The market for mobile consumer electronic devices, such as wireless handsets, notebook and tablet computers, smartphones, digital cameras and digital audio players, is large and growing rapidly as functionality increases and prices decrease. Internet access and decorative lighting, are among the most widely adopted electronic devices today. According to IDC, a market research firm, approximately 692 million mobile phones were sold globally in 2004. New services for mobile consumer electronic devices, such as digital music downloads, video downloads, video messaging, video streaming, Global Positioning System-based personal navigation, and web-based gaming, are helping drive consumer demand for these devices worldwide. In response to these market dynamics, manufacturers of mobile consumer electronic devices and service providers marketing these devices are incorporating an increasing number of applications, features and services.

As the number of applications, features and services available for mobile consumer electronic devices has increased, the number and variety of power loads, or individual subsystems requiring voltage regulation, has also grown. Each additional application or feature can require multiple functions and circuits that, in turn, require more individually-regulated and managed power sources. All of these additional loads reduce battery life, the duration of which is an important element of consumer satisfaction, as they each draw power for operation. Additional power is consumed and battery life reduced if components that supply and regulate power to all of these various power loads are inefficient. Therefore, high-performance power management semiconductors that extend battery life by improving power efficiency have become key enablers of mobile consumer electronic device functionality. According to iSuppli, a market research firm, the voltage regulator and reference power management semiconductor market is expected to grow from $6.1 billion in 2005 to $11.5 billion in 2009, a compound annual growth rate of 16.9%.

The Company currently offers an extensive portfolio of over 400 power management products comprising Power Management ASSPs and selected general-purpose Analog ICs in single-chip packages and multi-chip packages. The Company’s first PowerSOC products are under development.

The Company introduces products to address new market opportunities and to continue to improve the functional integration, size, efficiency, features, cost, ease of use and system integration of its solutions. The Company has developed a comprehensive product portfolio. The Company’s goal is to provide its customers with proprietary, high-performance products, but has also developed a number of relatively basic products in order to provide a more complete power management solution for its customers. The Company’s product portfolio includes three principal product lines, which are Total Power Management ICs, Application-specific power MOSFETs and other power management semiconductors.

The Company’s Total Power Management ICs, or TPM ICs, comprise a family of power management ASSPs and general purpose analog ICs designed using its analog circuit expertise and half-micron or smaller analog processes to cover a wide range of power management tasks, including precise voltage regulation, voltage supervision and battery management.

The Company’s Application-specific power MOSFETs, or ASPMs, are load switches enhanced with simple circuit functionality and protection capabilities, such as current limiting, temperature protections, input control level shifting and low noise slew rate limited turn on.

The Company’soOther power management semiconductors, which today primarily consist of discrete, power MOSFET technologies, or TrenchDMOS, through which millions of transistors are placed in parallel trenches etched in the top of the silicon die to achieve extremely low resistance switches in very small products.

Research and development expenses were $14.3 million for the year ended December 31, 2004, $7.1 million for the year ended December 31, 2003 and $5.4 million for the year ended December 31, 2002.

Sales and marketing expenses were $7.1 million for the year ended December 31, 2004, $3.6 million for the year ended December 31, 2003 and $2.6 million for the year ended December 31, 2002.

Interest and other expense was $43,000 for the year ended December 31, 2004, $203,000 for the year ended December 31, 2003 and $43,000 for the year ended December 31, 2002.

Interest and other income was $157,000 for the year ended December 31, 2004, $24,000 for the year ended December 31, 2003 and $52,000 for the year ended December 31, 2002.