RF Micro Devices (RFMD)

12.        OTHER

During fiscal 2007, the Company received notification from a customer with respect to the failure in the field of one of the Company's infrastructure products due to an alleged defect in the product.  The Company is currently in the process of conducting standard failure analysis procedures to determine the root cause of the field failures and is working with the customer to determine the extent of any potential costs associated with these field failures.  Accordingly, the Company cannot reasonably estimate the amount of its potential exposure for this matter.

11.        OTHER

During fiscal 2007, the Company received notification from a customer with respect to the failure in the field of one of the Company's infrastructure products due to an alleged defect in the product.  The Company is currently in the process of conducting standard failure analysis procedures to determine the root cause of the field failures and is working with the customer to determine the extent of any potential costs associated with these field failures.  Accordingly, the Company cannot reasonably estimate the amount of its potential exposure for this matter.

OTHER

During the first quarter of fiscal 2007, we procured defective materials from a third-party supplier, which we determined did not meet our quality standards.  The supplier agreed to accept financial responsibility for such defects.  As a result, we increased our inventory reserves by $7.5 million, increased accrued liabilities for potential warranty claims by $1.6 million and recorded a receivable from the third-party supplier in the amount of $9.1 million. 

During the second quarter of fiscal 2007, after completion of an inspection process, we determined that the defective material had a value of $6.2 million.  As a result, we reduced our inventory and warranty reserves by $2.9 million and adjusted our receivable from the third-party supplier from $9.1 million to $6.2 million.  In addition, during the second quarter of fiscal 2007, we issued a credit to a customer for $5.0 million as a result of this defective material and reached an agreement for a full reimbursement of this credit from a second third-party supplier. 

During the third quarter of fiscal 2007, the defective material was scrapped and the associated inventory reserve was reversed.  In addition, we collected an aggregate of $2.6 million from the responsible third-party suppliers, which was applied to reduce receivables by $1.6 million and cost of goods sold by $1.0 million.

OTHER

During the first quarter of fiscal 2007, we procured defective materials from a third-party supplier, which we determined did not meet our quality standards.  The supplier agreed to accept financial responsibility for such defects.  As a result, we increased our inventory reserves by $7.5 million, increased accrued liabilities for potential warranty claims by $1.6 million and recorded a receivable from the third-party supplier in the amount of $9.1 million. 

During the second quarter of fiscal 2007, after completion of an inspection process, we determined that the defective material had a value of $6.2 million.  As a result, we reduced our inventory and warranty reserves by $2.9 million and adjusted our receivable from the third-party supplier from $9.1 million to $6.2 million.

Additionally, during the second quarter of fiscal 2007 we issued a credit to a customer for $5.0 million as a result of this defective material.  We have reached agreement for a full reimbursement of this credit from the responsible third-party supplier.

OTHER

During the first quarter of fiscal 2007, we discovered mis-processed materials by a third-party subcontractor, which has agreed to accept financial responsibility for such defects.  As a result, we increased our inventory reserves by $7.5 million, increased accrued liabilities for potential warranty claims by $1.6 million and recorded a receivable from the third-party subcontractor in the amount of $9.1 million.