation of Section 337 of the Tariff Act of 1930 and terminated the investigation without issuing an exclusionary order against any products. We did not appeal the final determination to the Court of Appeals for the Federal Circuit. The stay in the district court action against Phicom, now operating under the name TSC MEMSYS Co. Ltd., was lifted. During our fiscal quarter ending September 24, 2011, we resolved amicably the district court action in Oregon, as well as any continuing infringement proceedings, through a confidential settlement agreement.

In July 2010, we filed a patent infringement lawsuit in the United States District Court for the Northern District of California against Micro-Probe Incorporated alleging Micro-Probe is willfully infringing six U.S. patents that cover aspects of our proprietary technology and wafer probe cards. In the lawsuit we are also seeking injunctive relief and money damages for Micro-Probe's alleged infringement of our U.S. Patent No. 6,441,315 for “Contact Structures With Blades Having A Wiping Motion,” U.S. Patent No. 6,825,422 for “Interconnection Element With Contact Blade,” U.S. Patent No. 6,965,244 for “High Performance Probe System,” U.S. Patent No. 7,227,371 for “High Performance Probe System,” U.S. Patent No. 6,246,247 for “Probe Card Assembly and Kit, and Methods of Using Same,” and U.S. Patent No. 6,624,648 for “Probe Card Assembly.” The complaint also sought injunctive relief and damages against Micro-Probe for unfair competition and further includes claims directed against a former employee for breach of confidence relative to our confidential and propriety information and against the former employee and Micro-Probe for conspiring to breach that confidence. After Micro-Probe and the former employee filed motions to dismiss, we voluntarily filed an amended complaint which was substantially similar to our original complaint except that we added a claim against the former employee alleging misappropriation of trade secrets and we omitted the infringement allegation related to our U.S. Patent No. 6,624,648, which is the subject of a re-examination proceeding before the U.S. Patent and Trademark Office, or USPTO, and for which we received a “Notice of Intent to Issue Inter Partes Reexamination Certificate” in January 2012. Micro-Probe and the former employee have both filed answers to our amended complaint. We have filed a second amended complaint in which we added allegations of infringement based upon two additional patents: U.S. Patent No. 7,671,614 for “Apparatus and Method for Adjusting An Orientation of Probes” and U.S. Patent No. 7,225,538 for “Resilient Contact Structures Formed And Then Attached To A Substrate”.

One or more third parties have initiated challenges in the U.S. and in foreign patent offices against certain of the above and other of our patents. These actions include requests for re-examination proceedings filed by Micro-Probe with the USPTO directed to our U.S. Patent Nos. 6,246,247, 6,825,422, 6,441,315, 6,965,244, 7,225,538, 7,227,371 and 7,671,614. The USPTO granted the re-examination requests directed to U.S. Patent Nos. 6,246,247, 6,825,422 and 6,441,315, and granted in part the requests directed to U.S. Patent Nos. 6,965,244, 7,227,371 and 7,671,614. The USPTO has issued a re-examination certificate for U.S. Patent No. 6,246,247. The foreign actions include proceedings in Taiwan against several of our Taiwan patents.

No provision has been made for patent-related litigation because we believe that it is not probable that a liability had been incurred as of December 31, 2011. We will incur material attorneys' fees in prosecuting and defending the various identified actions.

Commercial Litigation

On February 20, 2009, we filed a complaint for breach of contract, common counts, account stated and injunctive relief against Spansion, LLC, a Delaware limited liability company ("Spansion"), in the state superior court located in Santa Clara County, California. The complaint alleges that Spansion, in breach of Spansion's obligations under a purchase agreement entered into by us and Spansion, has failed to pay us for probe cards that we designed, developed and manufactured pursuant to several purchase orders placed by Spansion with us pursuant to the agreement. The complaint states that as of February 13, 2009, Spansion owed us $8.1 million for probe cards delivered by us and not paid for by Spansion. In the complaint, we are seeking (i) payment of at least $8.1 million, (ii) a temporary protective order and an injunction enjoining Spansion from assigning or in any way divesting itself of any monies that we believe Spansion received from a certain third party entity, (iii) a prejudgment writ of attachment in favor of us over Spansion's corporate assets and property, (iv) costs and (v) attorney's fees. Prior to making any appearance or filing any answer in the action, Spansion filed for protection under Chapter 11 of the Bankruptcy Laws of the United States, which served to stay our complaint against Spansion. In November 2009, we sold all rights, title and interest in the bankruptcy claim in the aggregate face amount of $8.1 million to a third party in exchange for net proceeds of $3.5 million, and in October 2010, we voluntarily dismissed our complaint against Spansion.

- Definition

The entire disclosure for commitments and contingencies.

+ References

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-Publisher FASB
-Name FASB Interpretation (FIN)
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Reference 2: http://www.xbrl.org/2003/role/presentationRef
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+ Details

Stockholders' Equity

12 Months Ended

Dec. 31, 2011

Stockholders' Equity Note [Abstract]

Stockholders' Equity

Preferred Stock

We have authorized 10,000,000 shares of undesignated preferred stock, $0.001 par value, none of which is issued and outstanding. Our Board of Directors shall determine the rights, preferences, privileges and restrictions of the preferred stock, including dividends rights, conversion rights, voting rights, terms of redemption, liquidation preferences, sinking fund terms and the number of shares constituting any series or the designation of any series.

Common Stock

Each share of common stock has the right to one vote. The holders of common stock are also entitled to receive dividends whenever funds are legally available and when declared by the Board of Directors, subject to the prior rights of holders of all classes of stock outstanding having priority rights as to dividends. No dividends have been declared or paid as of December 31, 2011.

Common Stock Repurchase Program

On October 20, 2010, the Company's Board of Directors authorized a program to repurchase up to $50.0 million of outstanding common stock. Under the authorized stock repurchase program, the Company may repurchase shares from time to time on the open market; the pace of repurchase activity will depend on levels of cash generation, current stock price, and other factors. The stock repurchase program was announced on October 26, 2010 and had a scheduled expiration of October 19, 2011. The program may be modified or discontinued at any time.

On October 12, 2011, our Board of Directors authorized the extension of this repurchase program through October 19, 2012. Under the existing program, we may repurchase up to a total of $40.5 million of outstanding common stock during the program period. The terms and conditions of the extended repurchase program remain the same as those in the original program approved in fiscal 2010.

During fiscal year 2010, we repurchased and retired 70,000 shares of common stock for $0.6 million. During fiscal year 2011, we repurchased and retired 2,332,740 shares for $16.4 million. All of our repurchases were made under the authorized repurchase program.

Repurchased shares are retired upon the settlement of the related trade transactions. Our policy related to repurchases of our common stock is to charge the excess of cost over par value to additional paid-in capital. All repurchases were made in compliance with Rule 10b-18 under the Securities Exchange Act of 1934, as amended.

Equity Incentive Plans

We have options to purchase shares of common stock outstanding under the 1996 Stock Option Plan, the Incentive Option Plan and the Management Incentive Option Plan (the "Plans") for which we have reserved shares for issuance upon exercise of these options. Since the effectiveness of our 2002 Equity Incentive Plan in connection with our initial public offering, we do not grant any options under the Plans. Under the Plans, the Board of Directors had the authority to issue incentive stock options to employees and non-qualified stock options and stock purchase rights to consultants and employees of ours. The Board of Directors had the authority to determine to whom options would be granted, the number of shares, the term and exercise price (which could not be less than fair market value at date of grant for incentive stock options or 85% of fair market value for non-qualified stock options). If an employee owned stock representing more than 10% of the outstanding shares, the price of each share would be at least 110% of the fair market value, as determined by the Board of Directors. Generally, the options issued under the Plans vest 25% on the first anniversary of the vesting commencement date and on a monthly basis thereafter for a period of an additional three years. The options have a maximum term of ten years. Unvested option exercises are subject to repurchase upon termination of the holder's status as an employee or consultant. At December 31, 2011 and December 25, 2010, no shares of common stock were subject to our right of repurchase.

On April 18, 2002, the Board of Directors adopted the 2002 Equity Incentive Plan ("2002 Plan"), which became effective upon the effective date of the initial public offering of our common stock. The 2002 Plan provides for the grant of both, incentive stock options and nonqualified stock options, restricted stock and restricted stock units. The incentive stock options may be granted to our employees and the nonqualified stock options, and all awards other than incentive stock options, may be granted to employees, directors and consultants. The exercise price of incentive stock options must be at least equal to the fair market value of common stock on the date of grant. The exercise price of incentive stock options granted to 10% stockholders must be at least equal to 110% of the fair market value of common stock on the date of grant and vest over five years. All other options granted under the 2002 Plan are exercisable as determined by the Compensation Committee of the Board of Directors. For options granted on or before February 9, 2006, the options generally expire ten years from date of grant and vest over three to four years. For options granted after February 9, 2006, the options generally expire seven years from the date of grant and vest over three to four years. Options re-granted as a result of our stock exchange program in the fourth quarter of fiscal 2010 (see Note 11—Stock-Based Compensation of Notes to the Consolidated Financial Statements) expire five years from date of the exchange and vest over three years. Restricted stock and restricted stock units granted under the 2002 Plan generally vest over four years in annual tranches.

We initially reserved 500,000 shares of common stock for issuance under the 2002 Plan plus any shares that have been reserved but not issued under our prior equity plans, plus any shares repurchased at the original purchase price and any options which expire, thereafter. In addition, on each January 1, the number of shares available for issuance under the 2002 Plan will be increased by an amount equal to 5.0% of the outstanding shares of common stock on the preceding day.

At December 31, 2011, 11,578,098 shares were available for grant under the 2002 Plan.

Stock Options

Activity of the stock options under the Plans and the 2002 Plan is set forth below:



	Outstanding Options
	Number of Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Life in Years	Aggregate Intrinsic Value
Outstanding at December 27, 2008	6,686,820		$	27.36
Options granted	449,980		17.71
Options exercised	(319,386	)	13.37
Options canceled	(957,594	)	34.80
Outstanding at December 26, 2009	5,859,820		26.17
Options granted (1)	3,425,309		10.15
Options exercised	(115,597	)	5.99
Options canceled (2)	(3,851,145	)	28.60
Outstanding at December 25, 2010	5,318,387		14.53
Options granted	459,750		9.72
Options exercised	(141,280	)	6.47
Options canceled	(1,017,835	)	19.92
Outstanding at December 31, 2011	4,619,022		$	13.11	4.45	$	—
Vested and expected to vest at December 31, 2011	4,376,041		$	13.29	4.37	$	—
Exercisable at December 31, 2011	2,435,711		$	16.10	3.51	$	—


(1)	Options granted in fiscal 2010 included 679,864 shares of re-granted stock options with an exercise price of $8.61 per share as a result of our stock option exchange program effective October 1, 2010.


(2)	Options canceled in fiscal 2010 included 2,779,782 shares with a weighted average exercise price of $29.58 per share as a result of our stock option exchange program effective October 1, 2010.

The intrinsic value of option exercises during fiscal 2011 was $0.2 million. Cash received from stock option exercises in fiscal 2011 was $0.9 million. We did not realize any gross tax benefits in connection with these exercises.

The intrinsic value of option exercises during fiscal 2010 was $0.5 million. Cash received from stock option exercises in fiscal 2010 was $0.7 million. We did not realize any gross tax benefits in connection with these exercises.

The intrinsic value of option exercises during fiscal 2009 was $2.5 million. Cash received from stock option exercises in fiscal 2009 was $3.5 million. In connection with these exercises, the gross tax benefit realized by us was $10,000.

We expect to settle employee stock option exercises by issuing new shares under the 2002 Plan.

Restricted Stock Units

Restricted stock units are converted into shares of our common stock upon vesting on a one-for-one basis. The vesting of restricted stock units is subject to the employee's continuing service to us. Activity of the restricted stock units under our 2002 Plan for the fiscal year ended December 31, 2011 is set forth below:



	Number of Shares		Weighted Average Grant Date Fair Value
Restricted stock units at December 27, 2008	583,865		$	19.92
Granted	1,151,462		18.00
Vested	(160,137	)	15.55
Canceled	(83,512	)	18.44
Restricted stock units at December 26, 2009	1,491,678		18.51
Granted	776,318		14.57
Vested	(464,050	)	18.95
Canceled	(431,034	)	17.99
Restricted stock units at December 25, 2010	1,372,912		16.29
Granted	687,645		9.94
Vested	(510,330	)	16.70
Canceled	(242,924	)	15.82
Restricted stock units at December 31, 2011	1,307,303		$	12.88

The total fair value of restricted stock units vested during fiscal 2011, 2010 and 2009 was $4.6 million, $6.0 million and $2.5 million respectively.

2002 Employee Stock Purchase Plan

On April 18, 2002, the Board of Directors approved the 2002 Employee Stock Purchase Plan ("2002 ESPP"). The 2002 ESPP is designed to enable eligible employees to purchase shares of common stock at a discount on a periodic basis through payroll deductions. Effective from February 1, 2007, the offering periods under the 2002 ESPP are a 12 month fixed offering period commencing on February 1 of each calendar year and ending on January 31 of the subsequent calendar year, and a six month fixed offering period commencing on August 1 of each calendar year and ending on January 31 of the subsequent calendar year. The 12 month offering period consists of two six month purchase periods and the six month offering period consists of one six month purchase period. The price of the common stock purchased is 85% of the lesser of the fair market value of the common stock on the first day of the applicable offering period or the last day of each purchase period, 1,500,000 shares of common stock were initially reserved for issuance under the 2002 ESPP. In addition, the number of shares available for issuance under the 2002 ESPP will be increased on each January 1 by an amount equal to 1.0% of the outstanding shares of common stock on the preceding day.

During fiscal 2011, 2010, and 2009, employees purchased 386,818 shares, 365,871 shares and 269,156 shares under this program at a weighted average exercise price of $7.27, $10.35 and $13.37, respectively.

- Definition

The entire disclosure for shareholders' equity, comprised of portions attributable to the parent entity and noncontrolling interest, if any, including other comprehensive income (as applicable). Including, but not limited to: (1) balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings; (2) accumulated balance for each classification of other comprehensive income and total amount of comprehensive income; (3) amount and nature of changes in separate accounts, including the number of shares authorized and outstanding, number of shares issued upon exercise and conversion, and for other comprehensive income, the adjustments for reclassifications to net income; (4) rights and privileges of each class of stock authorized; (5) basis of treasury stock, if other than cost, and amounts paid and accounting treatment for treasury stock purchased significantly in excess of market; (6) dividends paid or payable per share and in the aggregate for each class of stock for each period presented; (7) dividend restrictions and accumulated preferred dividends in arrears (in aggregate and per share amount); (8) retained earnings appropriations or restrictions, such as dividend restrictions; (9) impact of change in accounting principle, initial adoption of new accounting principle and correction of an error in previously issued financial statements; (10) shares held in trust for Employee Stock Ownership Plan (ESOP); (11) deferred compensation related to issuance of capital stock; (12) note received for issuance of stock; (13) unamortized discount on shares; (14) description, terms, and number of warrants or rights outstanding; (15) shares under subscription and subscription receivables, effective date of new retained earnings after quasi-reorganization and deficit eliminated by quasi-reorganization and, for a period of at least ten years after the effective date, the point in time from which the new retained dates; and (16) retroactive effective of subsequent change in capital structure.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher AICPA
-Name Accounting Principles Board Opinion (APB)
-Number 12
-Paragraph 10
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 2: http://www.xbrl.org/2003/role/presentationRef
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Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
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-Section 08
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Reference 4: http://www.xbrl.org/2003/role/presentationRef
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-Name Accounting Research Bulletin (ARB)
-Number 43
-Chapter 1
-Section B
-Paragraph 7, 11A
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 129
-Paragraph 2, 3, 4, 5, 6, 7, 8
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 08
-Article 4

Reference 7: http://www.xbrl.org/2003/role/presentationRef
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-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 8: http://www.xbrl.org/2003/role/presentationRef
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-Name Regulation S-X (SX)
-Number 210
-Section 02
-Paragraph 29, 30, 31
-Article 5

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-Name Staff Accounting Bulletin (SAB)
-Number Topic 4
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Reference 10: http://www.xbrl.org/2003/role/presentationRef
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Reference 21: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Glossary Preferred Stock
-URI http://asc.fasb.org/extlink&oid=6521494

Reference 22: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 210
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-URI http://asc.fasb.org/extlink&oid=6959260&loc=d3e187143-122770

+ Details

Stock-Based Compensation

12 Months Ended

Dec. 31, 2011

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Stock-Based Compensation

We account for all stock-based compensation to employees and directors, including grants of stock options, as stock-based compensation costs in the Consolidated Financial Statements based on the fair value measured as of the date of grant. These costs are recognized as an expense in the Consolidated Statements of Operations over the requisite service period and increase additional paid-in capital.

The table below shows the stock-based compensation expense included in the Consolidated Statement of Operations (in thousands):



	Fiscal Years Ended
	December 31, 2011		December 25, 2010		December 26, 2009
Stock-based compensation expense included in:
Cost of revenues(1)	$	3,473	$	3,733	$	3,516
Research and development	4,293		5,610		4,407
Selling, general and administrative(2)(3)	6,083		8,270		12,637
Restructuring charges, net	—		190		216
Total stock-based compensation	13,849		17,803		20,776
Tax effect on stock-based compensation	—		—		—
Total stock-based compensation, net of tax	$	13,849	$	17,803	$	20,776


(1)	Fiscal 2011 includes $0.3 million of net stock-based compensation expense resulting from the modification and acceleration of certain stock options and restricted stock units to a former executive in conjunction with a separation agreement and mutual release.

(2)

Fiscal 2010 includes $0.5 million of stock-based compensation expense and an offsetting benefit of $0.7 million related to the reversal of previously recognized expense for unvested stock options resulting from the modification and acceleration of the vesting of certain stock options and restricted stock units awarded to our former executive members in conjunction with their departure from the Company (See Note 15—Departure of Executive Officers of the Notes to Consolidated Financial Statements). Additionally, fiscal 2010 includes $0.1 million of net stock-based compensation expense resulting from the modification and acceleration of the vesting of certain stock options and restricted stock units awarded to former members of the Board of Directors in conjunction with their departure from the Company.


(3)	Fiscal 2009 includes $2.5 million of stock-based compensation expense resulting from the modification and acceleration of the vesting of a portion of options awarded to our founder and former Executive Chairman of the Board of Directors in conjunction with his separation agreement and mutual release.

Stock Options

The exercise price of each stock option equals the market price of our stock on the date of grant. Most options are scheduled to vest over three to four years and expire seven years from the grant date. The fair value of each option grant is estimated on the date of grant using the Black-Scholes option pricing model. In addition, we estimate forfeitures when recognizing compensation expense, and adjust our estimates of forfeitures over the requisite service period based on the extent to which actual forfeitures differ, or are expected to differ, from such estimates. Changes in estimated forfeitures are recognized as a change in estimate in the period of change and will also impact the amount of compensation expense to be recognized in future periods.

The following weighted-average assumptions were used in the estimated grant-date fair value calculations for stock options granted in fiscal 2011, 2010 and 2009. The re-granted options from our stock exchange program are excluded from this table.



	Fiscal Years Ended
	December 31, 2011		December 25, 2010		December 26, 2009
Stock Options:
Dividend yield	—	%	—	%	—	%
Expected volatility	50.30	%	50.89	%	52.19	%
Risk-free interest rate	1.67	%	1.23	%	1.68	%
Expected life (in years)	4.26		4.42		4.69

Our computation of expected volatility was based on a combination of historical and market-based implied volatility from traded options on our common stock. We believe that including market-based implied volatility in the calculation of expected volatility results in a more accurate measure of the volatility expected in future periods. Risk-free interest rates are yields for zero-coupon U.S. Treasury notes maturing approximately at the end of the expected option life. We determine the expected term by considering several factors, including historical option exercise behavior, post vesting turnover rates, contractual terms and vesting periods of the options granted. In fiscal 2010, we granted approximately 2.0 million stock options to employees with vesting periods that range from two to three years and contractual terms that range from five to seven years. Because we did not have sufficient historical data for stock options with similar vesting or contractual terms, the simplified method was applied for deriving the expected term for these stock options. The simplified method is based on the vesting period and the contractual term for each grant, or for each vesting-tranche for awards with graded vesting. The mid-point between the vesting date and the expiration date is used the expected term under this method. We did not apply the simplified method to any stock options granted in fiscal 2011.

During fiscal 2011, 459,750 shares of stock options were granted under the 2002 Plan with a weighted average grant-date fair value of $4.06 per share. Excluding the 679,864 shares of stock options that were re-granted on October 1, 2010, 2,745,445 shares of stock options were granted in fiscal 2010 with the weighted average grant-date fair value of $4.46 per share. During fiscal 2009, 449,980 shares of stock options were granted under the 2002 Plan with the weighted average grant-date fair values of $7.96 per share.

As of December 31, 2011, the unamortized stock-based compensation balance related to stock options was $8.2 million after estimated forfeitures, which will be recognized over an estimated period of 2.1 years based on the weighted average days to vest.

Stock Option Exchange

On October 1, 2010, we completed an offer to exchange certain outstanding employee stock options to purchase shares of the Company's common stock. Eligible for the exchange were outstanding options, vested or unvested, held by current employees (excluding directors and executive officers) with an exercise price greater than or equal to $13.63 per share. Subject to the terms and conditions of the exchange offer, we accepted for exchange and cancelled options to purchase an aggregate of 2,779,782 shares with a weighted average exercise price of $29.58 per share, and issued new options to purchase an aggregate of 679,864 shares with an exercise price of $8.61 per share, the closing stock price of our common stock on October 1, 2010. The new options were granted under our 2002 Plan and vest 33% on the first anniversary of the vesting commencement date and on a monthly basis thereafter for a period of an additional two years. The assumptions that were used in estimating grant-date fair value for these re-granted stock options were 0% dividend yield, 52.61% of expected volatility, 3.35 years of expected life and 0.74% of risk-free interest rate. The grant-date fair value of the re-granted stock options was $3.25 per share. The incremental compensation expense resulting from the completion of the exchange offer did not have a material impact on our consolidated financial position, results of operations and cash flows.

Employee Stock Purchase Plan

During the fiscal year ended December 31, 2011, 386,818 shares were issued under the 2002 ESPP. As of December 31, 2011, we had $0.1 million of total unrecognized stock-based compensation expense, which will be recognized over the weighted average period of approximately one month. Compensation expense is calculated using the fair value of the employees' purchase rights under the Black-Scholes model. The following assumptions were used in estimating the fair value of employees' purchase rights under the 2002 ESPP:



	Fiscal Years Ended
	December 31, 2011		December 25, 2010		December 26, 2009
Employee Stock Purchase Plan:
Dividend yield	—	%	—	%	—	%
Expected volatility	53.47	%	41.25	%	38.42	%
Risk-free interest rate	0.23	%	0.24	%	0.32	%
Expected life (in years)	0.8		0.7		0.6

Restricted Stock Units

The fair value of restricted stock units is determined using the market closing price of our common stock on the grant date, and compensation cost is recognized over the vesting period on a straight line basis. The restricted stock units generally vest over four years.

During fiscal 2011, 2010 and 2009, 687,645 shares, 776,318 shares and 1,151,462 shares of restricted stock units were granted under our 2002 Plan with the weighted average grant-date fair values of $9.94, $14.57 and $18.00 per share, respectively. As of December 31, 2011, the unamortized stock-based compensation balance related to restricted stock units was $8.4 million after estimated forfeitures, which will be recognized over an estimated period of 2.5 years based on the weighted average days to vest.

- Definition

The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 123R
-Paragraph 64, 65, A240
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher AICPA
-Name Statement of Position (SOP)
-Number 93-6
-Paragraph 53
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Staff Accounting Bulletin (SAB)
-Number Topic 14

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 50
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6406099&loc=d3e25284-112666

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 718
-SubTopic 10
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5047-113901

Reference 6: http://www.xbrl.org/2003/role/presentationRef
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-Name Accounting Standards Codification
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-URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5070-113901

Reference 7: http://www.xbrl.org/2003/role/presentationRef
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-Name Accounting Standards Codification
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-Paragraph 4
-URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5444-113901

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-Publisher FASB
-Name Accounting Standards Codification
-Topic 718
-SubTopic 40
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6418621&loc=d3e17540-113929

+ Details

Income Taxes

12 Months Ended

Dec. 31, 2011

Income Tax Disclosure [Abstract]

Income Taxes

The components of loss before income taxes were as follows (in thousands):



	Fiscal Years Ended
	December 31, 2011			December 25, 2010			December 26, 2009
United States	$	(71,172	)	$	(178,849	)	$	(130,815	)
Foreign	3,290			(11,357		)	(11,624		)
	$	(67,882	)	$	(190,206	)	$	(142,439	)

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



	Fiscal Years Ended
	December 31, 2011			December 25, 2010			December 26, 2009
Current provision (benefit):
Federal	$	(157	)	$	(2,436	)	$	(25,267	)
State	1			(107		)	61
Foreign	(546		)	2,728			806
	(702		)	185			(24,400		)
Deferred provision (benefit):
Federal	(37		)	(85		)	30,889
State	—			—			8,518
Foreign	(1,162		)	(2,020		)	(1,793		)
	(1,199		)	(2,105		)	37,614
Total provision for (benefit from) income taxes	$	(1,901	)	$	(1,920	)	$	13,214

The following is a reconciliation of the difference between income taxes computed by applying the federal statutory rate of 35% and the provision for (benefit from) income taxes for fiscal 2011, 2010 and 2009 (in thousands):



	Fiscal Years Ended
	December 31, 2011			December 25, 2010			December 26, 2009
U.S. statutory Federal tax rate	$	(23,759	)	$	(66,571	)	$	(49,854	)
State taxes and credits, net of Federal benefit	(1,890		)	(5,776		)	(424		)
Amortization of stock-based compensation, net of tax benefit	287			606			484
Research and development credits	(2,499		)	(2,622		)	(2,435		)
Foreign net operating losses	—			—			4,628
Tax exempt interest income	—			—			(90		)
Foreign taxes at rates different than the U.S.	(294		)	2,765			(244		)
Other permanent differences	126			1,829			2,439
Change in valuation allowance	25,622			68,634			57,702
Other	506			(785		)	1,008
Total	$	(1,901	)	$	(1,920	)	$	13,214

Deferred tax assets and liabilities are recognized for the future tax consequences of differences between the carrying amounts of assets and liabilities and their respective tax bases using enacted tax rates in effect for the year in which the differences are expected to be reversed. Significant deferred tax assets and liabilities consist of the following (in thousands):



	Fiscal Years Ended
	December 31, 2011			December 25, 2010
Tax credits	$	25,168		$	22,129
Inventory reserve	20,028			18,147
Other reserves and accruals	4,241			4,472
Non-statutory stock options	19,708			25,062
Depreciation and amortization	10,682			14,999
Net operating loss carryforwards	96,219			48,884
Gross deferred tax assets	176,046			133,693
Valuation allowance	(168,875		)	(127,730		)
Total deferred tax assets	7,171			5,963
Unrealized investment gains	(102		)	(280		)
Total deferred tax liabilities	(102		)	(280		)
Net deferred tax assets	$	7,069		$	5,683

We are required to evaluate the realizability of our deferred tax assets in both our U.S. and non-U.S. jurisdictions on an ongoing basis in accordance with GAAP to determine whether there is a need for a valuation allowance with respect to such deferred tax assets. During fiscal 2011 and 2010, we maintained a valuation allowance against our U.S. deferred tax assets. We intend to maintain a valuation allowance until sufficient positive evidence exists to support the realization of such deferred tax assets.

During the fiscal quarter ended June 25, 2011, we determined that it is more likely than not that the deferred tax assets of a non-U.S. jurisdiction will be realized after considering all positive and negative evidence. Positive evidence included finalization of our current restructuring activity for the related foreign jurisdiction and conclusion that such location will continue to be in operation for the foreseeable future, as well as a forecast of future taxable income sufficient to realize such deferred tax assets prior to the expiration of existing net operating loss carryforwards due to a change in the entity's structure to a cost-plus arrangement. Accordingly, a deferred tax valuation allowance release of $2.5 million was recorded as an income tax benefit during the quarter. Our conclusion that it is more likely than not that such deferred tax assets will be realized is strongly influenced by the expectation that such location will continue to be in operation for the foreseeable future. We believe such conclusion is reasonable in light of our current operational structure and forecasted operations, both for the foreign jurisdiction and our consolidated operations; however, such conclusion is inherently uncertain. Therefore, if we have material unforeseen losses or are required to restructure our non-U.S. operations to further align our operating expense structure with our expected revenues, then its ability to generate sufficient income necessary to realize a portion of the deferred tax assets may be reduced and an additional charge to increase the valuation allowance may be recorded.

The valuation allowance against deferred tax assets consisted of the following activity for the fiscal years ended December 31, 2011, December 25, 2010 and December 26, 2009 (in thousands):



Description	Balance at Beginning of Year		Additions		Reduction			Balance at End of Year
Allowance against deferred tax assets
Year ended December 26, 2009	$	1,395	$	57,702	$	—		$	59,097
Year ended December 25, 2010	59,097		68,634		—			127,731
Year ended December 31, 2011	127,731		44,520		(3,376		)	168,875

At December 31, 2011, we had Federal research and development tax credit, net operating loss, and foreign tax credit carryforwards of approximately $18.5 million, $231.3 million and $1.7 million, which will expire at various dates from 2015 through 2031. We had alternative minimum tax credits of $2.3 million which do not expire. We had California research credit and net operating loss carryforwards of approximately $20.6 million and $227.6 million, respectively. The California research credit can be carried forward indefinitely while California net operating loss carryforwards will expire at various dates from 2028 through 2031. We had Singapore net operating loss carryforwards of approximately $13.5 million which can be carried forward indefinitely.

U.S. income taxes and foreign withholding taxes associated with the repatriation of earnings of foreign subsidiaries were not provided for approximately $6.1 million of undistributed earnings of its foreign subsidiaries. We intend to reinvest these earnings indefinitely in our foreign subsidiaries. If these earnings were distributed to the U.S. in the form of dividends or otherwise, or if the shares of the relevant foreign subsidiaries were sold or otherwise transferred, we would be subject to additional U.S. income taxes (subject to an adjustment for foreign tax credits) and foreign withholding taxes. Determination of the amount of unrecognized deferred income tax liability related to these earnings is not practicable.

During fiscal 2011, fiscal 2010 and fiscal 2009, tax benefits associated with the exercise of employee stock options and other employee stock programs of $0, $0 and $10,000, respectively, were credited to stockholders' equity.

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



	Fiscal Years Ended
	December 31, 2011			December 25, 2010			December 26, 2009
Unrecognized tax benefit beginning balance	$	17,500		$	17,925		$	15,816
Additions based on tax positions related to the current year	751			1,610			1,620
Reductions for tax positions of prior years	(270		)	—			—
Reductions to unrecognized tax benefits due to lapse of the applicable statute of limitations	(148		)	(35		)	(29		)
Settlements	(81		)	(2,000		)	—
Unrecognized tax benefit ending balance	$	17,752		$	17,500		$	17,407

At December 31, 2011, we had gross tax-effected unrecognized tax benefits of $17.8 million of which $2.3 million if recognized, would impact the effective tax rate.

We recognize interest charges and penalties related to uncertain tax positions as part of the income tax provision. We recognized interest charges and penalties of $12,000 and $0.3 million in fiscal 2011 and fiscal 2009, respectively, and an interest benefit of $0.3 million for fiscal 2010. As of December 31, 2011 and December 25, 2010, we have accrued total interest charges and penalties of approximately $0.7 million and $0.6 million, respectively, related to uncertain tax positions.

The amount of income taxes we pay is subject to ongoing audits by Federal, state and foreign tax authorities which might result in proposed assessments. Our estimate for the potential outcome for any uncertain tax issue is judgmental in nature. However, we believe we have adequately provided for any reasonably foreseeable outcome related to those matters. Our future results may include favorable or unfavorable adjustments to our estimated tax liabilities in the period the assessments are made or resolved or when statutes of limitation on potential assessments expire. As of December 31, 2011 changes to our uncertain tax positions in the next 12 months that are reasonably possible are not expected to have a significant impact on our financial position or results of operations.

We and our subsidiaries file income tax returns in the U.S. Federal jurisdiction, various states and non-U.S. jurisdictions. We are currently under examination by the State of California Franchise Tax Board for fiscal years 2004 and 2005. The material jurisdictions in which we are subject to potential examination by tax authorities for tax years after 2003 include, among others, the U.S. (Federal and California), Singapore and Japan.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 08
-Paragraph h
-Article 4

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 109
-Paragraph 136, 172
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 109
-Paragraph 43, 44, 45, 46, 47, 48, 49
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 15
-URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32718-109319

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-Topic 740
-SubTopic 10
-Section 50
-Paragraph 9
-URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32639-109319

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08.(h))
-URI http://asc.fasb.org/extlink&oid=6881521&loc=d3e23780-122690

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32537-109319

Reference 8: http://www.xbrl.org/2003/role/presentationRef
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-Topic 740
-SubTopic 10
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32559-109319

+ Details

Employee Benefit Plans	12 Months Ended
Employee Benefit Plans	Dec. 31, 2011
Compensation and Retirement Disclosure [Abstract]
Employee Benefit Plans	Employee Benefit Plans We have an employee savings plan that qualifies as a deferred salary arrangement under Section 401(k) of the Internal Revenue Code. We match up to 50% of an eligible employee's contributions to a maximum of the first 3% of the eligible employee's contributions through a fiscal year. We also provide a tax-qualified profit sharing retirement plan for the benefit of eligible employees in the U.S. The plan is designed to provide employees with an accumulation of funds for retirement on a tax-deferred basis and provide for annual discretionary employer contributions. We suspended our match under the 401(k) plan in the second quarter of fiscal 2009 as part of our cost reduction efforts. During the third quarter of fiscal 2010, we reinstated the employer match feature due to the progress that we had made in streamlining and simplifying our operations and reducing operating costs as we continue to focus on returning the Company to profitability. The total charge to operations under the 401(k) and the profit sharing retirement plans aggregated $0.6 million in fiscal 2011, $0.2 million in fiscal 2010 and $0.9 million in fiscal 2009.

Operating Segment and Geographic Information

12 Months Ended

Dec. 31, 2011

Segment Reporting [Abstract]

Operating Segment and Geographic Information

We operate in one segment consisting of the design, development, manufacture, sale and support of precision, high performance advanced semiconductor wafer probe cards. Our chief operating decision maker is the Chief Executive Officer, who reviews operating results to make decisions about allocating resources and assessing performance for the entire company. Since we operate in one segment and in one group of similar products and services, all financial segment and product line information required can be found in the consolidated financial statements.

The following table summarizes revenue by country as a percentage of total revenues based upon ship-to location:



	December 31, 2011		December 25, 2010		December 26, 2009
Taiwan	31.8	%	38.5	%	19.9	%
South Korea	23.1		13.8		4.0
Japan	17.4		15.1		47.7
North America	15.3		20.3		18.1
Asia-Pacific	8.2		8.0		4.2
Europe	4.2		4.3		6.1
Total	100.0	%	100.0	%	100.0	%

The following table summarizes revenue by product group (in thousands):



	Fiscal Years Ended
	December 31, 2011		December 25, 2010		December 26, 2009
DRAM	$	115,678	$	131,207	$	108,820
SoC	29,050		27,290		19,233
Flash	24,597		30,068		7,282
Total revenues	$	169,325	$	188,565	$	135,335

Long-lived assets, comprising net property, plant and equipment, are reported based on the location of the asset. Long-lived assets by geographic location are as follows (in thousands):



	December 31, 2011		December 25, 2010		December 26, 2009
North America	$	31,291	$	32,363	$	84,734
Japan	1,967		2,554		4,594
South Korea	834		999		3,244
Asia-Pacific	499		547		1,632
Singapore	485		747		3,077
Europe	56		101		477
Total	$	35,132	$	37,311	$	97,758

The following customers represented greater than 10% of our revenues in fiscal 2011, fiscal 2010 and fiscal 2009:



	Fiscal 2011		Fiscal 2010		Fiscal 2009
Elpida Memory(1)	18.2	%	21.2	%	49.1	%
Hynix Semiconductor(2)	16.3		12.8		*
Samsung(3)	11.2		12.0		*
Micron Semiconductor(4)	10.2		*		*
Total	55.9	%	46.0	%	49.1	%


(1)	Includes Elpida Memory and its consolidated subsidiaries, Rexchip Electronics Corporation and Tera Probe, Inc.


(2)	Includes Hynix Semiconductor and its consolidated subsidiary Hynix-Numonyx Semiconductor.


(3)	Includes Samsung Semiconductor and its consolidated subsidiary Samsung Austin Semiconductor.


(4)	Includes Micron Semiconductor and its consolidated subsidiaries, including Micron Semiconductor Asia Pte. Ltd., Numonyx Pte. Ltd., Numonyx Israel Ltd. and Micron Japan, Ltd.


*	Less than 10% of revenues.

The percentages above reflect customer constellations as of December 31, 2011. Prior period concentrations have been updated to reflect the current customer compositions.

- Definition

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
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+ Details

Departure of Executive Officers	12 Months Ended
Departure of Executive Officers	Dec. 31, 2011
Departure of Executive Officers Disclosure [Abstract]
Departure of Executive Officers	Departure of Executive Officers In the second quarter of fiscal 2010, we entered into Separation Agreements with Mario Ruscev and Jean Bernard Vernet in connection with their resignations on May 19, 2010 as Chief Executive Officer and Chief Financial Officer, respectively. As a result, we recorded a net charge of $0.7 million within "Selling, general and administrative" expenses in the Consolidated Statements of Operations, comprised of $0.8 million of severance expenses net of $0.1 million benefits from stock-based compensation. They have each signed a general release and waiver of claims in favor of the Company, and continue to be bound by the Company's employment, confidential information and invention assignment agreement. Additionally, in December 2010, we entered into a Separation Agreement and General Release with a former Senior Vice President. As a result, we recorded a net charge of $0.2 million within "Selling, general and administrative" expenses in the Consolidated Statements of Operations, which comprised $0.3 million of severance expenses net of $0.1 million benefits from stock-based compensation. In October 2011, we entered into a Separation Agreement and General Release with a former Senior Vice President. As a result, we recorded charges of $0.8 million within “Cost of revenues” in the Condensed Consolidated Statement of Operations for the fiscal quarter and year ending December 31, 2011, such charge being composed of $0.5 million of payroll and related expenses and $0.3 million of stock-based compensation expense related to the modification of certain stock-based compensation awards.

Related Party Transactions	12 Months Ended
Related Party Transactions	Dec. 31, 2011
Related Party Transactions [Abstract]
Related Party Transactions	Related Party Transactions We engaged the law firm of Orrick, Herrington & Sutcliffe LLP ("Orrick") in fiscal 2007, and continuing through our fiscal 2011, to provide us with certain legal services, including matters related to compensation and benefits, and to represent us and certain of our then directors and officers in the securities class action litigation and the stockholder derivative litigation. A partner at Orrick, who is not involved in the above matters, is the brother-in-law of Stuart L. Merkadeau, our Senior Vice President, General Counsel and Secretary. Mr. Merkadeau does not have a financial or other interest in Orrick's engagement and Mr. Merkadeau's brother-in-law does not provide any legal services to us. Prior to engaging Orrick , our management discussed the potential engagement with our Governance Committee of the Board of Directors under the Statement of Policy regarding Related Person Transactions. The Governance Committee reviewed and approved the Orrick engagement, and continues to monitor the engagement, which in fiscal 2011 also included certain compensation and benefits matters, as well as certain labor and employment matters, as necessary. We paid Orrick $0.2 million and $0.8 million in fiscal 2011 and in fiscal 2010, respectively, for legal services rendered. As of the date of this Annual Report on Form 10-K, Orrick continues to provide legal services in the above matters.

- Definition

The entire disclosure for related party transactions, including the nature of the relationship(s), a description of the transactions, the amount of the transactions, the effects of any change in the method of establishing the terms of the transaction from the previous period, stated interest rate, expiration date, terms and manner of settlement per the agreement with the related party, and amounts due to or from related parties. If the entity and one or more other entities are under common ownership or management control and this control affects the operating results or financial position, disclosure includes the nature of the control relationship even if there are no transactions between the entities. Disclosure may also include the aggregate amount of current and deferred tax expense for each statement of earnings presented where the entity is a member of a group that files a consolidated tax return, the amount of any tax related balances due to or from affiliates as of the date of each statement of financial position presented, the principal provisions of the method by which the consolidated amount of current and deferred tax expense is allocated to the members of the group and the nature and effect of any changes in that method. Examples of related party transactions include transactions between (a) a parent company and its subsidiary; (b) subsidiaries of a common parent; (c) and entity and its principal owners; and (d) affiliates.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Article 4
-Section 08
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Reference 2: http://www.xbrl.org/2003/role/presentationRef
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-Name Statement of Financial Accounting Standard (FAS)
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+ Details

Selected Quarterly Financial Data (Unaudited)

12 Months Ended

Dec. 31, 2011

Quarterly Financial Information Disclosure [Abstract]

Selected Quarterly Financial Data (Unaudited)

The following selected quarterly financial data should be read in conjunction with our consolidated financial statements and the related notes and "Item 7: Management's Discussion and Analysis of Financial Condition and Results of Operations". This information has been derived from our unaudited consolidated financial statements that, in our opinion, reflect all recurring adjustments necessary to fairly present this information when read in conjunction with our consolidated financial statements and the related notes appearing in the section entitled "Consolidated Financial Statements". The results of operations for any quarter are not necessarily indicative of the results to be expected for any future period.



	Fiscal Quarters Ended
	Dec. 31, 2011			Sep. 24, 2011			June 25, 2011 (3)			Mar. 26, 2011			Dec. 25, 2010 (3)			Sep. 25, 2010(1)(2)			June 26, 2010			Mar. 27, 2010
	(in thousands, except per share data)
Revenues	$	30,224		$	52,115		$	46,558		$	40,428		$	43,912		$	47,347		$	57,640		$	39,666
Cost of revenues	35,199			40,141			36,668			36,359			40,593			54,541			53,710			41,994
Gross profit (loss)	(4,975		)	11,974			9,890			4,069			3,319			(7,194		)	3,930			(2,328		)
Operating Expenses:
Research and development	10,683			10,423			10,878			11,560			11,476			12,825			15,997			15,091
Selling, general and administrative	11,964			11,200			11,154			12,387			14,398			16,219			18,725			17,867
Restructuring charges, net	325			258			(1,099		)	1,038			1,305			8,539			2,513			3,550
Impairment of long lived assets	98			100			—			351			—			55,402			999			—
Total operating expenses	23,070			21,981			20,933			25,336			27,179			92,985			38,234			36,508
Operating loss	(28,045		)	(10,007		)	(11,043		)	(21,267		)	(23,860		)	(100,179		)	(34,304		)	(38,836		)
Interest income, net	276			335			369			424			426			623			722			775
Other income (expense), net	941			(75		)	584			(374		)	431			3,960			(82		)	117
Loss before income taxes	(26,828		)	(9,747		)	(10,090		)	(21,217		)	(23,003		)	(95,596		)	(33,664		)	(37,944		)
Provision for (benefit from) income taxes	147			157			(2,412		)	207			(2,592		)	231			200			240
Net loss	$	(26,975	)	$	(9,904	)	$	(7,678	)	$	(21,424	)	$	(20,411	)	$	(95,827	)	$	(33,864	)	$	(38,184	)
Net loss per share:
Basic and diluted	$	(0.54	)	$	(0.20	)	$	(0.15	)	$	(0.42	)	$	(0.40	)	$	(1.90	)	$	(0.68	)	$	(0.77	)
Weighted average number of shares used in per share calculations:
Basic and diluted	49,967			50,747			50,773			50,636			50,573			50,431			50,084			49,890


(1)	In the third quarter of fiscal 2010, "Other income (expense), net" included a $3.5 million gain resulting from the release of the liability previously recorded as a secured borrowing due to the dismissal of our complaint against a customer.

(2)

In the third quarter of fiscal 2010, we recorded a $4.1 million adjustment to cost of revenues net of $0.5 million income tax benefit, which resulted from an error in the calculation of capitalized manufacturing variances starting in the first quarter of fiscal 2009 through the second quarter of fiscal 2010. Out of the total adjustment, $2.9 million adjustment to cost of revenues net of the $0.5 million income tax benefit was for fiscal 2009.

(3)

In the second quarter of fiscal 2011, we recorded a tax benefit in the amount of $2.5 million from the release of a deferred tax valuation allowance recorded in a non-U.S. jurisdiction. This benefit resulted in an overall income tax benefit, rather than an income tax provision in the second quarter of fiscal 2011. In the fourth quarter of fiscal 2010, we recorded an income tax benefit in the amount of $2.4 million related to the settlement of an on-going audit in a non-U.S. jurisdiction. This benefit resulted in an overall income tax benefit, rather than an income tax provision in the fourth quarter of fiscal 2010.

- Definition

The entire disclosure for the quarterly financial data in the annual financial statements. The disclosure may include a tabular presentation of financial information for each fiscal quarter for the current and previous year, including revenues, gross profit, income or loss before extraordinary items and earnings per share data. It also includes an indication if the information in the note is unaudited, comments on the aggregate effect of year-end adjustments, and an explanation of matters or transactions that affect comparability or are pertinent to an understanding of the information furnished.

+ References + Details