News & Events
Intersil Corporation Reports Third Quarter 2006 Financial Results

— Record net revenues of $192.9 million; increases 22% Y-o-Y and 3% Q-o-Q~— Raises quarterly dividend 20% to $0.06 per share

Milpitas, CA, October 18, 2006 – Intersil Corporation (NASDAQ Global Select: ISIL), a world leader in the design and manufacture of high performance analog semiconductors, today reported financial results for the quarter ended September 29, 2006. Net revenues for the third quarter were $192.9 million, a 22% increase from $157.5 million in the third quarter of 2005 and a 3% increase from $187.6 million in the second quarter of 2006.

Third Quarter 2006 Generally Accepted Accounting Principles (GAAP) Results
For the third quarter of 2006, gross margins were 57.5%. This compares to gross margins of 56.0% in the same quarter last year, and 57.2% in the second quarter of 2006. Operating margins were 22.2%, as compared to operating margins of 18.6% in the same quarter last year, and 19.0% in the second quarter of 2006. Net income was $37.7 million, or $0.27 earnings per diluted share, as compared to net income of $27.1 million, or $0.19 earnings per diluted share in the same quarter last year. For the second quarter of 2006, the Company reported net income of $43.0 million, or $0.30 earnings per diluted share.

Third Quarter 2006 Non-GAAP Results
For the third quarter of 2006, non-GAAP gross margins were 58.0%. This compares to gross margins of 56.1% for the same quarter last year, and 57.8% for the second quarter of 2006. Operating margins were 29.9%, as compared to operating margins of 22.4% for the same quarter last year, and 27.7% for the second quarter of 2006. Net income was $46.9 million, or $0.33 earnings per diluted share. This compares to net income of $30.8 million, or $0.21 earnings per diluted share for the same quarter last year, and $43.7 million, or $0.30 earnings per diluted share for the second quarter of 2006.

“This was another successful quarter for the company,” stated Rich Beyer, Intersil’s Chief Executive Officer. “Through a better mix of products and several initiatives to reduce manufacturing costs, gross margins are now within our target of 58% to 62%. Even more impressive, operating margins are now at the high end of our model of 27% to 30%.”

By end market, Intersil’s third quarter revenues were as follows: high-end consumer (24% of revenues), computing (26% of revenues), industrial (25% of revenues), and communication (25% of revenues). “Revenues in the computing, industrial and communication markets all experienced sequential growth this quarter,” said Lou DiNardo, Intersil’s President and Chief Operating Officer. “Computing grew the fastest, approximately 17%, due to an increasing presence in power management solutions for notebook computers and a seasonally strong quarter for computing related products. Our investments to broaden and deepen our general purpose portfolio allowed both industrial and communication to continue to grow this quarter. We experienced a sequential decline in high-end consumer due, in particular, to optical storage, where innovation has paused until the ramp of higher data rate blue laser systems begins next year.”

DiNardo also noted, “As we previously indicated, inventories at our distribution partners began to drop in the third quarter. We anticipate they will continue to decline and reach target levels by the end of the fourth quarter.”

Intersil generated over $59 million in free cash flow, or 31% of revenues, for the quarter. The Company repurchased approximately $75 million or 3.2 million shares of its stock, under a previously announced stock repurchase program. In addition, as a result of Intersil’s increasing cash flow and strong balance sheet position, the Company’s board of directors authorized the increase of Intersil’s quarterly dividend from $0.05 per share to $0.06 per share of common stock. The payment of this quarterly dividend will be made on November 17, 2006 to shareholders of record as of the close of business on November 7, 2006.

Business Outlook
“For the fourth quarter, we expect the high-end consumer and computing end markets to be up modestly, which is less than normal seasonal growth as we expect inventory at our distribution partners to continue to decline in the quarter,” said Rich Beyer. “We expect the industrial market to be down slightly. And we expect the communication market to be down due to seasonality and softer demand for DSL, wireless base stations and satellite applications. As a result, we currently anticipate revenues to be down between 3% and 5% from third quarter revenues of $192.9 million, but up 4% to 7% from fourth quarter 2005 revenues of $175.6 million. We expect GAAP earnings per diluted share of approximately $0.24 to $0.25 and non-GAAP earnings per share of approximately $0.31 to $0.32.”

Investors and interested parties within the United States may listen to Intersil's conference call on October 18th at 1:45 p.m. Pacific/4:45 p.m. Eastern by dialing (866) 831-6291 using the password “Intersil.” International callers may connect to the call by dialing (617) 213-8860. A replay of Intersil’s conference call will be available for two weeks by dialing (888) 286-8010 in the U.S. or (617) 801-6888 internationally using the access code “17710127". A webcast replay of the conference call will be available for two weeks on the Company’s web site at http://www.intersil.com/investor. A copy of this press release may be found on the Company’s web site at http://www.intersil.com/investor.

About Intersil
Intersil Corporation is a leader in the design and manufacture of high-performance analog semiconductors. The Company's products address some of the industry's fastest growing markets such as flat panel displays, cell phones, handheld products and notebook computing. Intersil’s product families address both power management and analog signal processing functions. Intersil products include ICs for battery management; hot-swap and hot-plug controllers; linear regulators; supervisory ICs; switching DC/DC regulators; power MOSFET drivers; optical storage laser diode drivers; DSL line drivers; video and high-performance operational amplifiers; data converters; interface ICs; analog switches and multiplexers; crosspoint switches; voice-over-IP devices; and ICs for military, space and radiation-hardened applications. For more information about Intersil or to find out how to become a member of our winning team, visit the Company's web site and career page at www.intersil.com.

NON-GAAP REPORTING
In addition to GAAP reporting, Intersil reports net income or loss, as well as earnings per share, gross margin and operating margin on a non-GAAP basis. This non-GAAP earnings information excludes stock based compensation expense, amortization of intangibles and unusual items and their related tax effects. Intersil believes this non-GAAP earnings information provides meaningful insight into the Company’s on-going performance and has therefore chosen to provide this information to investors for a more consistent basis of comparison and to emphasize the results of on-going operations. Intersil also uses this information internally to evaluate and manage the Company’s operations and to determine incentive compensation. A reconciliation between GAAP and non-GAAP net income is included in the tables below.

FORWARD-LOOKING STATEMENTS
Intersil Corporation press releases and other related comments may contain forward-looking statements as defined in Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, in connection with the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are based upon Intersil Corporation's ("Intersil") management's current expectations, estimates, beliefs, assumptions, and projections about Intersil's business and industry. Words such as "anticipates," "expects," "intends," "plans," "predicts," "believes," "seeks," "estimates," "may," "will," "should," "would," "potential," "continue," "goals," "targets," and variations of these words (or negatives of these words) or similar expressions, are intended to identify forward-looking statements. In addition, any statements that refer to projections or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. These forward-looking statements are not guarantees of future performance and are subject to certain risks, uncertainties, and assumptions that are difficult to predict. Therefore, our actual results could differ materially and adversely from those expressed in any forward-looking statements as a result of various risk factors. Intersil does not adopt and is not responsible for any forward-looking statements and projections made by others in this press release. Intersil's Annual Report on Form 10-K, subsequent Quarterly Reports on Form 10-Q, recent Current Reports on Form 8-K, and other Intersil filings with the U.S. Securities and Exchange Commission ("SEC") (which you may obtain for free at the SEC's web site at http://www.sec.gov) discuss some of the important risk factors that may affect our business, results of operations, and financial condition. These forward-looking statements are made only as of the date of this communication and Intersil undertakes no obligation to update or revise these forward-looking statements.